Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I have submitted many amendments to the Bill. I am wondering why I went through this 274-page document in detail given that the guillotine is looming. I regret that. The Bill should never have been brought out of committee. We should have dealt with the Bill in committee. We have always facilitated the Government in respect of the passage of the legislation. Even when the Government of the time wrecked the country and brought the International Monetary Fund, IMF, here, we facilitated the passage of legislation. This should not have happened. Parts of this legislation need scrutiny.

I am concerned for farmers in my constituency in respect of the residential zoned land tax. I do not see what the Minister has brought forward. When the Minister, Deputy Donohoe, brought this legislation before the committee, I pointed out that there was an issue for farmers. He said there was no such issue but it was clear that there was. When the then Minister, former Deputy Michael McGrath, brought forward an amendment to last year's Finance Bill, I said nothing was going to change and the issue would not be resolved. He thought it was okay but it was not. The Government scrambled before the end of the summer to come up with this as a solution but I do not think it cuts the mustard. We are not even going to get the chance to discuss section 113 because we are only on section 2. There are serious concerns. It does not appear to me that the issue has been resolved. The legislation allows people to apply for a rezone of land and if they apply, they are exempt. Is the Minister telling me that everybody who applies and does not have planning permission on their land will be exempt from this tax, regardless of whether they are farming? Perhaps the Minister can enlighten us on that point. How long does the exemption last? Does it last forever or does it last until a determination is made by the local authority that rezoning is being granted? What the Minister, Deputy Michael McGrath, did last time was to allow them to apply again for rezoning. Why are we not just exempting agricultural land that is in use? That is the most logical thing to do. The thing that should not be done is for this land, which is serviced, to be rezoned. If, for example, the farmer in question passed away and there was no agricultural activity on the land in the next number of years, it should come under a tax. However, for as long as it is being actively used in farming, there should be no whiff of a tax being applied. That is what we pointed out to the Government two years ago and we are still dealing with the issue. As happened with Deputies Donohoe and Michael McGrath, we are going to find there are issues with that section as it relates to farmers. It is a very detailed section that interacts with legislation that amends the Taxes Consolidation Act 1997. We still do not have a consolidated Act, but that is another issue. I am concerned about that issue.

I am also concerned about the issue I raised two years ago with the then Ministers, Deputies Donohoe and Michael McGrath, in respect of the loophole that existed for pensions. People were facilitated two years ago, through a loophole in the legislation, to load the pensions of their children or spouses so that they can get money out of a company, put it into the pension fund of their family members and use the taxation of that to draw down those funds. The first €200,000 is exempt and a rate of only 20% applies to the next €300,000. In fairness, the Revenue Commissioners said there was a problem and the Government has acknowledged that through this amendment. The issue was that it was not linked to the salary of the individual. Somebody could be employed temporarily. This is the situation until this legislation passes. If I own a shop and want to employ my partner, I can pay her the minimum wage and put €2 million from the company into her pension pot. The first €200,000 of that would be tax free and the next €300,000 would be taxed at a rate of €200,000. If I wanted to get that €2 million out of the company by other means, I would have to pay personal tax rates, USC, PRSI, etc., at a rough rate of 50%. That is a big problem. How the Government has dealt with the issue is insufficient. It has linked the amount that can be put into the pension by the employer to the wage. There is still, however, an incentive - and this is what I would have loved to tease out with the Minister on Committee Stage - for that employer to increase the wage of his or her partner in that year. It is not based on an average wage over a period but is based on the specific year. There is an incentive to increase the wage to allow for the money to pass into the pension. The employee will obviously benefit from tax reliefs in terms of pension contributions. The employer will benefit from being able to write off this contribution against his or her corporation tax. There is then the beneficial tax in relation to the first €200,000 lump sum being tax free and the 20% rate for the next €300,000. I do not know if that is deliberate or it is another loophole that the Government has left in the legislation. I am not sure, and we are not going to have time to go through it.

I again question why the Minister continues to provide tax relief for landlords. The standard fund threshold is simply unfair. It is unfair that this amount of money is being provided to people who already have gold-plated pensions. The only people are who benefiting are those who already have a pension pot of €2 million. That is a massive pension pot that no ordinary public sector worker would have a sniff of. The Minister wants not only to increase it to €2.8 million by 2030 but wants to go further. I did the calculations. This is one of the only measures in our tax code that is index linked. Personal tax bands are not index linked. Tax credits that workers get are not index linked. The incapacitated tax credit for people who have children with additional needs and disabilities is not index linked in our tax code. Social welfare rates are not index linked in the Social Welfare Act. However, if you have a pension pot of €2 million, we are going to index link it. We are going to ensure tax relief is available on that pension pot not just up to €2.8 million, which was in the Government's press release. The Minister wants it to go up 3% or 4% every year according to inflation.

On past performances, by 2038 that would be €4 million. Was it Bertie Ahern who said the boom times are getting boomier? Fianna Fáil is definitely back. Landlords, tick; vulture funds, tick; the wealthiest in society with massive pensions, tick. This is just not on. We are not getting a chance to scrutinise this at all.

I have an amendment here on the USC. This is an issue that really affects workers. As I said, we have made a commitment. I do not know what Fianna Fáil is going to do but nobody believes it, because it argued in the past that it would abolish it on everything under €80,000. We are very clear. The amendment is about making sure the average worker never pays the USC again, to make sure that every single worker never pays USC on the first €45,000 they earn. That is what the amendment proposes. I will be pressing that amendment if we have time today.

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