Thomas Pringle (Donegal South West, Independent) | Oireachtas source

I wish to share time with Deputy Higgins.

The Bill has to be viewed in the context of the overall budgetary adjustment under which €3.5 billion is being removed from the economy this year and the significant impact this will have on citizens daily lives. It also has to be viewed in the context of the changes to social welfare benefits under which farm assist payments have been reduced, which is having a severe impact on rural communities. Farm assist is being adjusted for recipients across the country and they are experiencing significant reductions in their weekly payments. The inclusion of Sunday working in the assessment of applications for jobseeker's benefit and jobseeker's allowance will also have a significant impact.

Fine Gael has constantly said that it will not increase income tax but, in the Budget Statement last December, the Minister announced the abolition of the PRSI threshold, which is for all intents and purposes an increase in tax because PRSI is part of the tax take out of people's weekly salaries. Fine Gael's claim that it is not increasing taxation is, therefore, a fallacy and it should be seen for what it is.

The Government parties budgetary strategy is wrong and it cannot deliver the return to growth they intend. No stimulus is included in any of the provisions. Previous speakers referred to SMEs providing 70%of the country's employment but I wonder how many are involved in research and development and how many have the capital to have a corporation tax liability that would allow them to benefit from the measures in the legislation. I imagine there are very few.

Section 8 provides for the taxing of maternity benefit. When this is considered in the context of the proposal by the Minister for Social Protection to remove the universal child benefit payment, it can be seen as an attack on women. The taxing of maternity benefit is a mean spirited provision and I oppose the section on that basis.

Section 5 provides for the threshold for the time key employees must be involved in research and development to be reduced from 75% to 50%. That is lauded as one of the provisions that will help SMEs to increase employment but there is no provision to prevent large multinationals from availing of this tax break. This should be included to ensure the provision is directed at SMEs, which have a research and development aspect to their work. It should be pitched in a way that does not allow large companies to benefit from it and to piggyback the change.

The Labour Party has made much play on the increases in the DIRT and capital gains tax rates describing them as taxes on wealth. While wealthy people will be affected by the increases, many small savers and others who are not high net worth individuals will be affected. This could hardly be described as a wealth tax on their small savings. Where people get small inheritances, the capital gains tax increases will impact on them. This cannot be stated to be a wealth tax, as it is a general tax that targets everybody.

Section 97 provides that where property is held by a trustee on behalf of somebody subject to a personal insolvency arrangement, the tax on rental income will be levied on the person. The tax should be deduced from the rental income paid to the trustee and not levied on the person who is insolvent. If somebody is subject to a personal insolvency arrangement, the fact he or she does not have control over the property and is not benefiting from the rental income means he or she should be liable for tax on the rental income. If the section does not provide for this, it should be amended to ensure the tax will be collected on the rental income paid to the trustee who would be required to pay it on behalf of the person who is insolvent.

One measure I welcome is the extension of the fuel rebate to coach and bus operators. This should provide a small benefit and an incentive to such companies to continue in business.

The Minister should have rebalanced excise duty on alcohol. Earlier today, a publican told me he pays approximately €160, including excise duty and VAT, for a keg of beer but can buy the equivalent quantity of beer in cans in a supermarket for €90. This does not make sense, particularly in light of the harm alcohol causes in communities. Alcohol abuse is predominately caused by off-sales. The position should be rebalanced by increasing taxation on off-sales and reducing it on the pub trade in order that people can drink in a safe environment. The Cabinet is due to sign off on an alcohol Bill in the coming days, if it has not done so already, and should use this legislation to address the issue I raise.

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