Alan Farrell (Dublin Fingal, Fine Gael) | Oireachtas source

I very much appreciate the opportunity to participate in the debate on the Bill, which facilitates a range of significant and important changes to our taxation in a number of key areas. I want to take this opportunity to congratulate the Minister, Deputy McGrath, on his first budget as Minister for Finance. He has stepped out of the Chamber but I am sure the Minister of State, Deputy Calleary, will pass it on. At its core, budget 2024 will result in people throughout the island of Ireland keeping more of their own hard-earned money. This has been a core goal of Fine Gael in successive budgets and in successive governments. It is all the more important at a time when people are feeling the effects of the cost-of-living crisis.

In addition to a wide range of one-off payments, electricity credits and increasing core payments, as well as increases in payments through a range of supports, which I have previously discussed in the House, there are important tax changes that will also help individuals and families to better manage their own money by giving it back to them. Notably, changes to the income tax regime will mean people will keep more of their money at the end of the month. These changes will see the entrance to the higher rate of income tax at 40% rise to €42,000 per annum, an increase of €2,000. I particularly want to note that this is the tenth budget in row in which we have been able to reduce income tax. A decade of income tax cuts would not have happened had it not been for the prudent economic steps that were taken by Fine Gael and our coalition partner.

I want to refer briefly to the previous contributor, who implied on a number of occasions in her speech that inequality and income disparity are due to the taxation system. I remind her that two independent agencies have assessed the most recent budgets, and I believe they assess all budgets, and have stated that Ireland has one of the most progressive taxation systems in the world. In fact, I think we were first in 2021 although the Swedes might have pipped us more recently. We are certainly in the top few. According to the ERSI, we have managed to produce a series of budgets that have reduced income inequality year on year. I am very proud of these facts. It is important this is placed on the record of the House.

In tandem with the changes mentioned there are increases to the PAYE tax credit, which will rise by €100 per person, amounting to €1,875 for an individual and €3,750 for a married couple. As we discuss the nature of work and its value, it is important to address issues such as the universal social charge. I know it is a source of frustration for a great many people in the country. I was pleased to see changes to it included in budget 2024. We will see the 4.5% rate reduced to 4% while the entry rate to the 2% rate will rise by €2,840. This will ensure workers earning the national minimum wage will benefit.

I am very proud to see yet another increase to the minimum wage, which now stands at €12.70 per hour. This is the tenth occasion on which Fine Gael and our coalition partners have increased the national minimum wage since 2011. As I have stated on the record of the House previously, I hope we will also take action to ensure young people earn the same rate as their older colleagues who carry out the same work. This is a point I have made previously. I do not agree or accept that the value of work should see a differential in the minimum wage depending on a person's age. I would like to see this removed. The Minister of State, Deputy Richmond, was in the House earlier speaking about this matter. I certainly hope we will see progress made in the near future.

Notwithstanding the policy and the legislative measures being taken to address this issue of the minimum wage, there are important measures contained in the budget that will support younger people, in particular the inclusion of digs in the renter's tax credit and the increase to the renter's tax credit, which is rising to €750 per renter. There is also significant expansion to the eligibility for this tax credit, with access granted to parents who pay for their child's student rental accommodation, with regard to the rent a room scheme and, as I mentioned, with regard to digs. Notably this will apply to 2024 and 2025 and it is also retrospective to 2022 and 2023. This will mean a significant benefit to families who apply for it. I would like to highlight the relatively low take-up of this tax credit since its introduction in budget 2023. In light of the expanded eligibility and the increased rate of the tax credit, we may have to redouble our efforts to inform people as to its availability. I would like the Department to bear this in mind.

I am particularly pleased to see the extension of the help-to-buy scheme to 2025. This is a vital scheme that helps many people get on the property ladder which, of course, is what we all want to see. The latest figures from Revenue show that in the months from January to September 2023, there were 25,000 applicants to the scheme, which underlines its importance and the need for us in this House to remain committed to it and similar schemes and not to play politics with vital supports when it comes to a major national challenge.

In this context, for people already on the housing ladder, budget 2024 will see mortgage interest relief become available to homeowners with a remaining balance of between €80,000 and €500,000 on 31 December 2023. This will see the amount of relief increased to approximately €1,250 per household. This is yet another measure that will give ordinary people breathing space when they are trying to meet their mortgage payments. However, I would like to highlight the slight moral hazard associated with offering this particular tax credit, especially to tracker mortgage holders who, as we know, have not seen a significant interest rise in well over a decade.

I want to highlight some of the other measures that will be facilitated by the Bill. These include the home carer tax credit rising by €100 to €1,800, an increase of €100 in the single person carer tax credit, and an increase of €200 to the incapacitated child tax credit, which will rise to €3,500. I also want to highlight and support the decision to increase the research and development tax credit from 25% to 30%.

This is something I have long called for. I believe enhanced supports for the research and development sector in Ireland will keep us at the forefront of innovation, job creation and emerging trends in modern businesses, such as medicine and others.

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