Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I appreciate the opportunity to contribute to the debate. The Bill gives legislative effect to the budget. The budget was primarily based upon the VAT increase in the hospitality industry from 9% to 13.5%. According to the Minister for Finance, it will yield in the region of €466 million. It is possible that revenue from tourism will drop as a consequence of this measure. I am conscious we voted on this on budget night but this measure may be counterproductive because since the measure was introduced in 2011, 65,000 jobs have been generated in the hospitality sector. The revenue generated in this sector has increased by more than €2 billion. I question the wisdom of it. Recently at a breakfast briefing in my constituency in Mullingar an example was given of a cafe owner who has four staff and a turnover of €200,000 per annum. As a result of the VAT increase and the increase in the minimum wage, the cafe owner will have to find an additional €10,000 in 2019. That is €10,000 on a turnover of €200,000. It is a lot of money. It calls into question the long-term viability of a business like that. It is not only about that cafe owner; it is also about the small bed and breakfasts or hairdressers who were protesting earlier. Some bed and breakfasts only operate seasonally. They open from March to October and close for the winter months. I am thinking about service industries that are located outside of Dublin and the tourists hotspots. What fed into this was the fact that hotel rates in Dublin are high and hotels in Dublin are doing fine. As a result of that, the hospitality industry the length and breadth of this country seemed to be flying. It was a flawed analysis. I hope I am wrong but I think the measure will be counterproductive and will put a lot of pressure on the hospitality sector outside of the main tourist areas. The Minister whose job it is to protect the hospitality sector and the tourist industry, Deputy Ross, failed at Cabinet. He came in here two days after the budget, gave three and a half minutes of huff and bluster and blamed everybody for why he could not maintain the 9% VAT rate. He blamed the industry for standing up for itself. The cheek of an industry standing up and advocating on behalf of its members. I remind the Minister, Deputy Ross, that in August this year he contributed to the hysteria in the silly season, during a time of slow news, when he was out advocating that the hotel industry was milking the system. In that article he said that those large hotels would be penalised. He could not demonstrate what he meant by a large hotel and he tried to reassure the restaurants, small hotels, bed and breakfasts that all would be okay because he was going to protect them in the budget. Perhaps if he focused more on his own portfolio at the time of the negotiations instead of looking for his granny grant, or his split the house in two grant, he might have had more success. The Minister of State, Deputy Moran, spoke on my local radio station and seemed to blame us on this side of the House. He said it was our fault and that the four musketeers in the Independent Alliance had tried their best but failed. He said we gave no advantage. Given the fact we abstained on the budget, we were a major assistance to this Government. We abstained and the Government now pursues its own revenue generating measures.

I understand from departmental officials that they are not adverse to a satellite account being set up to record exactly what the tourism industry contributes on an annual basis.

That should have been done first to see what contribution tourism makes on an annual basis in order that we could have a true analysis of the economic activity, which would have been far better. On the €35 million increase that was secured, the Minister of State must engage with the sector and look at the regions that will be most adversely affected as a result of this VAT hike.

Another sneaky measure that will have a huge impact on tourism in the regions has been included in the Bill. I refer to the provision in section 36 regarding vehicle registration tax, VRT. This proposed measure could have a huge impact on the tourism industry. There has been no consultation or information on how it could potentially damage the rural tourism industry, which, as already stated, is reeling from the impact of the increase in the VAT rate. As Deputies know, this VRT has been available to the car rental industry since 1993 and the mechanism is based on a refund of the VAT payable on the VRT element of the car price in order to broadly maintain parity with the pre-1993 tax position. The relief amounts to an average of between €600 and €700 per car. According to the industry, 50% of the car hire fleet in Ireland is enabled through the existing mechanism and that there is a real threat to the industry should it be removed.

My main concern with the proposed changes relates to the areas outside Dublin city, Galway and Cork. When tourists come to Ireland and stay in guest houses, whether they be in Connemara, Kenmare, Longford, Mullingar or other areas in which there is not a huge network of public transport, almost all of them travel in hire cars. The Wild Atlantic Way is a great initiative, which must be acknowledged and commended, but how do people tend to travel along it? They fly into the country and then hire cars and use bikes. The introduction of this measure will add further cost for tourists who visit the regions. Internationally, proposed price hikes and our inability to manage capacity will make the rental industry extremely uncompetitive. One of the reasons or excuses given by the Department of Finance for the introduction of this measure is that section 39, which relates to the free movement of vehicles, is expected to minimise the impact of section 36. However, section 39 is not expected to take effect until next July and there is no guarantee that the scenarios outlined in it will transpire, particularly in light of the uncertainty of what will happen in the aftermath of Brexit in March. Section 39 states that there will be free movement of goods, meaning that we can satisfy our pent-up demand for additional cars through imports from European countries. I am sure the Minister of State and his officials are aware that there are only two other European countries, namely, the UK and Cyprus, in which people drive on the same side of the road as their Irish counterparts. With the UK leaving the EU, we will be unable to import from it. Will it be viable to import from Cyprus? I do not think so. I request that, at a minimum, what is proposed should be deferred and that consultations be entered into with the industry in order to ensure that there are no unintended consequences and that the hospitality and tourism sectors, which have felt the real brunt of the measures of this budget, will not be obliged to endure a further tax hike.

I also wish to focus on the proposed 100% increase in the betting tax. I am not a gambler and I could count on two hands the number of times I have placed bets each year. I do not even play the lotto. It is not out of any love for gambling, therefore, that I speak on this matter, but I acknowledge that there are people who gamble as a past-time in a structured and ordinary manner without any problem. There are also people with gambling addictions and, as is the case with those who are addicted to alcohol, those additions need to be addressed. What is proposed in the Bill, however, is a doubling of the betting tax on turnover. It is not on profits but rather on turnover. This is extremely unfair and it runs the risk of being counterproductive. It reduces rather than doubles the revenue intake because there is a real possibility that the proposal will ensure that some betting shops will be obliged to close. Commenting on this proposal, Professor Anthony Foley stated that the overall negative Exchequer impact on the closure of 400 bookmakers could be approximately €35 million, while the losses to the Exchequer will be in excess of the gain from the increase from 1% to 2%. He also indicated that if gross margins could be so easily achieved without adverse business consequences, the industry would have already done so in order that it could operate on higher gross margins, and would have avoided many of the previous closures of some 400 shops with the possible loss of 3,168 direct and indirect jobs. This matter needs to be revisited. If the Government wants to get money from the gambling industry, surely there are other mechanisms by means of which we should be able to realise the desired revenue without potential job losses.

One revenue-generating measure the Government has failed to introduce relates to the tolling of foreign trucks in Ireland. Approximately 15,500 heavy goods vehicles trucks are registered here, while there are approximately 7,500 in Northern Ireland. Every time these trucks go abroad, they pay a tolling charge of €10 per day. When foreign trucks come into this country, however, there is no tolling charge. I am not saying my figures are 100% accurate, but the industry informs me that the loss to the Exchequer from this is in the region of €20 million. Perhaps this matter could be examined.

Section 99A of the Finance Act 1999, inserted by section 51 of the Finance Act 2013, provides for the repayment to qualifying road haulage operators and passengers that are in the diesel rebate scheme. There is a serious problem with the rebate scheme, which, due to the way it is structured, does not encourage people to register and go through the administrative process because they get only a 1 cent return. Belgium's excise duty is similar to that which applies in Ireland but its average diesel rebate was 13.8 cent in 2016 and 17.3 cent in 2017, while in Ireland the rebate was nil and under 1 cent in 2016 and 2017, respectively. If we take an imaginative approach, there is an opportunity to consider amending existing legislation and examine the position regarding the number of Irish trucks whose owners are "tank tourists", as I think they are called, whereby they fuel up abroad. That type of behaviour leads to a loss of revenue for this country. If we amend how our rebate system is structured, rather than lose all the trucks that go abroad, we could gain because the foreign trucks that come to Ireland would be able to benefit. This would be a way of regaining some of the money that is lost through illegal and illegitimate fuelling.

I understand that the Government proposes to vote against our Bill on illicit goods, another area that should be tackled which would bring in much-needed revenue. The Minister for Transport, Tourism and Sport, Deputy Shane Ross, failed in his duty by not ensuring these measures were introduced to ensure a level playing field with the haulage industry at a critical time as Brexit approaches.

Another area badly neglected was climate change. There was an awful announcement today in my region of the midlands with job losses in Bord na Móna. I was frankly astonished to hear the Minister, Deputy Flanagan, on "Six One" this evening, saying that the stakeholders must come together. They should have been working on this months ago. It is not something that has happened at the last minute, like a multinational pulling out with only 12 hours notice. This has been worked on for months. The fact that a comprehensive package has not been put in place in advance is nothing short of scandalous. However, we cannot ignore that climate change is a reality. Some in this House are insular and have no concern for what is happening in the developing world and the loss of innocent life because of climate change, but we only need to look at what has happened in our own country in the last 12 months and the extremes of weather from 4 ft or 5 ft of snow to hurricanes, floods and a prolonged period of hot weather causing drought. Why was this not addressed in the budget? In August this year, the Taoiseach acknowledged the need for a carbon tax but again there was no political will to commence that process. That was shameful. The reason we need to look at carbon tax is that in recent years the Government has failed to introduce measures to encourage people to consider renewables. We still have no guidelines for solar farms and in wind farms we are still working on the outdated guidelines of 2006. The retrofitting of houses is too slow and inadequately funded. I know of a lady in Athlone who cannot qualify for the fuel allowance because she is €7 over the limit, and as a result she cannot qualify to have her house retrofitted. It is absolutely crazy stuff. Only this year, the benefit in kind was extended by three years for electric vehicles to give some level of certainty. I asked for that last year. There are not enough charge points. On budget day, the Minister, Deputy Donohoe, made a virtue of the fact that we will have no more diesel buses from July 2019. I have put down a parliamentary question asking how many more diesel buses we will have in advance of July 2019. I predict it will be a significant number, and those buses will continue to operate for many years, in excess of a decade.

We have had no meaningful increase in the area of cycling as an alternative form of public transport, particularly in large urban areas. I recently visited Amsterdam as part of a delegation to see how it embraces alternative transport. Some 65% of citizens in the city of Amsterdam travel to work by bike where they have a commute of less than 20 minutes. Think of what that does for congestion and for the environment.

I will finish my remarks on the health budget. It does not relate directly to the Finance Act but the fact that it was necessary to introduce a supplementary budget for health is a disgrace. The mismanagement in the Department of Health, or maybe more accurately the HSE, is a disgrace. We cannot continue to pump money into it without greater efficiencies and greater value for money.

I wish to make a particular note on mental health. Two or three days after the budget, I attended a third level protest in Athlone Institute of Technology. There is no dedicated ring-fenced budget for third level institutions. At a critical time in a young adult's life, we must provide the necessary mental health services in our third level institutions. We have seen an increase in the allocation to that area as a result of the confidence and supply arrangement. When our contributions are examined, I ask that it be made known to the relevant officials that third level institutions there must have adequate services for those who are dealing with mental health issues.

I am very conscious that I speak here with my hands somewhat tied behind my back because we are facilitating an arrangement. In the context of that arrangement, I hope the Government takes on board some of the suggestions that I have made. I am not coming here looking for additional expenditure without showing where additional generation measures could be introduced, and in a manner that would not cost jobs or place an extra burden on people's pockets.

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