Seán Kyne (Galway West, Fine Gael) | Oireachtas source

The main objective of this year's Finance Bill is to continue the vital task of stabilising the State's finances, which continue to be in a precarious position unfortunately. Balancing the books and returning the nation to a sustainable footing is of paramount importance. As can be seen in this and previous Finance Bills, performing this task is easier said than done. Widening our tax base in order that we reduce borrowing is vital and unavoidable. It should not be difficult for any Member to appreciate the substantial gap between income and expenditure, which currently requires the State to borrow €1.2 billion per month. The troika has also stated that Ireland must broaden its tax base.

Balancing the books is not sufficient, however. For example, substantial increases in expenditure in the health sector in recent decades have not, on their own, resulted in better outcomes. Smarter, more effective and targeted ways of working and achieving results are essential.

While the Finance Bill contains measures to widen the tax base - increased taxes are never popular - it also has a clear focus and purpose. Revenue raising measures are accompanied by a new vigour and an emphasis on positive actions in areas which will speed up our return to sustainability. For example, the ten point plan for medium and small sized businesses will collectively support job creation initiatives that will, in turn, reduce pressure on the social protection budget. The plan will help small and medium sized companies reduce administration costs, protect and enhance cashflow and extend the foreign earnings deduction for work related travel, which is essential for building export links.

Section 20, which extends the tax relief programme for the film industry, is another welcome initiative. I appeal to the Minister to consider extending this relief to other creative industries such as gaming. Cities such as Galway and Dublin are fast becoming locations of choice for this rapidly growing industry. We can and should encourage Irish entrepreneurs by supporting the development of an indigenous industry alongside the multinational companies, all of which are very welcome.

On the issue of multinational companies, section 31 is relevant as it concerns the agreement between Ireland and the United States regarding the system to improve our international tax compliance. The agreement also facilitates recognition of US accounting standards, a matter referred to in last year's Companies (Amendment) Act. Such innovation ensures that we will reduce and minimise red tape and bureaucracy while prioritising job creation.

I am also heartened to note the inclusion in the Bill of a provision addressing another issue that I and many others have raised with the Minister. I refer to the provision in section 16 allowing citizens to make a once-off withdrawal of up to 30% of the value of a pension created through additional voluntary contributions, AVCs. This issue has been raised a number of times in the Joint Committee on Jobs, Enterprise and Innovation, of which I am a member. The measure clearly required careful consideration as a balance needed to be struck between assisting citizens who are experiencing financial difficulties and protecting the provision they are making for retirement. I hope the measure will boost consumer spending and allow people to withdraw from an AVC pension to help out family members if they so desire.

On farming, of which I have significant knowledge, I welcome the Minister's initiative on stock relief. That more farmers are aged over 80 years than under 35 years is a major problem in agriculture and for this reason I welcome the initiative.

Budgets must be framed in a fair and transparent manner and the Finance Bill builds on the verified fact that the Irish taxation system is one of the most progressive in Europe, as has been confirmed by the OECD, Economic and Social Research Institute and European Commission. While the Bill, by necessity, widens the tax base, it also contains further measures to ensure that those who are most able to contribute to restoring the nation's finances do so. These include such initiatives as the requirement that older citizens with income in excess of €60,000 per annum pay the standard rate of the universal social charge, the abolition of top-slicing relief for lump sum payments of more than €200,000 and the 3% increase in deposit interest retention tax and capital gains tax, which brings CGT up to 33%. These and other measures ensure we can protect and maintain social welfare payments, while holding to the commitment not to increase tax bands or rates.

A sense of fairness is also evident in section 97. The section includes the necessary legislative changes to facilitate the Personal Insolvency Act, which is essential to alleviating the serious problem of mortgage arrears, an issue being debated in Private Members' time this week. I also welcome initiatives for hauliers and passenger transport companies, which will allow them to remain competitive and protect and expand their businesses. Deputies were subject to considerable lobbying to ensure the budget was at least cost neutral for hauliers.

The Finance Bill gives effect to a pro-jobs budget and sets in train a process that will ensure we broaden our tax base and secure sustainable funding sources for local authorities. The latter is important as Deputies, most of whom are former members of local authorities, know too well. The Bill is the latest in a series of Finance Bills planned by the Government to restore economic sovereignty and I welcome its many initiatives.

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