Dáil debates

Wednesday, 3 November 2021

4:17 pm

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I move: "That the Bill be now read a Second Time."

We are here to start our consideration of the Finance Bill 2021, which will give the necessary legal basis to the decisions announced in the budget and make a number of other necessary changes to tax legislation. The budget addressed the major issues facing Ireland: climate change, Covid and housing. In this budget we aim to support households, families, individuals and businesses to deal with the current challenges and to look to the future with more optimism.

Beginning with the income tax package, for next year it will have a value of €520 million. As I announced on budget day, I will increase the standard rate income tax band by €1,500, and the personal tax credit, employee tax credit and earned income credit will all be increased by €50. These changes will benefit everyone who pays income tax. The Finance Bill also contains changes in respect of the universal social charge, USC, which will ensure that a full-time worker on the minimum wage will remain outside the top rates of the USC and that medical card holders will continue to pay reduced rates of the USC for 2022.

Since the onset of the Covid-19 pandemic, the Government has provided unprecedented supports for businesses and workers. Some of this support has been provided by legislation under the aegis of my Department. The temporary wage subsidy scheme in the Emergency Measures in the Public Interest (Covid-19) Act 2020, the employment wage subsidy scheme in the Financial Provisions (Covid-19) (No. 2) Act 2020, the Covid restrictions support scheme in last year's Finance Act and the business resumption support scheme in the Finance (Covid-19 and Miscellaneous Provisions) Act 2021 all demonstrate a swift and effective response from the Government to provide timely and ongoing support for those whose livelihoods have been impacted. This support has been as important to individual employees as it has been to businesses. A total of 677,700 employees were supported by payments under the employment wage subsidy scheme, with €5.26 billion now paid out by Revenue in addition to €830 million in PRSI forgone.

I have always emphasised that there would be no cliff-edge to business supports. Therefore, the employment wage subsidy scheme will remain in place in a graduated form until 30 April. No change was made to the scheme for October and November. Businesses availing of the scheme at the end of the year will continue to be supported until the end of April. For the three months from December to February, a two-rate structure of €151.50 and €203 will apply. For the last two months of the scheme, March and April, a flat-rate subsidy of €100 will be put in place and the reduced rate of employer's PRSI will no longer apply. The scheme will close to new employers from 1 January 2022.

The pandemic has obviously resulted in changes to how we work. Remote working has enabled organisations to continue to provide services without having everyone physically in the office. This has allowed many people to achieve a better work-life balance, and Government policy is to support remote working. The Finance Bill will allow 30% income tax deduction for the vouched cost of expenses for heat, electricity and broadband incurred while working from home. This enhances and formalises existing arrangements which are currently operated by Revenue.

The Government recognises the great challenges posed by the housing issue and is addressing them through its Housing For All strategy. At the heart of this approach is the building of more homes. A key element of this strategy is the need to release land for construction of housing. This Bill aims to address that requirement by introducing a zoned land tax, the objective of which is to facilitate the public policy requirement that when suitable land is zoned and serviced for housing, it should be made available for residential development at the earliest opportunity. As part of the process of putting this tax in place, local authorities will first prepare and publish maps that will identify the land that will come within its scope. These maps will be updated by local authorities annually. There will be a lead-in time for the measure whereby land zoned before January 2022 will become liable for the tax from 1 January 2024, and land zoned after January 2022 will become liable for the tax after three years.

The Bill provides for a rate of 3% to be applied to the market value of land. I am satisfied that this is an appropriate rate to apply at the outset, and that it will have the desired effect of encouraging the timely activation of zoned and serviced residential development land for housing. To those who would argue that the rate is insufficient, I argue that this tax represents a significant charge on the income being generated by the land in question, and in many cases it will be uneconomic for a person to hold onto the land without developing it. I believe this measure will encourage landowners to develop this zoned and serviced land or to sell it to others to develop. In summary, I see the purpose of this tax as primarily being about changing behaviour rather than raising revenue.

I am aware that there are some who believe that a two-year lead-in time is too long. In response, however, we are dealing with a large body of land - in the region of 8,000 ha to 9,000 ha according to the Department of Housing, Local Government and Heritage - and therefore there is a need to get all the procedural matters right from the start, including the mapping, as well as a person's right to challenge their inclusion on the map. Failure to get this right could result in the whole process being undermined from the outset. It is vital, therefore, to provide a stable foundation for this new tax by ensuring that the necessary preparation is done properly. We will no doubt have further discussions on this matter on Committee Stage.

Finally, on housing, I would also like to highlight the fact that the Finance Bill extends the help-to-buy scheme in its current form for a further year to the end of 2022. The scheme will be comprehensively reviewed in the course of next year. In addition, the Bill extends the relief for pre-letting expenses for landlords for a further three years. This measure is aimed at ensuring the supply of rental property and is consistent with the Housing For All strategy.

I shall now turn to climate change. On budget day I said that the world is burning. We must take action. One of the ways available to us to reduce the temperature is through coherent and effective taxation policies. Carbon taxation is and will continue to be one of the main ways in which we can encourage changes in behaviour. It is important that we are clear and consistent in what we are doing. Last year, the Finance Act provided for annual increments in the carbon tax of €7.50 out to 2030. This was intended as a clear and firm signal for producers and consumers in terms of the price of carbon. It would have been absolutely wrong to resile from that signal as we experience the first change in fuel costs since this policy was implemented. As I outlined on budget day, moneys raised from carbon tax will be invested in targeted social welfare initiatives to prevent fuel poverty, be invested in a socially progressive national retrofitting programme, and be used to ensure a just transition.

We made significant changes to the vehicle registration tax, VRT, system last year in line with Government commitments to reduce emissions radically. The Finance Bill 2021 will continue this important work. The Bill makes further changes to the upper bands of the VRT table and extends the €5,000 relief for battery electric vehicles to the end of 2023. It also extends for three years the accelerated capital allowance scheme, ACA, for gas vehicles and refuelling equipment and extends the scheme to include hydrogen-powered vehicles and refuelling equipment.

The Bill exempts from tax the first €200 of income arising from the domestic generation of electricity supplied to the grid. This is intended to remove a barrier for entry for those who engage with the clean energy guarantee scheme.

The Bill extends a number of tax concessions for farmers including extending general stock relief measures for a further three years to the end of 2024. Young farmers stock relief, young trained farmer stamp duty relief and the registered farm partnership measures will be extended for one year to the end of 2022. This shortened period is necessary pending the outcome of CAP and related state-aid negotiations at EU level.

I will now go through some of the sections in the Bill in more detail but I will not have time to cover them all. Section 1 is one of a number of standard interpretation sections in the Bill.

Section 2 implements the USC changes announced in the budget. It raises the USC 2% threshold from €20,687 to €21,295 for the 2022 year of assessment in line with the increases in the national minimum wage applicable in 2022. This will ensure that the 2% rate remains the highest rate of USC that is charged on the income of full-time minimum wage workers. It also extends the reduced rate of USC for full medical card holders under 70 years of age whose individual annual income does not exceed €60,000 for a further year until the end of the 2022 tax year.

Section 3 provides for income tax relief for remote working, in the form of a tax deduction, allowing employees who work from home to claim 30% of the cost of electricity, heating and broadband, apportioned on the basis of the number of days worked from home during the year.

Section 4 provides for an exemption from income tax for the payment known as the pandemic placement grant made by or on behalf of the Minister for Health to qualifying nursing and midwifery students. The exemption applies to a maximum amount of €2,100 per qualifying student.

Section 5 extends the enhanced help-to-buy scheme by 12 months to 31 December 2022.

Section 6 gives effect to the budget announcement to increase the standard rate band and the main tax credits, with effect from 1 January 2022. As I said, the standard rate tax band will be increased by €1,500, with this increase applying to every individual. The basic personal tax credit available to married persons and civil partners jointly assessed to tax will increase from €3,300 to €3,400, while in all other cases the value of the tax credit will increase from €1,650 to €1,700. Both the employee tax credit and earned income tax credit will also increase by €50 from €1,650 to €1,700.

Section 7 provides a legislative basis for a number of concessionary exemptions from benefit-in-kind tax on employer-provided health benefits.

Section 9 provides relief from the benefit-in-kind charge applicable to employer-provided electric vehicles which are made available for use in the period from 1 January 2023.

Section 10 extends the sea-going Naval Service personnel credit by one further year, to the 2022 year of assessment. The value of the credit remains unchanged at €1,500.

Sections 12 to 15 provide for a number of pensions tax-related amendments to advance some recommendations made by the interdepartmental pensions reform and taxation group to simplify and harmonise the pensions landscape.

Section 16 extends the pre-letting expenses relief I mentioned earlier.

Section 17 removes a double tax charge on interest earned by a trust.

Section 18 brings companies not resident in the State that are in receipt of Irish-sourced rental income within the charge of corporation tax. This is in place of the income tax charge that currently applies. This change will result in the rate of taxation for such companies increasing from 20% to 25%, thereby equalising the treatment of these non-resident companies and that of those companies resident in the State. It will also ensure that such companies come within the scope of the new anti-tax avoidance directive interest-limitation rule also being introduced in this Bill.

Section 20 provides for the previously mentioned exemption from income tax of the first €200 of income arising from the domestic generation of electricity supplied to the grid.

Section 21 excludes capital expenditure on equipment that operates on fossil fuel from the accelerated capital allowances scheme for energy-efficient equipment.

Section 22 is another climate change-related amendment. It extends the accelerated capital allowances scheme for capital expenditure on gas vehicles and refuelling equipment up to 31 December 2024, and includes hydrogen-fuelled vehicles and equipment in the scheme.

Section 26 makes several changes to the employment investment incentive, the start-up relief for entrepreneurs and the start-up incentive. It extends the scheme for a further three years, broadens the range of investment vehicles that can be used, relaxes the rules concerning the so-called "capital redemption window", and removes the 30% expenditure rule.

Section 28 provides for the application of the "authorised OECD approach" for the attribution of income to a branch of a non-resident company operating in the State.

Section 30 introduces new anti-reverse-hybrid rules, in line with Ireland's commitment to implementing the EU anti-tax avoidance directives, and provides for several corrective amendments to the anti-hybrid rules introduced in 2019.

Section 31 introduces an interest limitation rule, as required by the EU anti-tax avoidance directives. It will impose an earnings-based limit on the amount of interest that a company may deduct in calculating taxable profits. The introduction of this measure, together with the anti-reverse-hybrid rules in section 30, sees the completion of Ireland's transposition of the anti-tax avoidance directives.

Section 32 relates to the film tax credit and confirms that payments made directly by a qualifying company to an individual involved in the provision of labour-only services for the purpose of the production of a qualifying film qualify as eligible expenditure.

Section 33 provides for the introduction of a new tax credit for qualifying costs incurred in the development of digital games. This relief will not be available for games primarily made for advertising or gambling and will be subject to a cultural test administered by the Department of Tourism, Culture, Arts, Gaeltacht, Sports and Media. This section will be introduced subject to a commencement order, pending State aid approval.

Section 34 extends the tax relief for start-up companies to 31 December 2026 and extends the claim window available to five years.

Section 39 confirms the budget increase in the rate of tobacco products tax, of 50 cent on a pack of 20 cigarettes, in the most popular price category, with pro rataincreases on other tobacco products.

Section 43 waives the excise duty due on the renewal of certain intoxicating liquor licences for the second consecutive year – in other words, the licensing year 2021–22. This arises from the Government's decision of 21 July 2021 to provide support to vintners and other licensed premises, recognising the economic impact of Covid-19 on their businesses.

Section 45 makes a further climate-related change. The vehicle registration tax, VRT, rates for category A vehicles remain unchanged for low-emission bands 1 to 8, with a 1% increase for bands 9 and 12; a 2% increase for bands 13 to 15; and a 4% increase for bands 16 to 20.

Section 46 extends the VRT relief provisions for electric vehicles to 31 December 2023.

Sections 47 to 53 make changes in respect of VAT.

Section 55 makes several changes regarding the regime of the higher stamp duty rate of 10% where more than nine individual residential units are acquired.

Section 57 extends the bank levy for a further year, to 2022. As I indicated previously, no charge will arise for KBC Bank Ireland plc and Ulster Bank Ireland in order not to further disrupt their withdrawal from the Irish market. I expect to collect in the region of €87 million in 2022 from this levy.

Section 67 deals with changes to the employment wage subsidy scheme, EWSS.

Section 69 covers warehousing matters.

Section 70 relates to double-interest charging.

Sections 71 to 73 make changes to the penalty regime for deliberately or carelessly submitting incorrect forms, or failing to return forms.

Sections 74 and 75 make changes to the publication regime for tax defaulters.

Section 77 deals with the zoned land tax.

Section 79 transposes DAC 7, the EU directive on administrative co-operation.

Much of the work on this Bill will be done on Committee Stage. It continues to deliver on the objectives set out in budget 2022. I commend it to the House.

4:32 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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As we begin discussing the Finance Bill tonight, I am deeply disappointed, to say the least, that the Government is going to miss the deadline once again to do what is right by the families in Donegal and elsewhere who are suffering as a result of no regulation or light-touch regulation. Their houses are crumbling around them. The extended deadline, 9 November, is now going to be missed by the Cabinet because it has not got its act together. That is not acceptable to the many families who are in mental turmoil waiting for the Government to do the right thing. It is not on.

Agus é sin ráite, cuirim fáilte roimh an deis labhairt ar an Bhille Airgeadais 2021 anocht. Bhí an cháinaisnéis againn trí seachtaine ó shin. Theip ar an cháinaisnéis seo cosaint a thabhairt do ghnáthdhaoine ón méadú ó thaobh costas maireachtála agus ó na harduithe ó thaobh costas fuinnimh atáimid uilig ag feiceáil. Tugann an Bille seo seasamh dlíthiúil don cháinaisnéis seo, cé chomh holc is atá na teipeanna seo. Tugann an Bille faoiseamh cánach do thiarnaí talún ach níl faic ann do thionóntaí. Tá pacáiste cánach ioncaim anseo ach tá sé níos fearr dóibh siúd atá ar bharr an dréimire ná dóibh atá ar a lár. Teipeann ar an Bhille seo deireadh a chur leis na buntáistí cánacha a dtugtar do na creach-chistí atá ag ardú costais thithíochta agus costais chíosa anseo sa chathair agus níos faide as an bhaile. Tig linn i bhfad níos fearr a dhéanamh ná an Bille seo atá os ár gcomhair.

I welcome the opportunity to speak on Second Stage of the Finance Bill 2021. On my way here I was reflecting on the fact that this legislation is being considered and scrutinised in circumstances that are very different from those that obtained when we were here last year dealing with the Finance Bill 2020. The latter Bill was introduced on the eve of very stringent public health measures in response to the pandemic. Thanks to the resilience of our people, the dedication of all our healthcare staff and the success of the vaccination programme, we are in a different place, although it is somewhat worrying.

On that subject, I want to begin by drawing attention to section 67, which will extend the EWSS in a graduated form until the end of April 2022. This is a measure that Sinn Féin proposed and supports. Indeed, throughout the pandemic we have been constructive in our approach, arguing for necessary measures to protect incomes and support employment, and we have supported the Government when it provided these. However, we also hold the Government to account when and where it is failing, which is all too often. The recent budget, delivered just three weeks ago, is a case in point in that it fails to respond to the difficulties and challenges faced by ordinary people.

With rising prices and a spike in the cost of energy, workers and families need support and protection this winter – a winter that will be difficult for many of them.

In recent months, there have been more than 30 energy price rises which are expected to increase the average annual household bill by up to €500. In the 12 months to September, energy prices rose by 22%, electricity by 21%, gas by 14% and home heating oil by a whopping 46%. These prices will increase further in the months ahead, putting significant pressure on the finances of low- and middle-income households. The Bill could have responded to these challenges by giving workers and families supports in the form of providing for an immediate cut to their energy bills. Other European governments are trying to do so and some of them have succeeded. In Spain, VAT on electricity was slashed, reducing prices by 10%. In recent weeks, the Czech finance minister wrote to the Commissioner for Economy, seeking authorisation to zero rate VAT for household energy bills. In my view, there is no reason why this Government should not stretch every sinew to give struggling households a helping hand this winter, either through a VAT reduction or a rebate. Sinn Féin would immediately engage with the Commission to remove VAT on domestic energy bills for a three-month period this winter, reducing the cost of lighting and heating one's home by 12% for low- and middle-income households. That is what this Government should do. I encourage the Minister to do what some other European ministers have been trying to do, that is, to engage with the Commission to secure this objective.

The Bill comes amid a wider cost-of-living crisis, with prices rising more than 5% in the past 12 months for workers and families, the biggest annual price hike in 20 years. The Central Bank expects prices to rise by another 3% in 2022, further eating into the purchasing power of households. Budget 2022 and the Finance Bill needed to respond to the cost of living crisis but they did not do so. Increases in core social welfare rates failed to keep pace with the rise in prices, while the centrepiece of the budget and the Bill is a tax package that is untargeted and an irresponsible use of limited resources. Section 6 of the Bill proposes to increase the standard rate band by €1,500, with a €50 increase for each of the personal employee and earned income tax credits. The change to the standard rate band comes at great cost but it will provide no benefit whatsoever to the 80% of taxpayers who fall below it. That is the measure that is before the House. Overall, this tax package will produce €2 a week for a worker on a salary of €30,000 but will benefit the Minister, his colleagues and higher earners by €415 a year.

While the Bill provides tax reliefs for those on high incomes and even further tax relief to landlords through section 16, it offers absolutely nothing - zilch - for renters. Rents have risen to astronomical levels, yet the Government published and passed three months ago legislation that allows landlords currently to increase rents by another whopping 5%. Sinn Féin in government would have pursued a different agenda. We have been calling on the Government to follow that agenda - one that is fair and puts renters first, not landlords. That agenda involves introducing a refundable tax credit equivalent to one months' rent that would be put back into the pockets of renters and then a ban on rent increases for three years, which would effectively reduce and freeze rents. That is the action that is needed. It is what Sinn Féin would do if we had the opportunity to be in government. However, under Fine Gael and Fianna Fáil the deck is stacked against renters and struggling home buyers.

There is no provision in the Bill to end the speculation on or financialisation of housing that is driving up rents, locking workers and families out of home ownership and allowing the bulk purchase of homes by investment funds. Why would Fianna Fáil and Fine Gael stop it? The Minister agrees with it. His predecessors rolled out the red carpet for these cuckoo funds and vulture funds. This is Fine Gael policy. It is at its core and in its DNA. This is how it thinks it will solve this issue but we know the consequences of this policy - high house prices that are reaching the madness of the peaks of the Celtic tiger era, the highest rents in this city of any European city and numbers of which any Minister sitting at Cabinet for one year, never mind ten years such as the Minister across the floor, should be ashamed. However, that is the reality. That is what has been done and what will be maintained under the Bill. We in Sinn Féin would end that. We would apply the full rate of capital gains tax, just like any other business has to pay, on the disposal of property by investment funds. We would apply a 17% stamp duty surcharge on purchases of all homes, including apartments, by these funds and hike up the rate of tax paid on dividends to 33%.

The Bill contains a new measure announced by the Minister in his budget speech. He referenced it again today. It is the introduction of a residential zoned land tax in section 76 and related sections. The stated purpose of this tax is to encourage the activisation of zoned and serviced residential development land. While the failed vacant site levy was set at a rate of 7%, this new measure by the Minister will involve that being reduced to a rate of 3% of the land's market value and it will only apply by 2024. The Minister bravely tells us that he makes no apologies for that. I welcome that the tax will be administered by Revenue to ensure effective enforcement. Sinn Féin has been calling for that for some time in the context of the vacant site levy. The vacant site levy was, at least, 7%, though Fianna Fáil argued it should have gone up to 14% and Sinn Féin believes it should have been increased to 15%, but the Minister, in his wisdom, has reduced it to 3%. That is wrong. The Minister should have reformed the vacant site levy and brought it into the fold of the Revenue Commissioners. It is now left as an abject Fine Gael failure. I look forward to engaging with the Minister at the Committee on Finance, Public Expenditure and Reform, and Taoiseach, as we always do, and scrutinising the detail and operation of this proposed tax.

Disappointingly, the Minister and the Bill have again failed to implement a tax that Sinn Féin has been calling for since 2016, that is, a vacant property tax to end the scourge of dereliction and vacancy and to put much-needed homes into use. The Government has ignored it. It has refused and delayed the introduction of a vacant property tax for many years at great cost.

There are many other provisions in the Bill, some of which I welcome, such as measures to incentivise improved energy. Other provisions require further scrutiny at committee and I and the other committee members will do that. However, the impulse of the Government is wrong. Despite the need for a more responsive and active State, the Government has made clear that it is unwilling to make the decisions, particularly in respect of taxation, that would provide for the change people demand and deserve.

4:42 pm

Photo of Mairead FarrellMairead Farrell (Galway West, Sinn Fein)
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Gabhaim buíochas leis an Leas-Cheann Comhairle agus leis an Aire as an mBille seo a chur faoi bhráid na Dála. Ar ndóigh táimid anseo chun plé a dhéanamh ar Bhille Airgeadais 2021 de chuid an Rialtais agus is mór an trua é, i ndáiríre, nach bhfuil fís ann nó nach bhfuil sé ag déanamh tada do ghnáthdhaoine atá ag streachailt lá i ndiaidh lae ag iarraidh a gcuid billí a íoc ach, ar an taobh eile de, tá sé ag cabhrú leo siúd a bhfuil an t-airgead acu cheana féin. We are here to discuss the Bill, which outlines the taxation measures arising from budget 2022. In some ways, it is a surprise that we are already back dealing with the Finance Bill. The past year seems to have gone by very quickly. The Bill includes measures arising from the transposition of the EU anti-tax avoidance directive. Some of these measures were delayed in the Finance Act 2020 and previous Finance Acts. A glaring example of that is the interest rate limitation. Nevertheless, I wish to speak on some of the more pertinent issues as they apply to ordinary people and I will also touch on other measures that are absent from the Bill. I will try to do so by discussing these measures in the context of housing, the cost of living and the business environment.

As the Minister is aware, housing continues to be the issue of our day. It is the issue that never goes stale - the problems are simply fresher than ever. This budget is just a continuation of the kind of measures that helped to bring us to this point. What is included? There is an extension of the help-to-buy scheme. This scheme was criticised by the Minister, Deputy McGrath, while he was in opposition as being inflationary in terms of housing prices. The reality is that he was not alone in holding that view; it was also the view of the Economic and Social Research Institute, the Parliamentary Budget Office and the National Competitiveness and Productivity Council. The scheme has proven to be inflationary but it is still with us and I do not understand why that is the case. I suppose that, like the shared equity scheme, it suits some people but really negatively impacts the majority.

As regards landlords, section 16 amends section 97A of the Taxes Consolidation Act 1997 to extend until the end of 2024 the provision which allows tax relief for landlords for pre-letting expenses in the case of properties that have been vacant for a period of 12 months before they are first let. If you surveyed renters and asked them what they most wanted to see in budget 2022, a tax break for landlords would probably not have been high on their list of priorities.

They are struggling week after week and month after month to pay their rents. In our clinics, and I am sure it is the same for the Minister, we often hear tenants saying that they are being evicted because of the supposed desire of the landlord to sell the property. Often, we hear that some minor renovations are done and then the property is rented out again at a much higher rate. Landlords can claim deductions against rental income from the expenses that are incurred. Therefore, in a way, the Minister has created a perverse incentive for them to do this, if they think they can get away with it. Unfortunately, the reality is that sometimes they do. I am not saying that it is always the case, but the reality is that it does happen.

To be clear, Sinn Féin would not have implemented this measure. Some of the large landlords have done well over the last few years, particularly when we consider that we have the highest rents in Europe. We would have introduced a refundable tax credit for renters equivalent to one month's rent and banned rent increases for a period of three years, effectively reducing rents and then freezing them. At least the Minister warned us in relation to what we all knew was going to happen, namely, that there was going to be a rise in inflation. The European Central Bank had stated that when things opened up there was going to be a rise in inflation. I think it is a bit of a pity that the Minister's colleague, the Minister for Housing, Local Government and Heritage, did not appear to be aware of this. It must not have come up at the Cabinet table, as he introduced rent control measures linked to the harmonised indices of consumer prices. Now, it looks like he will be amending that again, as it should have been. What we need to do is to freeze and reduce rents.

Section 77 of the Bill introduces the new residential zoned land tax. It will apply to land which is serviced and zoned for residential development in circumstances where the land has not been used for the development of housing. The new tax will apply to the market value of the zoned residential land at an initial rate of 3%. Remarkably, that is lower than the vacant site levy, which is set at 7%. I must say that I welcome the fact that Revenue will now be collecting this tax rather than the councils; it is something that we have long been advocating for. Like the Leas-Cheann Comhairle, I am from Galway city. If the Minister were to go to Galway city, he would see how plagued we are with vacant sites. What we need is strong action. The fact remains that the Minister intends to have a two-year lead time, and the new tax will apply in 2024 where the residential land is zoned after 2022. That is unbelievable. The reality is that the can is being kicked down the road. We have a housing crisis and a vacant site crisis, which must be dealt with immediately.

I also note that the new tax will be paid on a self-assessment basis. The valuation date for the purposes of establishing the market value will be 1 February for the relevant year. There is a requirement to revalue the land for each successive three-year period thereafter. Price inflation for residential zoned land is running at around 4% this year. The Minister has set the tax rate below the rate of inflation and once a landowner makes a self-assessment of the value, he or she does not have to do so again for another three years. I think that is beyond the realm of the ridiculous.

Of course, there are no measures included in the Bill to stop the financialisation of housing. We would end the great sell-off by ending the tax advantages which have been given to investment funds against the interests of hard-pressed renters and home buyers. We would apply the full rate of capital gains tax on the disposal of property by investment funds, apply a 17% stamp duty surcharge on the purchase of all homes, including apartments, by investment funds, and increase the rate of dividend witholding tax on property investment funds to 33%. The reality is that while this Government remains in place, a house will not be a home, it will be an asset class - something for speculation, concerned with yields, dividends and capital appreciation.

With regard to the cost of living, we have seen energy prices continue to spike. We know, from the CSO, that energy prices rose by 22% in the 12-month period to September 2021. Electricity prices rose by 21%, gas prices rose by 14% and the price of home heating oil went up by 46%. The carbon tax has also been hiked further. Let us hope that there are no blackouts this winter because of all the data centres that have been built over the last few years. We need to help reduce energy prices, not increase them. There should have been no hike in carbon tax by the Government in the budget, because the reality is that many people are struggling to pay at this moment in time and they are going to struggle even further.

In respect of the business environment, I note there is an income tax break in the Bill for foreign aviation staff, so long as the company they work for has a place of management here, which is good news for these workers because, of course, there was not much joy for domestic aviation workers during the pandemic.

With regard to the bank levy, I note that section 57 of the new Bill will result a reduction in revenues. What seems to be the case is that the Minister is reducing revenues by exempting KBC Bank Ireland and Ulster Bank from the levy, as they are now heading for the exit. Why he is doing this is, frankly, beyond me. These banks have enjoyed an oligopolistic market with little competition and now they are exempted from this levy. That is like a nice parting gift for them.

I am looking forward to Committee Stage. It is quite an interesting time. There will be some issues that I look forward to teasing out with the Minister. I note that the Bill contains a provision for a 50% relief in excise duty for non-EU small breweries. That amounts to a tax break for non-EU producers of alcohol. We know that Irish small breweries tend to be more labour-intensive than their large multinational competitors. I would be interested to tease out why the Minister is extending this tax break to their non-EU competitors. Will it not harm the domestic industry, while also increasing tax foregone?

Chun é seo a chríochnú, is mór an trua é nach bhfuil fís níos fearr sa Bhille seo do ghnáthdhaoine. I do not think it will deliver the transformative change that we need. I think it is largely business as usual, but I look forward to Committee Stage, to going through all the different amendments that will be brought and to have a proper discussion and engagement on it.

Debate adjourned.