Wednesday, 29 July 2020
Financial Provisions (Covid-19) (No. 2) Bill 2020: Second Stage (Resumed)
On the help-to-buy scheme, I never thought it was a good idea and I certainly do not think so at this point. It appears to show a misunderstanding of the problem at the root of the cost of housing and the unaffordability of housing. That problem is the cost of land and the failure of successive Governments to address this issue. They have allowed widespread land hoarding to continue and, in so doing, allowed developers to control the cost of land and, therefore, housing. This subsidy approach is absolutely wrong. A subsidy fuels the cost of housing and contributes to house price inflation. We would be better off spending the money used for this subsidy. Rather than putting it into the pockets of developers, we should use it for a proper affordable housing scheme.
We know that claims to date have amounted to €271.4 million. As of last September, roughly 21% of help-to-buy scheme claims were for properties priced at over €375,000. This suggests people with incomes in the region of €100,000 and I am not sure that is what we should be doing in providing housing subsidies. The scheme undoubtedly benefits higher income households. We would be better off scrapping the scheme and putting the money into building affordable housing.
The cycle-to-work scheme is a good scheme but there are flaws in it. I have no idea why we need to increase the upper limit for the cost of bicycles. It seems excessive. There was an understanding we would move away from variable tax-based schemes and that tax relief would be provided at the standard rate. It is a two-tier approach to providing support to people and militates against those on lower incomes who are paying a 20% tax rate.
Sections 10 and 11 deal with carry-back rules for income tax relief for the self-employed as well as corporation tax losses. Like many other parts of the July stimulus, these measures are not sector-specific, which means they are less effective at targeting businesses specifically impacted by Covid. There is a question of whether business viability outside of the Covid context will be taken into consideration with tax loss relief.
I will raise some technical issues, particularly in relation to the temporary wage subsidy scheme. Revenue proposed to implement the scheme by means of a new PRSI class. If this happens, apart from significant difficulties in implementation, it would continue to mark or identify an employee's payslip when viewed by banks or other third parties. This would cause damage and disadvantage to an employee. The Payroll Software Developers Association is providing an alternative way of processing the payroll and I would like the Minister for Finance, Deputy Donohoe, to indicate whether he is open to considering its proposal.
I want to point out a particular flaw in the wage subsidy scheme. The subsidy zones are banded such that there is no subsidy provided to employees who are earning less than €151.50. This means that a person earning €150 per week gets no subsidy at all. This creates an incentive for an employer to increases people's hours to bring them up to a wage of €152 per week, in which case they will get back €151.50. There will be significant pressure on employers to increase some people's hours and that may well be done to the disadvantage of other workers, who will lose hours as a result. I ask the Minister to examine the banding under the scheme because employers will undoubtedly be tempted to pay nobody less than the threshold of €151.50.
Regarding employer's PRSI, there is potential for substantial savings and, therefore, substantial losses to the Social Insurance Fund. The Bill is not specific in this regard and it is important that the Minister should provide some information on it. I am not sure it is a good approach to take, especially considering that employer's PRSI in this country is very much out of line with what applies in the rest of Europe. This provision potentially represents a big disadvantage and we need clarification on it.
I am not at all in favour of cutting the VAT rates. It is a very expensive measure to take and it is also a blunt instrument. The decision to cut the standard VAT rate from 23% to 21% will do very little to help anybody. This rate applies to high-end goods and a lot of imported goods and, as such, it is not what we are looking for. The cost of the change, at €400 million, could be much better spent on targeted supports for people in the most affected sectors. The provision is regrettable and I ask the Minister to consider it again.
While I welcome some aspects of the Bill's in regard to tourism, representatives of the industry in west Cork have pointed out that it does not go far enough to help the sector, which is one of most impacted by the pandemic. Tourism and hospitality is one of the main industries in west Cork and throughout rural Ireland. These small, often family-run, businesses provide vital employment and services in towns and villages, as well as being an outlet that local farms, fishing communities and food producers supply and rely on. The extension of the restart grant to a broader range of SMEs corrects some shortcomings of previous schemes. The specific reference to bed and breakfast accommodation has provided assurances for many businesses. However, the industry needs more ambitious grant funding rather than an extension of the credit guarantee scheme. Tour operators, restaurants, hotels, guest houses and everybody else in the hospitality sector need proper support, not more debt.
The other specific intervention for the tourism and hospitality sector, namely, the stay and spend incentive, is fundamentally flawed. It should be a simple voucher system, not a complex tax rebate that favours those who can afford to spend more and do without that money until it is rebated. People who cannot afford to avail of it and individuals who fall outside the tax net for different reasons are excluded. In addition, the October to April limit on the rebate covers the period when many businesses in the sector are closed. This incentive is of little use to them. Instead, a voucher of €125 should be provided to people to allow them to enjoy and support the hospitality sector in their local area or any of our many wonderful tourist destinations. That would allow for a greater uptake and would not discriminate against anybody. A simple voucher system, applicable for a longer period of the year, would improve the effectiveness of the scheme, enable people to holiday and dine out, and benefit the entire sector. The industry has been calling for a clear intervention for months. Instead of the planned blanket 2% VAT cut, a targeted cut for smaller retailers and the hospitality industry would be more effective.
The measures in the July stimulus to promote rural cycling, which could bring new forms of sustainable tourism to many areas, are beyond disappointing. They amount, in effect, to a planning exercise and the piloting of 20 km of cycleways this year. The plan also refers to the provision of greyways, that is, the use of hard shoulders on regional roads as cycleways or footpaths. Greyway provision seems to be a new policy, which is not referred to in Transport Infrastructure Ireland's, TII's, rural cycleway design document, and it sounds completely unappealing. If the Government is serious about developing cycling facilities and sustainable tourism, we need greenways. TII and accessibility campaigners classify greenways as fully segregated cycleways and paths. The programme for Government promises an integrated national greenway strategy. Greyways are a false start.
This pandemic has shown us all how to look at the world differently. It is very important, now more than ever, that the Government takes a more innovative and ambitious approach to supporting the tourism and hospitality sector in a sustainable way, especially in rural Ireland. The survival of many small, family-run businesses depends on it.
I am sharing time with Deputy Barry.
The wage subsidy scheme is a good scheme in principle, which tries to ensure that people who lost jobs and income as a result of the Covid-19 measures have a road back to employment, retain their relationship with their employment and have some sort of income support to sustain them through the very difficult period of the lockdown, when people, collectively and based on the principle that we are in it together, endured very significant hardship to protect our society from the virus. While it is correct to look to extend that scheme to protect people, his failure to provide support for particular sectors, namely, those hardest-hit by the measures taken to protect us from the pandemic, is destroying the solidarity that existed and threatens to undermine the principle that we are all in it together. This is a very dangerous thing to do when it is very likely that there will be a second wave of infections and further spikes. If there is a second wave and we have to call once again on people to come together and make sacrifices for the common good, the Minister will have done extreme damage to the goodwill of those who are being hung out to dry in the current situation, where he has started to dismantle the pandemic unemployment payment, PUP, support scheme without putting anything its place for particular groups.
The Minister can probably guess which groups I am talking about because I have been referring to them repeatedly for weeks. In the case of two of those sectors, I fought very hard to get their representatives in front of the Special Committee on Covid-19 Response, where they presented their case. However, it appears that the Government is just not listening and I do not understand why that is the case. The two groups are, first, people in the arts, music, live entertainment and the events sector and, second, taxi drivers. Both of these groups have been given no roadmap to full recovery of their incomes and they are being savaged by the cuts to the PUP. This morning alone, I had ten emails from taxi drivers who have had their payment cut. I am inundated, as I expect many Deputies are, by correspondence from musicians and others in the arts sector who have had their payments cut. I was able to get their representatives before the committee, where they explained their plight and begged, urged and appealed to the Government to provide them with an income subsidy until such time as the sectors in which they are employed fully recover. The Government has ignored them.
I appeal to the Minister to reconsider, even at this late stage, and to provide them with specific supports. Their requests are very reasonable and he could have met them in this Bill. I tried to submit amendments but encountered difficulties. The Opposition has bent over backwards to accommodate the Government by waiving pre-legislative scrutiny and allowing guillotines on all the Bills that need to be put through.
Some of the amendments I submitted earlier were refused because they were too late, even though I submitted them before Second Stage. That is unfair. It is not the Minister's fault but I appeal to him to address this matter, even at this late stage. If employers can get a wage subsidy, why can taxi drivers, who are their own employers, not get the same? Why can they not get an income subsidy when their business has collapsed by approximately 80%, which is much more than the required percentage to benefit from the wage subsidy that employers are getting? The Minister can ask any taxi driver who is going out looking for work at the moment. They are getting a fraction of the work, because their previous work was strongly linked to the sectors most hard hit, such as tourism, music, live entertainment, theatres and bars that are now closed. That was a significant volume of their work. It is now gone and they are, therefore, struggling. Taxi drivers have made a few requests, some of which do not even require money. They asked for a step-down income subsidy, which the Government could have put in this Bill; a moratorium on the further issuing of taxi licences, given that we have more taxis in this city than in New York city; the ten-year rule for replacing their cars to be changed to 15 years because of all the income they have lost; and to benefit from the restart schemes, from which they are being excluded. They still have fixed costs to cover such as insurance, paying taxi companies and other fixed costs, which were estimated in one recent report to be €11,000 a year. They are being denied even the €1,000 grant from the Department of Employment Affairs and Social Protection, never mind the €4,000 grant that is being given to other businesses. How is that fair? I ask the Minister to provide some support for these workers.
The Government's failure to support a particular cohort of taxi drivers is endangering lives and public health, because older taxi drivers aged over 66 did not get the PUP and continued to work during the pandemic, thus endangering their own health when they should have been cocooning. Many of them decided to stop working but are now being whipped back out to work when they do not feel safe doing so. That is unfair and it endangers the public health effort as well as those drivers' specific health. I appeal to the Minister to engage with these workers and to provide them with some supports until their sector, which has been decimated through no fault of their own, recovers.
Similarly, musicians, artists, crews and so on need some support for their sector as well. In many cases, they are not benefitting from the grants and their income supports have been cut due to the PUP cuts. I refer to people who play music in bars or bands that do weddings. There are restrictions on the number of people that can go to weddings, and fewer people are likely to get married in the current circumstances, so there is less work for them. There might be a bit of work available and they might get the odd gig, but it is nothing like it was previously. They need an income subsidy, which is a floor below which they will not go and which they can earn a bit on top of. That is the same principle the Government is applying to employers, so why can it not apply it to these sectors that have been especially hard hit? The Government should do that because its treatment of these workers contrasts with the way it is treating employers. Money is being thrown at employers liberally.
I assume the reason the Government will not give money to arts workers and taxi drivers is that it is afraid they will scam the system. When I asked earlier why the Government was not supporting them, the Taoiseach said that such supports were hard to administrate. That is code for the Government being afraid it will be scammed. This is the same impulse that led to the cuts in the PUP, the travel advice debacle and so on. Basically, the Government thinks that lower-income workers and the less well off are going to scam the system. That is the bias that is operating here, whereas we will throw billions of euro at big businesses and are not too worried about whether they might be scamming us. Many of those businesses are profitable. There are no provisions in this Bill to ensure that big businesses, which are making significant profits, are not ripping us off and taking advantage of the subsidy scheme. There is no scrutiny there and they are not excluded while others are. It is not fair. I appeal to the Minister to be fair, first, because fairness is important in and of itself but, second, because we are all in this together. The social solidarity we will need in the face of Covid-19 for the foreseeable future will be absolutely wrecked if the Government continues in this manner. Many of these workers have expressed a lot of anger and despair about this.
Finally, employers that are being given the subsidy should not get it unless they recognise trade unions. If they are guilty of collective redundancies, unilateral pay cuts or taking advantage of this wage subsidy, they should not get it. There should be conditions attached to big and profitable businesses benefitting from this subsidy to guarantee the rights of workers.
I will share the remaining time with Deputy Paul Murphy, who will be present shortly. I will refer to the July stimulus but I will first make some specific comments about the TWSS and the PUP. I welcome the fact that the payments are being continued into 2021, albeit with the TWSS under a slightly different guise. However, I do not welcome the fact that the PUP is due to be cut on 17 September and that workers who are out of work through no fault of their own will be forced to take pay cuts of between €50 and €100 a week. The Government's July stimulus package will give more than a few people in such circumstances a nasty September shock.
Though I am here to discuss these payments, I will also comment in passing on the U-turn the Government performed this morning regarding the PUP and holidays. That U-turn shows two things about this Government. First, it shows that there is a basic right-wing instinct in this Government. Second, it shows is that this is a weak Government that can be forced into climbdowns when it takes a step too far or attacks the rights of ordinary people. Ordinary people should take note of that because what happened this morning is significant.
The July stimulus has been hailed as by far and away the biggest stimulus package in the history of the State. It certainly is big in comparison with the past. The question is whether it is big in the context of what is needed now. It represents 1.5% of GDP, but when combined with all the other measures that have been introduced since March, it equates to 4.3% of GDP, which is the European average for such packages, although it is less than Germany's 4.9% or France's 5%. It is well below the US package, at 12.2%, or Japan's, which is more than 20%. The grant aid for small, medium and big businesses is somewhat blind to the question of the size and needs of different firms. For example, a larger company, which may have profited from the pandemic, has a large cash surplus and is paying large dividends to shareholders, is able to tap into the grants through the reduction in VAT, the waiving of rates, and so on.
I strongly support Deputy Boyd Barrett's point that conditions must be attached to grant aid given to small and medium companies. If workers want to join a union and those companies are denying them the right to do so, they should not automatically get the cash. They should also not get any money if they are paying big bonuses to people on the board of directors or if they are not tax resident, and so on. Conditions need to be put on them. Instead of receiving grant aid, big companies that shed jobs should be nationalised. Aer Lingus, which is seeking 500 redundancies, should be nationalised. The lack of scope for direct State-led investment is a huge weakness of this stimulus, and that is a missed opportunity.
The Nevin Economic Research Institute, NERI, estimated in 2018 that €1 billion of State investment can create 10,000 jobs directly. In fact, it is less than €1 billion; it is €575 million when one gets one's tax back and take into account one's savings on social welfare. The aforementioned €575 million creates not just 10,000 jobs directly but also 6,750 jobs indirectly and therefore, for €575 million, it is possible to create 16,750 jobs. Spending this stimulus money spent on such an initiative would see 200,000 jobs, and more, in construction, in banking and finance, in green energy, in apprenticeships and among young people.
My final point is that this is a bigger recession than was experienced in 2007 or in 1974-75. The comparison is with the 1930s and the Great Depression. What does this mean for Ireland, a small open economy? It means mass unemployment, inequality and tax increases, as well as cuts down the road. I will conclude by stating that what will come onto the agenda in the years to come is not this or that change, it is system change. I refer to a break with capitalism and a democratic socialist alternative.
The way the Government and the political establishment have been marketing the July stimulus, one would think that it was going to transform the economy, that it will be a landmark for the Government and will show that it is up to the tasks ahead of it. The reality, however, is that the stimulus package is socially unjust and regressive and is economically irrational from the point of view of the majority of people in this society. Moreover, the propaganda campaign that the Government has used to sell the stimulus is fundamentally dishonest. The Government feds us austerity and calls it stimulus.
The Government claims that this is the greatest ever State investment in the economy, at €7.4 billion. While Fianna Fáil and the Green Party may have forgotten their last period in government, the rest of us have not and people remember that they spent €64 billion on a stimulus based on bailing out the banks. What we see in this package is a litany of handouts for business, the stay and spend incentive, which will do nothing to stimulate demand among the hundreds of thousands of unemployed people who cannot access it, the wage support scheme that looks like it has been designed to be abused by businesses seeking to exploit cheap labour and a raft of tax breaks. What do workers get? Massive cuts to the pandemic unemployment payment with more cuts to come in the future. It cannot be called a stimulus when all the investment will benefit a small minority and it contains measures that will make hundreds of thousands of people worse off and take hundreds of millions of euro out of the economy while doing so.
Let us take the example of the help-to-buy scheme. It has expanded further and that is simply more money going into the pockets of developers. Even at this time of economic crisis and the deep depression that is opening up, the Government's stimulus includes more money for private developers. It is a measure that stimulates demand in the housing market, in a context when demand already massively outweighs the available supply. The Government's answer is to stimulate that demand further, which is a recipe for the continued driving up of house prices and putting homes further out of the reach of more and more working-class people. The only way to solve the housing crisis is by doing what the Government does not want to do, and that is mass building of public housing. If there is a supply shortage, increase the supply and do not push up the price.
I draw attention to something contained in the July stimulus that has attracted little attention so far, namely, its labour activation measures. Let us look at a press release from the Department of Employment Affairs and Social Protection, over which the Minister, Deputy Humphreys, presides, which has announced an additional 10,000 places are to be provided on the youth employment support scheme, YESS. That is a lot of people, especially when we remember that the total number of people who went through the JobBridge scheme, which was a major controversy at the time, was 38,000 people over five years.
This YES scheme is to be expanded from a small scheme for 18 to 24 year olds to people of all ages. It is a return to the widely-hated JobBridge scheme, or ScamBridge as we termed it at time, except that it has been made even worse. There are three-to-six-month internships, at 24 hours a week and with weekly pay of €229. That is €26 extra for 24 hours of work a week. That is less than the €50 top-up, which was rightly seen as an insult when it came to the JobBridge scheme. It amounts to less than €1.08 an hour and it is designed to drive down wages. It is no accident that it comes in the same week as the decision to not increase the minimum wage and to slash further the PUP. It is all designed to depress wages across the economy.
That is what we get, instead of the State directly investing in creating the jobs we need in health and education. People will not accept JobBridge 2.0. They will see it as the scam that it is. Internships currently available on the scheme include working as a warehouse operative, an administrative assistant in a credit union and a pharmacy sales assistant. Like JobBridge, those sound much more like jobs rather than genuine internships. The justification that this scheme is for young people with no work experience, always a flawed justification, is now gone given that the scheme has expanded.
A socialist stimulus would involve real public investment in green infrastructure and in green energy and public transport in particular. It would invest in green jobs and bring welfare payments back up to a basic minimum of €350 a week. Our stimulus package would be a socialist green new deal and not hand-outs for big business and austerity for the rest.
I thank the Leas-Cheann Comhairle and congratulate her formally on her election. It is great to see a woman from the west of Ireland in the seat that she now holds.
I thank the Minister for taking this debate. I welcome the stimulus package as in principle, it should be welcomed. While I have concerns that it may not be as focused as it needs to be, the intention has merit and I welcome that the package has been brought forward. I will flag some concerns with the Minister and I hope he will address them during the Committee and Report Stages of this legislation, or between now and budget day.
One of my concerns is the temporary wage subsidy scheme. I had advocated that this should have been more extensively used than the pandemic unemployment payment. I welcome that it is now being extended and put on a statutory basis. I have concerns, however, regarding the Bord na Móna seasonal staff in my part of the country who have been directly impacted by the Covid-19 crisis. Initially, there was a fall-off in demand for electricity and subsequently they have been affected as a result of planning decisions. Many of those seasonal staff were not called back by Bord na Móna prior to 1 March and as a result they are ineligible for this subsidy. They are not in receipt of the PUP and in many cases, are drawing off their means-tested payment under unemployment assistance at this stage. If we are talking about a just transition, therefore, we must ensure that we have a just transition for the seasonal staff in Bord na Móna who have lost out on the temporary wage subsidy scheme and the pandemic unemployment payment. I hope the Minister will engage with Bord na Móna on this specific issue.
When the Minister is engaging with Bord na Móna, I would be grateful if he could raise another issue. Last October specific funding was set aside for Bord na Móna. We had legislation before us last week with the same purpose and the objective was to try and guarantee employment for Bord na Móna employees in a just transition through rehabilitating bogs across the midlands. Staff have informed me that as a result of the agreement reached in the context of the Workplace Relations Commission, WRC, there is no commitment to employing Bord na Móna seasonal staff to carry out this rehabilitative work. They definitely will not be employed during the three winter months of the year but there is also no guarantee that those workers will get employment during the other nine months of the year. It is imperative that Bord na Móna staff members have the opportunity to gain employment as a result of the investment being channelled through the company and into the midland counties.
I welcome the €10 million provided in the business continuity fund for the coach operator industry. However, I believe it is insufficient. As the Minister knows, coach operators have lost out on tourism this year. Many operators are involved in private school transport and have also lost that income. The private hire market has completely collapsed. There are over 1,700 operators in the country, employing 11,500 people. The business continuity fund is equivalent to €870 for each of those employees. That is insufficient to deal with the specific problem the industry faces. If we are talking about more sustainable transport, these particular operators are the key because they make approximately 75 million passenger journeys per year. I ask the Minister to look again at that issue.
I want the Minister to address another issue that is not dealt with in this legislation, which is disappointing. The Government is now actively encouraging people and families not to go on holidays abroad regardless of whether the destination country is on the green list. The difficulty is that, in many cases, families have already paid for their holidays and there is no mechanism in place for them to receive a refund. The Government is not intervening but is instead giving the insurance industry a free pass on this matter. Ordinary working families who do not take the holidays they have booked are losing approximately €1 million a day in lost holiday fees. The vast majority of people to whom I have spoken want to stay at home but will end up losing the money they have already paid for their family holiday. It would surely make far more sense for the Government to provide those people with a voucher to remain at home and holiday in Ireland in lieu of travelling abroad with the associated risk of bringing back Covid-19. The vast majority of families to whom I have spoken would like to remain at home but cannot afford to do so.
I will turn to the tourism sector and the new support package being introduced. I welcome that investment is being made in the tourism sector and the scheme involves some innovation. That said, a tax credit scheme is not the way to go because we need to be encouraging retired people in particular to travel in the off-peak season. Retired people have time on their hands whereas, sadly, many of us with young families will not get the opportunity to travel. Of course, retired people are not paying tax in many cases and will not be able to avail of this particular incentive. Some operators might increase the cost of services or accommodation to leverage this money while some of the people who might wish to avail of the scheme will not be able to get the benefit of tax relief. A mechanism must be put in place to facilitate older people.
There also needs to be a mechanism put in place that does not discriminate against my part of the country. Fáilte Ireland has made a substantial investment in marketing Ireland's Hidden Heartlands about which the Minister and I have spoken at length. The Minister knows my neck of the woods very well and deep in his heart he is, in principle, in favour of promoting the area. This scheme discriminates against my region. There is a nasty little clause that Merrion Street has included in the legislation to the effect that a property must be registered with Fáilte Ireland to qualify for the scheme. That is great for someone who is from Kerry or represents that county. There are 155 premises registered with Fáilte Ireland that provide bed and breakfast accommodation in County Kerry. There are 15 in County Westmeath, ten in County Roscommon, nine in County Offaly, three in County Longford and five in County Laois. Where will people go? They will not visit the Hidden Heartlands, a part of the country that has had its guts pulled out as a result of the just transition.
Fáilte Ireland has spent a substantial amount of money marketing our region. We can easily provide social distancing because we do not have the large populations that other areas have. The amenities and recreational facilities are in place and thanks to the announcement made today by two Ministers, Deputies Eamon Ryan and Catherine Martin, further investment will be made in greenways in our region. That is very welcome but we do not have Fáilte Ireland accredited accommodation. There is accommodation available but it is not accredited by Fáilte Ireland. Surely if a business is registered for VAT, has a tax clearance certificate and is providing holiday accommodation and food, it should be eligible for the scheme. Why do businesses have to be registered and pay a fee to Fáilte Ireland in order to avail of the scheme? My understanding is that the push is coming from Merrion Street and not Fáilte Ireland on this matter.
The situation now is that I can bring my family on holidays, we can buy a burger and chips and claim tax relief on that expenditure but if I go with Airbnb or self-catering accommodation that is not registered with Fáilte Ireland, I cannot claim that relief. Surely the sector of the economy that we need to be supporting is the one that is dependent on tourism, particularly in our region which has a fledgling tourism sector that is starting to take off. There was a big announcement on the Hidden Heartlands two years ago and many businesses have invested in upgrading their accommodation and converting farmhouses to accommodate families. Investment has also been made in infrastructure but if the businesses in question do not come with the Fáilte Ireland stamp, their customers cannot avail of this tax relief.
I plead with the Minister to take action if he is serious about promoting balanced regional development, ensuring we have tourism in the Hidden Heartlands in the middle of Ireland and encouraging and incentivising businesses to establish in the tourism sector in the region. That will be the future for Bord na Móna employees, particularly seasonal ones. A detailed application to the just transition fund has been submitted by some of these employees in counties Longford and Roscommon. I hope it will be accepted by the Government but what would be the point in doing that if we do not facilitate people to come and stay in our region because we do not have a rubber stamp of approval from Fáilte Ireland? I plead with the Minister to consider this matter before we deal with Report Stage.
I am delighted to have an opportunity to speak on the Financial Provisions (Covid-19) (No. 2) Bill 2020. I welcome many of the measures in the July stimulus package but, unfortunately, it simply does not go far enough in many areas. It has all the hallmarks of a departmental document without the understanding of what makes people tick in rural and urban areas all over Ireland. The purpose of stay and spend incentives is to incentivise taxpayers to support registered providers of accommodation and food during the off-peak season, thus providing support for an industry that has been devastated by Covid-19. It is certainly well-intentioned but I have concerns about it.
From the point of view of the industry, any increase in consumer demand is welcome but the scheme is likely to bring about a significant increase in administration. Self-employed people are weary of, and over-burdened by, administration. They have probably had a break from administration during the pandemic but they have not had a break from anything else. I anticipate a problem with splitting receipts so that everyone can claim relief on their own portion of the total bill.
There is already reduced capacity and increased requirements for cleaning and hygiene at this time. Many in the industry have sounded warnings and this is a nonsensical kind of a set-up.
There is disappointment that the Government decided not to further reduce the VAT rate. The reduction is minuscule. Reducing VAT is a simple way to allow people to spend their money and not reducing it further is a missed opportunity.
This is the first time I have addressed the Minister, Deputy Donohoe, since his reappointment and I wish him well in the role. I previously offered congratulations to the new Minister for Public Expenditure and Reform, Deputy Michael McGrath, but I wish Deputy Donohoe well in his continuing ministerial role. I will be forthright and make objections when I see things that require me to do that.
The Government does not get what makes people tick. There is bureaucracy.
From a consumer point of view, while the spend-and-stay initiative is well intentioned in its aim to promote business in the off-peak season, the exclusion of pensioners is very disappointing. In recent years, members of many active retirement associations have taken trips to Killarney and to hotels in many areas. They are wonderful organisations for people who are retired. Those people should have been looked after. People come to Dublin for day trips, go for weekend trips to Killarney and attend country music events. They love such trips.
Those aged over 66 years have been victimised throughout the pandemic. Many are working, yet cannot claim any payments because they are only eligible for pensions. All they wanted was a top-up so the pension payment would be the same as the PUP. That would have recognised the fact that they built this country, reared their families and paid their taxes and PRSI. Some pensioners have worked for 40 years or longer, and should have got something.
I discussed the music entertainment industry yesterday. There has been an abject failure in this regard. Social welfare provisions did not deal with that. This industry is part of our heritage, dúchas and culture. Musicians are adored and admired and, above all, they are self-made people. They had jobs and decided to go it alone. They had the profession, trade and skill set, which are very important, and then had to become self-employed and get vans and very costly equipment. Some of the bigger bands had an entourage, including sound engineers.
The industry has been wiped out. Those working in it have been told by the Department of Employment Affairs and Social Protection to get work elsewhere. Are we going to wipe away that part of our culture and an industry that is loved by ordinary people of all ages from the cradle to the grave? Those in the industry have been left in an awful situation. They are being discriminated against when it comes to the pandemic unemployment payment. The Minister will have to do something because we will lose part of our culture like snow off a ditch. Cad a dhéanfaimid feasta gan adhmad? Cad a dhéanfaimid feasta gan amhráin a chanadh agus an fhidil a sheinm? Is mór an trua é.
It is an awful pity. The Minister does not seem to understand the situation. The permanent government does not understand what makes people tick and how they want to live. Those in the entertainment sector have been placed on a reduced payment of €203 per week. This is the Minister's area, given that he holds the purse strings.
What is happening with the pubs is a joke. People who buy a €9 sandwich or meal can go to a pub. Sandwiches are supposed to prevent a Covid infection. It is a total farce. The pubs have been blackguarded. I know dozens of people aged 66 years and older who could not get payments and were shut down by the Government. Worse than that, they were told their businesses could reopen last Monday week but were not allowed to do so. The time limit for the decision was too short. People did not get enough lead-in notice and had to pay for stock and everything else. They have been dealt a body blow. It is ridiculous.
In terms of employment wage subsidies, I welcome that people can claim this year's tax against last year's tax. I support PAYE workers. They had the choice to opt for payment based on their income in 2019 or 2020, but the self-employed did not. Their payments were based on figures for 2018 or 2019. The system should be fair and balanced for everybody. The stimulus package was a missed opportunity. Our businesses are floundering.
The tourism and hospitality industries are floundering. Today, I raised the issue of Clarecastle and the fabulous Swiss Cottage in Cahir. OPW sites are locked up. Surely we can let people into the environs and courtyards of a splendid castle. There are hundreds of people in Cahir every Sunday. It is a beautiful town. The hotels and shops want footfall. The gates are dúnta and there are padlocks on them. Staff must be protected and safe, but the courtyards and open areas and environs of the buildings must be opened. It is not fair that other sites in Tipperary, such as the Rock of Cashel, are open while those in Cahir are not. It is discrimination and it is not fair.
I congratulate the Minister on his new position and welcome the stimulus package, even though it does not cover everything that I need. It is to be hoped amendments can be introduced so that it can work for all of the people in Ireland.
Publicans were told that they could open two weeks ago. They stocked their bars and sanitised their pubs in preparation for opening. The Government then made a decision not to allow them to open. Publicans who have closed their businesses are in receipt of the Covid payment. In rural areas, it is often the case that only family members work in pubs. Publicans across the country have contacted me this week to tell me that one person working in a pub is getting the Covid payment but that person's partner had the payment reduced to €203. People are being penalised despite the fact that publicans have spent money on getting their pubs ready, sanitising everything and putting massive work into premises. We have to get this right.
Opening rural pubs is very simple. External catering can be brought into public houses. One can get soup and a sandwich from any bar during the tourism season. Pubs do not need kitchens for that type of system. External caterers provide food from vat units and fridges. They only heat up sandwiches. Our rural pubs could open if a small bit of common sense was introduced.
All I am asking is for our rural pubs to open up because people are travelling ten or 15 miles to towns and villages. People who are being dropped off for a drink need to get somebody to collect them, which adds to their journey. They are not supporting their local areas. Some pubs are open because they serve food and others are afraid they will find it very difficult to get their customer base back. If this happens, rural pubs will close anyway.
Bus companies have told me they invested in new tour buses at cost of hundreds of thousands of euro at the start of the year. New buses are now parked in yards, but they have to be paid for. They have 201 licence plates, but will not be used until at least 2021. These buses have very few kilometres on the clock because they have been parked in yards, and must be re-registered. Buses are paid for based on a five-year turnaround so that we have good quality buses for tours. We have to do something for bus companies or reimburse them for the losses they will incur for the buses they have bought.
Dromcollogher respite care centre was the first centre for the elderly built in Ireland. It is a 20-bed unit that provides breaks for families for one or two weeks a year. It has been closed since March. It has had 7,000 admissions since 2002. It serves Limerick, north Cork and north Kerry. It operates under the regulations governing nursing homes. It is not a nursing home; it is a respite centre. Legislation is preventing it from reopening. Fewer people want to go to the centre, but it is not allowed to open because its regulation falls under the nursing homes legislation. We have to work to change that.
We need to build more and extend rest homes. Unless we can do so, they will never be able to reopen under the current legislation. There needs to be investment in these homes which help people to stay at home and have one or two weeks of respite.
This helps, as people do not go into nursing homes because they get the respite care they need during the year and can be catered for at home. We need to invest in our older people and help them. The community around the likes of Dromcollogher district respite care centre need it to reopen. It will not be able to reopen, however, unless it gets proper investment and unless this legislation is changed. I ask for the Minister's to help do anything he can to change this Bill and get investment into these rest homes in order that people in the areas of Limerick, north Cork and north Kerry will get the help and investment they need to care for their elderly in the future.
I am delighted to get an opportunity today to speak on the stimulus package and the issues that still concern people. In fairness, there is no point in being altogether critical of the package. It contains measures that in time will begin a roadmap for people to try to get back to some normality and employment, which is of huge importance.
I want to home in on the expenditure regarding hospitals and the whole issue of the Covid-19 situation. Clonakilty Community Hospital was struck heavily, unfortunately, with Covid-19. At the end of the day, there is absolutely nothing staff or management can do in that hospital if the issue is that the hospital is not up to a standard it needs to be at. It has been quite some time since HIQA produced a strongly-worded report on that hospital and I recall that in 2016, the then Minister for Health, Deputy Harris, signed a statutory instrument to the effect that all hospitals had to be brought up to 80% single-bed occupancy. Unfortunately, the statutory instrument pushed out the standards for those hospitals to 2021.
My problem is that Clonakilty Community Hospital expects funding. Will it get the funding? The HSE is more or less stating that some of these hospitals may not now come up to standard. Reports last week indicated that the HSE and HIQA are going to court about Clonakilty Community Hospital. The bottom line, however, is that does not deliver the funding that is needed regarding the hospital being brought up the standard to which every community hospital needs to be brought. I would appreciate it were the Minister to look into that.
I brought up these issues last week with the Minister for Health, Deputy Stephen Donnelly, regarding Bantry General Hospital and was promised a written response. That was a week ago and I have not received a written response. When I look at the programme for Government, there is nothing written on Bantry General Hospital. It serves a population of more than 80,000 people in Cork South-West. If one does not get into Bantry, in some cases in the peninsulas, one effectively is three hours away from the nearest hospital. The funding is needed and obviously it has been a great protection to the people of Cork South-West with regard to the Covid-19 crisis we have today. A new full-time anaesthetist was promised and has not been delivered. It is a serious concern to the people of Cork South-West. There also was a promise of an endoscopy unit when the then Minister for Health, Deputy Harris, visited the hospital in 2018. That has not been delivered to date and this needs to be looked into.
On the issue of schools, I must give credit where credit is due to the Minister, Deputy Foley, who, in the short term she has been inside the House, has delivered on a number of schools in south-west Cork that urgently needed works to be carried out. As I said, credit where credit is due.
I am aware that schools like the one in Ballydehob need urgent funding because I was there last week and it was scandalous to see buckets around the rooms trying to catch the dropping water. It is an issue that needs to be taken up. However, we also need to look at the private schools, such as Bandon Grammar School, which I have been in contact with, and a lot of schools in west Cork, as well as the public schools. With regard to the private schools, a document published in the pathway recently made clear that fee-charging schools such as in Bandon and other places will not receive any assistance under the minor works grants for necessary changes to classrooms, toilets etc. to enable social distancing and enhanced hygiene. They will not receive any staffing alleviation for either spreading out classes or for guidance counselling for the many children who are experiencing mental health challenges due to the current situation. I appreciate that is not under the aegis of the Minister's Department but funding needs to be made available. The private schools are going back into the pockets of the parents. They cannot keep hitting the parents any further than they already have done to deliver these essential works in the school. I would appreciate it if the Minister would talk to the Department of Education and Skills. I have questions tomorrow for that Department and I will raise this issue because it is of serious concern to the school there. I would appreciate that. Other schools, such as the one in Castletownbere, have contacted me because everybody is trying to carry out urgent works to deliver a safe place for the children to return to school.
I happen to fully agree with Deputy Mattie McGrath and his sentiment regarding the publicans. Many of them face ruin. I have a conflict of interest in that my two brothers are publicans and my daughter works in a pub but, perhaps, I know first-hand the crisis that their door is shut. They have no aid, as such, and continue to have no aid and really do not have an ear. It looked to me as if, in continuation to the position prior to Covid-19, there was an attack on the publicans. They employee 50,000 people. The attacks seem to have continued. These are rural pubs and what the Government has done now, unfortunately, is to push in parties all over the place. I know it from my own constituency and it is sad to see large, uncontrolled parties happening up there now. We have a new crisis after keeping the door of the publicans shut. They need to be put on a fair and level playing pitch.
I also want to speak about the over-66s. They have been treated terribly. I ask the same question I asked last night: what did people over 66 do to Fine Gael and Fianna Fáil? They have completely ignored them. The only little bit of comfort they might have got in the stimulus package was if they could have got the €125 holiday relief. They will not get it. As far as I can see, they cannot get it because they are not paying tax but are getting a pension. These people have paid tax all their life but they are now being squeezed out. The poor man and woman who was working and who was over 66 years of age got nothing, as such, in terms of compensation through Covid-19. We even suggested making up the difference between the pension and the Covid-19 payment and they were refused that. Now, such people will not be able to get the little bit of holiday relief - which others are going to find difficult to get but we will not go down that road as they are, at least, entitled to it - and that is terribly unfair. The Minister must answer the question as to what these people have done to deserve this type of treatment. They need to be respected. They are the people who made us who we are today.
Other issues in my own constituency include serious concerns on infrastructure for the greater good and a massive broadband crisis that needs to be looked into. However, we also have road issues and I want to talk about the unfinished southern relief road in Bandon. Despite promise after promise for the past ten or 15 years, nothing has happened. The northern relief road is now going to be half of a northern relief road, if it ever goes ahead, which is another shambles, as it will lead to further gridlock and further closures of businesses because it will come right down almost into the middle of Bandon town.
There are a lot of issues. The Minister might say I am pressing on the critical issues but they are the issues that concern the people of my constituency and the people of the country in its own right.
I will begin by welcoming what the Minister intends to achieve with this Bill, which is to continue to provide support for people as the economy reopens and to provide an injection of economic stimulus. I also will begin by saying that the Bill is a missed opportunity and demonstrates a lack of connectedness with the real economy, at least, the economy I come from and the area that I represent.
New Deputies are frequently told to watch out for the Leinster House bubble because sometimes what goes on there is little connected with the real world. We are not in Leinster House now and we are not in a Leinster House bubble. To me, however, this Dáil looks increasingly like a bunch of rare orchids in the National Botanic Gardens protected from the realities of where they live.
In a couple of months' time, we are going to ask pupils and teachers to go back into schools, and rightly so. Our children deserve an education. We are going to ask our medics, doctors and nurses, to go back into overcrowded hospitals and provide a health service, not just a Covid-19 health service, but a general health service, and rightly so. We deserve as a nation, like every other nation in Europe, a functioning health system. Somehow, however, we are different.
We are wearing masks, I believe, as a statement. The Minister for Finance should look around this auditorium now. This is costing hundreds of thousands of euro. Is this value for money or is it an example to ordinary working people whom we are telling to get on with their lives because we have to live with this virus? We have no choice; we must move forward and get on with our lives.
I want to focus on the temporary wage subsidy scheme. The Minister and I discussed this in Leinster House when he was a Minister in the previous Government. We agreed that it was not perfect and needed to be tweaked, but that those tweaks would be carried out. In particular, seasonal workers in seasonal businesses could not avail of the temporary wage subsidy scheme because those employees were not in employment at the end of February. I welcome that the scheme is being tweaked to allow for people returning from maternity leave and other forms of leave to go back to work. Irrespective of whether the Government had tweaked it, that would have happened because they would have won a discrimination case against the Government.
However, there is still nothing for seasonal workers going back to work.
I read the Bill. Now they can go back to work if the employer sustains a 70% loss between 1 July and 31 December 2020. Those seasonal businesses could have lost, as they did lose, the entirety of the first half of the year's business. If they do not lose more than 30% of the second half of the year, they are not entitled to access the employment wage subsidy scheme. That means that unless those seasonal businesses lose more than 65% of their business over the entire 12 months, they are not entitled to the employment wage subsidy scheme, as the temporary wage subsidy scheme has become. I have read the Bill and I invite the Minister to tell me I am wrong in that. I invite him to tell me that a business does not have to lose more than 30% of its normal income crucially from 1 July so that any losses it has incurred up to 1 July will not qualify it. I invite the Minister to tell me I am wrong.
Many of those seasonal enterprises are bars and restaurants. I invite the Minister to compare how those small family-run firms are being treated with how the meat plants are being treated. I see Deputy O'Donoghue here. Representatives from the meat plants informed the Special Committee on Covid-19 Response that they had availed of the temporary wage subsidy scheme. Good for them. Of course, they availed of it. They avail of everything because they screw everybody. I know the Leas-Cheann Comhairle is new to the job. I had to check this yesterday in a different context. Apparently "screw" is not unparliamentary language. They screwed their workers. They did not allow them sick pay. People were showing up even though they had symptoms because they were afraid not to show up for work.
They screwed the farmers in what they paid them because they dropped the price beef well below the cost of production. Up to recently they were killing up to 95% of the numbers they killed last year according to Department of Agriculture, Food and Marine figures. Despite all of that, they were availing of the temporary wage subsidy scheme, but small seasonal businesses up and down the west coast could not avail of the scheme. In this Bill the Minister proposes to lock them out for the remainder of the year by failing to take into account the losses they incurred in the first half of 2020. They incurred those losses because the Government shut them, and rightly so. I do not take issue with that. The Government told them they had to close their doors in the national interest, and most of them did it without question. However, now when it is time to look at the bigger picture, they are being forgotten yet again.
There was considerable criticism of the Government of which the Minister for Finance was a member up to a few weeks ago over its complete inability to understand the economy outside Dublin or the importance of seasonal work in the tourism sector, in particular throughout the west of Ireland, and to understand farmers. I invite the Minister to look beyond the M50 and allow seasonal businesses to access to the employment wage subsidy scheme, as it is called. If they are required to demonstrate a loss of more than 30% in the second half of this year, effectively they are required to demonstrate a loss of more than 65% over the entire year.
I have read the Bill and I do not need to be patronised about reading Bills. I read it as I read all Bills, as I read the statutory instrument that made general guidance in respect of the population a law in respect of those who are in receipt of social welfare payments, be they the pandemic unemployment payment or jobseeker's allowance.
Of course, we are frequently talking about the same group of people. We are talking about people who were put out of work in the national interest. Many of them were put out of work by the actions of the Government, actions that were necessary. Now it is time to do what is necessary to get those people back up and running. A man who was in my class in school brought his horses to the gate of Leinster House. He is an incredibly hard-working man who built up a business that is reliant on foreign tourism which has been shut down by the Government. I believe the Minister is the chairman of the Eurogroup. Ireland is unique in Europe in how we have shut down travel. That man no longer has a business. He rang me yesterday to ask what was in the stimulus package for him because he could not see anything. I listened to him and said, "No, Seán. There's nothing in it for you. Sorry." He will be able to demonstrate 30% losses for the rest of the year, but many businesses will not. Those businesses that will not have 30% losses for the rest of the year would have losses in excess of 50% over the year. I ask the Minister to include them in a spirit of fairness and solidarity to get this country up and running again, not just the part of the country the Minister and the Cabinet represent, but the rest of the country that deserves the same chances.
The measures the Minister announced in the July stimulus are positive. I think I heard him describe the package as the next stage in the Government's response to Covid-19 and in that context those measures are welcome. There are some omissions and missed opportunities, but there are many positives. The plan in its entirety has been described as lacking in scale and ambition by SME Recovery Ireland and there is more than a grain of truth in that statement. This seems like a holding measure, steadying the ship in turbulent waters, putting down an anchor, but not really moving forward. While stability matters, there is an understandable sense of frustration over some missed opportunities.
Let us consider some of the detail. The extension of the wage subsidy scheme and pandemic unemployment payment is very important and good news for many people. The extension of the wage subsidy scheme to the end of March 2021 and its extension to new and seasonal staff are positive, notwithstanding the excellent point my colleague, Deputy McNamara, made, which the Minister should take into consideration.
The €200 million in grant aid for retraining for those who have become unemployed is also a positive move. There have, however, also been missed opportunities. There is a real concern that those earning less than €151.50 will not get Government support. Will the Minister explain his rationale for excluding these low earners?
I expressed my views on the pandemic unemployment payment, PUP, to the Minister, Deputy Humphreys, last night. We subsequently voted through a section which means that those receiving the payment should be actively looking for work. Does that mean that a person working in a bar that remains closed must actively seek work?
Must musicians and the thousands employed in the arts and creative industries actively seek work, even though these sectors are in lockdown? Do those who own coaches, minibuses or any other vehicles used to transport mainly foreign tourists around the country need to actively look for work? Apart from anything else, this would have significant displacement effects on some sectors that are struggling to find a way to survive with Covid. These are sectors in which people are using their imagination, ingenuity and creativity to get back into the labour market in their own sectors. Are we telling these people that their sectors are closed and that we do not know when they will open but that training and courses are available to help them upskill in totally different sectors? That is inherently unfair, unjust and discriminatory.
Apart from anything else, it will not work. As I said, it will damage, devalue and demoralise certain sectors. I could understand looking at such options in six to nine months' time when we have a better sense of how the economy will stabilise but to do so now is a real blow to many. I specifically mentioned those who work in or own pubs and those in the music industry and coach tourism sector but other sectors are also affected. This should not be pursued for now.
I am pleased to see increases in the amounts available under the restart grants for businesses and an increase in their scope so they are no longer tied to paying rates. I have many times asked the Minister for Finance and other Ministers to increase the grant aid available to businesses that are trying to restart. The Minister's stimulus package will come as a relief to many businesses. Many just need a little bit of hope that, if they try again and restart, they will be given some real and substantial help. The economics must be right but we all know that, for entrepreneurs and small businesses, hope and belief are just as important.
The Minister's decision to allow people to warehouse tax debt without being charged interest on those debts for 12 months after the initial period of Covid-19 restrictions is also a glimmer of hope. People know that Revenue is not waiting to pounce and that gives them a little bit of hope.
I probably do not know enough about the area but it seems to me that more targeted interventions might have been better than the reduction in the VAT rate from 23% to 21%. If VAT was to be reduced, the one area that should have been looked at was the tourism and hospitality sector.
The VAT rate for this sector should have been reduced from 13.5% to 9% or lower. My colleagues spoke about the regions. This cut will have a huge impact on tourism businesses but it will have a much bigger impact in the Border regions, counties such as Sligo, Leitrim, Donegal and Cavan. In many areas of these counties, the Border is only a few hundred yards away, beyond which the VAT rate has been reduced to 5%. That will make a real difference to many Border towns and to many resorts dotted along the Border. It will have a great impact on a tourism economy that is struggling and which relies on Irish people and people travelling across the Border. It is, therefore, a double whammy. Irish people living along the Border will get better value on the other side because of the lower VAT rate and may therefore be inclined to travel. That is fine but equally those who traditionally come across the Border to Donegal, Leitrim and Sligo in very significant numbers may look again because they know they can get better value at home. Many tourism providers in those Border resorts are desperately hoping for a decent August and are very disappointed that the VAT rate remains as is.
I have two final points. The stay and spend initiative is great but there is something I do not understand. Nobody seems to have seen that it is discriminatory as some people can never avail of it. An initiative like this should be universally available. It would be greatly appreciated. I think of my own mother, who will go mad when she hears I referenced her. She receives an old age pension and is on a fixed income. If she knew she had vouchers worth €125 she would love to spend them. It is the only way many of those on a fixed income could afford to go out for a meal, to go out for a day or to spend a night away somewhere. A 20% discount would give them that incentive. The Minister must find a way to extend this to everybody. They will appreciate it, they will spend it and they will think it is a good Government initiative.
My final point relates to something which is not dealt with in the July stimulus package. I ask the Minister and the Government to urgently find some way to support Aer Lingus. As far as I know, Aer Lingus is one of only a few airlines, if not the only airline, in western Europe not to have received government aid. I am deeply concerned that IAG could shut Aer Lingus down and liquidate the company. This would result in the loss of jobs, connectivity, the iconic Aer Lingus brand and competition within the aviation sector. It would desolate the workforce. It is simply unthinkable. I ask that the Minister and Government look at putting in place some form of state aid package to maintain Aer Lingus as a viable company.
This Bill is a key part of the July stimulus package. The State is investing in key projects and supporting workers and businesses on an historic scale. The size of the response underlines our commitment to protecting jobs and communities. The State will spend €87 billion in 2020 to provide more services to citizens than ever before. The stimulus package contains more than 50 measures and is worth over €5.2 billion, or €7.4 billion if the credit guarantee scheme which passed through the House last week is included. As part of the package, a further €500 million will be injected to bring capital spending in 2020 up to €9.4 billion, which is another historic record.
The fundamental objectives of the measures contained in this Bill are to boost economic activity, to back businesses and to get as many people as possible back to work. The introduction of the employment wage subsidy scheme is a welcome move. It will ensure that we can continue to have as many people as possible returning to work. It reinforces the key relationship between employers and employees. I have walked the main streets of towns in east Cork and have spoken to many business people. No business owner wants to shut down his or her business permanently. No employee wants to remain out of work. Both want to be able to do an honest day's work and to get on with their lives.
The past few months have been extremely difficult for people and businesses up and down the country. I am happy that the TWSS, and the employment wage subsidy scheme will run in parallel from 31 July until the TWSS concludes at the end of August. This provides extra flexibility to employers with new hires and seasonal workers to ensure that as many people as possible will get back to work.
Businesses also need breathing space. They need the time to get back on their feet, reopen their doors and get back to business. I held a clinic in the past few weeks in Cobh, where I met several business owners who expressed not only the need to reopen but to have breathing space once reopened. Businesses are playing catch-up on all fronts and they require the full support of the Government to help navigate their way through this crisis. To borrow a great phrase from Bill Clinton. It is about giving people a hand-up not a handout.
I welcome several tax measures in this Bill that give businesses this breathing space such as enhanced corporate tax loss relief and income tax relief for the self-employed, which will provide additional liquidity supports for business. This is alongside the introduction of the legislative basis for the warehousing of tax liabilities. This will allow for businesses affected by Covid-19 to delay payment of their PAYE and VAT debts for a set period with no additional interest or penalties. There is no point in getting people back up on their feet with the expectation that they will recover by 100% straightaway. It takes time to recover and this is a sensible and necessary move.
I welcome the several measures intended to boost demand in the domestic economy. I will borrow the famous phrase, "Your spending is my income". It is about ensuring people are spending in their local communities, protecting businesses and ensuring we have balanced regional development across the country. The stay and spend incentive for the accommodation and food sector is hugely important. These sectors are immensely important across the constituency of Cork East. Cork East is home to many famous tourist destinations from Midleton Distillery to Fota Island zoo to the historic towns of Cobh and Youghal. Sometimes we forget what a beautiful country we live in and this is a great opportunity to explore it and to spend locally and help the local economy.
The decrease in the standard rate of VAT from 23% to 21% from September until the end of February 2021 will add to the boost to the domestic economy. We want to ensure the recovery is broad-based and measures such as the reduction in VAT allow the Government to provide relief to the widest sections of society. It is also important that no one is left behind in this recovery.
Finally, I welcome the enhancements to the help-to-buy scheme for the remainder of 2020. This will provide necessary support for first-time buyers by either increasing the support available by €10,000 or reducing the criteria of the 10% deposit to 5%. This will stimulate demand for first-time buyers for houses, encourage house completions and assist first-time buyers in accumulating a deposit for a new home. We cannot let this pandemic stop people from getting on with their lives. We cannot afford to have another lost decade in the economy. I believe that this Bill, alongside measures such as the July stimulus package, will ensure that does not happen.
We all need to recognise that recessions are a feature of all economies. It is unfortunately the case that that is so. We need to recognise that recessions occur when there is a decline in economic activity and a significant reduction in spending. There were many recessions in the 20th century, I am sure there were many recessions before the 20th century, but I suppose our ancestors at that time did not have the means or mechanisms to evaluate and appraise economic activity.
This country and the world went through a significant recession between 2007 and 2009. Such was the severity and breadth of that recession that it is referred to in academic research as the Great Recession. It had significant consequences for the world and this country. It just did not have significant economic consequences for this country; it also had significant social consequences some of which were devastating for the people who live here.
Since the recession between 2007 and 2009, there was a general expectation that we were going to meet another recession. Everyone assumed and hoped that the next recession would not be as severe but there was a recognition that there would be one. I recall that in 2016 there was a belief that because of turbulence in the Chinese markets that there was a recession coming. Then, I recall in 2018 there was concern about trade tensions between China and the US and that another recession might be coming. Although we all knew that another recession was coming, I do not think anyone in this House, or indeed anyone in the world, thought that the recession was going to be caused by a global pandemic, but that is the case with what we have to face and we must recognise that this recession is highly unusual and highly exceptional when one looks at the cause. Because it is a recession that is being caused by such an exceptional event, we need to recognise that it is different in a number of material respects. First, when one look at how recessions generally occur, there is usually a gradual decline in economic activity leading to the recession or, alternatively, there is a sudden event and after that there is a gradual decline in economic activity. Neither of these happened in this recession. Instead, we had an immediate and unpredictable, dramatic decline in economic activity. It occurred as a result of the outbreak of the pandemic, first in the Far East and then it moved over into Europe.
The second difference in this recession relates to how the it was caused, and we should not be embarrassed to say this, as a result of a deliberate act of government, not just our own Government but of governments around the world. As I said previously, those deliberate acts in closing down our economy were merited and justified at the time. We saw what was happening in the intensive care units of Italy and Spain. We were legitimately concerned that people in Ireland would be subjected to the same circumstances in our own intensive care units and that we would be left in the appalling position where people seeking intensive care could not be provided with it because our units were overrun, so we closed our economy. That was a deliberate act by us and that distinguishes this recession from previous recessions.
The third way this recession is different from previous recessions is that, in general, when one tries to get out of a recession, the most important thing to do is to try to invigorate consumer confidence to get people out spending again. One tries to instil confidence into the population because, in general, what a recession does is create a sense of financial insecurity among the citizens of a country. People in this country feel a great sense of financial insecurity, but what distinguishes this recession from previous recessions is that there is more than fear of financial insecurity, people are fearful for their health. That is why we need to recognise that there are some parts of the recovery to this recession that are imponderable to us at this stage. For instance, when one looks at businesses such as restaurants or small cafes, to what extent is the recovery of those businesses going to be dependent upon individuals having the confidence to go back into restaurants and pubs? That is something we do not know the answer to as of yet, but we will have to carefully appraise it.
Much of the academic research on the economic consequences of this pandemic is very uncertain at present. If one looks at any economic research, it will try to give three or four different examples, depending upon whether there is a severe outbreak of the disease in the future or whether it is manageable, as it is at present. In fairness to economists, and to everyone else, there is great uncertainty as to what the outcome will be. We know that the OECD has stated that the level of output in economies will decline by somewhere between one fifth and one quarter. If that happens, consumer spending is going to be down by one third. If that happens and it continues, I regret to say that we will find that this recession is going to be even more devastating than the recession of 2007 to 2009. However, it is not all bad news. Anyone who has looked at June's retail spending figures published by the CSO yesterday, which I am sure the Minister has done, will know they were up on June last year, so that is a positive outlook on the horizon.
It reveals that people are prepared to spend money in certain sectors but we have to recognise that other sectors, which involve the close congregation of people, that are going to be very affected by it.
The response of the Government to the pandemic has been very positive. Opposition Members can be critical but when one considers the response in general it has been positive and large. First and foremost, we have had the PUP, which was very beneficial to people who lost their jobs immediately. I welcome the fact that we are not eradicating the payment and that there is a recognition that it has to stay. Second, the TWSS has provided huge support to businesses and we need to continue with that scheme. Third, many grants are available for businesses to restart. I welcome the fact that commercial rates are going to be waived and individuals are going to be given that recognition. We need to recognise that we need to provide further supports for businesses into the future.
The State's objective should be to cushion the blow to businesses from this extraordinary recession and economic event. In short, the State can provide to businesses a parachute to help their descent and to ensure they can land safety when this pandemic passes through and dies out, as it presumably will. If we did not do that and had followed the approach taken around the world to the 2007 to 2009 recession we would find ourselves in a very appalling situation. That recession was dealt with by the Government deciding that debts had to be dealt with immediately. Around the world it was decided that the state would not intervene to try to help people get over very turbulent waters. If we had tried that this time, all of the businesses in the centre of this city and around the country would have gone to the wall in March and April. They would not have survived. The State, therefore, can commend itself on the fact that measures were put in place to ensure those businesses survived. They will hopefully survive into the future. We need to ensure we provide safe passage for those businesses from now through to the other side of the pandemic, where we will, hopefully, have a much safer economy.
However, we should not allow this pandemic to control and dominate our lives. It is a disease, and every generation produces diseases. It is a dangerous disease for vulnerable and elderly people and seems to affect different people in different ways but we need to recognise that we cannot allow it to control our lives. The best economic development that has occurred in recent times is the announcement that our children will fully return to school at the end of August. That is an enormous enhancement to our economy as well as being absolutely essential for our children's development. We also need to recognise that there is a lot of sense in what Deputy McNamara said recently. We are sending out the wrong message by being stuck in this enormous mausoleum. We need to get out of here. We need to get back to Leinster House, where we can work together which we are readily able to do. We should not give the impression to the public at large who are looking in that politicians are in some way a special species deserving of special protection.
The State has made a significant investment in businesses and it is the correct thing to do. We have made this big investment in businesses because we recognise the societal benefit of businesses and the employment they provide and the fact that there is more to an economy than the generation of profits. At some stage after this, those businesses will be able to walk fully on their own but they need to recognise that they also have a societal responsibility, just as the State does. For too long many businesses have seen their exclusive role as being the generation of profits for shareholders. The people managing the businesses try to maximise profits for shareholders, which they do very effectively, and as a result, they receive large rewards. Businesses need to recognise that they have greater societal responsibilities than simply maximising profits for their shareholders and that they have a responsibility to the economy and to society in the same way as the State recognises its responsibilities. That role is not fulfilled by businesses simply assuming and presenting their corporate responsibility duties and giving out small amounts to charities and local projects. They need to recognise that they need to get away from their devotion to the accumulation to of profits for shareholders. That is not a Marxist sentiment; that simply recognises the greater responsibility that businesses have above and beyond the generation of their own profits.
The legislation will be beneficial. It is a continuation of the proposals that were put in place initially. I welcome that section 2 will replace the TWSS with the EWSS. It is a very good scheme and we need to keep it going.
Sections 3 to 5, inclusive, deal with debt warehousing measures announced by the Revenue Commissioners back in March. I welcome them. Revenue need to adopt a more conciliatory approach to people in business, and indeed outside of it, who have found it very difficult to make tax payments due to the pandemic and economic collapse.
Section 6 amends the Taxes Consolidation Act 1997 and reduces the 3% interest rate Revenue can charge. Then there is the stay and spend tax credit, which will be beneficial. People have asked why we do not bring that in immediately so that people can go off on holidays in August and avail of it then. Most Members and most people in Ireland are going to spend their holidays in Ireland. We are going to have a good August and part of September holiday season here. It is a good idea to hold off on this scheme until October. I welcome also the €10,000 increase in the help-to-buy scheme tax rebate to €30,000.
Section 9 deals with the cycle-to-work scheme. One beneficial thing we have learned during the course of the lockdown is that lots of people should be cycling around this city. It is probably one of the best cities in Europe for cycling. It is flat, one can move quickly around it and there have been improvements in the cycling infrastructure. I hope those improvements will continue and we get a better cycling infrastructure but more people should be cycling. I am pleased that bicycle shops are sold out. We need to start encouraging more people in the cities to use bicycles as it is the most efficient way of getting around.
I am sharing time with three of my colleagues.
Cuirim fáilte roimh an Aire. Any Government spending in our economy is welcome and necessary right now. The only questions we need to ask about the package that has been announced by Government is who benefits and where benefits. The question of who benefits is really concerning because many ordinary workers and families will not benefit sufficiently from this package. Our carers, people who are providing crucial facilities, those who lost their jobs and family farmers will not benefit sufficiently. Where benefits from the package? I tell the Minister that my own constituency of Cavan-Monaghan will not benefit as much as it should from such a package.
I instance the tax rebate, in particular, relating to the Government's so-called stay and spend initiative. What it has essentially done is take what was a really positive and potentially hugely significant proposal for a voucher scheme brought forward by Sinn Féin and made it as regressive as possible. It does not invest in the businesses that desperately need support right now. Contrary to what Deputy O'Calllaghan said, not everybody has the luxury of taking holidays in August, as Members do. Many people simply do not have the money to do so.
Many of the businesses depending on such people investing and spending in their local communities or going on a short family break will not get the benefit of this scheme. Those consumers who can avail of the scheme will not be able to get the money back for a full tax year. People who visit a restaurant or stay in a local hotel or a hotel elsewhere in the State next January will not get the rebate for another 12 months. This will not stimulate the economy. In many cases, it will just put money back into the pockets of people who do not need it as much as our carers, those who lost their jobs and those whom I have mentioned.
There is a crucial provision in the legislation that needs to be removed if it is to have an impact on counties such as mine. To avail of the stay and spend package businesses will need to be registered with Fáilte Ireland. This is a crazy requirement. It is absolutely unnecessary and needs to be reversed. Most businesses in County Monaghan are not registered with Fáilte Ireland. Fáilte Ireland hardly knows where County Monaghan is in the first place. Why would businesses hand over €300 to register with Fáilte Ireland when they get absolutely nothing in return? Most of the bed and breakfast accommodation and most of the local restaurants simply are not registered with Fáilte Ireland. It is nonsensical and unacceptable that the provision is being put in place as part of the legislation. It serves no purpose whatsoever other than to give Fáilte Ireland a boost, in other words, it takes money out of businesses that can hardly afford it and puts it in the hands of that agency. It is absolutely unfair and I appeal to the Minister to withdraw this provision from the legislation.
The one area of our economy that does not need to be stimulated is demand in housing. Most young people and families cannot get on to the property ladder because demand is too strong and does not match supply. The help-to-buy scheme will simply pour oil on the fire of the housing crisis we already have. If the Government wants to stimulate housing, it should give local authorities money to build houses. This is how we will stimulate the economy through the construction sector and ensure young families can afford to buy a home. The provision in the scheme will not work.
We always welcome a VAT reduction but the reduction from 23% to 21% will not be felt by consumers because most businesses will have to soak up any saving in this regard. A reduction for the hospitality sector from 13.5% to 9% would have made a real impact. We have tabled an amendment in this regard and I urge the Government to support it.
The very notion of speaking about a stimulus package while removing money from the pockets of those who most need it does not make sense, and to suggest that over the course of this package we will reduce the incomes of people on the pandemic unemployment payment is absolutely crazy. It has austerity at its heart and does not make sense. These are the very people who will spend every cent they get. They will actually support the businesses the Government has not supported in this package. To ensure our economy keeps ticking over and to support those people who need it most, those who have lost their jobs for no reason other than that their employers had to shut down as a result of this pandemic need support. I urge the Government to reconsider.
The Bill falls short of what many businesses in Tipperary have told me they need. A key requirement for the businesses to which I have spoken is for a stimulus package that would not get them into further debt. Non-debt funding is also needed for the many leisure centres throughout the county, particularly in Thurles and Roscrea, which contribute to the community's physical and mental health and which face financial challenge because of the cost of having to close and the expected reduced footfall.
The Bill falls short of what is needed. We have done the sums and found the overall package equates to a ratio between debt and grants of 4:1. This ratio favours the financial institutions more than it does the businesses. The Government has given many businesses little choice but to continue to struggle along because they cannot afford to access finance that is only available through further debt. Sinn Féin told the Minister that grant assistance was a vital resource for many of the businesses but he chose not to heed our call. A grant package of €1.7 billion was what we called for, which would be in line with Germany and elsewhere, but the Government decided that businesses must get themselves more indebted. This will make some of them even more vulnerable to failure when faced with the challenges coming down the road.
A grant package was something the tourism industry in particular appealed for, given that many in the sector cannot avail of the restart grant. While it was extended to other sectors and the rates available were increased, it was not made available to those who could not qualify in the first round because of their turnover rates in the past. It is also likely the grant scheme will run out before many of the businesses that want to avail of it will be able to do so.
I also want to talk about debt warehousing. The Bill provides for the warehousing of PAYE and VAT debts for businesses severely impacted by Covid-19, which have experienced a significant drop in turnover and have been unable to pay their liabilities in part or in full. While there are businesses that will definitely make use of this, there is one particular provision that may prove counterproductive for some. It is the provision whereby no interest will be charged on the tax debts for the initial restricted trading period of 12 months. Thereafter, a 3% per annum interest rate will apply. This is likely to be problematic for businesses that may not have got back up on their feet at that stage but nonetheless will be faced with an increase in their repayments. Can this not be rethought, given that the impact on some businesses is more severe than on others? We must think of those who, because of the restrictions and guidelines, will be the last to open and may have incurred greater liabilities in that time.
Let us talk about the poor version of Sinn Féin's staycation voucher, the stay and spend initiative. We proposed a proper and more equitable voucher system but the Minister opted for the measure that excludes the least well-off, such as the unemployed, those without taxable employment and carers. Before the Minister seeks to refute this, he should allow me to quote from the briefing document, which states that to benefit from the scheme an individual will need to have an income tax or USC liability against which the tax credit can be set. This excludes many people, particularly those who have the least and are most in need of a break and who more than likely were particularly affected by the lockdown. It is also useless for many others.
While a reduction in VAT is a welcome initiative, what was needed by the domestic sector was a reduction from 13.5% to 9%. The Minister should not claim the stay and spend initiative will make up for this because it will not, given that it is time limited until the end of April next year. Surely a more prolonged period of support is needed for the hotel and hospitality sector. While the measures in the Bill constitute a litany of missed opportunities, the Minister did not miss the opportunity to start with those in need of State supports through the pandemic unemployment payment. People are already experiencing a cut in their payments and further cuts are on the way.
I raise the challenges confronting our musicians and those involved in the arts and entertainment industries. They have told me that what they need at this stage is a survival package and not the stimulus package. A survey by the Music and Entertainment Association of Ireland found that 31.6% of respondents had their pandemic unemployment payment reduced and are now struggling to get by. They need the payment to be restored in full. Many are behind in utility bills and in danger of losing their vans and cars and are experiencing considerable financial stress. Some are in danger of losing their home. What does the Bill do for them? What will the Minister do for them?
The Government needs a few words of advice. Instead of fleecing financial victims of the crisis at the airport while at the same time awarding Ministers handsomely, it should understand it is supposed to work for the people out there and act accordingly. It has missed yet another opportunity to make things better.
An awful lot has been said. We welcome some parts of these proposals. Obviously, we need to get as much stimulus as possible into the economy, which has been absolutely hammered. As has already been said by many previous speakers, it is very difficult to look at a stimulus programme while dealing with reduced pandemic unemployment payments. The pandemic unemployment payment and the temporary wage subsidy scheme were spoken about initially as necessities to facilitate people to make the best decisions with regard to health options. The deciding factor was that these schemes would also provide a stimulus in the economy and ensure people could pay bills such as rent. They would put money into local shops and butchers and other businesses that were still open and needed to operate. In some sense, we are speaking about a stimulus programme at the same time as we are pursuing austerity and regressive policies.
It has been stated that the stay and spend scheme is a yellow pack version of Sinn Féin's voucher scheme to give everybody a voucher. That scheme could have easily been delivered through Department of Employment Affairs and Social Protection offices or An Post and it would have allowed all people to go out and spend, be it on a meal or a short stay somewhere. We would have been able to give the tourism and hospitality sector, which has been absolutely hammered, a real stimulus and lift. It would have secured jobs and businesses. Instead, we are discussing a scenario in which people who have money and can afford to spend will spend, and those who are more organised will take a photograph of their receipts and get a return on them a year later. Not many people are going to go for a meal or are going to take a trip and so forth on the basis of a pay off they may get a year later. In that sense I fail to see how it will not be an absolute failure.
We welcome the reduction in VAT from 23% to 21%. However, as has been said by other Members, the failure in this regard relates to the hospitality sector. I have spoken about the damage that has been done and the dangers that lie ahead for businesses. We could have considered a reduction in VAT from 13.5% to 9%, which would have been a real stimulus. It was a lost opportunity and the Government must examine it. I accept that this is only one of the many steps in the stimulus programmes, but we must constantly recheck. Like everybody else, we are pointing out some of the flaws and the Government will discover them itself. At that point it will have to follow the feedback loop and improve the system to ensure we secure as many jobs and businesses as possible.
We also welcome the TWSS, even it becoming the EWSS, and the fact that there will be continuity of financing for businesses to maintain jobs. There are weaknesses in the fact that it does not secure low-paid workers to the same degree. We believe a little tweaking is necessary in that regard.
The help-to-buy scheme has major problems. As has often been the case previously, this may just be moneys that end up with developers as an unintended consequence. If the Government is determined to follow through on this, it will have to check this soon. We knew long before the election that housing is a major problem across the State. The only way to deal with it is through the State taking an active part in building affordable housing, affordable cost rental and public housing on public lands.
I welcome some of the measures relating to the self-employed such as enhanced and accelerated tax relief for people who may have lost money. This is very necessary. These people had profitable operations or businesses and they have suffered badly during this period. We must give them the necessary supports, but we must also ensure a large quotient of people fall into this bracket because my fear is that there is a large number of such people. We have already heard about people who work not only in the tourism sector but also in arts and entertainment. We must facilitate them with continued payments which are not necessarily cut and which allow them to conduct occasional gigs and the like, although they will have limited options in that regard.
We just need to tweak some of the positives in this Bill and remove the negatives.
My party and I agree with some parts of this Bill. We also feel that some aspects do not go far enough to support the hard-working low and middle income workers and families across the State. While I strongly agree with any reduction in the higher rate of VAT, I question the omission of a reduction in the lower rate of VAT focused on the tourism and hospitality sector. My home county of Clare is all too aware of how this pandemic has affected the tourism industry. We have seen the almost total collapse of Shannon Airport, the closure of Shannon Heritage sites, with some of them yet to reopen, and a decline across the hospitality sector in the county. The best option to support these struggling businesses would be to lower the VAT rate for the sector to make services more cost friendly at the point of use. For that reason we will table an amendment to the Bill to provide for the reduction of the lower rate, which will provide immediate liquidity supports to an industry that is on its knees. I strongly urge all parties and groups to support it.
On reading the July stimulus, I was baffled by the omission of 700,000 citizens from the scheme, especially considering that Sinn Féin proposed a voucher scheme a number of weeks ago that would have put money directly into the pocket of every citizen, which could then be injected back into the local economy. These vouchers would have given every person a helping hand, regardless of income and circumstances. The Government has taken the Sinn Féin proposal and made it as regressive as possible. Its proposal will require struggling families, who have had to defer mortgage repayments and other debts this year, to pay upfront for services and they may be able reclaim it in January. Can anybody see how this will benefit ordinary working families or how it would even be possible? How will families who are struggling be able to afford to avail of this scheme? Quite simply, they cannot. They will not be able to front-load the cost and that means businesses will not benefit from it. Have these points been thought through?
I am also at a loss for words when it comes to the proposal to extend the help-to-buy scheme. This scheme has never helped low and middle income earners to get on the property ladder. I constantly hear from frustrated people in Clare who are in steady employment, for example, in the pharma-tech industry, and who are unable to get a decent mortgage to buy a second-hand property. On the other hand, I also hear about people earning in excess of €100,000 being able to avail of a cash rebate of up to €20,000 on a new build. Where is the fairness in this model?
This Bill falls short due to its lack of supports for low and middle income workers, such as musicians, bus and coach operators, taxi drivers and students who are reliant on work in the tourism sector. This is a missed opportunity to put in place a package of supports for the most vulnerable in society who need a helping hand.
I am glad to have the opportunity to comment on this important Bill. Over the years I have spoken on many finance Bills and budgets. I do not know if one learns with the passage of time or not, but I am struck by two issues. Comparisons have been made between the current situation and the economic collapse, as if the two were the same and the same remedy should apply. Some Members still reiterate that there were options ten or 12 years ago. There were no options then. We were destitute and the country was bankrupt. There were no banks and no place to go. We had to beg, borrow and plead with our colleagues across the globe to restart the economy. There were no options whatsoever. However, at that time a series of Members stood up in the House day after day and castigated the Government for the policies it adopted. They swore that they would fail, that it would be sooner rather than later and that a huge price was going to be paid. A huge price was going to be paid anyway and there were no options. We had nowhere to go to borrow anything.
The banks in this country could not lend money to anybody. The country could borrow money only at a very peculiar rate, unfortunately for our sakes.
This pandemic is different. It came our way. Nobody invited it. We incurred it. It was just one of those things that happens occasionally, and we could not avoid it. People speak from time to time as if there were something that could have been done to avoid it. There was not. It was not possible to avoid it. People hold up other places and countries across the globe - not many - where better results were found. Some of the countries concerned have very little interaction such as the kind that takes place between this country and other European countries and our next-door neighbour across the water, notwithstanding Brexit. The amount of travel and interaction that takes place in this part of the globe is many times greater than it is elsewhere. It should not be forgotten that the London-Dublin air route is one of the busiest, if not the busiest, in the world.
We have to compare like with like and recognise that in a very difficult situation the previous Government and the current one have taken decisions that had to be taken in the first instance to protect the health of the people. What would be said if nothing were done or if the virus had been allowed to run its course, as suggested in other jurisdictions? Darwinism would take over and the fittest would survive, and after a time the virus would run its course and dissipate. It did not happen that way, though, and still has not happened. The virus persists. We therefore have to be careful and conscious and make the right decisions. We must recognise two things. We may have to tweak these measures again. We may have to come back to them again. I advise and ask the Minister that that be done for all the legislation we have put through the Houses in the past few days. We must recognise that we may discover other issues between now and the next budget that may require attention. If that is needed, let us do it, but let us do whatever has to be done at the right time, in the right fashion and in the right volume to ensure we can sustain our economy in the best possible way and at the same time defend our people against the onslaught of the virus.
I was amused to hear some of the contributions from some parts of the House. Things have not changed over the years. I heard phrases such as "too little and too late". The glass is empty. It never was half full. "Lost opportunity" is the favourite phrase nowadays. Then there is "more could have been done", "more should have been done" and "more is needed". Of course more is needed. More is always needed. When is enough enough? Nobody ever says something like that because one day - in the not-too-distant future, I hope - our economy will recover and learn to fly again. At that stage we must have spent on the one hand wisely and, on the other, strategically in such a way as to ensure that our economy is projected forward in a realistic and sustainable way and at the same time that we recognise that we cannot stay in this mode forever. It does not work that way. International communities and international trade do not work that way. We must therefore recognise that at the end of the day our economy must recover, and will recover, and that at that stage the economy takes over in the normal way and will survive, generate more demand and employment and self-generate. That is hugely important, and we need to recognise that it is still available to us and there for the taking.
I think back to 2011 and 2012, when various economists all over the globe wrote again and again that we were running the wrong way, that what we were doing would not work and that Keynesian economics was the way to go. Of course, one has to be able to borrow from somebody if one is to spend one's way out of an economic drift. These economists said there were options and that austerity, as they called it, was not one. It was out of necessity that the things that were done then were done. They had to be done. Severe risk had to be undertaken. The people stood up to the plate and recognised that there was a way out if we kept our cool, kept calm and made wise decisions, that we would be able to stand up again and revisit the situation in a few years' time. As a consequence, when this virus struck our economy was in a much more advantageous position. Obviously, we would prefer to be in a better position - we always will - but the fact is that we had done the right thing, despite all the criticism. By "we" I mean the people and the Government. I totally reject this notion in some quarters that there were several other options. There was none, and time proved that to be the case. Those who were in government at that time realise full well how few the options were, and because of this I think the right decisions were taken because the other options were not there.
Let us now look at what we need to do now. As the Acting Chairman knows, I have been critical of the lending institutions in this country and the way in which they handled the previous crisis. They could have done better. I am not being pessimistic. I am speaking as someone who has dealt with individual cases again and again and who continues to do so. This very day I dealt with a case in which a borrower had been contacted by a lending institution. The borrower informed the lending institution that I was an authorised third party, and the banker expressed doubt as to whether that would be legal. Such bankers need to learn quickly. All of us have the right legally to represent our constituents in one way or another, as we see fit and when and how often we see fit. We do not need to be lectured by any lending institution as to what our role is in society, in life or wherever else. Needless to say, I have reminded the banker of this.
In addition, from my experience in this area, and this comes into focus in the context of this debate as well, some people will arbitrarily decide a business is not working and not viable. Who decides that? Is it the person who owns the business, the person who runs the business, the people who are employing the staff or some so-called expert who, on the basis of a desktop examination, will come to a conclusion? That may well be fine in the upper echelons of banking worldwide, and I know that it happens all the time, but we are in a minuscule situation in comparison with that and we have to deal with what we have ourselves on the domestic front. This means assisting in every way possible, including legally, the people we represent, acknowledging and rewarding the efforts they are making and challenging those who do otherwise. That is what instils the much-needed confidence in the country. It instils confidence in the people, the business sector and the domestic sector in general. That confidence is a necessity. I hope this financial stimulus will instil that confidence and will be selective enough to ensure that the people at whom it is targeted will be in a position to avail of it, that it will not prove to be beyond their reach and that they will not get frustrated in their efforts to avail of the assistance involved. This is a big package. It has been dismissed by Members of the House - for political reasons, obviously. Sometimes people should stand up and say that what they are saying is political and not factual. This is a big package, and more may have to come. We should treat it with the utmost respect and treat with respect also the manner in which it was put forward to target particular areas that will have maximum positive impact on the economy and, as a result, regenerate the demand that is necessary to keep the economy going.
I have been amused by some of the debate over the past few days on social welfare law and how it has changed.
I am afraid some of the Members who spoke either did not deal with many queries on behalf of their constituents over the past 15 or 20 years or knew what they were saying was incorrect. The fact of the matter is there always have been issues in that Department because of a huge budget. When I was a Minister of State, that Department had the biggest budget of any Department in the country. There always must be safeguards. My objection in the past has been to the manner in which some of the rules were applied. It comes as no shock to me and I hope my constituents were not the only ones targeted over recent years. Again and again, I had to intervene on behalf of constituents to such an extent that I becamepersona non gratain certain quarters but my job and my duty as a public representative is to represent my constituents, rich or poor, in all states and at all times and to assist and advise them in their best interest and that of the country. I would like to think I can still do that and will attempt to do that.
The points that have been raised appear to have been raised in the context that new, intrusive regulations have been introduced. They have not. They have always been there and operating. I do not say they were what I would have wanted but they were there. There was severe scrutiny of individuals up and down this country over the years. I have as much experience of that business as anybody in this House and more than many. I went to the appeals system more often than I can account for. Sometimes I won and sometimes I lost but, generally, I won on the basis of the rules that were there and the manner in which they should be interpreted.
I want to make the point that we should be factual, particularly in opposition, and God knows that we in our party spent a lot of our lives in opposition. We need to put forward points of view that are realistic and fairly accurate. Otherwise, we generate antipathy among the public, not for any individual - although that has happened in the past, as well - but antipathy to the institution we represent. Generating antipathy towards the institution we represent in this House is wrong and does not do anybody any good. It serves the short-term purpose of popularity for those who do so but it does not address the issues the people are concerned about.
I believe we are doing what is necessary in restoring the economy. In relation to the boost for the housing deposits, for instance, I am not certain that is going to work because it certainly will not reduce the cost of housing. One thing we learned over the years was that the more the housing market is supported directly with a direct injection, the more expensive houses become. What we really need, and in this I agree with the last speaker, is to build more houses. We need to build more local authority houses and more affordable houses. There is no sense in saying it cannot be done. This has been said to me again and again over the past ten or 15 years. Of course it can be done. It was done when we had less aptitude in that area in the past. We were able to build houses to meet the needs of the country down through the years when we had little mechanisation and very little money. We, as a country, did what we had to do in those circumstances and it was successful.
We can spend all the time in the world crying about what we have not got, calling for more, becoming depressed and depressing everybody else. We can shout and roar and point to our individual constituencies and say how bad they are. We can depress the people we represent more than is needed. People go through a lot of trauma. There was trauma during the financial crisis. There is trauma during this crisis and we will continue to go through it. We need to assist them and assuage their fears insofar as we can. We need to be realistic. We should not exaggerate. We should try to do the best we can for them and to do it in the way we would like to have it done to us. We have had various scares over the years and Deputy Jim O'Callaghan referred to the fact that there is a crisis on the horizon all the time and there always will be. That is the way it is. However, we have to be prepared for it and prepared to do the right thing to assist those who need assistance, to do it in a positive and supportive way and to recognise that one day, we will turn that curve and it will be to their benefit and ours. We need to address the issues of concern as shown by the people in the most recent general election. There is no doubt that there were issues there. It is the job of the present Government to deal with it. In the financial crisis, we had to restore the financial structures, the banking system and the economic system of the country and we had to restore confidence in the country, both national confidence and international confidence. That was done. The next phase is to restore the social fabric of the country and its people and to make it meaningful for them so they know the Government they have in office at any given time is mindful of their needs and concerns and that such a Government is willing, ready and able to respond.
Denigrating and castigating ourselves will not do anything for us. We have to revive ourselves and our enthusiasm. We have to look forward in the clear knowledge that we can do it and we will have to do it. That is the way it has always been and always will be.
I am happy to speak on this important but technical Bill. As we know, the purpose of the Bill is in part to provide access to funding sources by enabling the State to participate in European instruments designed to deal with economic impacts of Covid-19. One of the main instruments is the European scheme for temporary support to mitigate unemployment risks in an emergency, SURE. With respect to this scheme, as I understand it from reports in the Financial Times, at least 18 member states have submitted expressions of interest for loans totalling €94.5 billion from the SURE programme. This selling of almost €100 billion of new debt will make the EU the largest issuer of bonds in Europe, aside from the national governments. This is in addition to the €50 billion of bonds that are outstanding, most of which were used to fund loans to Ireland during the debt crisis. From what I can see, these bonds will be backed by a system of voluntary guarantees from the EU's national governments worth €25 billion. Can the Minister, Deputy Donohoe, provide some clarity on the nature of Ireland's relationship to the voluntary guarantee aspect of the SURE scheme? This is important because we need to know if Ireland will be financially exposed, given the high levels of Europe-wide debt about to be created.
The Minister of State, Deputy Fleming, accepted during a debate on this Bill in the Seanad recently that one of the most important and prudent conditions on the instrument is the requirement that no more than 10% of all loans will fall due for payment in any one year. He also mentioned that one of the benefits of this guarantee mechanism is that it ensures member states do not have to pay any money upfront. I seek more detail on when the money will have to be repaid and when will the period of not-upfront run out. I acknowledge that there is a sense among some EU observers that, while SURE goes some way towards creating much needed lending capacity, it is far too modest to have a significant impact on the EU's fiscal response to the Covid-19 crisis. According to the Bruegel think tank, the main limitation of SURE is that it solves the wrong problem.
The think tank also notes that access to finance is not an issue for euro area countries at this stage, thanks in large part to the massive intervention by the European Central Bank since mid-March but that were access to finance to become a real problem for some countries, SURE would then become too small. I raise this particular aspect because of my concern that our capacity in Ireland to access finance certainly will become more of an issue in the months and years ahead. I refer here to the rather sizeable elephant in the room, namely, the scale of our national debt. We know from the Oireachtas's Parliamentary Budget Office that Ireland's debt-to-GDP ratio is currently 59%, which is below the EU average and the 60% threshold set by the Stability and Growth Pact. However, using a more appropriate measure of economic activity for Ireland, we see that the debt-to-GNI ratio is 100.2%, which is significantly higher than the EU average. I have concerns that because we are now part of the voluntary guarantee aspect of the SURE scheme, any future exposure might make life very difficult for us.
I will conclude by referring to the VAT rate of 13.5% applying to some sectors, which was increased some time ago from 9%. Will that rate be lowered given that businesses in the tourism sector are really struggling? Many hairdressing businesses are trying to get back on their feet and rebuild their business after a significant period of unprecedented disruption. Will a lower rate be sought in their case? I understand the Government does not have the power to reduce the VAT rate, but will it seek to have it lowered for the sectors that need it? I would be grateful if the Minister could answer those questions.
I welcome the opportunity to contribute to the debate on this legislation. There are some aspects of it which serve to underpin the funding coming from Europe and by way of the July stimulus package that was announced in the past few days. Looking at the overall context, we are in a very difficult position post pandemic. The period from the early days of the lockdown in March through to the present time has seen many sectors of our society very hard hit by the crisis. The carnage and chaos in the business community are there for all to see. I know every Deputy in the House will be talking to people in business and in communities who are under severe pressure.
It is very important that we look at how the pandemic has changed people's lives and made many changes to society. As is always the case, the public is ahead of the political curve in this regard. We have seen the changes people have made to the way they live their lives. Working remotely, or smart working as some people call it, has taken on a life of its own and has completely changed many aspects of life for people. There are many lessons we have to learn from Covid, including the public health issues and all of that, and from the changes in society arising from the crisis. We should be very grateful to the Irish people for the way they bought into all the draconian measures that were introduced, from the very start of the lockdown period in March and April. They put the greater good ahead of their own immediate concerns and their family lives. Many people have suffered and lost loved ones through Covid and that will leave a scar. In my opinion, it will have an impact for generations to come, not just for the people who experienced it and were traumatised by it. I have heard of many people who went through very difficult experiences during this time.
We need to look at what has happened in society in recent months and recognise the extreme lessons that can be taken from it. Things are different from how they were prior to the pandemic. This time last year, if people in this House talked about working from home, it was seen as an aspiration that rural Deputies had in their minds. It was considered flimflam and something people did not take seriously. I say this with the greatest respect but city people thought it was an aspiration that was out of touch with reality and that everything would have to be as it was, with society having grown through urbanisation over the past decades. The view was that everything had to be in the large cities. If the people who are making decisions, whether they are from large urban centres or not, reflect carefully on what has happened, we will be able to build a better Ireland out of it.
We have to look at a continuation of remote working. Going back ten or 15 years, when a programme of decentralisation was announced, it was scoffed at and begrudged, with some media people saying the plan was drawn up on the back of a cigarette packet. I would challenge all those who were very critical of the programme because, in fact, it had an enormous impact where it was carried through and brought to fruition. In the instances where it was effected properly, it had a huge impact on the Departments and agencies in question and an enormous economic impact on the communities to which those services were decentralised. The Minister must take a very bold approach in looking again at the decentralisation of workers out of the large urban centres.
We in rural Ireland have an awful lot going for us. At the height of the pandemic, many people were looking energetically at the prospect of rural Ireland being a place where they could live and work and, in addition, better protect their families going forward, because rural communities are less vulnerable to infection than those in large urban centres as a consequence of there not being too many people together in the one spot. We have to look at the positives of living in rural areas and be unashamedly demanding that society take on board what we have to offer. We must make no apologies in any way, shape or form for the fantastic facilities we have in rural communities. In fact, we must build on them. Where policymakers or others are looking down their noses at country folk, we must seek to take that attitude away and dispel it once and for all. We have a massive amount to offer, from the cradle to the grave, and we must ensure that decentralisation is put back on the table and that people are taken out of the large urban centres.
Before the pandemic, and especially in the period prior to the election, many people were talking about the trains being full going into Dublin. People were commuting on a daily or weekly basis from Cork, Limerick Junction and everywhere else and we heard about how the early morning Cork train was full at Thurles or even before it. That is not living. We have proved that the work people were doing in the cities can be done very well and, in some cases, even better when it is done in rural communities. We have fantastic education facilities and better communities than anywhere else. That really needs to be acknowledged and we need to look at how we can make things better for those communities into the future.
The provisions in the July stimulus are desperately important because many businesses, particularly in the service and tourism industries, have been shattered by the pandemic. We have seen how bus contractors, for example, have lost their livelihood. I have been talking to many people who would have worked on bus tours during the summer months. All of that has changed. We have to be realistic about what we can rebuild. We must look to rebuild sustainable communities throughout the State. We need to challenge the sometimes nonsensical approach - I have to use that word - people in Departments take to issues concerning rural Ireland. There is no shadow of a doubt that such an attitude is there. A type of dismissive approach to rural communities is inherent in some Departments. Rural communities have the ability to contribute enormously to Irish society and we have to make sure that policymakers, whether politicians or senior people in Departments, recognise what we have to offer and that many workers from rural areas can give a better service to people if they are allowed to work from home.
Many Departments have been decentralised over the years and every public representative in the country engages with them. Such offices, whether in Kerry, Limerick, Clare, Cork or anywhere else, are efficient and excellent at doing their job. The Department of Agriculture, Food and the Marine was decentralised to Wexford and Portlaoise and no one can say that those two offices are not doing their jobs properly. We have to challenge this notion that it cannot happen because it can, with the proper will from the Government. We should take a look at what happened during the pandemic. Irish people are always a step ahead and they have made these decisions already. One multinational company told its workers this week that it would not bring staff who were working from home into its headquarters for another 12 months. It has made the decision that people are productive while working from home and are doing an excellent job in those communities. We as a State have to take on board what is happening. People have changed their attitudes, spoken with their feet and have been working from home in their communities. Doing so leads to a better life, more fulfilment, more involvement in communities, a better family life and a better society that supports families, elderly people and young people. It leads to a completely better life and this notion that everything has to be centred in Dublin must be dispelled.
As the Government makes decisions over the next while, I appeal to the Minister to be bold and brave and to embrace the changes society and people have made by voting with their feet. We must engage with people and embrace the changes they have adopted. We must also put a proper scheme in place to incentivise people to work from their own homes and communities and to enhance those communities the length and breadth of the country. I refer to my own community in Duhallow in Cork North-West. We must also make sure that the decisions taken are brave enough and that the Government is brave enough, on this occasion, to put together a proper decentralisation agenda. Departments should be moved out of Dublin to places with cheaper rent, reduced commute times and less demand on taxpayers for transport and housing. By doing that, we can have more people living in rural communities and build them up.
I welcome this Bill but I have some deep reservations about it. They are quite technical and I hope the Minister can take them on board. There is a pattern in rural areas, particularly along the west coast, of tourism businesses opening from St. Patrick's Day, or around March or Easter, and closing around Hallowe'en or near Christmas. Many of them are not open in January and February every year. That is crucial because, as a consequence, they were not eligible under the TWSS. I welcome the effort to address this through the introduction of the EWSS. Many of these businesses, such as hotels and so on, did not open at all in the first half of this year and so their turnover for that period was down by 100%. If the staycation incentive works, their income in the second half of the year might be quite good and might be over the 70% threshold. According to the Bill as drafted, these businesses, which were not entitled to the TWSS because they were not trading in January and February, will also not be entitled to the EWSS if their turnover in the second half of the year is over 70%, despite the fact that the gross turnover might only be 40% of their 2019 turnover. Businesses that were trading in January and February and continued trading throughout the year at a capacity of just under 70% would be entitled to both schemes. I suggest a very simple change, which is that the 1 July date is put back to 1 January. If a business' turnover for the year is down by 30%, it should be entitled to the scheme. Otherwise, there will be a double-whammy for seasonal tourist businesses, which will put many of them out of business.
I am always worried about the second iteration of a scheme because sometimes when people get at it, they add more and more conditions. When I looked at the small print, I noticed that, for some reason, proprietary directors are now excluded from the EWSS scheme. Ireland is full of very small self-employed businesses, some of which are formed into small companies, and the proprietary directors can sometimes comprise between 40% and 70% of the workforce. These proprietary directors are ordinary workers in the business as well. This Bill proposes to allow them to write off last year's tax, take a credit or average it over two years, but that is not going to solve these people's problems because while some of these companies will be making a profit, the actual profits will be very small once they have paid themselves a salary. Some of them will have a small turnover. I know of one company in the crystal business, for example. As there will no foreign tourists this year and its product is not as big a seller on the local market for the staycation business, it will hold onto its master craftspeople for the full year and will produce products that, please God, it will be able to sell next year if its bookings hold up and we get international tourists. Its other choice is to let its master workers, who in some cases have been there for up to 40 years, go. The Minister knows the consequence of that. Losing that kind of expertise would decimate a small business. I hope that even at this late stage the Minister might be able to look at the exclusion and take it out of the Bill, at least for very small companies. It would make a significant difference if he did so.
I refer to the staycation or stay and spend tax credit. I listened to the debate on this matter and I can understand the attraction from an administrative point of view because it is a good fix given how many taxpayers there are. However, I join those who said it removes a very important segment of people from the market, namely, those who do not have a taxable income or do not pay income tax.
As the Minister is aware, there is a tax exemption for people over the age of 65. Couples with an annual income of less than €36,000 and single persons with an annual income of €18,000 do not pay tax. Many of those people, however, have paid for their houses, have a little bit of money in the bank and have some to spend. If anyone doubts that, I suggest that the Minister talk to his good colleague, Deputy Ring, who lives in Westport. That is a town that stays open throughout the winter every year, specialising in a market built around the railway station. People over the age of 65 get free travel to Westport, where they stay in good hotels at good rates. That has created great life in the town.
This scheme will not attract pensioners such as these because there is nothing in it for them. There has only ever been one scheme with a reversible tax credit. I was trying to recall which one it was. People who had no tax to pay could get the value of the credit back from the Revenue. It was a simple enough mechanism. Revenue has the bank details of nearly everybody and it is very good at making tax refunds. If someone sends in a tax return to the Revenue and has slightly overpaid because of health expenditure, etc., the Revenue will always repay the overpayment. It is efficient and not overly bureaucratic.
It would be a major boost to this scheme if the Minister included such a process and made a rebate available. Even people with no income tax liability, therefore, could get the value of the tax credit paid into their bank accounts. There is a major market for the very people the Minister is trying to get to spend money, namely, savers with money in the bank and people with no debts. We must remember that those over the age of 65 account for a large proportion of the people with the ready cash needed by businesses in many towns. Westport and other towns in the west will make themselves safe regarding Covid-19. They will organise in a safe way and the same has to be said for Iarnród Éireann. For this reason, the change I propose could be introduced.
These are practical measures that could be taken that would address the little gremlins that get into schemes. To summarise, I ask that the 1 July date be brought back, as otherwise the scheme will be totally lopsided against seasonal businesses, which will, please God, do relatively better in the second half of the year, having had no business until the end of June. The second point is in respect of the proprietary directors and the third concerns making it even better for staycations by allowing all people registered with the Revenue in on the gig.
I thank Deputy Ó Cuív. In recognition of the political groupings and the manner in which Members have indicated, I call Deputy Michael Healy-Rae, who will be followed by Deputy O'Donnell. Deputy Healy-Rae has up to 20 minutes.
I will not take that long, but I thank the Acting Chairman for allowing me the opportunity to speak on this important issue. I have not had the opportunity since the Minister's reappointment to wish him the best of luck and success in his role. I know he will be extremely diligent and hardworking, and I always appreciate and respect that very much. The Minister knows that the hospitality sector, including our hoteliers and vintners, was desperately hoping that radical changes would be made in the VAT rate and it would be reduced again. There were calls to bring the rate down to 0% for a period and then increased back to 9%. I was hoping the Government would have looked at that proposal sympathetically because it would have been a great stimulus and would have encouraged people to use the hospitality sector again. Much of that sector is on its knees now.
I must use this opportunity to plead with the Minister, on behalf of the Vintners Federation of Ireland, VFI, which represents our publicans, to ensure that pubs will be allowed to reopen on or before 10 August. The major fear people have is that the pubs will not be allowed to open then either. If the Minister can, I would like him to make a statement on whether it will be possible to allow the pubs to open on or before 10 August.
Returning to the rate of VAT, I honestly do not think it should have been increased from 9%. I lobbied the Government and the Minister hard about this issue in the past and I was hoping this opportunity would have been taken to bring VAT back down to a much lower rate. Unfortunately, that did not happen. There are also anomalies, for example, when we talk about trying to ensure that employers will be able to continue benefiting from the existing employment incentive schemes. I appreciate what the Government is trying to do, but as a person who operates a small business, I fully understand the difficulties small businesses have now. I referred to small businesses but I must also talk about bigger businesses because bigger employers have the same issues as smaller employers, only compounded by having more employees. They are desperate not to lay off people. They want to get everybody back to work and keep employing the people they have because they respect the work of those people and their contribution to businesses over the years. These employers just want to get the wheels rolling and the show on the road again.
There are issues with the fine-tuning of this initiative. The provision setting out the percentage of turnover by which businesses must be down if they are to continue to receive these payments can be misleading. I know of businesses which should be continuing to avail of the scheme in some shape or fashion but cannot do so because of the way the reduction in income is set. The reduction should apply for a period of time.
I am not one of those, like some who sit to my left at times, who believe the money in the Minister's pocket is endless and he can wave his hands and do whatever he likes. I am a realist and live in the real world. I understand the budgetary constraints the Minister operates under. I realise fully what it takes to balance a book, and whether someone is the Minister for Finance or the proprietor of a pub, shop or small manufacturing business, I live in the real world. I am not asking the Minister to do the impossible. I am asking him to do what could be achieved and perhaps to readjust the figures to allow people, for a limited time, to continue to receive the assistance they need regarding employees. Sometimes being in business is like being a farmer. It could be a case of hitting a desperate wall of financial difficulty, and if it were possible to get over the hump, it might be possible to reach greener pastures where better days would be ahead. It is like the situation during the last economic crash. Many businesses went out of operation and we were all terribly sorry to see that happen. A small thing might have sustained those businesses then and got them over that hump. All I hope now is that the Minister and his officials will be able to look sympathetically at the types of cases I am alluding to.
The more businesses that can be opened and the more economic activity we can get going, the better. It is awful to walk around, even in the city of Dublin, and see all the fine businesses still closed. It is upsetting and frightening to think of all those people at home who would rather be gainfully employed in their workplaces. They would give anything to get back to normal and that is all people want.
I am not coming in here knocking and criticising the Minister or his Department for what they have been doing.
I honestly think the Government has been as proactive as possible. I would have reservations over the amount of praise lavished on the EU deal that was agreed last week. The Minister knows that I acknowledge everybody's work. The Taoiseach travelled to take part in last week's summit and of course he did his best but I would not herald it as a great deal for the Irish. We will have to contribute an awful amount of money so there is an argument to be made there. That said, I believe everybody is trying to do their best. It would be welcome if we stimulated the economy and kept small businesses going while trying to address anomalies within the system for a period of time. It would mean a lot to the people I represent.
I spoke today and yesterday evening about musicians. There are approximately 35,000 musicians in the country about whom there has been very little talk. Their lives have been completely turned upside down and their financial needs are as great as anybody else's. Many of them were not working on 6 March and have not been working since and, as such, have failed to get any Covid money. Those people have been unemployed all of this year. This was to be their time for making money, playing music and entertaining people but, unfortunately, it has not happened. I desperately ask the Minister to help with this issue.
There are imaginative business people in that sector such as the O'Donoghue family in Killarney, County Kerry. That family has been involved in the hospitality sector for decades, more than 60 years, proudly flying the flag for Kerry and entertaining people in the magnificent INEC. They came up with the idea of drive-in concerts and, unfortunately, had to scrap their programme because it was deemed that entertainers should not be on stage. At the same time, drive-in bingo was perfectly acceptable. There should have been no problem if people were acting responsibly on stage and there could have been one-man or one-woman shows. Where is the public health danger in that? It did not make sense.
That innovation and others like it would help to create economic activity and employment. I appreciate that the Tánaiste last week told me that the Government was going to look seriously at the issue. I am naming the INEC in Killarney because it is my own local centre for that type of entertainment but how many more businesses could have that type of drive-in concert? These are employers who are trying to keep their doors open. Could we, as politicians, not help to facilitate that type of drive-in facility where entertainment would be provided? If I thought it would cause public endangerment, never in a million years would I ask the Minister to consider it. I do not want to see one person's life or health endangered but, at the same time, we cannot wrap ourselves in cotton wool forever and consider it unsafe for people to drive a car into a massive car park to watch a concert on stage. My goodness, where is the wrong in that? Where is the public health endangerment? It does not make sense.
I ask the Minister and the Government to consider sensible suggestions such as that one. I rely on the Minister to be commonsensical. He cannot tell me that the Government will look at these kinds of suggestions in the future because we need to look now. We need this to be done before Friday in order that in the short time that is left of our summer, businesses can be given a green light and a helping hand from the Government.
I also want the Minister to do everything he can for the hotel industry. I have been contacted by many employers who are worried about getting people back into the workforce if they have work available. Employers want to ensure that the Government will do everything possible to encourage people, if there is work available for them and as soon as it is safe and appropriate to do so, to come off the pandemic unemployment payment.
I thank Deputy Michael Healy-Rae for giving way. I welcome the July stimulus package of €7.2 billion. I wish to raise a few points that have come up in conversations I have had with business people in Limerick and north Tipperary, particularly relating to the employment wage subsidy scheme. The existing scheme covers proprietary directors, who are people with more than 50% shareholding in a limited company. Many businesses in the SME sector operate such incorporations. Typically, a person to whom that applies starts out as a sole trader before incorporating into a limited company. Proprietary directors are covered under the existing scheme and would be considered an employee of a limited company. I think it was a good measure to keep all employees together, including proprietary directors.
Under the legislation before Members that provides for the employment wage subsidy scheme, proprietary directors do not qualify. That needs to be amended. I know that, under the previous scheme, the Minister looked to correct anomalies where they arose. The general thrust of the scheme is very good.
I hope that guidelines will go up on the Revenue website as quickly as possible. Many employers are asking me about the arrangements for paying staff and the amount they can expect to receive. Ultimately, this matter is all about getting people into employment and keeping them there.
I ask the Minister to look specifically at amending the legislation to include proprietary directors who are effectively the owners of SMEs that happen to be incorporated, as many businesses are. That is something that needs to be corrected and amended. I have been getting a lot of feedback on that matter. The guidelines for the scheme must go up online.
I welcome the fact that the Minister is allowing business losses for a sole trader in 2020 to be put back against 2019. Many businesses will be getting their 2019 accounts ready at the moment and will file returns in October. It would expedite matters if people can throw the losses back to the 2019 tax year. It is likely that people will have overpaid tax last year and would be entitled to a refund that would give their businesses an enormous boost. That is important.
The staycation credit is welcome. The Minister has talked about an application through which people can claim that credit and it should be put in place as quickly as possible to allow people to make those claims. It is a welcome measure. It is good that consumers will pay hotels and bed and breakfast accommodation to stay in them and, together with other areas of hospitality, can claim a credit back. Pub owners are anxious because they want to reopen in a safe fashion and I ask that guidelines for that area will be looked at.
I will turn now to look forward and consider the future of Ireland. The negatives from the pandemic have been difficult on businesses but there have also been positives. There is now a model for working from home and flexible working hours that can work. Using Zoom meetings benefits the climate because people do not have to travel. I welcome the fact that we are looking at that whole area. Decentralisation must now be looked at again in a constructive way. The last effort at decentralisation had a few successful elements but ran aground. It needs to be looked at again and issues like traffic must be considered. Balanced regional development requires 75% growth outside Dublin.
That is important and would be a practical measure to assist those outside the greater Dublin area.
The Microfinance Ireland loan scheme has been a great success to date. However, the Minister is probably aware at this point that it is not accepting any new applications. Many businesses want to apply for loans and to get their businesses back up and running. I ask that the extra funding that will be made available to Microfinance Ireland be expedited. It would have a very practical import. I also welcome the fact that the restart grant scheme has been significantly enhanced. That is important for businesses.
The July stimulus package is to be welcomed. I expect it will feed into the national economic plan in the next budget. I always felt that one of the successes of the Covid pandemic from the point of view of Government was that it was very flexible in regard to the arrangements that needed to be tweaked. The employment subsidy scheme was tweaked on a number of occasions. It works very well.
We need to tweak other schemes to ensure that proprietary directors can be included. That would make an enormous difference to businesses. There is an anomaly whereby employees are in receipt of the WSS but two, three or more proprietary directors cannot claim Covid payments because their company has had to cease operation. It is an anomaly that needs to be corrected.
We need to get the staycation app up and running. Decentralisation needs to be progressed. There is a need for a White Paper policy statement on that.
If the Minister did nothing more but instruct Microfinance Ireland to continue to accept loan applications so that they can be assessed until such time as extra funding is put in place to allow payouts, that would be welcome. There is no reason we should lose time. It is something about which I feel very strongly.
This Bill is about getting people back into employment. Businesses face very challenging times. I commend the Irish people and, more particularly, Irish businesses and employees on what they have come through. The July stimulus will provide them with a significant degree of support and I compliment the Government on its work to date. I will continue to work with it. Anything I have put forward is done with the aim of improving what are the very good schemes that are in place and ensuring they work to the maximum extent possible to keep people in employment and to get them back into work.