Róisín Shortall (Dublin North West, Social Democrats) | Oireachtas source

On the help-to-buy scheme, I never thought it was a good idea and I certainly do not think so at this point. It appears to show a misunderstanding of the problem at the root of the cost of housing and the unaffordability of housing. That problem is the cost of land and the failure of successive Governments to address this issue. They have allowed widespread land hoarding to continue and, in so doing, allowed developers to control the cost of land and, therefore, housing. This subsidy approach is absolutely wrong. A subsidy fuels the cost of housing and contributes to house price inflation. We would be better off spending the money used for this subsidy. Rather than putting it into the pockets of developers, we should use it for a proper affordable housing scheme.

We know that claims to date have amounted to €271.4 million. As of last September, roughly 21% of help-to-buy scheme claims were for properties priced at over €375,000. This suggests people with incomes in the region of €100,000 and I am not sure that is what we should be doing in providing housing subsidies. The scheme undoubtedly benefits higher income households. We would be better off scrapping the scheme and putting the money into building affordable housing.

The cycle-to-work scheme is a good scheme but there are flaws in it. I have no idea why we need to increase the upper limit for the cost of bicycles. It seems excessive. There was an understanding we would move away from variable tax-based schemes and that tax relief would be provided at the standard rate. It is a two-tier approach to providing support to people and militates against those on lower incomes who are paying a 20% tax rate.

Sections 10 and 11 deal with carry-back rules for income tax relief for the self-employed as well as corporation tax losses. Like many other parts of the July stimulus, these measures are not sector-specific, which means they are less effective at targeting businesses specifically impacted by Covid. There is a question of whether business viability outside of the Covid context will be taken into consideration with tax loss relief.

I will raise some technical issues, particularly in relation to the temporary wage subsidy scheme. Revenue proposed to implement the scheme by means of a new PRSI class. If this happens, apart from significant difficulties in implementation, it would continue to mark or identify an employee's payslip when viewed by banks or other third parties. This would cause damage and disadvantage to an employee. The Payroll Software Developers Association is providing an alternative way of processing the payroll and I would like the Minister for Finance, Deputy Donohoe, to indicate whether he is open to considering its proposal.

3 o’clock

I want to point out a particular flaw in the wage subsidy scheme. The subsidy zones are banded such that there is no subsidy provided to employees who are earning less than €151.50. This means that a person earning €150 per week gets no subsidy at all. This creates an incentive for an employer to increases people's hours to bring them up to a wage of €152 per week, in which case they will get back €151.50. There will be significant pressure on employers to increase some people's hours and that may well be done to the disadvantage of other workers, who will lose hours as a result. I ask the Minister to examine the banding under the scheme because employers will undoubtedly be tempted to pay nobody less than the threshold of €151.50.

Regarding employer's PRSI, there is potential for substantial savings and, therefore, substantial losses to the Social Insurance Fund. The Bill is not specific in this regard and it is important that the Minister should provide some information on it. I am not sure it is a good approach to take, especially considering that employer's PRSI in this country is very much out of line with what applies in the rest of Europe. This provision potentially represents a big disadvantage and we need clarification on it.

I am not at all in favour of cutting the VAT rates. It is a very expensive measure to take and it is also a blunt instrument. The decision to cut the standard VAT rate from 23% to 21% will do very little to help anybody. This rate applies to high-end goods and a lot of imported goods and, as such, it is not what we are looking for. The cost of the change, at €400 million, could be much better spent on targeted supports for people in the most affected sectors. The provision is regrettable and I ask the Minister to consider it again.

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