Oireachtas Joint and Select Committees

Tuesday, 5 November 2019

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2019: Committee Stage

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

To deal with each of those matters in turn, in an earlier contribution, I explained why I am not in a position to introduce refundable tax credits and reliefs within our system. I explained the technical difficulties that exist. I made the point that if we were to bring in refundable credits, it would of itself have a cost consequence that we would have to take on board. The figure I shared with the committee, which in fairness was for all reliefs, was €2 billion. I would not be in a position to introduce a refundable relief for one area but not for another; there would be an expectation that it should be introduced across the board. The Deputy is assuming that I can do something that I have said the Exchequer cannot afford. Even if we could afford to do it, despite the significant technology available to the Revenue Commissioners, the technical capacity is not there to do it. Earlier I explained why we cannot do it. In his presentation on rent relief, the Deputy referred to a refundable relief but the amendment to which I was speaking does not. He clarified that in his statement.

The Deputy said that my concerns about this could be dealt with by the implementation of a rent freeze. There is no rent freeze at the moment and the Minister for Housing, Planning and Local Government has explained on a number of occasions on behalf of the Government that the introduction of a such a measure could have unintended consequences. It could make it even more difficult for tenants in the future and those who might be tenants in terms of the supply of rental accommodation and what might happen in the rental sector.

The Deputy has resisted the urge to go down the road of making political charges on this and I will do the same.

I accept the point that we have significant issues with rent levels and what this mean for those paying rents and their fears for the future. My genuine assessment of the Deputy's proposal is that in the absence of a freeze this is not the correct policy measure. While a freeze would be attractive in the short term, beyond that it could have difficult consequences. I then said that in the absence of a refundable approach, a road I do not want to go down in the tax code, we could end up putting in place a tax credit scheme that does not benefit those who need it the most, similar to the argument the Deputy looked to make against me on an earlier amendment. In any event, the Deputy is aware of the pressures that mean rent increases are pressed up more and more against the 4% cap. My assessment is the implementation of such a measure could be a further catalyst of this happening. This would not be in the long-term interests of tenants or the use of taxpayers' money.

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