Seán Fleming (Laois-Offaly, Fianna Fail)

We have not gone there yet. However, there are simpler ways of doing it.

Perhaps the Bill is so voluminous at 279 pages because it gets into such small details. There is a point in the level of detail where the law of diminishing returns sets in. I agree with the scheme, which should be made as simple and workable as possible. If a person is out for nine days on one occasion and 11 days the next time, the scheme should not be invalidated for such small details. It should be 60 days in the year without worrying if a person was five days or nine days on a particular trip. I suggest that in the interest of simplicity.

Last July the Government introduced what initially was to be a budget, then a mini-budget and finally it was relegated to the jobs initiative. Essentially it was a €2 billion raid on the private pension funds by taking 0.6% out of the all the private pension funds over a number of years, which was to be used for job creation purposes. We know all the money deducted last year was not used for that purpose - half of it was. There is a €200 million carryover into this year and it is important that it be used on job creation initiatives.

I table a series of amendments to that legislation in order to apply the pension levy to approved retirement funds. I pointed out that people such as Seán FitzPatrick and Michael Fingleton had large pension funds - allegedly more than €10 million although some claim it was closer to €30 million - which were not captured by the pension levy. I asked the Minister, Deputy Noonan, to consider that. I believe the Minister of State, Deputy Brian Hayes, might have been here in the Chamber during the debate. He said he would re-examine the issue and might return to it in the Finance Bill and increase the rate from 5% to 6% on the approved retirement funds, which would be another way of capturing a similar amount. I am pleased that the Government was listening to the very constructive amendments we proposed.

There was unfairness and Deputies were unhappy that when the pension levy was introduced, it excluded the wealthiest people who had the facilities to set up these approved retirement funds. The Minister took it on board and gave a commitment to review it for inclusion in the Bill before us. I understand that the annual imputed distribution from approved retirement funds has been increased from 5% to 6% on multiple ARFs exceeding €2 million on 30 November in the relevant year. The Bill clarifies in such cases that the 6% distribution rate applies to the entire approved retirement fund and not simply the excess above €2 million. The annual imputed distribution is the amount of the approved retirement fund which must be subjected to tax annually. The change has effect from 2012.

These matters can be transferred within families and I understand that where an individual transfers an approved retirement fund on death to a child aged over 21, the assets are to be taxed at 30% - it was formerly at the standard rate of 20%. I welcome this change which is in line with the spirit of the amendment we tabled in July and I support the Government in taking that route. In addition to the financial benefit there must be equity regarding people who have special retirement funds separate from ordinary citizens who have what we call the normal pension funds and who were being hit on that basis.

The increase in the rate of VAT to 23% flies in the face of what was announced six months earlier in the jobs initiative with the reduction in the VAT rate for certain sectors. If it was right to reduce the VAT rate, it is not right to increase the VAT rate. One or other is wrong and I believe the increase as confirmed in the Finance Bill is wrong. We all saw the impact it had on the January sales with the number of businesses and retail outlets closing down because people do not have the cash to spend. When we were doing our best to get inflation down and costs under control, the Government decided to increase the VAT rate on a large variety of items that people purchase on a daily or weekly basis. In a full year it is estimated that this will take in €670 million.

However, the Department has clarified and Minister has confirmed that it is done on the basis that there will be no changes in consumer spending patterns in arriving at this number. It would have been more prudent and honest if the Department had estimated there would be a small reduction in the amount of retail activity because of the increase in VAT and therefore reduce the estimate of the yield from this source in Budget Statement. While I hope it will not happen, I would be afraid there will be a fall-off in the yield from VAT during the course of the year.

The next issue is the 25 cent increase on a packet of cigarettes. While I am not a smoker, I understand the price has increased from approximately €8.65 to €8.90. I would support the Minister if he put a further €1 on top of that and introduced such an amendment on Committee Stage. Everyone knows the health case for doing so and I believe the only reason for not doing it is the amount of smuggling of illegal cigarettes. We all know anecdotally that if a person, who walks into an eastern European-run shop in any of our constituencies, is one of their own he or she will get the smuggled ones that came in the car, but an Irish person will pay the full rate. It is happening on a wide-scale basis and not just in one or two shops.

It is reported that up to 30% of the cigarettes smoked in Ireland are smuggled. I would like to see the emphasis on greater confiscation of the contraband coming into the country because we do not know the materials that make up those cigarettes. At least we have some idea of how harmful the legitimate cigarettes are. The Government should go harder on that. I accept that by increasing the price of cigarettes it increases the incentive for people to smuggle because of the bigger profit margin to be made if they are selling them at €5 a packet instead of €8.90 a packet. The emphasis should be on trying to reduce the illegal trade in that area.

The big issue affecting everybody is the increase in carbon tax. Diesel and petrol have increased to an enormous extent. Petrol is now approximately €1.60 a litre and diesel is €1.55 and it changes regularly. Every week in our constituencies people from the haulage industry talk to us about the cost of keeping a truck on the road, which is getting very expensive. That added to the road tolls means that people in the transport business must cut their costs. Those running lorries or company cars have a business cost which they must reduce. The rest of us who buy fuel at the filling station are paying the extra rate and everybody now knows how much it costs to fill a large car with petrol, which can be up to €100 in some cases. I have seen a pattern develop in the past six months whereby people are now buying €5, €10 or €20 worth of petrol or diesel, whereas previously they got €50 worth on the basis that it will keep them going for a couple of days. Many distributors are now selling home heating oil in 5 gallon drums.

People come in with 5 gallon drums and take home two drums which will do them for one or two weeks. They cannot afford for the lorry to deliver. Years ago, when people needed oil they asked for the tank to be filled up. Now the people at the other end of the telephone ask how many litres are wanted, whether 100, 200 or 300 litres. Some companies have a minimum delivery quantity because it is not economical otherwise. They must keep their trucks on the road. The cost of transport has gone up considerably.

I refer to one anecdotal situation. Deputy Tom Hayes and others who travel to Dublin will be familiar with it. There is a new toll road on the M7 and M8 at Portlaoise. Everyone from Limerick and Cork travels on it. I live on the old N7 road. There used to be a good deal of traffic on the main road in front of my house in Castletown village on the N7 between Mountrath and Roscrea. There was always a difficulty getting out of the village. However, for one year after the toll motorway was opened in Summer 2010 traffic on the road diminished considerably. In recent months I have found when I go out from my house that the traffic is nearly back at its old level on the old road. It is not that there are more lorries, vans or cars on the road but fewer are using the toll roads because they are so expensive, a further example of the costs of motoring and transport. This is pushing up the costs to businesses and making us less competitive. The Government increased motor tax rates in the budget. I realise they had been rather low but the percentage increase at the lowest level was severe and there should have been some way of alleviating the costs borne by individual motorists.

The Budget Statement included a €100 household charge and there are few exemptions. I wish to raise an issue relating to the charge and we have tabled parliamentary questions on the matter. There are many people, especially elderly people, who do not have access to an Internet or payment by credit card while using a computer when sitting at home in their kitchens at night. Many pensioners have come to me asking if they can go to the council to pay. An arrangement is in place whereby if one is sitting at home with a laptop one can pay €25 per quarter. However, if one goes into the local authority office to pay, the local authority will not accept the payment in instalments at the local authority cash desk. One must pay either €100 or nothing. This is a most unfair imposition, especially on elderly people and people who have low incomes and who are not exempt.

A mechanism should be in place to treat all citizens equally when it comes to paying new levies. There should not be one system for those who can operate the new modern high technology systems of payment but another for people who are unable to do so, who have not been trained and who do not have the resources, education or the financial wherewithal to have laptops in their houses. They should not be discriminated against and informed that they must pay €100 upfront. This is unfair and wrong and it is a nasty way of saying to certain people that they are not in the modern Ireland and they must pay €100 upfront when they go to the cash desk. I call for an amendment on this matter during the passage of the legislation.

For several years I have been unsuccessful with Ministers in calling for the imposition of an extra €1 at a minimum on every can of beer in every off-licence, supermarket and filling station. I support such a measure as do most sensible people. The idea of being able to get a slab of 20 beers, even if they are only 500 ml at 99 c each or 20 for €20 or 24 for €20, is too cheap. Too many young people are binge drinking at 12 and 13 years of age. The Minister of State need not try to tell me that they are too young to buy drink. They get their older brothers and friends to buy drink for them. It is cheaper than water or milk. Alcohol should not be the cheapest item in the supermarket. Even at this late stage I support an amendment whereby no can of standard sized beer could be sold in an off-licence for less than €2. I am unsure what mechanism the Government would have to introduce to do so but it should do so.

The Budget Statement was most unfair and harsh on one-parent families. The amount they can earn while still claiming that payment has been reduced on a weekly basis as has the amount they can earn for home help and community employment schemes. The fuel allowance has been cut by six weeks for everyone. This means the current season will end on Friday, 6 April and the full season for 2012 and 2013 will commence on 8 October 2012. There has been a six week reduction in the rate. The Government maintains it has not cut rates but it cuts the amount of money it gives to people. The Government can claim that is not a rate cut but it is. People know the money they get in their payment each week is less for six weeks of the year. That is a rate cut although the Government may wish to involve itself in semantics and say it is not.

The change to the age limit for one-parent family payments claiming for their children is changing and this will cause hardship as well. We support large aspects of the Bill. It needs significant improvement and we will be tabling amendments during the course of the passage of the Bill through the House.

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