Terence Flanagan (Dublin North East, Fine Gael) | Oireachtas source

I also welcome the opportunity to speak on the Bill. This Government has had three objectives since it was elected to office two years ago: first, to return the country back to stability and deal with the national finances; second, to repair the banking system and get Ireland's banks lending again, particularly to enterprises; and, third, to restore jobs and economic growth.

A lot has been achieved in stabilising the economy, rebuilding the country's reputation internationally and getting the banking system working. There is, however, a lot more work to be done in dealing with the unemployment situation which is totally unacceptable. The Government will be dealing with it as a matter of urgency over the coming years.

The promissory note has been replaced with a new long-term Government bond which is very welcome. It provides the necessary breathing space for other options which the Government can take in the forthcoming two budgets. Work is taking place in getting financial help from the European Stability Mechanism in relation to the other 50% of total banking debt that went into our banks.

This Bill contains many good initiatives, including some new things from the budget. Some of these ideas have already been mentioned by the Minister for Finance, Deputy Noonan, in his Budget Statement. The primary focus of the budget and the Finance Bill is to create jobs and get Ireland working again.

The introduction of the new Jobs Plus scheme later this year will provide grants to employers to encourage them to employ individuals who have been on the live register for longer than 12 months. That move is to be welcomed and I look forward to hearing more details about it.

In the Bill before the House, the Government has rightly decided to focus on a 12-point plan for small and medium enterprises, which are the key providers of jobs across the country. If the domestic economy is going to recover, it is crucial that we deal with the high unemployment problem by encouraging enterprise and creating jobs.

Over 250,000 private sector jobs were lost between 2008 and 2011. This is a challenging time for all sectors that have been hit by the recession. Job creation is the key in this regard. Each of the 12 points contained in the SME plan is designed to help this critical sector to trade, grow new products and markets, and ensure that existing jobs are retained and new jobs created. SMEs account for almost 70% of people employed in Ireland, hence the strong focus in the Bill on that sector.

I wish to put on record the great work that the Minister of State, Deputy John Perry, is doing in this area. He comes from a business background and is committed in this respect. He understands the issues involved and is working extremely hard for small and medium-sized enterprises. The measures in the Bill include a three-year corporation tax relief for start-up companies; extending foreign earnings' deduction for work-related travel to certain newly included countries, such as those in Africa; increasing the VAT cash receipts basis threshold from €1 million to €1.25 million; and amending the close company surcharge to improve cash flow for SMEs.

The Bill proposes to amend the research and development tax credit by reducing it from 75% to 50%. This concerns the proportion of time an employee has to spend exclusively on research and development activities in order to qualify for the tax credit. That is an improvement on the previous onerous position.

In addition, the employment and investment incentive is being amended to include hotels, guest-houses and self-catering accommodation, which will greatly help existing and new employment in this industry. There is a glut of hotels around the country but this is an important sector, particular this year with The Gathering. The hotel sector currently employs approximately 51,000 people, so it is only right that it should be included under this incentive.

This Bill underpins decisions made in the budget to help farmers who are restructuring operations to benefit from capital gains tax relief when the proceeds of a sale of farm land are reinvested in the farm. Should individuals dispose of agricultural assets to their children, there is relief from stamp duties on transfers of agricultural lands up to December 2015. That is a concrete step for agriculture, which plays such an important economic role. We want to see a future for young farmers so they can continue working in this green industry.

Individuals will be allowed, on a once-off basis, to withdraw up to 30% of the value of their pension AVCs.

Members will be aware that such additional voluntary contributions, AVCs, are supplementary benefits on top of one's ordinary retirement benefits. This is bound to help ordinary people who find themselves with cash flow problems and who are unable to access - or who lack - other savings. Withdrawals will be taxed because individuals will have benefited from tax reliefs initially when taking out such AVCs but they will have an opportunity to use their money and hopefully will spend it within the country, because that is what is needed at present. As a previous speaker has noted, the aviation sector also is important and the Minister has dealt with the provision of accelerated capital allowances regarding the construction of hangars and in respect of the refurbishment of certain buildings or structures to deal with commercial aircraft. Very generous capital allowances and reliefs will be available in this regard. The cost of fuel has made things difficult for this industry, which provides a considerable number of jobs. Moreover, many aviation European headquarters are based in Ireland and, accordingly, it is quite appropriate to provide some help in this regard.

I greatly welcome the living city initiative that has been announced on a pilot basis. It pertains to regeneration and is similar to other urban renewal schemes that were provided in the past. While Waterford and Limerick are the two cities that have been selected on a pilot basis, as a Dublin Deputy I certainly hope Dublin also will be included over time. In particular, there are parts of the north and south inner cities in which there are Georgian buildings that could do with encouragement to their owners to live there and to refurbish such buildings. This is a very worthwhile initiative.

In respect of cigarettes, I note the Bill provides for an increase of 10 cent per packet of 20 cigarettes. Were Members to be serious about dealing with smoking, they should be considering a higher charge per cigarette packet. Obviously, I can make this point as a non-smoker but I acknowledge that others may feel differently. Nevertheless, it is known that smoking-related illnesses account for many of the reasons people find themselves in hospitals. A new graphic photograph is being placed on cigarette packets to discourage younger people who may be starting to pick up the habit in an effort to put them off. I have been approached by the National Federation of Retail Newsagents in Ireland, as well as other retailers, regarding this issue. In particular, its president, Joe Sweeney, has informed me that the federation's members are greatly concerned about a new European tobacco products directive, which provides for the oversized graphic image. In addition, it proposes that from henceforth, the cigarettes will be in plain packaging. This is of major concern to the federation and is a blow to struggling retailers who are concerned that as a consequence, the issue of the black market, which already is massive-----

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