Charles Flanagan (Laois, Fine Gael) | Oireachtas source

A number of questions were asked on a variety of issues contained in the financial resolutions. There having been no adverse comment on Financial Resolution No. 5, I do not intend to say anything further on that because I gather from the silence of Opposition Deputies that they are accepting of it. That reduces the debate to the area of the stamp duty increase of 1.5% and the banking levy.

I will respond first to the comments of Deputy MacSharry, who was ably assisted by Deputies Smith, Troy, Tóibín, Fitzmaurice and Danny Healy-Rae in respect of the stamp duty increase. I assure the Deputies that all of the current reliefs that are in existence for agricultural land will still be available. In respect to the purchase or transfer of agricultural land, I refer to the exemption for young, trained farmers, as mentioned by Deputy Breathnach, the farm consolidation relief, which rural Deputies will be particularly apprised of, in addition to the consanguinity relief, which to my mind will cover many of the instances put forward by the Deputies. In respect of non-residential commercial land, the increase is of the order of 1.5%. That is a stamp duty that was 9% not so long ago.

I will answer Deputy Troy's question by stating that there was an impact assessment. The Department of Finance consistently monitors sectoral elements of the economy and keeps all tax measures under review as appropriate. There was a specific assessment regarding activity in the commercial property sector. The observations were to the effect that the commercial property sector remains positive, with few signs of adverse impact as a result of stamp duty measures introduced in budget 2018. The Department contends that the favourable yield on offer to investors in the Dublin market, the continuing number of planning permissions granted for non-residential units, and the high volume of office space under construction all suggest that the slight increase in the rate of stamp duty would not lead to a significant decrease in investment. I mentioned that the agricultural reliefs are still remain intact. That covers the vast majority of land transfers in the agricultural sector.

Turning to the bank levy, I acknowledge the point raised by Deputy Howlin on behalf of his party, as well as by Deputy Tóibín. Both Members will be familiar with the ongoing debate in this sector. They will also be aware that the Minister considered a number of options, with particular reference to a proposed increase in the levy and that increase would be on a permanent basis. This was the subject of debate here in the House from time to time at parliamentary Question Time and also in more general finance debates. I repeat, however, that it is the view of the Minister and his Department that there are several strong reasons not to increase the yield further and to ensure that it remains at the current €150 million yield. It is important we ensure that the full cost does not fall on consumers through higher interest rates on loans and higher banking fees. Those are outcomes that would result if the yield were higher.

Another valid point is that a substantial increase would also raise the likelihood of a legal challenge to the bank levy. I state that given the fact that, for example, credit unions are currently exempt and do not make payments.

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