Tommy Broughan (Dublin North East, Labour) | Oireachtas source

I am glad of the opportunity to speak on the Finance (No. 2) Bill. This is approximately the twenty-second Finance Bill I have spoken on in this House, probably fewer than the Leas-Cheann Comhairle. Over the years one tends to focus on the tax expenditures. The tax reliefs in this Finance Bill amount to approximately €526 million. The question arises of whether those reliefs are working in the best way for the economy and society. In our EU partner nations it is often estimated that anything from €10 billion to €13 billion in additional funding for national budgets evaporates through tax reliefs and taxes foregone.

There were some positive elements to the budget, particularly the introduction of the home renovation incentive scheme. We should have a major social housing programme for many reasons to do with the property market. In principle, section 5 is welcome. The rationale of tackling the shadow economy is behind that section. Some people still feel, however, that the measure will be a token one because the application of the VAT refund on home renovation projects will be through tax credits over two years rather than a direct grant to the homeowner under the amended section 477B(3)(b) of the Taxes Consolidation Act 1997. The most stringent criticism was made within days of the budget by the distinguished economist Mr. Colm McCarthy. I hope it gives another boost to the construction industry because we need to return to building a sustainable 20,000 to 30,000 homes per year, and all the other construction works that go on in upgrading, repairing and insulating our homes.

The start your own business scheme in section 6 is also very interesting. I wonder if it is to some extent a token measure. Over the past quarter century I have been heavily involved in helping small business start-ups on the north side of Dublin. The scheme proposed in section 6 inserts a new section 472AA into the Taxes Consolidation Act 1997. One wonders whether there will be a significant take-up of the scheme given that to qualify individuals must have been unemployed for at least 15 months. It also includes people in receipt of jobseeker's benefit and potentially those who are working part-time. It may be difficult for people to qualify for that scheme.

I welcome the Living City initiative.

I spoke to our new Dublin City manager, Owen Keegan, and to the Taoiseach on the night of the budget about the state of Upper O'Connell Street. It is unacceptable that we have two major derelict sites there and that some street lighting is not working. We are within two years of the centenary commemoration of the major national event in our recent history. I urge the Minister of State to target this issue, provided he is not sent to Brussels as it is rumoured he may be or asked to campaign in the election for that. I suggest he could focus on restoring O'Connell Street to the majestic condition it was in 25 or 30 years ago.

I also welcome section 38 of the Bill which seeks to address problems in regard to this country's international reputation. Like other Deputies, I believe that the proposal in section 7, which relates to the so-called reform of tax credits for separated parents, is a sneaky and unfair way of increasing income tax to be paid by these citizens. Parents who share caring responsibilities have contacted me in large numbers to express their vehement disgust at the provision which they rightly feel is discriminatory.

The change to relief for medical insurance premiums is also a disgraceful measure. It has been noted that changes to the relief for medical insurance and to the DIRT rate will generate approximately the same amount of tax revenue as the bank and pension levies combined. The health budget has been cut drastically and the fanciful figure of €666 million in savings required was presented by the Minister for Health. At the same time, citizens already struggling to keep paying medical insurance premiums will be badly hit.

The increases in the rate of DIRT and the exit tax on life insurance policies, in sections 23 and 30, further discriminate against older citizens. With these caveats, I agree we need to apply strict cost benefit criteria to all tax reliefs.

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