Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I welcome the amendment, which is a result of an amendment tabled by Deputy Burton on Committee Stage and will expand the scheme to local government properties. It is probably regrettable that we are in a situation whereby an amendment like this has to be proposed. I will support the amendment, but it should not be the norm. The normal practice is that if houses are owned by local authorities, the work should be carried out by them. As a result of inadequate funding across local authorities, essential works are not being carried out.

I am sure we have all visited houses where windows have to be replaced, cornflake boxes are used to try to fill gaps and stop drafts coming in, doors are leaking or chimneys are cracked. Local authorities, because of a lack of resources, cannot carry out work. Individuals are forced to turn to credit unions, moneylenders or other financial institutions to take out loans in order to carry out work.

This amendment would allow them to have the VAT returned or a tax rebate, but only in certain circumstances. We all know some rent for local authority housing is based on people's level of income. This scheme is very much based on one's taxable income. Some people do not have a taxable income. Despite the amendment, they would carry out work on State properties but because of their level of taxable income they would not be able to avail of the scheme. That goes to the heart of one of the problems with the scheme. I mentioned this problem on Committee Stage and I am disappointed the Government has not come forward with an amendment to deal with the matter.

I ask the Minister to give us some indication that his Department will examine the facts I put on the record on Committee Stage in terms of the very low uptake of the scheme over the past three years in many counties outside of large urban areas. I cited the examples of Monaghan, my county of Donegal and many other counties - the Minister provided me with a list of relevant counties in response to a parliamentary question. Over a three-year period, 200 or 300 properties have availed of the scheme. The issue is the threshold. Another issue is something the Minister pointed out, namely, the fact it relies on taxable income. Counties where people earn very low wages mean that the taxable income may not be worthy of eligibility for the scheme.

There is need for a review of the scheme in light of the statistics, rather than whether it should be extended for another two years or so. We need to examine why there has not been sufficient uptake in many counties compared to other areas. A commitment from the Government to deal with that issue in terms of the threshold and the fact that it is based on taxable income is required.

For instance, although two people could get the same contractor and carry out the same work, if one does not pay tax because his income is so low and his tax credits cover his liability, he will not get a benefit from the State, but his neighbour, who has a larger income, will. There is an unfairness in that. The Minister can argue that it is a tax rebate but the reality is that the person on the low income would be paying tax through VAT on the products, which is what this scheme is supposed to be about. There is an issue here, particularly in terms of the thresholds. While people may know that they can roll this up, when carrying out work, they will think about the immediate work to be carried out, whether it is the replacing of windows at a cost of €2,000 or €1,500, and they will not think that next year they might be doing something else and that it will all add up and so they may decide to go with a contractor that may not be registered for VAT. As the Minister stated in his opening remarks, one of the reasons for the scheme is to try to bring those on the black market into a registered system where everyone is paying the appropriate taxation.

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