John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I welcome the chance to make a few points on the Finance Bill. I commend the Minister on his efforts over the past five and a half years. At the height of the recession, the budget deficit was well in excess of €20 billion. This year, with favourable economic winds, I hope it will be virtually wiped out completely. This is through the stewardship of the Minister and the efforts of the people. It represents a phenomenal turnaround in the economic underpinning of our society. It is a by-product of the fact that the unemployment rate continues to fall. The rate has fallen to well below 8%, having peaked at well over 15%. Many people who had to leave Ireland in the height of the recession are now considering the possibility of returning. All of these are positive indicators. Some of the economic difficulties experienced now, particularly in respect of housing, are associated with our having had some success in recent years.

I, too, welcome the changes in the budget regarding taxation, particularly the reduction the Minister announced to DIRT, albeit small and staged. To my mind, our capital taxes remain largely too high. It is possibly time to consider offering people an opportunity to save for the future a little more, and that is why I believe the DIRT reduction is important. With regard to the universal social charge, whether temporary or not, our income tax system has too many moving parts. The universal social charge did replace a number of levies that brought in substantial amounts of money, even in advance of the crash. Some consideration is being given to changing our PRSI system because our contributions, both from employees and employers, are lower than in most other comparable European countries. Perhaps if changes are ultimately to be made involving the complete phasing out of the universal social charge, they might be on the PRSI side also.

Deputy D'Arcy mentioned social protection increases. Changes affecting child care deserve a special mention. They do not apply to me but perhaps they will in the future. This is the first time a Government has made a serious effort to address the significant child care costs faced by families with two working parents. While many people might not qualify initially because the thresholds are high, at least a path has been laid out for proper provision for meeting the cost of child care in the future.

I am a little tired of many members of the Opposition and some of the previous speakers quoting statements to the effect that the wealthiest should pay the most. Any comparative analysis of the Irish income tax system shows overwhelmingly that the people who earn more pay significantly more, as it should be. It is as if some people who view politics through a different economic prism than me just ignore the facts in the belief that the wealthy do not pay anything. The vast majority of our income tax revenue is from the highest earners. That is borne out in any analysis by the OECD and others, including the budget scrutiny committee. Professor Barrett of the ESRI and others stated quite clearly that the Irish taxation and welfare systems are the most progressive in the European Union. One of the witnesses said they are the most "redistributive". This is a fact that is often not mentioned.

I wish to make a case for a particular group whose plight has been brought to my attention. I have had some discussions with the Minister over the years on mortgage interest relief and the changes that were announced to commence at the end of 2012. I refer to a category of people who were building their own homes and who had been gifted sites prior to 2012. They might have drawn down some of their loans prior to the end of that year and subsequently drew down the remainder in 2013 and perhaps later. They have not benefited from the maximum impact of mortgage interest relief. It was an anomaly, particularly for those in receipt of gifts of sites, usually family members of people involved in the agriculture business. I suspect a very small number of people were affected but I do not have the overall figure. I hope that, on Committee and Report Stages, the Minister will be in a position to ensure the difficulty faced by this small group, which is very severely disadvantaged by what has occurred, will be addressed.

What has occurred goes against the spirit of what the Minister was trying to do at the time but it is one of those things that can happen when finance Bills and taxation changes are introduced. The pitch should be levelled. The money foregone by many of the individuals, couples and families affected is very significant. I urge the Minister to address this. I will be submitting an amendment so the rules may be adjusted to ensure those people building their own houses on having received the gift of a site will be catered for in the same way as people who purchased a site. As I understand it, that is the difference between the two categories and it gave rise to this anomaly. I hope that, before the Finance Bill is completed, the anomaly will be corrected.

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