Michael Noonan (Limerick City, Fine Gael)

Consistent with our promise in the programme for Government, I am allowing farmers a double income tax deduction for increased costs arising from the change in carbon tax. Farmers will also be significant beneficiaries of the reduction in the universal social charge.

A measure that will benefit businesses is a reduction in the VAT rate on district heating from 21% to 13.5%. This will bring district heating into line with the majority of heating supplies. I am also amending the VAT refund order for farm construction to provide that farmers may claim a refund on wind turbines purchased from 1 January 2012.

Pensions

Owing to the changes in pension tax relief adopted in last year's budget and the Finance Act 2011 and the pension fund levy required to fund the jobs initiative, the pensions sector will make a sizeable contribution of approximately €750 million to the Exchequer in 2012. Although the EU-IMF programme commits us to move to standard rate relief on pension contributions, I do not propose to do this or make changes to the existing marginal rate relief at this time. However, the incentive regime for supplementary pension provision will need to be reformed to make the system sustainable and more equitable in the long term. My Department and the Revenue Commissioners will work with the various stakeholders during the next year to develop a workable solution. This will include consultation on whether and to what degree pension funds might invest more in Ireland than abroad, as advocated by one of our leading trade unions.

Household Charge and Motor Tax

The household charge of €100 per dwelling has already been announced by the Minister for the Environment, Community and Local Government, Deputy Phil Hogan.

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