Paschal Donohoe (Dublin Central, Fine Gael)

I want to thank all the Deputies who contributed on this debate. I have stayed for all of Second Stage to hear the different views that have been raised and I look forward to dealing with these matters in more detail on Committee Stage, beginning in two weeks.

I will now deal with some of the different charges and debates around the Finance Bill. As some speakers have recognised, this is the first of five budgets this Government will bring in. This budget aims to lay the foundations through a higher level of investment within our economy that, I believe, will provide the support our economy needs to regain some of the growth and some of the jobs that would have been lost by the very uncertain environment we are now in. When I talk about things like our economy or growth, that has a very human face for me. I am referring to the households that depend on jobs. I am referring to those who use our public services and work in our public services, who need a stable and growing economy from which we can fund those public services and support, particularly, our most vulnerable.

The key feature of this budget is one not particularly referenced within the Finance Bill itself because it is a spending measure. That feature is the degree to which overall investment in our economy has now moved up to over €19 billion per year. That will take effect next year due to the work that has been done in the national development plan. That is, in particular, about providing the investment in our water infrastructure and electricity grid that is essential to allow more homes to be built in the years ahead. I make all those points regarding budget 2026 overall because it influences every single one of the decisions that have been made with regard to taxation in the Finance Bill 2025. The Bill itself contains over €1 billion in tax measures. As has been well documented and debated up to this point, the Bill does not include measures with regard to personal taxation. If our economy remains strong - budget 2026 is part of the investment that is needed to support growth within our economy - it is my intention to bring forward changes on personal taxation as I have done in many, though not all, of the other budgets I have been involved in. I would make the case that it is vital that we stand by a view regarding overall tax changes within our economy being at a certain level. If I was to bring forward all of the measures included in this budget with regard to business taxation and add to those changes in personal taxation as well, that would have brought the overall size of this budget up to around €10.5 billion, if not more. That is simply a budget that would be too big and would pose risks in terms of how we can pay for this in the future. I appreciate that, at a time when the cost of living is still a challenge for so many and I hear, as every other TD in this House does, the challenges people have in getting by, this is a difficult argument for people to accept at a time during which they are worried about the rising cost of living in front of them. However, if we are going to have the ability to continue to help budget by budget and to continue to put in place measures that are permanent, that we can afford and that we can sustain, our budgets overall need to be of a certain size and need to involve us making choices within that. That is the case I have made in bringing forward this budget, and it is the case I will be making even more strongly when we move on to Committee Stage, because the accumulation of many of the different measures I have been called on to do here this evening would mean a lower surplus or maybe no surplus at all, which would then involve using the corporate tax receipts that many speakers have said there could be a risk on over time. I firmly believe that would be the wrong thing to do, given all the risks our country is currently facing.

Regarding the living city initiative, I heard a number of different views on it this evening asking why I expanded it to five different cities and why I did not expand it into other towns, villages and cities across our country. The reason for that is because of the national planning framework. I have now extended it to the next layer of cities where this is seen as being important for their further development, the further economic development of our country and the delivery of more homes. I am trying to ensure that the development of the living city initiative happens in a way that is consistent with our overall national planning framework.

With regard to the VAT reduction on apartments, the only reason I am bringing forward this measure is to allow more homes to be built. Charges have been made here that this is about supporting big developers and it is about adding to profitability. The only reason I am bringing forward this measure is to lead to more homes being built and to try to improve the viability challenge that is most acute around the delivery of apartments. I heard some calls here this evening and some points being made regarding the degree to which this benefits apartments that have already been built. I accept that is a consequence of how this measure has been brought forward. However, it is not possible to have a tax that is consumption based, that is, paid at the point the transaction or purchase happens, and at the same time say we will have a different tax depending on when an apartment is commenced. We cannot do both. That would breach the principle of fiscal neutrality upon which our tax code is structured. I heard a number of colleagues raise the point regarding the application of this VAT measure with regard to approved housing bodies. At the start of this debate, I acknowledged this was an issue and that, as I consider Committee Stage, I would examine whether there were amendments or changes that were possible as regards that particular matter.

With regard to VAT on hospitality, I heard a number of different views. Some Deputies want the change to happen more quickly. It would not be possible to do that and still deliver a budget of the overall size I believe gives us some prospect of the budget being safe and consistent with the framework we published earlier in the year. Bringing it forward in the summer tries to get the balance right.

On the other hand, I heard some Deputies say we should exclude businesses of a certain size and heard particular businesses mentioned as an example of that. VAT law does not allow for the exclusion of businesses based on turnover and the vast majority of businesses in the hospitality sector in our country are small or medium sized. A small number of businesses are large. Some of the businesses quoted during the debate exist on the base of franchises and, therefore, are run by people in their communities. All of these businesses employ people whose jobs I am trying to protect and sustain in the time ahead. There are 150,000 such employees. The hospitality sector continues to be very important in our economy and how we can better support that sector in the future is important at a time when we will bring forward measures to support larger employers.

With regard to larger employers, the research and development tax credit is being approved in order to support innovation in our economy. In turn, that innovation is at the heart of how we can keep the jobs we have in larger employers and create more. That is the final reason I am making changes with regard to the special assignee relief programme, SARP.

I was interested to hear a number of Deputies raise issues regarding deemed disposal and ETFs. It is welcome to hear an issue like this being debated in the Dáil. I did not make a further change on deemed disposal because of the cost involved. It would be a very significant measure. I made other changes to support investment and reduce some of the taxes that people pay in that area. Overall, how we support investment and savings in our economy is an important area that we need to do more on in the time ahead.

That is a quick overview of the different matters raised. I look forward to dealing with them in more detail on Committee Stage.

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