Jimmy Deenihan (Kerry North, Fine Gael)

I will confine my remarks to art, sport and tourism which are my areas of responsibility. The real and pressing threat to the growth and future development of the tourism industry was not addressed in the budget or in this Bill. Tourism is an exceptionally important industry to our economy and I repeat that it provides more than 140,000 jobs in the country as a whole. However, there is nothing in the budget nor in this Bill that will go any way towards meeting the real challenges faced by those in the industry.

Doing business in Ireland is expensive and those in the tourism industry have already endured years of inflation at double the rate of their competitors. Coupled with this, increases in Government-driven stealth taxes and charges have been dramatic. The increases in the cost of food and drink, insurance, ESB, gas bills, VAT and other goods and services have been dramatic in recent years. For example, Ireland has the second highest VAT rate in the eurozone for hotel accommodation and eating out. Furthermore, wine excise duty is by far the highest in the eurozone while spirits excise duty trails only that of Sweden and Finland in the European Union. These rates and duties have a real impact upon the attractiveness of Ireland as a destination for international tourism.

Ireland is the third most expensive country in the European Union for goods and services. A basket of food costing €100 in Ireland costs only €82 in the UK. Of the 16,000 small to medium-sized enterprises that make up the bulk of the tourism industry, it is the smallest players in the sector, those involved in family-run bed and breakfasts and small guesthouses, that are being hit hard. The budget for 2005 and this Bill could have made substantial changes that would have underpinned the future growth and development of the sector. This is an issue on which I wish to dwell in the time available.

Ireland is the only country in the EU with a VAT rate in excess of 10% that does not allow for the reclamation of this tax on business expenses incurred on hotel and restaurant charges. I would like the Minister of State's official who is present to take up this matter with the Minister. We will be table an amendment on this matter on Committee Stage. The Irish Hotels Federation said in its budget submission to Government that this anomaly in the Irish VAT regime places Irish hotels and restaurants at a serious disadvantage, even to its nearest neighbour in Northern Ireland, when competing for the high yield and growing travel sector. The non-availability of this VAT allowance in effect means Ireland cannot expect to attract a reasonable proportion of the €40 billion worth of global international tourism business involved in conferences, corporate meetings and incentive travel business generally. Allowing VAT on hotel and restaurant charges as an input for business for that purpose would be a major boost to the industry. We will push hard for this on Committee Stage.

Last year I enjoyed one of the few successes I have had in opposition when I pressed hard for an extension of the capital allowances for hotels. In fairness to the Minister, after much pressure, he conceded to my request and, as a result, billions of euro worth of proposals have been made to county councils and there will be a massive return for the economy. That is an example of the influence an Opposition spokesman can have. The cut-off point of June 2006 for this scheme, however, is too early because many of these plans will be sent to An Bord Pleanála and the jobs will not be completed by then. The cut-off point for completion should be extended to 2007.

Last year we voted on tax credits for leading GAA players. Such a facility is available for international sportspersons but not for our GAA members. I tabled an amendment last year that was not accepted despite the goodwill of many on the Government side of the House. The Minister is a keen GAA supporter and I ask him to look at alternatives, maybe through the Sports Council. Each county can now only have a panel of 24, a small number, so any proposal would not involve extending the facility to 50 or more people. Kerry had a panel of 30 players and had to drop six of them. It should be easy to do something for inter-country panels because they are so well defined. We should revisit this on Committee Stage.

Questions were raised about tax exemption for very wealthy artists, particularly singers. We must examine that exemption from the perspective that it only applies to creative artists and not to interpretative artists. Actors must pay tax while writers, who are regarded as creative artists, do not. This is an anomaly that should be addressed. A small number at the top are gaining most from this provision. There should perhaps be a cut-off point of €250,000 above which people should have to pay tax.

There was only one Irish performer at the Wexford Opera Festival last year and the festival organisers had to pay VAT on the fees paid to the incoming artists. This is unfair for a voluntary group and I will table an amendment to address this on Committee Stage.

The tourism industry is under pressure and there will be casualties this year. The bed and breakfast and guesthouse sectors were hallmarks of our tourism industry but they are under pressure because hotels, which have increased in number and must maintain cash flow, are discounting. Instead of going to guesthouses, people are going to hotels. By its nature, bed and breakfast accommodation is spread throughout rural areas — it is the only enterprise in some villages. VAT and related issues will cause serious problems for this sector if they are not addressed.

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