Timmy Dooley (Clare, Fianna Fail)

The Finance (No.2) Bill is very much in line with expectations based on the jobs initiative announced in the House recently. The Bill effectively gives the technical details required to give effect to the jobs initiative. It has been debated as to whether the jobs initiative can be considered an attack on private pension funds. There will be an opportunity to debate it in more detail on Committee Stage.

I hope, however, the Taoiseach and Minister for Finance will accede to Fianna Fáil's request to publish the advices they received relating to overall pensions policy. We are all concerned about the long-term viability of and the deficits in many of these funds. It would seem bizarre the Government would seek to undermine the financial stability of these funds. Accordingly, it is important the advice the Government received is published, perhaps on Committee Stage. It would give all Members an opportunity to decide whether the pension levy is the most appropriate way to raise the jobs initiative funding, which in the end is a rather modest stimulus to the economy.

I welcome this stimulus and any measures that might ultimately re-ignite a level of activity in the economy. However, the initiative falls far short of what was promised prior and during the general election campaign. Deputy Kieran O'Donnell stated the Bill was relatively modest and did not seek targets for job creation. On February 23, Fine Gael, however, promised to publish a jobs budget within 100 days of going into government which would result in the creation of 100,000 jobs by 2015. The Tánaiste and Minister for Foreign Affairs told the House on 6 April:

The totality of the Government's economic programme is aimed at the creation of jobs. The jobs budget will be introduced in the month of May. The detail of how many jobs it is intended to support and the precise measures to provide and support the provision of jobs will be contained in that Budget Statement.

These are some of the expectations that have been created. I do not want to refight the general election on the floor of the House. I accept we lost the election and the Government has the support of the people in its difficult endeavour. However, it would be nice if it recognised it has changed its stance and, maybe, leaped ahead too liberally in the election campaign. It should set targets that are more realisable. After the election, there is an expectation among the public that the Government has a magic wand to resolve this economic morass. It would be a good start if it were more honest and upfront about the speed by which recovery can be achieved.

While there is some potential with the measures contained in the Finance (No.2) Bill, it is also a gamble. The potential impact the levy on private pension funds will have on their viability might outweigh the amount it will raise which may well be only a thin spread of funding across certain sectors, particularly tourism.

As tourism spokesperson for Fianna Fáil, I know how much the sector has the potential to get the economy back on track. Our loss of competitiveness, however, has impacted on our capacity to compete internationally for tourists. Notwithstanding that, I cannot see how the reduction of the VAT rate for the sector is enough to have a meaningful impact on Ireland's attractiveness to tourists. The Government has proposed the 9% rate will apply mainly to restaurant and catering services and areas such as museums and art gallery exhibitions, fairgrounds or amusement park services, hairdressing services, printed matter such as brochures, maps, programmes, leaflets, catalogues, magazines and newspapers. I am not sure how a VAT reduction in newspapers and magazines will resolve our economic problems. Another example is in eating out where this reduction will result in a reduction of €2 for an early bird meal for two that comes to €50. That would not buy one cup of tea, let alone two. How many times would a visiting couple have to eat out to save the price of a full meal? That is how people view these types of measures and I am not sure if it will re-ignite activity in this sector. I hope, however, it will have some impact. The abolition of the travel tax has potential. The introduction of the travel tax became something which was being positioned against us by the airlines. Often, perception becomes the reality. One particular airline has a tendency to utilise the media in an effective manner, often engaging in a greying of the facts in an effort to spin the message that the travel tax was somehow the cause of the drop in passenger numbers. The drop in passenger numbers out of and into Ireland during the past two years has been largely as a result of the downturn in the economy.

During the boom years from 2005 to 2007, activity at our airports was very strong. However, when one analyses more closely the figures in this regard one finds that much of that traffic was Irish people travelling abroad on short breaks and so on, which was a change in pattern of vacation. When one analyses the figures to an even greater extent one finds that approximately 80% were Irish originating passengers and 20% were inbound. I accept that when flights are no longer operational because that 80% of passengers, or a percentage of them, are not travelling there is a corresponding reduction in inbound travel. It has been suggested that the abolition of the travel tax will recreate activity. I am not sure it will. I do not believe Irish people are ready or have the wherewithal to recommence travelling, which is, perhaps, not bad a thing. Perhaps we need to be promoting the notion of staycations which would encourage people to remain at home and spend whatever limited money they have here.

As regards Shannon - Deputies O'Sullivan and O'Donnell will be familiar with what happens in the Shannon region - I have always believed that any truthful and detailed economic analysis of the region would have found that the activity of a particular airline had not benefited the region during the boom years as much as some people thought. I believe it was a drain on the resources of the region at a time when people travelled more freely, had more money and ready access out of the country to sunnier locations. It is often stated that access to sunny destinations is of benefit to the region. However, all it does is take Irish money out of the country. Ryanair has been particularly good at promoting this. I ask the Minister for Finance and, in particular, the Minister for Transport, to be mindful of this in entering into discussions about the reduction of charges at airports, which I accept are important and need to be balanced.

Airlines must come to the table with a better presentation in terms of how they manage their charges. There exists a smokescreen to present all the charges as somehow being those levied either by way of tax or landing or other general charges, which ultimately is money needed to pay for the management of the infrastructure, to ensure the airports are kept up to standard and to pay staff working there. There is a considerable amount of work to be done in this area to assist the tourism sector. However, it would be wide of the mark to believe the tourism issue would be resolved by a reduction in the VAT rate and the abolition of the travel tax. That will not happen because the bulk of activity at our airports was outbound.

From a tourism perspective, we must be far more imaginative and must look to the attractions we have. Competitiveness is essential but at the end of the day people come to Ireland for a particular purpose. That purpose has changed. I listened with interest to Deputy Naughten's contribution. I acknowledge that some people come here for heritage and genealogical reasons and I have no doubt more will do so as a result of the visit of President Obama and his wife in the past couple of days. There was a similar surge in this regard when former Presidents Regan, Kennedy and Clinton - President Nixon to a lesser degree - visited Ireland. Notwithstanding this, there are peaks and troughs in activity. We must concentrate on our nearest neighbour - the recent visit of Queen Elizabeth II will be helpful in this regard - and on the European market. We must tailor our product. No longer will people come here because we have lakes, green hills and other folksy types of things. They were an offering for a different time. We must be much more imaginative in terms of developing a product. While Irish music is an important product we must ensure we do not fall behind because we are not providing for families in particular, in respect of whom we have given up the market. We have ceded this sector to the sun destinations. Not every family wants to go to a sun destination but they do want facilities appropriate to their needs.

There is a role for Government in terms of bringing innovation to our tourism product. Deputy O'Donnell will be familiar with the late Mr. Brendan O'Regan who was the brainchild behind the mid-western Shannon region. Often, too much emphasis is placed on the airport because it is the access point. People came through the airport for a reason. The folk park developed through Mr. O'Regan's ingenuity, the Cliffs of Moher, Adare and so on were products of their time and were very successful. However, it is time we came up with something to operate in parallel with them. We need to find the new Brendan O'Regan and to bring a level of competition to tourism on a regional basis. We must encourage regions to compete for funding for iconic projects. The Cliffs of Moher in County Clare is one such project into which we all put a great deal of effort in terms of ensuring it received appropriate funding to upgrade its facilities. The State and European Union invested some €30 million in that project. While it has been of much benefit to those who visited it, it has not resulted in an increase in numbers.

We need to look to new ideas and to invest money in the creation of the next wave of products and attractions, which will be a hard task. Often Governments - this is true also of my party when in government - believe such tasks are for the industry, that it need only create the environment for job creation and others should come up with the ideas. However, we must provide a stimulus to encourage people to come up with ideas and must ensure such ideas are supported. We have seen the benefit and potential of the convention centre. It is an iconic project which is heavily funded by the State and will have true potential in time. We need to come up with similar projects outside the Dublin region. The mid-west, because it has the infrastructure, is well positioned in this regard. However, I do not wish to be parochial when speaking about such an important matter. I am concerned that money is being spread too thinly and I am not sure it will have the impact suggested. I hope there will be some benefit.

The explanatory memorandum refers to the 9% VAT rate applying to sporting facilities, in respect of which there is an anomaly. A European Court of Justice judgment found against Ireland in regard to the manner in which VAT is collected from public versus private bodies, including in respect of parking, leisure facilities and so on. There has been much toing and froing on this issue, including when Deputy Brian Lenihan was Minister for Finance. This relates to section 117(2)(b) of the Finance Act 2010 which was not commenced because the then Minister ordered a review of the legislation which was enacted to satisfy the ECJ judgment. The Dublin Chamber of Commerce has made a submission to the Minister for Finance on the jobs initiative in which it requests that consideration be given to the unfair competition by VAT exempt bodies to deal with the outcome of the European Court of Justice judgment which was taken against Ireland by the Commission. It further states that this matter needs to be considered in the context of the unfair competition "by local authorities and other VAT exempt public bodies". It is an issue which is particularly acute in the leisure industry, where the failure to charge VAT on non-core activities resulted in predatory pricing by VAT exempt bodies. The Dublin Chamber of Commerce believes urgent attention should be given to the creation of a level playing field for public and private sector bodies competing for the same market, not only in order to engender fair competition but also to ensure Ireland is fully compliant with its obligations under EU law.

That has an impact on private operators providing services in the leisure sector where they compete with publicly funded bodies. For example, there are a number of privately operated five-a-side soccer pitches. Private operators have funded their own operations but are competing with universities and local GAA and soccer clubs which have been funded through capital investment under the Sports Capital Programme. A private operator, who has funded his operation, must pay VAT while our friends in the clubs and societies, the bulk of whose capital funding is provided by the State, do not return VAT. This is creating a disparity, and the European Court of Justice found it to be unfair. The unfairness also applies to parking and other services. An element of this judgment awaits commencement. It is in the Finance Act 2010 but has not been commenced. I ask the Minister for Finance to give consideration to the commencement of that section as part of the jobs initiative. He was quite vocal on this issue himself when, in a parliamentary question on 19 October 2010, he asked the then Minister if he would commence that section. I may be overstating Deputy Noonan's position. He asked when the ministerial order regarding the leisure sector, arising from section 117 of the Finance Act, would be commenced. I ask the Minister to deal with this issue in his later remarks.

Prior to the general election, the parties now in government made much of the necessity to deal with upward-only rent reviews for existing leases. I am anxious that this be dealt with. I was concerned about this issue myself at the time. The advice from the Attorney General was that the issue moved into the area of property rights and involved constitutional matters. At least one of the parties in opposition at that time had received a legal opinion that would give support to its case that the matter could be revisited. It would be nice to see that legal advice brought into effect, if it is still available, as early as possible. Could it be presented by way of legislation, either as an amendment to this Bill or in some other Bill?

I ask the Minister for Finance to ensure that appropriate funding is put in place to deal with our regional airports. There are concerns about the operation and capital expenditure of our regional airports, which are important from a tourism and business perspective. Much of this initiative is about keeping business in place and assisting tourism. Regional airports are not always widely used for tourism but they are an important feature in support of business. In places like Galway, Kerry and Donegal there is an effort to generate some level of economic activity. The links between Dublin Airport and those regions are vital. We need to ensure they have the appropriate funding to be able to operate.

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