Oireachtas Joint and Select Committees

Monday, 16 November 2020

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

Finance Bill 2020: Committee Stage

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I thank the Minister for clarifying the fact it is an advance tax credit and, obviously, will not be available to use twice. Many businesses that contacted me believed the Government was issuing grants of up to €5,000 to them. In fairness, the Government has its spin unit but it allowed the perception to exist that these grants were additional to expenses that could be claimed and offset against profits. It is disappointing that was allowed to happen. That said, it is an advance tax credit and will come as a huge relief to businesses which need cash now and not when their returns are being made. There are, however, core issues here. The Minister talks about a geographically based scheme that can last for quite a while and will possibly allow for different restrictions in different areas, as we have seen in the past. That is absolutely 100% correct; a business premises is easily identifiable and, therefore, can be dealt with in that manner.

I draw the Minister's attention to what happens in some other jurisdictions and, indeed, what happens on this island across the Border where there are three categories. There is a category whereby a person is forced to close or severely restrict where he or she has a physical premises and so forth. That is somewhat like what we have here. There is a grant aid amount of money per week for that category. There are other categories, including two for service industries. One is for service industries that are affected as a result of being part of the supply chain to a restricted company or premises which has a physical premises. There is an allocation for that type of supply service based on the fact those service providers pay no rates. They have a different and more enhanced allocation based on service companies which pay rates. I fail to see why that cannot happen in this jurisdiction, even in the context the Minister outlined where, for example, a county is under a higher level of restrictions. Say, for instance, county X was on level 5 and the rest of the State was on level 2.

Obviously businesses that were curtailed and met the requirements of section 11 of this Bill will be able to avail of the Covid restrictions support, CRS, scheme. I believe that companies that provide services, whether they are located in Wicklow, Kerry, Dublin or whatever, to a company that is restricted in county X could also avail of this scheme if they are able to show they are in the supply chain of the company in county X and if they have been impacted by a downturn, overall, of 75% but they would still have to meet the same criteria. A company that is the main supplier to a company in county X may as well be in that county. The problem is that it may not be located in that county and, therefore, is unable to avail of the benefits provided by the CRS scheme.

This is not a grant. I accept that the Government intends for the scheme to help companies to survive. If these companies survive they will neither have received additional payment nor paid out more as a result of this scheme. As it is bringing it in advance to help them at their time of need, why restrict the scheme in a way that does not support services that are servicing these companies? I am not talking about servicing 10% that might go to a restricted company. I am talking about a service industry that is severely restricted because of this applying to a restricted company.

I am sure that the Minister is well aware of the financial stability note by the Central Bank, which gives us great information and data on the companies that have been severely impacted and the services that service them, which is what we are discussing here. The Central Bank has defined companies in a traffic light system where there is red, amber and green. The note clearly shows that green producers or suppliers, which are the company suppliers that are not restricted, sell €7 billion of services into companies that are red companies, which are companies deemed restricted because of distancing and being unable to allow people on to their premises. In total, in the green, amber and red traffic light system for the services there is €13 billion of services provided and over half of that is provided by green companies but none of the green companies would get any support under the CRS scheme. The report shows that it is absolutely crucial to maintain the health and financial well-being of these service industries.

If we come out of this ensuring that the companies are supported but have lost the service industries, then there is a serious problem. The report clearly shows data whereby €7 billion of services is generated by what are designated as green service industries, which are not affected by the restrictions. The problem is that the €7 billion is being sold into red companies that are severely restricted. That is what the Minister is forgetting with this scheme. I welcome the scheme as it is beneficial. I have a different view of grants and believe we need to support grants. The current proposal is a very clever way to bring in money now as opposed to when companies need it because if it is not brought in now they may not be here when they must deal with their tax bill. I support the scheme as it makes sense and there are similar schemes in operation in other areas. I acknowledge that this is not simple but other areas have been able to design something that includes the service industries as well.

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