John Lyons (Dublin North West, Labour)

I thank the Acting Chairman, Deputy Catherine Byrne, for the opportunity to speak on the Finance Bill.

I want to speak today about what I consider to be the positives of the Bill and where we can do better in the future. In any finance Bill and any type of provision, we must look at the decisions we make and at how we can improve the outcome next time around. As Deputy Nash stated, the time for all secrets being kept until the last day must be over and there must be a new process. There are certain aspects which will allow that to happen for future budgets.

First and foremost, the context in which the decisions in this Bill were made is important. The economic collapse that has happened in Ireland since the property bubble burst has cost us our economic independence and impacted greatly on people's lives in many ways, such as through unemployment, falling living standards and negative equity. Every day we all meet people facing these challenges and we use this interaction to inform and direct our work, and to inform Ministers as well.

We all, no matter on what side of the House we sit, want to put right the problems facing our country but we may disagree on how this is to be done. The facts, however, are the same for us all. This year we will spend €16 billion more than we take in and the only willing lenders to us are the EU and the IMF. As the House will be aware, these loans come with conditions and we are required to reduce our borrowing by an agreed amount each year. This year it meant reducing our borrowing by €3.8 billion.

Any budget that takes €3.8 billion out of the economy will impact heavily on families and individuals by asking them to contribute more and make even greater sacrifices, and we have heard Members speak about some of those already. I reiterate what other Members have stated in that these are not decisions we would normally consider, as we know their effects. We have, however, been elected with a mandate to address these challenges. This means making the decisions that will put us back in charge of our own affairs, but it also gives us an opportunity to make improvements where we can and to learn for the future.

A number of elements of the Bill on which I want to focus will make a significant difference in the lives of tens of thousands of people. Some Members, including Deputy Nash, mentioned some of these already. There have been no changes to income tax bands, rates or exemptions in this budget, as promised in the programme for Government. Also, although it is not included in the Bill, it is worth repeating that we delivered on our commitment not to cut headline social welfare rates.

Changes have been made to the universal social charge where the income exemption level has been raised from €4,004 to €10,036 removing, as Deputy Nash stated, approximately 330,000 low income earners from the USC tax net. This change will mean that these workers, who are mainly seasonal and part-time workers, will no longer have to pay the USC. As well as delivering on a key element in the programme for Government it is also the right thing to do. Restoring the minimum wage in July last, to €8.65 an hour, was also the right thing to do for low income workers.

On mortgage interest relief, another programme for Government promise was to increase mortgage interest relief to 30% for first-time buyers who took out their first mortgage in the period from 2004 to 2008. This increased rate of relief will apply up until the end of 2017 and will benefit approximately 214,000 mortgage holders. This move will help those who bought at the height of the boom, many of whom are experiencing negative equity and difficulties with their mortgages.

On first-time buyers, I also welcome the moves to increase reliefs for those intending to purchase homes this year. First-time buyers will be able to avail of relief at a 25% rate, with a sliding scale to 20% on ceilings of €10,000 for a single person and €20,000 for a married couple. Non first-time buyers will be able to avail of relief at a rate of 15% on ceilings of €3,000 for a single person and €6,000 for a married couple. Looking at the current position in the housing market, and by extension the construction industry, this is a measured approach to encourage activity in the market.

Approximately 170,000 construction workers have lost their jobs since 2007 and construction activity as a percentage of GDP has gone from excessive levels to below what would be considered normal levels, with a disastrous effect on employment. These time-limited measures are reasonable efforts to encourage activity which may lead to increased employment in the sector.

Turning to some business supports as well as measures to help individuals, the Bill also includes new business and enterprise supports that aim to create employment and grow economic activity. The first of these is the foreign income earnings deduction. If we are to continue the growth in exports, in particular exports for indigenous companies, we need to capture market share in emerging economies. Much has been written about the BRIC economies' growing share of global economic activity and the need for business to capture a share of this. The foreign income earnings deduction for employees who develop these markets is a welcome support to Irish businesses to expand into these markets with the potential to create jobs.

This measure ties in with the focus of the Action Plan for Jobs and other innovative ideas like the Bord Bia marketing fellowship, where Irish graduates are paired with exporting businesses to promote agri-food exports in new markets. This is the type of joined-up approach necessary to enable Irish businesses expand and create jobs.

The special assignee relief programme, SARP, is another welcome measure. This programme will provide an incentive to foreign executives to relocate here.

Deputy McLellan feels differently about this. It will act as an incentive for multinationals to stay here and expand. While it is a tax break for a specific category of worker, I welcome it as it is designed to give us a competitive advantage in crucial growth sectors. For example, this week the action plan for jobs focused on the potential for job creation in sectors like digital gaming and ICT. In certain sectors like these, a concentration of expertise is required to grow a development hub. Canada is a good example, having given tax breaks to gaming developers for a number of years to kick start its gaming industry. It is now a world leading gaming centre. This incentive is also time limited and has the potential to bring jobs to Ireland as well and keeping existing jobs here.

This Bill also includes changes to the research and development tax credit to spur new business ideas. More flexibility in the allocation of the tax credit has been provided for and this, along with our corporation tax rate, will add to our attraction in the highly competitive sectors we are targeting for job growth.

A range of measures have also been included in this Bill to grow employment in the financial services sector. Despite our recent experience of banking and financial incompetence, financial services are still a huge employer here and an area with high potential for future job growth in areas like the green IFSC.

We must learn from mistakes and solve them in the future. These measures are designed to aid job growth and for that they are welcome. There must be more focus on equality within the budgetary process. Equality means different things to different people. It is very easy to get lost in the figures around our economic situation and this Bill is no different. To the ordinary man and woman, the feeling of fairness is always foremost in their minds and, likewise, it should be in ours. All budgetary decisions should be equality proofed and it is imperative that Departments carry out equality audits on future budgetary process to ensure an even distribution of any pain and future gain.

We have a revised budget cycle timetable with aims for a multi-annual approach that provides increased oversight and aims to allow certainty regarding investment and decision making. I appreciate this new focus but I would like to see greater analysis of how these decisions are made, the concepts underlying the decision making process and, fundamentally, whether equality is at the heart of the decision. This must be the focus of future decision making especially on budgetary matters as equality must be our focus and our goal.

I welcome this Finance Bill in the context of our financial position and the measures to promote job creation. Our priority is to exit the EU-IMF programme and restore our economic independence. The decisions in this Finance Bill are a step in this process and we have sought to share the burden fairly. In a budget that takes €3.8 billion out of the economy, it is almost impossible for it to be seen as completely fair but we must always strive to have equality at the heart of future budgetary processes.

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