Eoghan Murphy (Dublin South East, Fine Gael) | Oireachtas source

I welcome the Finance Bill and the measures in it and congratulate the Minister, Deputy Noonan, on his work. I wish to touch on some issues I raised in pre-budget submissions to the Minister, so he will be familiar with them. On income taxation in general, it is good to see that taxes on work are beginning to come down in a number of areas. These reductions are necessary at this point in the economic cycle, if we are to continue to increase productivity and jobs. The result will be more taxes coming through to Revenue and more money to spend in the public good. It is important that we are doing that.

I would caution against maintaining the discrimination imposed on high earners through the USC. It is counter-productive to economic growth and it is also unfair given that these earners pay a far greater proportion of their income in tax compared to other workers in Ireland and to high earners in other jurisdictions. I hope we can quickly come to a point where nobody's marginal rate of taxation is above 50% because it is far too high. I am very glad we have made a commitment to do this if we are re-elected.

It is equally important that we finally move to tax equality for the self-employed versus PAYE workers. We made the first step in that direction in this budget and, if we are re-elected, I hope we can achieve it in one more budget rather than spreading it out over two or three. It comes back to what earlier speakers have said about bad taxes driving out good money. Wealth creation is a good thing. We should create as much wealth as we can in order to distribute it in a fair way towards the public good. That should be our motivation as we look forward, hopefully, to another term in government and a fiscal course for the coming years.

A number of measures were considered when it came to lower income earners. I would have liked to have seen a reduction in the VAT rate, either alongside or instead of measures introduced in the Finance Bill. It might have been introduced instead of taking people out of the USC tax net altogether, for example. In the matter of disposable income on lower salaries, a change in VAT could have a proportionally greater impact on people's lives. I hope we can consider that in the future.

When it comes to capital acquisitions tax - some people call it the death tax and others know it as the inheritance tax - the change in the threshold was very welcome but it needs to be increased even more. Looking at other OECD countries, Norway and Sweden do not have any inheritance tax at all and the threshold entry point in the UK is much higher than ours. I would like to see that threshold increase, or to see us moving, like Germany, to a more progressive system of inheritance taxation. Theirs is a different system altogether and some would argue it is fairer. The way in which we collect this tax and the time we give to do so also needs to be examined. The tax is levied within the first six months and people do not necessarily have the means to pay it without disposing of the asset and yet it might not be possible to dispose of the asset to pay the tax.

I will speak further about incentivising investment in small companies when we come to the Credit Guarantee (Amendment) Bill later this afternoon. Peer-to-peer financing is now an established mechanism here. I have raised it a number of times in the Dáil over the past few years. It is an alternative funding model for small businesses and an alternative saving and investment market for small lenders. We need to consider what the UK is doing to encourage this new financing market. There, they encourage lenders by including interest earned in tax break schemes, and encourage borrowers by topping up successful loans with Government money. The UK has seen this type of financing grow exponentially in the past three years. It is much better for the small saver who wants to earn a higher rate of return and put their money to more productive use. It is much better for the borrower who wants to avoid incurring some of the costs associated with bank lending, which might not always be open to them. I hope we can follow suit in this regard. There are other measures I would like to see us copy from the UK but I will come to them at another time. The peer-to-peer financing measures that have been adopted are proven; they do work and there is no reason we cannot implement them.

Land use in Dublin is a very important issue. We need to incentivise more efficient land use. One issue that was put to me recently is under-occupation of homes, in particular family homes. There may no longer be a need for a family home of a large size, or it may be too expensive for the couple to maintain the house. At the same time, we have lots of young families looking for affordable homes who cannot find them. If we could incentivise the market for trading down, for a couple in a large house moving into a smaller home or apartment, it would be a good thing. Perhaps we could do it by exempting people from stamp duty when trading down. Criteria would have to be put in place to make sure the exemption was not abused. It might help bring about more efficient use of land in Dublin.

We also have a significant amount of vacant space above commercial premises in Dublin. It can be seen on any main street in the city and in our urban villages. We can incentivise above-the-shop living, which is closer to the norm in other European cities. The quickest way to achieve that is through tax reliefs. It needs to be considered now, particularly in the context of the current crisis. Collaboration with Dublin City Council would be needed because the regulation and red tape when it comes to changing the use of above-shop spaces - factors like access, minimum size and standards - must be examined. There is now a form of hyper-regulation of these standards which is not the case in other European cities. We have all been to other European cities, either through work or personal travel, and they do not have the kind of restrictions on accommodation conversion that we have in Dublin.

It would have been beneficial if I could have brought these issues to an independent budget oversight office separate from the Department of Finance and had them costed, debated and maybe even recommended by an independent budget committee. It is welcome that the Minister is committed to an independent budget oversight office. The sooner we get it off the ground the better. It must be accompanied by some sort of standing, year-round budgetary scrutiny committee separate from the Joint Committee on Finance, Public Expenditure and Reform, which has a much wider remit and focus. We could then debate individual measures once we had them costed and perhaps bring them forward as recommendations. I would also like to see the Irish Fiscal Advisory Council reporting directly to such a committee to give it greater independence from the Government and also to give the Dáil greater power.

The Minister is aware of my tax transparency website, taxtransparency.iebecause I have shown it to him. It is now up and running for the 2016 budget figures. Anyone can have their income tax calculated and get a breakdown in simple euros and cents of how that money is spent by Government Departments. The UK and the US do it. The Department of Public Expenditure and Reform, the Revenue Commissioners and the Comptroller and Auditor General support it. The Department of Finance should now support and introduce it.

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