Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

Gabhaim buíochas leis an Leas-Cheann Comhairle agus leis an Aire as an mBille seo a chur faoi bhráid na Dála. Ar ndóigh táimid anseo chun plé a dhéanamh ar Bhille Airgeadais 2021 de chuid an Rialtais agus is mór an trua é, i ndáiríre, nach bhfuil fís ann nó nach bhfuil sé ag déanamh tada do ghnáthdhaoine atá ag streachailt lá i ndiaidh lae ag iarraidh a gcuid billí a íoc ach, ar an taobh eile de, tá sé ag cabhrú leo siúd a bhfuil an t-airgead acu cheana féin. We are here to discuss the Bill, which outlines the taxation measures arising from budget 2022. In some ways, it is a surprise that we are already back dealing with the Finance Bill. The past year seems to have gone by very quickly. The Bill includes measures arising from the transposition of the EU anti-tax avoidance directive. Some of these measures were delayed in the Finance Act 2020 and previous Finance Acts. A glaring example of that is the interest rate limitation. Nevertheless, I wish to speak on some of the more pertinent issues as they apply to ordinary people and I will also touch on other measures that are absent from the Bill. I will try to do so by discussing these measures in the context of housing, the cost of living and the business environment.

As the Minister is aware, housing continues to be the issue of our day. It is the issue that never goes stale - the problems are simply fresher than ever. This budget is just a continuation of the kind of measures that helped to bring us to this point. What is included? There is an extension of the help-to-buy scheme. This scheme was criticised by the Minister, Deputy McGrath, while he was in opposition as being inflationary in terms of housing prices. The reality is that he was not alone in holding that view; it was also the view of the Economic and Social Research Institute, the Parliamentary Budget Office and the National Competitiveness and Productivity Council. The scheme has proven to be inflationary but it is still with us and I do not understand why that is the case. I suppose that, like the shared equity scheme, it suits some people but really negatively impacts the majority.

As regards landlords, section 16 amends section 97A of the Taxes Consolidation Act 1997 to extend until the end of 2024 the provision which allows tax relief for landlords for pre-letting expenses in the case of properties that have been vacant for a period of 12 months before they are first let. If you surveyed renters and asked them what they most wanted to see in budget 2022, a tax break for landlords would probably not have been high on their list of priorities.

They are struggling week after week and month after month to pay their rents. In our clinics, and I am sure it is the same for the Minister, we often hear tenants saying that they are being evicted because of the supposed desire of the landlord to sell the property. Often, we hear that some minor renovations are done and then the property is rented out again at a much higher rate. Landlords can claim deductions against rental income from the expenses that are incurred. Therefore, in a way, the Minister has created a perverse incentive for them to do this, if they think they can get away with it. Unfortunately, the reality is that sometimes they do. I am not saying that it is always the case, but the reality is that it does happen.

To be clear, Sinn Féin would not have implemented this measure. Some of the large landlords have done well over the last few years, particularly when we consider that we have the highest rents in Europe. We would have introduced a refundable tax credit for renters equivalent to one month's rent and banned rent increases for a period of three years, effectively reducing rents and then freezing them. At least the Minister warned us in relation to what we all knew was going to happen, namely, that there was going to be a rise in inflation. The European Central Bank had stated that when things opened up there was going to be a rise in inflation. I think it is a bit of a pity that the Minister's colleague, the Minister for Housing, Local Government and Heritage, did not appear to be aware of this. It must not have come up at the Cabinet table, as he introduced rent control measures linked to the harmonised indices of consumer prices. Now, it looks like he will be amending that again, as it should have been. What we need to do is to freeze and reduce rents.

Section 77 of the Bill introduces the new residential zoned land tax. It will apply to land which is serviced and zoned for residential development in circumstances where the land has not been used for the development of housing. The new tax will apply to the market value of the zoned residential land at an initial rate of 3%. Remarkably, that is lower than the vacant site levy, which is set at 7%. I must say that I welcome the fact that Revenue will now be collecting this tax rather than the councils; it is something that we have long been advocating for. Like the Leas-Cheann Comhairle, I am from Galway city. If the Minister were to go to Galway city, he would see how plagued we are with vacant sites. What we need is strong action. The fact remains that the Minister intends to have a two-year lead time, and the new tax will apply in 2024 where the residential land is zoned after 2022. That is unbelievable. The reality is that the can is being kicked down the road. We have a housing crisis and a vacant site crisis, which must be dealt with immediately.

I also note that the new tax will be paid on a self-assessment basis. The valuation date for the purposes of establishing the market value will be 1 February for the relevant year. There is a requirement to revalue the land for each successive three-year period thereafter. Price inflation for residential zoned land is running at around 4% this year. The Minister has set the tax rate below the rate of inflation and once a landowner makes a self-assessment of the value, he or she does not have to do so again for another three years. I think that is beyond the realm of the ridiculous.

Of course, there are no measures included in the Bill to stop the financialisation of housing. We would end the great sell-off by ending the tax advantages which have been given to investment funds against the interests of hard-pressed renters and home buyers. We would apply the full rate of capital gains tax on the disposal of property by investment funds, apply a 17% stamp duty surcharge on the purchase of all homes, including apartments, by investment funds, and increase the rate of dividend witholding tax on property investment funds to 33%. The reality is that while this Government remains in place, a house will not be a home, it will be an asset class - something for speculation, concerned with yields, dividends and capital appreciation.

With regard to the cost of living, we have seen energy prices continue to spike. We know, from the CSO, that energy prices rose by 22% in the 12-month period to September 2021. Electricity prices rose by 21%, gas prices rose by 14% and the price of home heating oil went up by 46%. The carbon tax has also been hiked further. Let us hope that there are no blackouts this winter because of all the data centres that have been built over the last few years. We need to help reduce energy prices, not increase them. There should have been no hike in carbon tax by the Government in the budget, because the reality is that many people are struggling to pay at this moment in time and they are going to struggle even further.

In respect of the business environment, I note there is an income tax break in the Bill for foreign aviation staff, so long as the company they work for has a place of management here, which is good news for these workers because, of course, there was not much joy for domestic aviation workers during the pandemic.

With regard to the bank levy, I note that section 57 of the new Bill will result a reduction in revenues. What seems to be the case is that the Minister is reducing revenues by exempting KBC Bank Ireland and Ulster Bank from the levy, as they are now heading for the exit. Why he is doing this is, frankly, beyond me. These banks have enjoyed an oligopolistic market with little competition and now they are exempted from this levy. That is like a nice parting gift for them.

I am looking forward to Committee Stage. It is quite an interesting time. There will be some issues that I look forward to teasing out with the Minister. I note that the Bill contains a provision for a 50% relief in excise duty for non-EU small breweries. That amounts to a tax break for non-EU producers of alcohol. We know that Irish small breweries tend to be more labour-intensive than their large multinational competitors. I would be interested to tease out why the Minister is extending this tax break to their non-EU competitors. Will it not harm the domestic industry, while also increasing tax foregone?

Chun é seo a chríochnú, is mór an trua é nach bhfuil fís níos fearr sa Bhille seo do ghnáthdhaoine. I do not think it will deliver the transformative change that we need. I think it is largely business as usual, but I look forward to Committee Stage, to going through all the different amendments that will be brought and to have a proper discussion and engagement on it.

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