Seán Kenny (Dublin North East, Labour) | Oireachtas source

I will make some brief comments on the Finance Bill which is the legislation that underpins the first budget that takes Ireland firmly from crash back to recovery. This recovery is clear from figures indicating GDP growth of 4.7% in 2014 and 3.9% in 2015. There will be 1.92 million people at work at end of 2014, an increase of 80,000 since the low point in 2012. An additional 48,000 jobs are forecast by end of 2015.

There are a number of positive aspects of the budget that I want to emphasise. In budget 2015, all the levers of the taxsystem, including taxthresholds, bands and rates, have been utilised to target reliefs squarely at low- and middle-income workers and households. With regard to single PAYE workers, for example, a person earning €25,000 will see a 4.6% reduction in his or her total tax bill, including income tax, USC and PRSI. A single person earning €45,000 will see a 3.9% reduction in the bill and a person on €70,000 will see his or her total tax bill reduced by 2.9%. Similarly, a married couple on one income of €25,000 in the PAYE sector will see a reduction of 8.4% in the total tax paid. A similar couple on €45,000 will see a 5% reduction, with a couple on €70,000 receiving a 3.1% reduction in the total tax bill. This is clearly a progressive package of tax measures. More tax is being paid by the highest income earners than at the lower end, and the bottom line is that reliefs have been targeted at low- and middle-income workers. This highlights the Government's commitment to ensuring that low- and middle-income earners and families are prioritised when it comes to feeling the benefit of the emerging recovery in their pockets.

In budget 2015 a relief from deposit interest retention tax, better known as DIRT, for first-time house buyers was announced, which is welcome. This applies to savings used by first-time house buyers towards the deposit on a house. This is to apply to houses bought between October 2014 and 31 December 2017. The refund of DIRT will be for up to four years prior to the purchase date and will apply to the amount of DIRT charged on deposits, up to the value of 20% of the purchase price. For example, if a house costs €200,000, a first-time buyer will be able to claim a refund of DIRT paid on the first €40,000 that he or she had on deposit up to the date of purchase. The refund will be for a period up to four years.

Therefore, if €40,000 was in an account that was to be used to pay a deposit on a house and that account paid 3% interest, that would mean deposit interest retention tax, DIRT, of about €1,600 over four years. Under this refund scheme that €1,600 would be refunded by Revenue to the first-time house buyer.

A total of €808 million is allocated for housing programmes, which is a huge investment and the first step towards serious and significant investment over the next number of years in social housing. I welcome this aspect of the budget in particular - it is of great importance given the housing crisis that is so evident and about which I am approached every day. Local authorities are to provide 946 housing units through direct building and acquisition and 440 housing units will be provided through voluntary housing bodies and co-operatives. Up to 150 new homes will be provided in the community for people with disabilities who are leaving institutional care and 400 new housing units will be provided for people with specific needs. Some €40.4 million will be provided for approximately 7,600 housing adaptation grants for older people and people with disabilities.

Some 1,000 vacant housing units will be refurbished and brought back into use in 2015 and an extra €3 million will be provided for regeneration and remedial works in disadvantaged communities. It is expected that 8,000 households will transfer from rent supplements to the new housing assistance payment and up to 2,000 new transfers are expected under the rental accommodation scheme. I welcome the extension of the home renovation incentive to include rental properties as it will result in better accommodation and living standards in the private rented sector.

Much attention has been paid to the soon to be abolished double-Irish tax scheme. I am glad to see that this scheme is being changed as I believe it did reputational damage to Ireland. It angered overseas governments because it allowed multinational companies to channel untaxed revenues to Irish subsidiary companies, which then paid the money to another company registered in Ireland that is tax resident elsewhere, usually a tax haven such as Bermuda. In short, it was a tax loophole and it needed to be closed.

The 12.5% corporation tax rate, which is a cornerstone of the Government's foreign direct investment strategy, will not change and I welcome this. I also welcome the social welfare improvements announced in budget 2015, such as the beginning of the restoration of the Christmas bonus paid to long-term social welfare recipients. They will receive a 25% bonus this Christmas. In 2015, some €1.97 billion will be paid out for the child benefit allowance with 613,000 families getting an extra €5 per child per month. The living alone allowance for 177,500 pensioners and people with disabilities will be increased to €9 per week.

I commend the Bill to the House. I see it as the beginning of the way forward for an Ireland in recovery.

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