Dáil debates

Tuesday, 21 March 2023

Finance Bill 2023: Second Stage

 

7:05 pm

Photo of Marian HarkinMarian Harkin (Sligo-Leitrim, Independent) | Oireachtas source

This Bill, I presume, is seen as a further response to the continuing cost-of-living crisis. In 2022, inflation stood at over 8% and is expected to be well over 7% this year. It may increase further, an issue I will come back to later. That amounts to 15% in total, which makes a significant difference to families, individuals and businesses. Food inflation is even higher, at 16.3% year-on-year, and is now at a 15-year high. That means that a couple of baskets of groceries costing €78 this day last year would cost €90.71 this year. We are seeing fuel inflation running at record levels and families and businesses struggling.

The Bill has a number of positive aspects which I support. Equally, there are serious gaps which I will highlight. I see it as a strength and not a weakness to amend and improve the Finance Bill. Nobody is perfect, no decision is perfect and context means everything. In that context, this is a positive move. It was clear from the beginning that TBESS would not work. Very few businesses availed of it. The changes the Minister has announced are very important and will make a real difference. Many business owners who contacted me in recent months could not avail of the scheme. The extension of TBESS to May 2023 is important, as is the decision to amend the threshold for the average increase in the per unit cost of electricity from 50% to 30% to qualify for the scheme. That is positive for many businesses, as is the fact that the change will be applied retrospectively.

The Minister is also raising the cap from €10,000 to €15,000 for a single business, and from €30,000 to €45,000 for a business with multiple premises, from 1 March. As I said, businesses will appreciate and welcome this, but I have one small concern. I have not had time to read the Bill in detail, but the Minister stated earlier that “the Bill provides for a new time limit for making claims under the scheme, which will be two months from the end of the specified period rather than four months from the end of the claim period to which the claim relates.” If, however, a person wanted to claim back to September, two months later would bring us to the end of October, so a further four months would bring us to the end of February, but that was three weeks ago. If that is the case, businesses will need more flexibility given that, for a start, many of them will not even be aware of these changes. If they have to claim back to September, therefore, some of them will miss out on this. As I said, I am simply quoting from the Minister's contribution and perhaps my interpretation of what he said is not correct, but if it is, I think he will need to look again at the number of months permitted from the end of the claim period to which the claim relates.

It is deeply disappointing the Minister is still considering a separate scheme only for businesses that use oil and liquefied petroleum gas, LPG. He told us the Minister for Enterprise, Trade and Employment is "exploring options”, but it is way too late. The costs are hitting businesses hard now and I think the Minister, Deputy McGrath, will agree we need immediate action. It is too late for Ministers to be exploring options.

The Minister told us earlier about the phased restoration of the rates of excise duty on petrol, diesel and marked gas. By 31 October this year, there will a 5 cent per litre increase in the rate for marked gas and oil, a 16 cent increase per litre for diesel and a 21 cent increase in the equivalent rate for petrol. That will hit the transport sector hard and it will be a body blow to motorists and road hauliers. Not only will it hit those sectors hard, however, but it will drive inflation higher. Earlier, I said the expected inflation rate was about 7.5%, but because of these increases that will feed into higher costs for transport and so on, the price of every type of good that is transported will increase, which means the inflation rate for food will be higher and the expected rate of inflation will definitely increase. I would have thought the purpose of this Bill was not so much to decrease the rate of inflation, given I am not sure the Minister can do that since it is the job of the ECB, but certainly not to add to it. I honestly believe, however, that those changes will add to the cost of inflation, which means we are likely to see further rate increases from the ECB if inflation keeps rising, a point I will return to when I talk about mortgage holders.

I was pleased to see the continuation of the 9% VAT rate for the hospitality and tourism sector. While there is no doubt there has been evidence of price gouging, as we saw in Dublin last weekend, huge numbers are employed in that sector in the regions, where it is one of the most important sectors after agriculture. Small restaurants, cafés and family hotels make a huge difference to the local economy, so from that perspective, I was glad to see the Minister held that rate at 9%.

The gaping hole in this legislation is the fact there is no reference to housing. Every one of us in this House will be able to recognise we are in the middle of a housing crisis. Nobody will deny that. I supported a Sinn Féin motion a few weeks ago that looked for a targeted mortgage interest relief measure. It was a modest measure that would make a real difference to some mortgage holders, who have seen six rate increases by the ECB. Arising from those increases, they see similar increases in their mortgage repayments. We are looking at increases of somewhere between €300 and €500 per month in mortgage repayments for many householders, the same people who are dealing with the unprecedented inflation rates in food, fuel, goods and services. The Bill was an opportunity to assist certain mortgage holders, most especially those whose mortgages were sold to vulture funds, who are now paying mortgage interest rates of up to 9%. In fact, I heard to an economist yesterday saying some mortgage holders whose mortgages had been sold to vulture funds could find themselves paying mortgage interest rates in double digits. I come from a generation that remembers double-digit interest rates for mortgages, but I never thought I would see them again. Whether or not that comes to pass, and whether they will be 9.5% or 10.5% as the year goes on, I cannot say, but it is highly likely some mortgage holders will find themselves paying mortgage interest rates in double digits, and we know the significant pressure that will put on those people as they struggle with increasing inflation. The Bill was an opportunity to help some of those mortgage holders in a targeted, limited way but it has been missed. As I said, Sinn Féin put forward a proposal, and while the Government did not have to take it, it could have devised a proposal itself that would have targeted those most in need, and I am disappointed that is not in the Bill.

Of course, all anybody is talking about today is the fact that if the eviction ban is lifted, many families, individuals, children, people with disabilities, people who are ill and many others - there is a long list but I will not go through it - will find themselves looking for emergency accommodation in the near future, and many counties have little or no emergency accommodation. The reason I say they will be looking for emergency accommodation and will not be able to get a place to rent, whether an apartment, a house or whatever, is that before I came to the Chamber, I checked, as did some other Deputies, how many rental properties, according to Daft.ie, are available right now to rent in the constituency I represent. In the entire county of Roscommon, there are 13 properties to rent, while in Sligo, there are 21. In Donegal, a large county, there are 57, and in Leitrim, four properties are available to rent. If the lifting of the eviction ban goes ahead, where are people in Leitrim, Sligo, Roscommon and Donegal going to go? Where are they going to find rental accommodation? This is a real crisis and for some people, it will become a real emergency.

I proposed, with some of my colleagues, that we extend the eviction ban to June 2024 to give the Government a chance to build and refurbish homes, and not have winter evictions this time next year. Accompanying that, the suggestion I made was that there would be a similar relaxation of the requirements for planning permission to refurbish existing buildings or new temporary buildings, that is, modular homes, as already exists for providing accommodation for Ukrainian refugees.

If public authorities and local authorities could refurbish derelict or empty buildings and install modular homes for the next 15 months without having to seek planning permission, significant numbers of homes could come on stream. That is what is important. It is what really matters. It would mean more homes would be available for families. There has been relaxation in the planning laws in the context of providing accommodation for Ukrainian refugees. The Government needs to consider doing likewise in the context of providing accommodation for everybody who needs it. That would make a big difference to the numbers. I believe it makes sense. If I am wrong, the Minister is free to tell me so.

In the context of the Bill, a tax package to entice landlords to stay in the market would be welcome. Corporate landlords enjoy a very favourable tax rate but small incidental landlords pay the full rate of tax. They have offsets but they pay the full rate of tax thereafter. I have spoken to landlords. There is a worry that more of them will leave the market. A tax incentive should be extended to encourage them to stay in the market and all the stops should be pulled out on everything else, including the planning requirements in the specific areas of public authorities and refurbished or modular houses. If the planning requirements in that regard are relaxed, it will bring more houses on stream and the pressure will ease and a Government might find itself in a position to lift an eviction ban knowing there was enough supply, or a reasonable amount thereof, in the market for people to be able to rent homes, rather than the current situation where there are currently four properties for rent in County Leitrim and 21 in County Sligo.

There are good proposals in the Bill but there are also glaring gaps. The real gap is housing and, because of that, I am disappointed with the Bill overall.

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