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

I thank my colleague, Deputy O'Keeffe, for sharing time.

I welcome the opportunity to contribute to this debate on Budget 2020. I am very conscious in contributing that I do so with one hand tied behind my back. While we are very much an Opposition party, the budget would not have been passed were it not for the confidence and supply arrangement that currently exists. Were it not for Brexit we would not have facilitated a fourth budget. This has proven to be the correct decision when one looks at the turmoil that exists across the water in the House of Commons, compared to the stability that we have here. That stability has given the space to the Government to be able to go out and negotiate with our European counterparts and with the UK Government.

Yesterday I was at a talk by the Right Honourable Ken Clarke in Dublin Castle who acknowledged the sensible approach being taken by the House of Parliament in Ireland in comparison to the ongoing charade in the House of Commons. While this morning and yesterday there has been reason for a little bit more optimism on Brexit than there was on budget day, even with the DUP putting up some resistance, the fact that the party is continuing to engage with the UK Government and that the UK, Ireland and the EU will work right up until 31 October to achieve a deal, is a good sign. It is imperative for both of our countries that a no-deal Brexit is prevented. When one looks at the figures for 2018, Ireland exported €16 billion worth of goods to the UK, which is 11% of our exports, and imported €20 billion worth of goods from the UK, which is 22% of our imports. The level of trade and interdependence between both countries cannot be underestimated. In saying that, while the mood music has changed, it is important that we continue to prepare for the worst-case scenario as our businesses and companies rely on that.

In that context, I was somewhat concerned about some of the proposals that came from the Minister, Deputy Humphreys, on the business supports. In particular - I raised this the following day in questions to the Minister - there are no grants available to small micro-businesses. The only supports that are available to micro-businesses are repayable grants and loans while larger multinational and larger indigenous firms will be able to avail of grants. It is important to point out that we must be able to support our smaller businesses by way of grants. Putting additional financial burdens on smaller businesses may not be the answer and may not help them overcome a difficult period. I hope a hard Brexit is prevented.

People sometimes forget that, even if a deal is achieved, it will only be the first phase. There will still be many more phases. While there will be a transitional period in which to work out a trade deal, what supports will exist for SMEs? They will still face many challenges under the transitional arrangements.

Albert Einstein once said the definition of insanity is doing the same thing over and over again while expecting a different result. The last Fianna Fáil Government was rightly criticised for over-reliance on transactional taxes, including stamp duty, and for using the yield for current expenditure. The problem was compounded by the international downturn and when the transactional stamp duty dried up, it led to corrective measures being more severe. I fear the current Government is poised to make the same mistake, but this time by over-relying on corporation tax. In 2011, €3.5 billion was taken in, which was 10% of our overall tax receipts. In 2018, the yield increased to €10.4 billion, which is 19% of all tax collected. More worrying, of the €10.4 billion, 45% was from ten multinational companies. This amounted to €4.7 billion from ten international companies in 2018.

What has been very positive in this regard is that both of the main centre ground parties have been consistent in their support of the corporation tax rate of 12.5%. The consistency and certainty have been a foundation stone in attracting foreign direct investment. We will continue to support this but we also need a policy that will attract the key decision-makers among the foreign direct investment companies, the multinationals. We need a policy that ensures the decision-makers of the companies will locate in Ireland. If the decision-makers of a company are here during a downturn, there will be a much better chance of the company weathering it and staying in this economy. In saying that, we need to consider rebalancing our tax base. We need to consider introducing much greater supports for our SMEs. The existing supports are not working. That is not a message coming from me but a message coming loud and clear from the SMEs and their representative bodies. I acknowledge there has been an increase in terms of the tax credit but it is still not on par with the arrangement for PAYE employees, despite there being a commitment to this effect in the programme for Government.

With regard to capital gains tax, the objective is to incentivise entrepreneurs to grow their businesses and to reward risk. Growing business creates additional jobs, which is good for the economy, but our lifetime limit of €1 million is paltry by comparison with the limit in the United Kingdom, which is £10 million. This needs to be addressed. Our research and development regime is laden with red tape. Only 2% of SMEs are availing themselves of the measure in this regard. That also needs to be addressed.

What really needs to be addressed is the high cost of insurance. I do not see the Government doing this with any sense of urgency. Fraud continues to be a major problem, and there are no repercussions. The number of claims paid out is a major problem, and there is no sense of urgency in dealing with it. The lack of transparency is a major problem. Despite a promise to have the national claims database on the record by 2018, we are now approaching 2020 and it still has not been done. Borrowing costs for the SME sector are 65% higher than in the rest of the European Union. That is simply not good enough.

Undoubtedly the commercial property sector will shrug off the rise in stamp duty given that demand is currently strong but I worry that this create a competitiveness issue in the longer term. There have been five changes to commercial stamp duty rates in recent years. This leads to uncertainty. While uncertainty will be accommodated in a buoyant market, it will become a competitiveness issue in the future. This needs to be examined.

The living city initiative was extended in the budget but, funnily enough, there was no funding allocated for the extension. This clearly demonstrates people are not availing of the incentive. It is not working and it needs to be reviewed so that more people will avail of it.

The rebate mooted for hauliers was misleading. It does not do what it says on the tin. This needs to be addressed in the Finance Bill.

The greatest failings of this Government are in health and housing. In the coming weeks, for the fifth time, I will bring a bus of patients to the North for treatment. This is a serious indication of how our health service is failing our citizens, despite the fact that there have been many supplementary health budgets. There could be no more vivid description of the housing issue than the description in this morning's newspapers of a five year old child eating dinner while sitting on cardboard on the streets of Dublin. While the Taoiseach tried to portray a loss of life in Cork as the fault of the victim, surely he could not convince even his hardened right-wing Fine Gael supporters that a five year old is to blame for being homeless. The Government is failing in so many areas. I look forward to the new year, when we will have a general election and the Government's contribution to society will be adjudicated upon by the wider public. I predict and hope it will rightly be issued with its P45.

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