Wednesday, 6 November 2013
Finance (No. 2) Bill 2013: Second Stage (Resumed)
There is much to be positive about in this Bill. It is a Bill which, in my opinion, has job creation at its centre. I want to take this opportunity to identify some aspects of the Bill where improvements may be made to the efficacy of certain provisions contained therein. I would be hopeful the Minister for Finance will be positively disposed to accepting some of these propositions, many of which I argue are logical, cost-free and make sense.
The Living Cities initiative, to which Deputy McLellan referred, is an excellent and potentially very progressive scheme. I note the Bill covers Cork, Dublin, Galway and Kilkenny in terms of this element of the pilot phase. Originally, as I understand it, it also covered Limerick and Waterford. I am assuming the take-up was quite positive.
The Chair will forgive me for being shamelessly parochial for a moment but, given the Minister has included Kilkenny in the extended scheme, I do not believe there is any good reason that he cannot also include two even larger urban areas, namely, Drogheda, my own home town, and Dundalk. I do not believe any town in Ireland can claim to have been bypassed by the ravages of the recent economic collapse but no town in central Ireland can boast the equivalent historic and, arguably, the architectural merit of Drogheda, an ancient medieval city. I have been a long-standing advocate of the regeneration of the historic and commercial heart of Drogheda. Opportunities were missed in the good times to provide the kind of incentives we are now offering to encourage living urban spaces, living over the shop and so on. As the Minister acknowledges through this initiative, we need vibrant and sustainable town centres that do not close at 6 p.m. or 7 p.m. but remain dynamic, vibrant and family-friendly, 24 hours a day, seven days a week. I urge the Minister to make provision in the Bill for the inclusion of towns such as Drogheda and Dundalk, the two largest towns in the State.
There has been much debate in regard to the provision in the Bill in respect of the change to the single parent tax credit. I must admit to having some concerns in terms of how this will be applied and some of the damage that may be done. I note the Minister announced this morning that he will be making some changes on Committee Stage to elements of the provision, which will be helpful to some but, I would argue, will not be helpful to quite a large cohort of individuals who will be affected.
As a case in point, a situation which has been drawn to my own attention by a constituent, and which I have reflected on at some length, involves the following. The man is a separated father of a teenage child, with joint custody and guardianship rights, where the caring duties are shared evenly by both the mother and the father. His former wife is considered formally by the State to be the child's primary carer and she receives the child benefit payment, which is understandable. Under the current system they both enjoy a tax credit as parents whose relationship has ended and they both have the legal responsibilities that I outlined. Under the provision contained in the Bill, he will lose the tax credit while his ex-partner, who earns a multiple of his salary, will continue to receive a credit, even though the costs of parenting and rearing the child are in many ways shared equally by both parents.
This is a difficult situation for anybody to accept. It is my firm opinion that a better way should be found through the tax code to provide equal supports, in so far as is practicable, to both parents who have legally binding caring duties for their child or children. The House may be familiar with a proposal by One Family, a long-standing organisation working with those who are parenting alone. It has argued for the introduction of what it terms a shared child support credit. This could be considered with an associated adjustment to the tax band to reflect the equal cost and the parity of parenting under circumstances where the family and parents are subject to written child support agreements. This would be a much more sustainable and fairer way of reforming the system as it currently stands.
I am pleased, on foot of the Minister's statement this morning in his Second Stage speech, that he has accepted the logic of aligning the relief of the long-term unemployed with the 12-month eligibility period for the back to work enterprise allowance. This is a logical step. I am glad he will address this anomaly because I was wondering aloud as to why there was a three-month disparity in terms of those who could take up this relief for the long-term unemployed, so this is a very positive step.
As the House knows, some 20% of our long-term unemployed were formerly employed in the building sector.
The argument has been made that until such time as significant numbers of construction workers return to sustainable employment, we will continue to have a stark and distressing unemployment problem. We are, however, making serious inroads into addressing that matter.
The provision to allow for a VAT rebate in respect of home improvements is both eye-catching and practical and will ensure that construction workers return to employment. It will also incentivise people to spend moneys which they may have on deposit with their banks. This will assist in getting the economy to move further in the right direction. A key component of the Government's energy strategy and its jobs strategy is to promote and incentivise the retrofitting of homes and other properties. This will have the effect of getting people back to work and of ensuring that buildings are much more energy efficient. It would be short-sighted and would betray the notion of joined-up government if we failed to integrate energy efficiency measures into this package. We are all happy to provide some assistance to the construction industry and to ensure that those previously employed in that industry return to work. However, we must also be mindful of the need to incorporate requirements relating to energy efficiency into the Bill. To that end, the tax rebate should also involve a requirement to improve all-round energy efficiency in homes which benefit from the rebate. In this regard, I refer to projects involving the spending of €10,000 or more.
There should be an onus on homeowners to prove that work has been undertaken in order to improve the BER ratings of their properties. This is a matter on which the Bill is currently silent. We must ensure that the good work of the Minister for Communications, Energy and Natural Resources and his colleagues in government in respect of promoting energy efficiency is aligned with the intentions and actions of the Minister for Finance and his Department. While I accept that the Minister for Finance may be reluctant to be overly restrictive in terms of the application of the relief in the context of who may or may not qualify, there is a strong case for the inclusion of an obligation in this regard in the Bill for those who wish to take advantage of this very eye-catching and positive incentive.