Dáil debates

Tuesday, 25 October 2022

Finance Bill 2022: Second Stage

 

7:10 pm

Photo of Peter FitzpatrickPeter Fitzpatrick (Louth, Independent) | Oireachtas source

The Finance Bill, which gives effect to some of the measures arising from the recent budget, is being considered in a number of particular contexts, including the cost-of-living crisis and electricity supply crisis. This year, a huge increase in the cost of energy is an additional cost for those who are already struggling to get by. Even before the recent spike in inflation, Ireland was the one of the most expensive countries in the EU in which to live. Our housing costs are the highest in the EU while the price of goods and services is 40% higher than the average across the EU. Generally speaking, the budget was welcomed by most people and businesses. In my speech on budget day, I acknowledged the Government's efforts to improve the circumstances of the public and the business community.

I wish to raise a number of items specifically relating to sections 84, 86 and 88 of the Bill. First and foremost, section 88 makes provision for the €1.25 billion temporary business energy support scheme, which was originally planned to cover just case I businesses, such as those involved in trade such as shops, hotels and restaurants. I welcome the announcement that the Finance Bill will extend this scope to cover case II businesses also. The fund aims to help mainly small businesses, covering up to 40% of the increase in energy bills, up to €10,000 per month until February. However, the Government has also decided that where a business operates from more than one location, the cap will be increased to a maximum of €30,000 per month. This is good news for some, but not for all. Although these measures are welcome, there are serious concerns being brought to me by businesses in Dundalk that are experiencing sky-rocketing electricity bills. The issue with the new energy support is that it only runs until February, and that date is even subject to EU approval. We are ending our energy support in February and then increasing VAT to 13.5% on the hospitality sector on 1 March. Are we trying to close businesses? This is disappointing and does not give certainty to business owners, especially if they have a hard winter.

Ireland Active; the representative body for leisure centres, gyms, swimming pools and commercial sports facilities in Ireland has stated that the cost of heating pools is resulting in very high bills. In Dundalk alone there are three leisure centres. On top of this, we have some of the biggest call centres that, during Covid, complied with the remote working model. Now, many employees who have been working from home since the pandemic are weighing up their options coming into winter. Many consider it more costly to work from home with the price of oil and gas on the rise, and are considering returning to the office. This is going to cause a lot of problems for the businesses. Some are experiencing a 300% to 400% increase in utility costs. This is going to cause lay-offs in businesses.

When the temporary business energy support scheme is found not to help that much, there will be serious problems. I agree that the electricity measures have provided relief for many households but the hospitality sector is again suffering. This shows the Government is out of touch with hardworking business owners who, after surviving the Covid crisis, are now being crippled by the cost of living. This is the main message I am getting from people in my constituency.

Homelessness is at record levels. People are queuing on the streets for a room. They are being priced out of buying a home and they are paying nearly half their wages in rent. The housing crisis is felt in every part of the country. In my constituency of Louth and in east Meath, there is a severe housing shortage and spiralling rental costs. The latest figures from Daft.ie show the cost of renting in Louth has risen by more than 8% in the past year, with the average rent now at €1,420. Letting agencies have painted a devastating picture of the current rental market, with the shortage of supply hitting people of all ages and walks of life. In Louth and east Meath, the rental crisis is catastrophic, with thousands of people viewing a handful of homes.

I have raised the issue of vacant homes numerous times in the House. I welcome section 84 of the Bill, which introduces a vacant homes tax in order to increase the supply of homes for rent or purchase. The provision will, I hope, encourage the owners of long-term vacant properties that are habitable and are subject to local property tax to bring them back into use. However, it will not apply to derelict or uninhabitable properties. In this time of crisis, we must ensure all houses are fully utilised.

Section 86 introduces provision for a defective concrete product levy, with the intention of raising revenue to contribute towards mica reliefs. Although section 5 extends and enhances the help-to-buy relief for a further two years, this levy will penalise young people trying to build or buy their first home, as well as local authorities trying to build social housing. The burden of the new levy is likely to fall on the residents of new-build homes rather than on the building industry. The Society of Chartered Surveyors Ireland calculates it will add approximately €4,000 to the cost of an average three-bedroom semi-detached house. We need to assess fully the cost implications of this new levy and how it will affect the most vulnerable in our society. As I have mentioned previously, it will have an all-encompassing effect on our economy, including on construction and housing, infrastructure and right across the board to our farming industry.

The Finance Bill and budget are two sides of the same coin. The real test will be their ability to have an impact on people's lives. There are many aspects of the Bill that we must praise. The increase in tax credits, the increase in inclusivity and other aspects need to be acknowledged. However, we are entering into a very volatile period in respect of living costs. The Bill has been neither future-proofed nor rural-proofed. The cost of most items is rising far too quickly. The cost of building homes is increasing swiftly. The cost of lighting and heating homes is rising rapidly. Any benefits people will get from this Bill and the budget will quickly be absorbed by those rising costs. I fear the real danger will be inflation. It is important that the Government recognises this and takes whatever action needs to be taken.

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