Dáil debates

Wednesday, 3 November 2021

Finance Bill 2021: Second Stage

 

4:32 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein) | Oireachtas source

As we begin discussing the Finance Bill tonight, I am deeply disappointed, to say the least, that the Government is going to miss the deadline once again to do what is right by the families in Donegal and elsewhere who are suffering as a result of no regulation or light-touch regulation. Their houses are crumbling around them. The extended deadline, 9 November, is now going to be missed by the Cabinet because it has not got its act together. That is not acceptable to the many families who are in mental turmoil waiting for the Government to do the right thing. It is not on.

Agus é sin ráite, cuirim fáilte roimh an deis labhairt ar an Bhille Airgeadais 2021 anocht. Bhí an cháinaisnéis againn trí seachtaine ó shin. Theip ar an cháinaisnéis seo cosaint a thabhairt do ghnáthdhaoine ón méadú ó thaobh costas maireachtála agus ó na harduithe ó thaobh costas fuinnimh atáimid uilig ag feiceáil. Tugann an Bille seo seasamh dlíthiúil don cháinaisnéis seo, cé chomh holc is atá na teipeanna seo. Tugann an Bille faoiseamh cánach do thiarnaí talún ach níl faic ann do thionóntaí. Tá pacáiste cánach ioncaim anseo ach tá sé níos fearr dóibh siúd atá ar bharr an dréimire ná dóibh atá ar a lár. Teipeann ar an Bhille seo deireadh a chur leis na buntáistí cánacha a dtugtar do na creach-chistí atá ag ardú costais thithíochta agus costais chíosa anseo sa chathair agus níos faide as an bhaile. Tig linn i bhfad níos fearr a dhéanamh ná an Bille seo atá os ár gcomhair.

I welcome the opportunity to speak on Second Stage of the Finance Bill 2021. On my way here I was reflecting on the fact that this legislation is being considered and scrutinised in circumstances that are very different from those that obtained when we were here last year dealing with the Finance Bill 2020. The latter Bill was introduced on the eve of very stringent public health measures in response to the pandemic. Thanks to the resilience of our people, the dedication of all our healthcare staff and the success of the vaccination programme, we are in a different place, although it is somewhat worrying.

On that subject, I want to begin by drawing attention to section 67, which will extend the EWSS in a graduated form until the end of April 2022. This is a measure that Sinn Féin proposed and supports. Indeed, throughout the pandemic we have been constructive in our approach, arguing for necessary measures to protect incomes and support employment, and we have supported the Government when it provided these. However, we also hold the Government to account when and where it is failing, which is all too often. The recent budget, delivered just three weeks ago, is a case in point in that it fails to respond to the difficulties and challenges faced by ordinary people.

With rising prices and a spike in the cost of energy, workers and families need support and protection this winter – a winter that will be difficult for many of them.

In recent months, there have been more than 30 energy price rises which are expected to increase the average annual household bill by up to €500. In the 12 months to September, energy prices rose by 22%, electricity by 21%, gas by 14% and home heating oil by a whopping 46%. These prices will increase further in the months ahead, putting significant pressure on the finances of low- and middle-income households. The Bill could have responded to these challenges by giving workers and families supports in the form of providing for an immediate cut to their energy bills. Other European governments are trying to do so and some of them have succeeded. In Spain, VAT on electricity was slashed, reducing prices by 10%. In recent weeks, the Czech finance minister wrote to the Commissioner for Economy, seeking authorisation to zero rate VAT for household energy bills. In my view, there is no reason why this Government should not stretch every sinew to give struggling households a helping hand this winter, either through a VAT reduction or a rebate. Sinn Féin would immediately engage with the Commission to remove VAT on domestic energy bills for a three-month period this winter, reducing the cost of lighting and heating one's home by 12% for low- and middle-income households. That is what this Government should do. I encourage the Minister to do what some other European ministers have been trying to do, that is, to engage with the Commission to secure this objective.

The Bill comes amid a wider cost-of-living crisis, with prices rising more than 5% in the past 12 months for workers and families, the biggest annual price hike in 20 years. The Central Bank expects prices to rise by another 3% in 2022, further eating into the purchasing power of households. Budget 2022 and the Finance Bill needed to respond to the cost of living crisis but they did not do so. Increases in core social welfare rates failed to keep pace with the rise in prices, while the centrepiece of the budget and the Bill is a tax package that is untargeted and an irresponsible use of limited resources. Section 6 of the Bill proposes to increase the standard rate band by €1,500, with a €50 increase for each of the personal employee and earned income tax credits. The change to the standard rate band comes at great cost but it will provide no benefit whatsoever to the 80% of taxpayers who fall below it. That is the measure that is before the House. Overall, this tax package will produce €2 a week for a worker on a salary of €30,000 but will benefit the Minister, his colleagues and higher earners by €415 a year.

While the Bill provides tax reliefs for those on high incomes and even further tax relief to landlords through section 16, it offers absolutely nothing - zilch - for renters. Rents have risen to astronomical levels, yet the Government published and passed three months ago legislation that allows landlords currently to increase rents by another whopping 5%. Sinn Féin in government would have pursued a different agenda. We have been calling on the Government to follow that agenda - one that is fair and puts renters first, not landlords. That agenda involves introducing a refundable tax credit equivalent to one months' rent that would be put back into the pockets of renters and then a ban on rent increases for three years, which would effectively reduce and freeze rents. That is the action that is needed. It is what Sinn Féin would do if we had the opportunity to be in government. However, under Fine Gael and Fianna Fáil the deck is stacked against renters and struggling home buyers.

There is no provision in the Bill to end the speculation on or financialisation of housing that is driving up rents, locking workers and families out of home ownership and allowing the bulk purchase of homes by investment funds. Why would Fianna Fáil and Fine Gael stop it? The Minister agrees with it. His predecessors rolled out the red carpet for these cuckoo funds and vulture funds. This is Fine Gael policy. It is at its core and in its DNA. This is how it thinks it will solve this issue but we know the consequences of this policy - high house prices that are reaching the madness of the peaks of the Celtic tiger era, the highest rents in this city of any European city and numbers of which any Minister sitting at Cabinet for one year, never mind ten years such as the Minister across the floor, should be ashamed. However, that is the reality. That is what has been done and what will be maintained under the Bill. We in Sinn Féin would end that. We would apply the full rate of capital gains tax, just like any other business has to pay, on the disposal of property by investment funds. We would apply a 17% stamp duty surcharge on purchases of all homes, including apartments, by these funds and hike up the rate of tax paid on dividends to 33%.

The Bill contains a new measure announced by the Minister in his budget speech. He referenced it again today. It is the introduction of a residential zoned land tax in section 76 and related sections. The stated purpose of this tax is to encourage the activisation of zoned and serviced residential development land. While the failed vacant site levy was set at a rate of 7%, this new measure by the Minister will involve that being reduced to a rate of 3% of the land's market value and it will only apply by 2024. The Minister bravely tells us that he makes no apologies for that. I welcome that the tax will be administered by Revenue to ensure effective enforcement. Sinn Féin has been calling for that for some time in the context of the vacant site levy. The vacant site levy was, at least, 7%, though Fianna Fáil argued it should have gone up to 14% and Sinn Féin believes it should have been increased to 15%, but the Minister, in his wisdom, has reduced it to 3%. That is wrong. The Minister should have reformed the vacant site levy and brought it into the fold of the Revenue Commissioners. It is now left as an abject Fine Gael failure. I look forward to engaging with the Minister at the Committee on Finance, Public Expenditure and Reform, and Taoiseach, as we always do, and scrutinising the detail and operation of this proposed tax.

Disappointingly, the Minister and the Bill have again failed to implement a tax that Sinn Féin has been calling for since 2016, that is, a vacant property tax to end the scourge of dereliction and vacancy and to put much-needed homes into use. The Government has ignored it. It has refused and delayed the introduction of a vacant property tax for many years at great cost.

There are many other provisions in the Bill, some of which I welcome, such as measures to incentivise improved energy. Other provisions require further scrutiny at committee and I and the other committee members will do that. However, the impulse of the Government is wrong. Despite the need for a more responsive and active State, the Government has made clear that it is unwilling to make the decisions, particularly in respect of taxation, that would provide for the change people demand and deserve.

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