Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

I use it as an example of the access to corridors. I understand that it comes from others but it is part and parcel of the budgetary proposal.

The Bill does tick some boxes. In the past, the Minister has presented me and my party as negative when we were attempting to constructively criticise legislation. We all will be aware that is a political ploy and it is par for the course. He will be aware that we have never shied away from welcoming measures for which we ourselves have campaigned.

The increases in capital gains tax and acquisitions tax are positive moves. I welcome them, even if they do not go as far as we would like them to go. I also welcome the further clamping down on some tax avoidance measures, such as the withdrawal of the foreign service relief for ex-gratia payments and the implementation of stamp duty anti-avoidance measures. I welcome the extension and improvement of start-up relief, as long as it continues to be tied to job creation. The changes to how employees benefit trusts are treated for tax purposes are a positive move.

I am glad to see that the Bill contains excise duty relief for hauliers and transport providers. The relief for hauliers is something for which we called in our jobs action plan last year and I, too, believe it has the potential to be revenue neutral. Significantly, the tax treatment allowances for civil partnerships are necessary and good and welcome news. There are other parts to the Bill that also would merit welcome.

However, there are some features in the Bill over which there are question marks. The establishment of real estate investment trusts, REITs, has been widely welcomed by the property analysts and numerous economic commentators. I have some concerns and questions about these entities. I recognise that these are functioning in many jurisdictions and, in many cases, successfully so. They have been established in the United States since the 1960s and over the past decade a plethora of countries have started to introduce them. Essentially, these REITs are investment vehicles and the level at which the investment is set, and the cost in that regard, will be a determining factor.

There are also questions regarding how the Minister has set these investment vehicles up. One of the concerns is that the REITs, as entities, thrive in low-rate environments. They have sprung up in distressed property markets worldwide to take advantage of collapsed property prices and while they may encourage some recovery in property prices, they also have many of the warning indicators associated with bubble investment vehicles. I am concerned that this State may be hopping on a bandwagon that has already pulled out of the station. I question that the Minister set the dividend at 85%, given that, I believe, Britain and the United States have set it at 90%. There also are questions regarding the mixed assets and that the legislation seems to lack any meaningful asset test to protect potential investors. These are some issues which we will be able to address in more detail on Committee Stage.

In addition, the changes to research and development tax credits for employees give rise for concern. If this tax credit introduced last year was to accommodate companies engaging employees for research and development, why is the portion of those employees' research and development work being reduced, from 75% to 50%, in the Bill?

Why was this not spotted last year? What is the thinking behind it? There are no quantitative data on how the scheme introduced last year is playing out today.

I question the living city initiative on which I have serious reservations. Regeneration of urban centres is absolutely crucial. In Sinn Féin's jobs action plan, we proposed the completion of the Limerick and Dublin regeneration schemes as a socially-friendly policy leading to job creation. This is regeneration of housing estates that have been crying out for help for many years and have been ignored by successive governments and finally we are seeing some movement.

The writing-off of tax over a period of years to renovate what is probably a small number of Georgian houses in two counties looks and smells very much like section 23, and does not make sense. This clause allows up to 100% tax back over ten years of an investment in an asset that one can use for retail purposes as well as for living in. There are serious concerns over why the State would provide such support for somebody who is developing the bottom of a Georgian house into a retail unit, thereby putting the next house, which is not Georgian, in the same street at a complete disadvantage. It skews the market terribly and also allows for somebody to invest huge amounts of money. While there is a threshold that it must be 10% of the market value, there is no cap on the amount of upgrading works that might be carried out to such a Georgian house and qualify for the tax break. This means that the State is potentially giving hundreds of thousands of euro to people to fix the upper storeys of a Georgian house for living accommodation and the basement and ground floor for retail use. That is seriously questionable.

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