Dáil debates

Tuesday, 7 December 2010

Financial Resolution No. 33: Income Tax and Corporation Tax

 

(1) THAT section 234 of the Taxes Consolidation Act 1997 (No. 39 of 1997) be amended, as respects income from a qualifying patent (within the meaning of that section) which is paid to a person on or after 24 November 2010, by inserting the following after subsection (8):

"(9) This section shall not apply to income from a qualifying patent which is paid to a person on or after 24 November 2010.".

(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Financial Resolution No. 24 relates to section 120A of the Taxes Consolidation Act 1997 which provides for an exemption from benefit-in-kind charge for employer-provided child care. The capital cost of the provision of certain free or subsidised child care facilities by employers is exempt from benefit-in-kind charge on the employees that avail of such facilities. This relief was introduced in 1999 to encourage employers to invest in child care facilities and thus increase the overall supply of child care places. At the time of its introduction there was a scarcity of child care places and the costs associated with child care were increasing. The provisions were amended in 2001 to permit a number of smaller employers to come together in the provision of child care facilities. However, the Revenue Commissioners have indicated that in practice only larger employers avail of the relief. The Commission on Taxation in its report recommended the abolition of this exemption citing equity due to the likelihood that only large employers have the ability to make the necessary investments. It is now proposed that this provision be abolished with effect from 1 January 2011. The cost to the employer of providing such a benefit in kind for each individual employee will now be assessed as part of the employee's emoluments for the year and the appropriate taxpayer levies will be collected through the PAYE system. The estimated yield to the Exchequer will be €3 million in 2011 and €6 million in a full year.

Financial Resolution No. 25 relates to section 472C of the Taxes Consolidation Act 1997 which was introduced in 2001 to provide income tax relief for trade union subscriptions for trade union members. The amount of relief at present is €350 at the standard rate of tax which is equivalent to a tax credit of €70. As part of the national recovery plan and with a view to widening the tax base it has been decided that this relief will be abolished for the tax year 2011 and subsequent tax years. The estimated yield to the Exchequer will be €19 million in 2011 and €26 million in a full year.

Financial Resolution No. 26 relates to section 118(5E) of the Taxes Consolidation Act 1997 which provides for an exemption from benefit-in-kind charge where an employer meets the cost of professional fees or subscriptions on behalf of an employee or a director where the membership is relevant to the employment. This exemption is being removed with effect from 1 January 2011. In future, when an employer pays such fees the amount will be treated as a notional pay and PAYE and PRSI shall be deducted accordingly. Details will be published in the finance Bill.

Financial Resolution No. 27 is with regard to section 473 of the Taxes Consolidation Act 1997 which provides for tax relief at the standard rate in respect of rent paid by individuals for private rented accommodation which is their sole or main residence. Rent relief was introduced in 1982 and has been increased a number of times since its introduction. The provisional cost of rent relief in 2008 was €97 million. However, since 2008 rents have fallen considerably. CSO figures for the first ten months of the year show that rents fell by 14.5% in 2009 and a further 5.9% in 2010.

The level of rent qualifying for relief depends on an individual's marital status and age. The maximum tax credit available under the scheme for those over 55 years of age is €1,600 for a married couple and €800 for a single individual and it is €800 and €400 respectively for those under 55. The Commission on Taxation was of the view that in the same way that mortgage interest relief increased the cost of housing, rent relief increases the cost of private residential accommodation. For this reason, the commission recommended that rent relief should be discontinued.

Deputies will recall that in the budget for 2010 the Minister abolished mortgage interest relief for new mortgages taken out after 1 January 2013. Those entitled to that relief at present will retain it until 31 December 2017. It has now been decided to abolish rent relief on a phased basis over the same period. In order to maximise the Exchequer yields from this measure, new claimants will not be able to claim the relief with effect from today. Withdrawal of the relief over this period will be achieved by reducing the amount of rent that can be relieved by 20% in the years 2011 and 2012, with further annual reductions of 10% thereafter until 2018. Based on 2008 provisional figures, the annual yield to the Exchequer for such a phased withdrawal will be €19.4 million in 2011, €38.8 million in 2012 and the yield thereafter will increase annually until 2018 when the relief will be completely withdrawn.

Financial Resolution No. 28 gives statutory effect to the budget announcement that tax relief for certain share option schemes will cease from 24 November 2010, the date of publication of the national recovery plan. Employees who are given options to purchase shares in their employer company at a predetermined price can make a gain when they purchase shares that have increased in value since the option was vented. Such gains are exempt from income tax where the employer company meets certain conditions and receives formal approval for the scheme from the Revenue Commissioners.

The Commission on Taxation was tasked with reviewing all tax expenditure with a view to assessing the economic and social benefits they deliver and to recommend the discontinuation of those that are unjustified on cost benefit grounds. It is recommended that this scheme be discontinued on the basis of the low employee participation rate compared with participation in unapproved share option schemes that do not allow such income tax exemption. The termination of this scheme is also motivated by the requirement to rebalance the public finances and to broaden our tax base. The scheme is estimated to have cost €500,000 in 2009, the most recent year for which estimates are available.

Financial Resolution No. 29 gives statutory effect to the budget announcement terminating the scheme that provides for a single lifetime income tax deduction of up to €6,350 for an employee who purchases shares in his or her employer company where those shares are retained for a period of three years without being sold. The Commission on Taxation recommended that the scheme be discontinued on the basis of the low employee participation rate. The most recent figures are for 2008 when 280 individuals participated at a cost to the Exchequer of €300,000.

Financial Resolution No. 30 gives statutory effect to the budget announcement that the taxation of an employee's emoluments in the form of shares or stocks would be brought within the PAYE collection system. Where an employee does not pay full market value for shares, the shares are treated as perquisites for income tax purposes and taxed at remuneration of the employment. However, unlike other types of remuneration the income tax charged on the value of such shares is paid through the self-assessment system and not through the PAYE system. This resolution brings the payment and collection of income tax and share rewards into the PAYE system and aligns the tax treatment with that of other types of benefits-in-kind received by employees. This measure will not increase the amount of income tax charged but may, depending on when shares are received, result in earlier payment of tax. In the case of employees, the payment of PRSI is linked to whatever remuneration is payable through the PAYE system. In addition, this resolution will bring the share rewards within the charge of PRSI.

Financial Resolution No. 31 is w section 248 of the Taxes Consolidation Act 1997 which was introduced in 1974 to incentivise individuals to invest in Irish companies by giving them tax relief in respect of interest paid on moneys borrowed to purchase an interest in or make a loan to a company. The relief was reviewed by the Department of Finance in 2005 when there was a general review of tax incentives. The findings at the time included that there was little evidence to show that the relief led to increased employment or had any notable effect on economic growth. It was also found that companies benefiting from the relief were not in general operating in sectors being actively supported by the State through Enterprise Ireland and that the majority of those individuals using the relief earned in excess of €200,000.

As a result of this review, the relief was curtailed in the budget for 2006 to exclude relief on interest for loans to acquire shares in certain companies. Despite this change, there has been a lack of evidence which demonstrates a return from this relief in terms of employment and growth. Given the cost of the relief, which was estimated at €48.5 million in 2008, and the need for the income tax base to be widened by the elimination of inefficient reliefs and incentives it has been decided that interest payable on such loans taken out after 7 December 2010 will not qualify for relief.

The relief in respect of interest on existing loans will be phased out. For the tax year 2011 relief will be given in respect of 75% of the interest paid; for the tax year 2012 relief would be given in respect of 50% of the interest paid; for the tax year 2013 relief will be given in respect of 25% of the interest paid; and for the tax year 2014 and subsequent years the relief will be abolished. It should be noted that the Government's commitment to supporting investment in small and medium Irish companies by their owners and other potential investors is not diminished by the winding down of this inefficient and expensive relief. The new business investment targeting employment incentive will employ a better focused scheme of tax relief to incentivise owners and others to invest in small and medium Irish companies.

The estimated yields for the Exchequer will be €12.1 million in 2011; €24.3 million in 2012; €36.4 million in 2013; and €48.5 million in 2014.

The purpose of resolutions Nos. 32 and 33 is to abolish the tax exemption for patent royalty income and the related exemption for distributions made by a company out of exempt patent royalty income. This is provided for in the four year plan and will yield an estimated €50 million in a full year. The measure takes effect from 24 November, the date of publication of the plan. The tax exemption for patent income which is available to Irish resident individuals and companies is provided for in section 234 and 141 of the Tax Consolidation Act 1997. Section 234 provides a tax exemption for royalty in respect of a qualifying patent, subject to an annual limit of €5 million. A qualifying patent is a patent in relation to which all the research, planning and development work leading to the patented invention was carried out in the State or in another country which is part of the European Economic Area.

Section 141 provides a tax exemption, subject to certain restrictions, for distributions made to Irish resident persons from companies' exempt patent income. The relief is being abolished on foot of a recommendation to this effect in the report of the Commission on Taxation, which recommendation the Government has accepted. As part of its terms of reference, the commission was asked to review all the expenditure to determine if the continued operation of the exemptions was justified on cost benefit grounds. The commission concluded that the relief has not resulted to any great extent in companies carrying out research and development activity and that the relief was being used in some cases by companies as a tax avoidance device to remunerate employees. It considered that there was a significant dead weight element to the relief and that it provided a windfall gain after a successful invention rather than an incentive to encourage new research and development. The Government agrees with the conclusions of the commission that available resources should be focused instead on the research and development tax credit scheme. That scheme provides a more direct and effective incentive for enterprises to innovate and invest in research and development activities and the scheme has been enhanced significantly by the Government in recent years for this purpose.

11:00 am

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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I wish to address the issue of the removal of the benefit in kind exemption for employer provided child care. The yield is expected to be approximately €6 million in a full year. Access to and affordability of child care is a major issue as the cost of child care is the equivalent of a second mortgage and more for many families. I know of someone in Dublin who pays €2,400 a month for three children under school-going age. Child care facilities provided by an employer may seem to place employees in an enviable situation but we should consider what the consequences for employees would be of not having access to child care at an affordable price. Often people without affordable child care cannot take up employment opportunities.

Another aspect we should consider is community child care facilities that are scattered throughout the country. I must declare an interest in this area as one of my children is in such a facility. These facilities are subsidised through a tiered system and Deputy O'Donoghue, as a former Minister, can take some credit for the network of such facilities. However, we only have a patchwork arrangement. Some communities are well served with such facilities, while others have no access to child care. We could argue that the optimum provision is where employers provide a facility for their employees.

The expected yield from the removal of the exemption is only €6 million. Rather than remove it, we should be striving to provide a much more comprehensive pre-school child care arrangement at an affordable price. Instead, this proposal dismantles a positive development. I agree that it may only be public service employees or the employees of large corporations who benefit from employer provided child care and that the majority of employees of small companies do not have access to this type of facility. However, that does not mean that affordable child care provision is not laudable or should not be encouraged.

It seems that we have not thought through the issue of the affordability of child care. Given that we are going through a crisis, the Minister has with the stroke of a pen dismantled one of the most innovative provisions in terms of child care and is penalising beneficiaries without having put in place a comprehensive child care programme. This is a retrograde step. In terms of the minuscule amount of money this move will save, the Minister should step back from it.

We should be striving for a nationwide, comprehensive, community not-for-profit provision of child care that was subsidised in a tiered way relative to employment status. In the interim, we should not penalise employers who had the foresight to avail of the incentives that were there to provide a service for employees. In light of the costs involved for child care for young couples, the removal of the exemption is a seriously retrograde step. I appeal to the Minister, in the interest of the children and of the ability of parents to be able to afford to go to work, to revoke this decision. One could argue that subsidised community child care facilities sometimes act as a disincentive for people to take up employment opportunities but in this case we are talking about people who are working and availing of a service that has been provided by employers. Now, in one fell swoop, the Minister will dismantle this progressive service for the sake of a relatively small amount of money.

By its nature, child care affects younger people. These are the same people who are in negative equity and up to their necks in debt with mortgages they cannot afford and in danger of having their houses repossessed. Many of them are also in vulnerable employment situations. They already suffer enough stress, financial and otherwise. I appeal to the Minister not to dismantle what was an innovative provision in terms of child care, all for the sake of a minuscule amount of money in the context of the problems we face.

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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These resolutions deal with the abolition or phasing out of a batch of reliefs, the abolition of most of which were recommended by the Commission on Taxation. In general, the Labour Party agrees with the removal of many of those reliefs, particularly in the circumstances in which we find ourselves. However, I have an issue with regard to the abolition of two of the reliefs. The first is the same one that has been raised by Deputy Creed. I agree with what he has said on that. The abolition of the exemption from benefit in kind for employer provided child care is a mistake. It is a mistake because it will hit a relatively small number of working parents. The provision of child care in places of employment is something that should be encouraged by the State. Working parents must go to considerable expense to provide child care and make child care arrangements. Many parents have to take a child to a child minder, drop another child to school and then get to work on time. The provision of child care in places of employment is the route we should be taking, particularly for very young children.

We should remember that it is not so long ago since we had a problem in this country with regard to maintaining staff in the workforce, particularly working mothers. Some years ago, much emphasis was placed on the measures that needed to be taken in order to provide adequate child care or incentives and supports for working mothers. Employers were encouraged to provide dedicated facilities in places of employment. It is a retrograde and mean step to row back on that provision. Not only is the amount involved, €6 million in a full year, relatively small but I also do not believe it will be realised. If the benefit-in-kind is removed, some employers who currently provide child care facilities may decide to discontinue doing so and the elimination of the arrangement will be the tipping point that causes some people to leave the workforce. As a country, we do not provide much encouragement for working parents, and working mothers in particular, to stay in the workforce. In many cases, child care is subsidised for parents who are not working, and rightly so. This exemption to benefit-in-kind helps parents who are working. It is not a sound argument to claim that only the larger employers offered child care. We should be trying to encourage more rather than fewer employers to likewise. I strongly support Deputy Creed on this matter and the Labour Party is opposed to the elimination of this relief. If necessary, we will oppose the financial resolution on those grounds.

The abolition of rent relief will, again, hit working people, and young workers in particular. Rent relief benefits young people who were frozen out of the housing market. These are the very people who are at present contemplating whether they will stay in this country or throw in the towel and emigrate. They are the people who will be affected by the 10% reduction in salaries of new entrants to the public service. I get e-mails from young graduates who ask me why they should be put on a lower rate of pay when they start working as teachers. Rent relief applies to people who are at work. Those who are not at work qualify for rent allowances.

The Taoiseach challenged the Labour Party on where we stood in regard to working people. These two provisions will directly hit working people and will be a disincentive for work. Many of the young people to whom I speak are starting despair for the future of this country. On top of cuts in pay and tax measures, the little bit of rent relief they received will now be taken away from them.

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Aontaím le cuid mhaith den mhéid a bhí le rá ag an Teachta a labhair romham. I am surprised the Labour Party Deputy did not mention a third measure in this group of financial resolutions that will hit the working person, namely, the removal of tax relief on trade union subscriptions. Now is the very time when we should be encouraging those who still have jobs to retain their trade union membership so that they can have proper representation in a time of recession and ensure their pay and conditions are not further undermined. Removing the relief will make it more expensive to be a member of a trade union, which is a retrograde step.

The other two measures only add to the pain this budget will inflict on the working poor, as well as those who have just about been getting by until now. Employers will be forced to discontinue providing child care facilities. Tax reliefs were supposed to benefit everybody by encouraging good practices. Many tax reliefs were, however, introduced to line the pockets of a small number of people in our society. We lack a system of universal child care which is free or, at least, cheap for young couples who labour under huge mortgages because of the property boom and the shortage of social housing. They must meet the high costs of child care simply to stay in work and pay their bills.

The rent charged on properties in Ireland is higher than in any other European country of which I am aware. Rent relief was a limited mechanism for those who could not avail of social housing because local authorities were not funded sufficiently. The budget further reduces the grants paid to local authorities, regeneration projects and social housing initiatives. People will as a result be forced to remain in rented accommodation but the tax relief they enjoyed to date will now be lost. We have not seen substantial reductions in rent in all parts of the country. Rents in Dublin have not decreased at the lower end of the market to the degree that would justify the removal of the relief.

The State has not yet ensured that all landlords are properly registered and inspected. Rent relief would have provided a mechanism to enforce standards among landlords. Once it is abolished, we will revert to the old practice of paying into the black economy because there will be no need for registration. These three measures are detrimental to the public good and should be opposed.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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I fully support Financial Resolutions Nos. 28 to 33, inclusive. Some of them were used in the past for tax avoidance purposes. These financial resolutions will simplify the tax code and put everybody on an equal footing. PAYE income is now involved, whether one is paid in shares or patent royalties. Those who are in a position to put this type of tax avoidance scheme in place should not be favoured. We are going some way towards improving the situation in that regard and I commend the Minister on that.

I take on board what Deputy Gilmore said about benefit-in-kind. It appears, however, that only larger employers have put these benefits in place. Other issues have arisen recently with regard to large employers who can give favourable treatment to employees. The question of the ESB and free electricity is a case in point. Large employers who are in a position to avoid tax because they have the necessary resources are favoured. It is unfortunate that some people will now have to pay benefit-in-kind tax on child care, but this is fair and equitable.

The Minister stated that abolishing tax relief on trade union subscriptions will save €26 million in a full year. Some trade union members may pay tax at 41% but I suspect the majority pay at 20%. Some may not pay tax at all. This implies an income to trade unions of approximately €130 million per year. This raises the question of what trade unions do with €130 million. Should there be more regulation, accountability, transparency and reporting of trade union funds and what they use them for? Like all well-governed institutions, they should be up-front with their members and with the public.

Photo of Emmet StaggEmmet Stagg (Kildare North, Labour)
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They are totally up-front. Why is the Deputy casting a slur?

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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Deputy Stagg, please allow Deputy Ardagh to speak.

Photo of Emmet StaggEmmet Stagg (Kildare North, Labour)
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Trade union accounts are audited and published and Deputy Ardagh knows that. That is a deliberate slur on people who are not here.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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I know of two firms who received several million euro for professional services relating to NAMA. They are the accountancy firm, PricewaterhouseCoopers, and solicitors, Arthur Cox. Will the fees paid by Arthur Cox to the Law Society of Ireland and by PricewaterhouseCoopers to professional accountancy bodies no longer be exempt from tax? Professional bodies, such as the Law Society of Ireland, often provide services such as continuing professional development courses. Could one differentiate between fees which support the administration of such bodies and those which are used for education and training?

It is unfortunate that a number of people do not claim tax relief on the rent of private property because they do not know about it. I accept the need to reduce the relief because of the reduction in rents. This relief should be advertised more widely in order that those who are entitled to it actually get it.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I support the remarks made in respect of the Financial Resolution No. 24, especially by Deputies Gilmore and Creed. I do not know of any other member state of the European Union where a complete 180° flip on public policy could be done overnight. We are going from an entire system based on tax reliefs and incentives and tax-driven development to a razed earth where they will all be wiped out. The Minister's reply will be that the Commission on Taxation recommended this. We are all then supposed to bow the head and accept that we must do it. It is not as simple as that. One cannot even ask a Fianna Fáil colleague how long the bad weather will last but he will say: "We appointed Professor Patrick Honohan to the Central Bank, and he is really fantastic. No one could slur that man. He is marvellous."

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Fianna Fail)
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Deputy Stagg knows as well as I do that the Green Party has been in charge of the weather for some time.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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They have sorted out global warming.

Photo of Seán PowerSeán Power (Kildare South, Fianna Fail)
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Since the late Deputy Michael O'Leary was the first minister for snow.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Many incentives are completely overcooked, have outlasted their productivity and are unwise. The big ones, such as pension relief and property-based incentives are finally beginning to be dealt with. The ones we are talking about here, however, are largely Mickey Mouse measures. The savings are not worth talking about.

I understand why people outside this House call for leadership, authority and good example. We are in no position to contest that call. It is a reasonable and deserving proposition, but there is also a fair amount of begrudgery around. Why begrudge parents who happen to work for a good employer who has gone out of his or her way to provide child care in a fashion that qualifies for this exemption from benefit-in-kind tax? Why do we want to shut them down? Do we presume they will continue to provide child care if they do not get the tax exemption? For the sake of €6 million in a full year, I do not see the point of it.

I wish the Commission on Taxation had gone down through each of its proposals and said that each should be implemented. It did not do so. The commission pointed up certain things and gave background and information regarding individual tax breaks, shelters and incentives, but it was not prescriptive with regard to priorities.

I take Deputy Ardagh's point on tax avoidance. I agree with bringing the transfer of share awards into the PAYE system and making them subject to tax at PAYE rates. I remember when tax relief for the purchase of new shares in an employing company was introduced. The Minister for Finance, Deputy Bertie Ahern, said this was a great idea designed to encourage industrial peace and good industrial relations in that type of company. The entire yield from this measure in a full year is €300,000. It is not long since we were following Mrs. Thatcher's property owning democracy. Now, everything has to go. I do not see the point.

I refer to Deputy Ardagh's point about the notional income of the trade union movement. As I understand, the trade unions are regulated by the Registrar of Friendly Societies, if that is still the case. The trade unions have to produce audited accounts. However, given the hole we have been landed in, I cannot make an argument to resist the change that is proposed here. It raises some meaningful income as distinct from something like the new shares purchasing scheme which raises damn all. People may point to the banks as a good reason for not having such a scheme but that is a different problem.

Deputy Gilmore highlighted the rent relief, which will hit a lot of low-paid people very hard. We are going in one direction with housing policy. We use tax as an instrument of social policy and then we change direction and go in the opposite direction. It is a little like the earlier discussion where Deputy Ardagh highlighted the unreasonableness, for example, of the write-down of section 23 reliefs against the section 23 property only. Not unreasonably, he pointed to examples in his own constituency where the new owner would not be able to pay the interest on the mortgage in return for the amount of rent he or she might get. That is very probably true but the question it raises is whether this is good housing policy.

It seems to me that like this proposal, they were all designed to drive the output of private housing and to transfer our social housing need into private housing and create and expand the need for housing supplement, which is hugely uneconomic and which has produced an entire category of person who is trapped in that apartment because if she goes to work, she loses her housing rental supplement. There are significant implications, policy-wise and it is now proposed that we reverse engines.

Deputy Ó Snodaigh is right in that it is also my experience in my constituency that at the lower end the rents have changed damn all although they have changed at the higher end. It is now proposed to end on a phased basis the rent relief to match the mortgage interest relief for young people who find themselves housed in these circumstances. They ended up there because they could not get a mortgage at the time, the price of housing was inordinate at many times their salary.

We have moved from one extreme to the other and we are all searching around for where savings can be made to contribute to something like the ball-park figure that is required. I am not so sure it is good leadership from this House to induce good employers who have gone out of their way to provide child care to either shut it down or to charge for it, or make whatever new arrangement they wish to put in place, no more than it is good industrial relations to kill off the share scheme which was probably minimally subscribed in this country. There are young workers in that €97 million the Minister hopes to save in a full year who are on the rent relief on that type of housing. When the sums are being done in The Irish Times tomorrow morning, this should be factored in because it will be a significant factor for many young people who have started work, such as young nurses and teachers.

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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Three Deputies remain to speak, Deputies John O'Donoghue, Ciarán Lynch and Pearse Doherty with five minutes to accommodate them.

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Fianna Fail)
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On a day such as today and in recent times, it is very easy to forget the progress which we have made in recent decades. It is less than 50 years ago since, for example, a working woman in the public service had to retire on marriage. I recall that there were very few women in the workplace. I became Minister for Justice, Equality and Law Reform in 1997 and one of the first acts I had the privilege of performing was to introduce the equal opportunity programme, which provided in excess of €450 million for the provision of child care across the State.

It was an equal opportunity measure, the object of the exercise being to provide equality of opportunity, not to discriminate, nor to force anybody to do anything which he or she did not wish to do, but to provide equality of opportunity. It did that to a large degree. I accept it could have been better but insofar as the funding was available it was utilised well. Today, almost an equal number of women as man are in the workplace and this is a very welcome development. I predict that in a matter of years, there will be a greater number of females in the workplace than males. It is very important that equality of opportunity be maintained. The relief is small beer in that context and it is not of massive relevance. Nonetheless, the support in particular of community child care services is of fundamental importance as we look at the make-up or the components of our workplace today.

With regard to the issue of the trade union subscriptions, I greatly support trade unionism and the tradition of Larkin and Connolly. It would be a very bad day for any democracy were it to be the case that a trade union could not gather lawfully and protest on behalf of its members. However, I found it ironic and feel obliged to comment on the statement of Deputy Ó Snodaigh. I agree with the right of people to protest, I agree with trade unionism and I would always defend trade unionists but what I could never defend and what I could never stand over in a democracy is an elected representative of this House going out onto the street with a mob, seeking to break down the gates of Government Buildings to which he is entitled, as a Member of this House, to walk through-----

(Interruptions).

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Fianna Fail)
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That is the road to anarchy and anarchy is the road to ruin.

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Deputy O'Donoghue should look at the video and he would see the opposite is the case.

Photo of Ciarán LynchCiarán Lynch (Cork South Central, Labour)
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I will speak on the issue of rent relief. The Minister proposes to phase out this relief over a period of eight years. I ask him for an explanation of how this can be achieved. Does it mean that people will need to remain in singular accommodation over the next eight years or is it aimed at people who are currently in receipt of rent allowance in a multiple of locations over that period?

My colleague, Deputy Rabbitte referred to the fact that in the past decade and a half there was significant incentivisation in the property sector where investment properties were prioritised over residential properties. While this may have been redressed in the budget, it is ironic that those at the bottom end of tax reliefs are the first to face the chop on this issue. Those in receipt of rent relief are in income limbo. They are not earning enough to buy a home but they are earning too much to qualify for rent supplement. This vulnerable group is being targeted.

The Minister for Finance indicated that a property price register database would be introduced. Perhaps it is about time we saw similar reform in the area of rent where we have a rental database and rents are calculated and identified in a more accurate and measurable way. Reform in this area is long overdue so that rents, as they are in other jurisdictions, are tied to the CPI and other matters. Ultimately people joining the workforce need to have some level of flexibility which can often mean travelling from one part of the country to another in order to take up work and in doing so not wanting to purchase a home meaning that rents are a critical factor. I ask the Minister redress the matter.

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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I will have to leave Deputy Doherty and fit him in at another stage.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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May I speak briefly?

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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Just very briefly.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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I listened to Deputy O'Donoghue earlier. There are many things I do not understand in the week I have been in this House. One thing I cannot understand is Deputy O'Donoghue sympathising with people who are losing their incomes because of these levies given that he is the same person who bled the expenses system dry, travelling to horse race meetings all over the world-----

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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The Deputy must speak to the motion.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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-----and had to be kicked out of the position in which you now sit, a Cheann Comhairle.

Regarding the tax relief-----

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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I must put the question.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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-----on trade union subscriptions, never did we have greater need for reliefs on such subscriptions, which should be at the lower rate of tax. At a time when the Government will reduce the minimum wage and employers will use it as a guise to drive down wages, I cannot understand how any party that claims to be on the left would support such a measure as getting rid of union tax reliefs.

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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I must deal with another resolution before midnight.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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The Minister talked about phasing out rent reliefs. In effect in the next 20 minutes somebody entering into a rental contract will have no rent relief because new claimants into this system will not have rent reliefs after midnight.

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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Deputy, please.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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Where is the proportionality in that? How do we allow section 23 property speculators-----

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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I am putting the question.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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-----to continue up to 2021, but yet rent relief will be finished by tonight?

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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The Deputy will be able to elaborate on budget debate tomorrow and on following days.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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How do we allow the owners of those buildings to continue to get mortgage interest relief but people in their own domestic homes do not get it, people in private rental accommodation will have it phased out and people entering the system from midnight will not get it? Where is the proportionality?

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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I am putting the question.

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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Where is the impact assessment into that?

Photo of Séamus KirkSéamus Kirk (Louth, Ceann Comhairle)
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As it is now 11.40 p.m., I must put the question in accordance with the order of the Dáil of this day.

Question put: "That Financial Resolutions Nos. 24 to 33, inclusive, be agreed to."

The Dail Divided:

For the motion: 83 (Bertie Ahern, Dermot Ahern, Michael Ahern, Noel Ahern, Barry Andrews, Chris Andrews, Seán Ardagh, Bobby Aylward, Joe Behan, Niall Blaney, Áine Brady, Cyprian Brady, Johnny Brady, John Browne, Thomas Byrne, Dara Calleary, Pat Carey, Niall Collins, Margaret Conlon, Seán Connick, Mary Coughlan, Brian Cowen, John Cregan, Ciarán Cuffe, John Curran, Noel Dempsey, Jimmy Devins, Timmy Dooley, Frank Fahey, Michael Finneran, Michael Fitzpatrick, Seán Fleming, Beverley Flynn, Paul Gogarty, John Gormley, Mary Hanafin, Mary Harney, Seán Haughey, Jackie Healy-Rae, Máire Hoctor, Billy Kelleher, Peter Kelly, Brendan Kenneally, Michael Kennedy, Tony Killeen, Michael Kitt, Tom Kitt, Brian Lenihan Jnr, Conor Lenihan, Michael Lowry, Tom McEllistrim, Mattie McGrath, Michael McGrath, John McGuinness, Martin Mansergh, Micheál Martin, John Moloney, Michael Moynihan, Michael Mulcahy, M J Nolan, Éamon Ó Cuív, Seán Ó Fearghaíl, Darragh O'Brien, Charlie O'Connor, Willie O'Dea, John O'Donoghue, Noel O'Flynn, Rory O'Hanlon, Batt O'Keeffe, Ned O'Keeffe, Mary O'Rourke, Christy O'Sullivan, Peter Power, Seán Power, Dick Roche, Eamon Ryan, Trevor Sargent, Eamon Scanlon, Brendan Smith, Noel Treacy, Mary Wallace, Mary White, Michael Woods)

Against the motion: 27 (Tommy Broughan, Joan Burton, Joe Costello, Pearse Doherty, Martin Ferris, Eamon Gilmore, Michael D Higgins, Brendan Howlin, Ciarán Lynch, Kathleen Lynch, Finian McGrath, Liz McManus, Arthur Morgan, Caoimhghín Ó Caoláin, Aengus Ó Snodaigh, Brian O'Shea, Jan O'Sullivan, Maureen O'Sullivan, Willie Penrose, Ruairi Quinn, Pat Rabbitte, Seán Sherlock, Róisín Shortall, Emmet Stagg, Joanna Tuffy, Mary Upton, Jack Wall)

Tellers: Tá, Deputies John Curran and John Cregan; Níl, Deputies Aengus Ó Snodaigh and Emmet Stagg

Question declared carried