Dáil debates

Tuesday, 21 March 2023

5:05 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

I appreciate the opportunity to speak on the Bill, which is relatively short and provides for some of the cost-of-living measures announced by the Government last month. The full package of measures will cost more than €1.2 billion and will put money back into people’s pockets, help with bills and ensure there is no cliff edge for the temporary measures already in place.

In the past year, Ireland has experienced a broad-based surge in inflationary pressures, leading to higher prices for households and businesses alike. The key driver of these pressures has been Russia’s illegal war in Ukraine. The Government appreciates the difficulties facing families and that is why significant measures, both within and outside the annual budgetary cycle, have been implemented in an effort to protect households and businesses. As a result of the prudent management of the public finances to date, we are in a position to help mitigate some of these price increases. In my remarks, I will concentrate on the measures contained in the Bill. A number of these measures were debated in the House on 22 February when the financial resolutions to give them temporary effect were approved. I thank the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach for its constructive engagement to date on the outline of the Bill, which means these important measures can move as quickly as possible through the legislative process.

The Bill is very short, consisting of six sections. Sections 1 and 4 deal with agri-tax reliefs. Deputies will be aware that a number of agri-tax reliefs were introduced or extended in Finance Act 2022, but, as the revised EU agricultural block exemption regulation, ABER, had not yet been agreed, it was at that time only possible to provide for them to the end of June this year. The new regulation came into effect on 1 January 2023.

Section 1 provides for the extension of farm restructuring capital gains tax relief to 31 December 2025, young trained farmer stock relief to 31 December 2024 and registered farm partnership stock relief to 31 December 2024, as well as the extension and amendment of the publication requirements of the accelerated capital allowance relief for capital expenditure on slurry storage to 31 December 2025 and the amendment of the publication requirements for the accelerated wear and tear allowances for farm safety equipment. The amendment of the publication requirements is necessary under the requirements of the revised ABER.

Section 4 deals with two reliefs provided for in the Stamp Duties Consolidation Act 1999. It provides for the extension of the farm consolidation stamp duty relief and the young trained farmer stamp duty relief to 31 December 2025 and for the amendment of the period during which an individual can qualify for the latter relief after acquiring land, from four years to three, to comply with Article 18(6) of the revised regulation. The sections also provide for transitional arrangements relating to the coming into effect of those changes.

Section 2 provides for the phased restoration of the rates of excise on petrol, diesel and marked gas oil that will take place in three stages in the coming months, as announced on 21 February. This will see rates restored on 1 June by 6 cent per litre of petrol, 5 cent per litre of diesel and 1 cent per litre of marked gas oil. On 1 September these rates will increase by a further 7 cent for petrol, 5 cent for diesel, 1 cent for marked gas oil. Rates will then be fully restored on 31 October, with a final increase of 8 cent for petrol, 6 cent for diesel and 3 cent for marked gas oil. The extension and phased reintroduction of these excise reductions is estimated to cost €383 million. These changes have been introduced by financial resolution and approved by the Dáil. I note that oil prices have fallen back in recent weeks, with Brent crude oil now down 14% in the year to date. Along with weakness in the US dollar, I am hopeful this will soon result in reductions in prices paid by motorists at the forecourt, in advance of the commencement of excise duty changes.

Section 3 deals with VAT changes, some of which were introduced by financial resolution on 22 February. It provides for the extension of the 9% rate of VAT on the supply of electricity and gas until 31 October 2023, as well as the extension of the 9% rate of VAT on the supply of certain goods and services in the hospitality and tourism sectors, among others, until 31 August 2023. Finally, it provides for the continuation of the application of the zero rate of VAT to the supply of Covid-19 testing kits.

I have already spoken on section 4 with section 1 as both sections deal with agri-tax reliefs.

Section 5 deals with the temporary business energy support scheme, TBESS, which was announced in budget 2023. To date 27,531 claims, with a total value of €60.61 million, have been approved under the scheme. A motion agreed by the House on 22 February approved a number of draft orders. These orders extended the TBESS to the end of April, while the monthly cash cap was increased from €10,000 to €15,000 for a business with a single premises and from €30,000 to €45,000 for a business with multiple premises. These changes took effect from 1 March. I said at the time that legislation would be required to implement the other changes announced by the Government. This Bill will provide for those changes. The TBESS is provided for in sections 100 and 101 of the Finance Act 2022. Section 5 will amend section 100 of the Finance Act 2022 to provide that I may make a ministerial order extending the scheme to a date not later than 31 July 2023. Section 101 of the Finance Act 2022 will also be amended by the Bill.

First, the scheme will be extended to 31 May 2023. The scheme was due to end on 28 February but, following exercise of the power contained in section 100 of Finance Act 2022, I extended the scheme to the end of April, which is the latest date provided for in that legislation. The further extension to the end of May will help businesses deal with the continuing impact of high energy costs, while the power to extend to 31 July will provide flexibility to further extend the scheme if considered appropriate. Second, the energy cost threshold is being reduced. To be eligible for TBESS currently, a business must have experienced a 50% increase in the average per unit cost of electricity or natural gas relative to the reference period. This is being reduced to 30%. This change will be applied retrospectively from 1 September, when the TBESS commenced. That means businesses whose average unit price for electricity or natural gas increased by 40%, for example, in September, October, November and December 2022 relative to the same months in 2021 and that are currently excluded from the scheme will qualify. Moreover, they will be able to submit a claim going back to 1 September 2022. Third, the amount of relief a business will receive is being increased. Businesses are currently entitled to a payment equal to 40% of the uplift in their energy costs. From 1 March, this will increase to 50%. Finally, the Bill provides for a new time limit for making claims under the scheme, which will be two months from the end of the specified period rather than four months from the end of the claim period to which the claim relates. As the amendments are subject to state aid approval, provision is made for a commencement order to give effect to the amendments when such approval is received. We hope that approval will be forthcoming shortly.

Deputies will be aware that the Government announced recently that a separate scheme will be considered for businesses that use oil and liquefied petroleum gas, LPG. The Minister for Enterprise, Trade and Employment has committed to exploring options for such a scheme and to revert to the Government on this matter in due course. The final section of the Bill is the standard one dealing with the Short Title.

Deputies will be aware that I recently announced a temporary change in the benefit-in-kind regime for vehicles and that I intend to bring forward a Committee Stage amendment to deal with this. While the move to a CO2-based benefit-in-kind system, which incentivises the use of electric vehicles and lower emission vehicles, is an important element of achieving our climate targets, a significant number of employees with vehicles in the typical emissions range experienced exceptionally large increases in their income tax liabilities since the start of 2023.

The Government has agreed to introduce a relief of €10,000 to be applied to the original market value, OMV, of cars in categories A to D, inclusive, in order to reduce the amount of benefit-in-kind payable. This is not applicable to cars in category E. In effect, this means that for the purposes of calculating benefit-in-kind liability, employers may reduce the market value by €10,000. This treatment will also apply to all vans and electric vehicles. For electric vehicles, the OMV deduction of €10,000 will be in addition to the existing relief of €35,000 that is currently available for electric vehicles, meaning that the total relief in the current year will be €45,000. The upper limit in the highest mileage band is amended by way of a 4,000 km reduction so that the highest mileage band is now entered into at 48,001 km. These temporary changes will be retrospectively applied from 1 January this year and will remain in place until the end of the current year.

As I said at the outset, this is a short but important Finance Bill. We already discussed some aspects of it in terms of motions and financial resolutions on 22 February last. I look forward to further constructive discussion on it now on Second Stage and as it progresses through the legislative process. The Bill provides for a number of targeted tax changes and specific measures to support families and businesses dealing with the impact of high inflation. I am glad to commend this Bill to the House.

5:15 pm

Photo of Marian HarkinMarian Harkin (Sligo-Leitrim, Independent)
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Sinn Féin has 20 minutes. Deputies Doherty and Mairéad Farrell will have ten minutes each.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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I welcome the opportunity to speak on the Finance Bill 2023. This legislation at its most general is a response to the cost-of-living and energy crisis that has impacted the financial resilience of households and businesses right across the State. In what follows, I wish to comment on the main provisions of the legislation. First, however, I would like to make a point regarding the very need for this legislation in the first place.

This legislation, providing as it does for tax provisions, comes outside of the normal budget cycle. In recent times, we have heard from Government Minister after Minister who have spoken against any suggestion that measures should be introduced outside the normal budget cycle to support households that are suffering under the cost-of-living crisis, yet here we are today with a Government doing just that. Of course, the fact that we are voting on this legislation is evidence that the recent budget last year was an insufficient response to the unprecedented cost-of-living crisis, as we pointed out at the time.

I will begin by commenting on what is absent from this legislation, which is the lack of any response to the sharp and sudden rise in mortgage interest costs facing so many homeowners. From tomorrow, the European Central Bank, ECB, lending rate will increase for the sixth time since July. This will take effect tomorrow. This rate hike will immediately impact more than 250,000 Irish homeowners who have already seen their mortgage repayments steadily increase since last summer. It will also hit the pockets of tens of thousands of borrowers who have had their mortgages sold on to vulture funds. These mortgage holders are effectively trapped with nowhere to turn. They have no option to fix their rates or switch. This is despite repeated assurances from Government Minister after Government Minister. Indeed, even the Taoiseach himself said they would not be any worse off if their mortgages were sold to these vulture funds. These borrowers are without doubt a lot worse off today. Many are now set to pay thousands of euro more in interest costs per year. I have seen letters from individuals that show me they are paying €5,000 and €6,000 more to service their mortgages to keep a roof over their families' heads compared to where they were last year, and still there is no response from the Government.

Speaking before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach in recent weeks, a representative from the Money Advice and Budgeting Service, MABS, said, "The interest rate hikes serve as a particularly alarming trend during a cost-of-living crisis, and it is having disastrous effects." That is what representatives from MABS told us. These are people who work on the front line. I echo the words of MABS, which is a State agency with first-hand experience of the difficulties borrowers are facing as interest rates rise. Irish mortgage holders are already paying interest rates 50% higher than the European average. The average interest rate on outstanding mortgages was 2.88% in December compared to 1.89% in the rest of Europe.

Sinn Féin has proposed the introduction of mortgage interest relief to absorb 30% of the increased interest costs for struggling borrowers. This is temporary and intended to run until the end of the year. It is targeted, absorbing a portion of the increased costs since interest rates began to climb. The Government rejected this proposal out of hand and it has come to the table with nothing to offer these individuals and families. This is despite the fact that it allows landlords to deduct 100% of their mortgage interest for tax purposes. However, it is refusing to provide any relief whatsoever - anything at all, no matter how small - for struggling homeowners who are trying to keep a roof over their families' heads and pay their mortgages. That is the missing piece in this Finance Bill.

Section 2 provides for the extension of the reduced rates of excise duty applying to petrol and diesel, although on a staggered basis, with the rates gradually increasing. While I welcome the fact that the current reduced rates have been extended until June, I believe the rates need to be kept under review. We have staggered increases in this legislation and the rate of tax on petrol and diesel is now going to be more than what it was when it was reduced. It will be exceeded as a result of further hikes in carbon taxes in October which, again, is the wrong decision. In this regard, I will point out that this section provides for the rate of excise across several fuel types, including home heating oil, to be increased. As we can see from this section, the Government is going to increase the rate of tax on home heating oil in the grip of a cost-of-living crisis. This is the second time it will have done this since last year. The Government will increase the price of a 900 litre fill of a tank by another €20 in the midst of soaring inflation, reducing the living standards of families. I cannot understand why the Government is moving in this direction.

Section 3 provides for the extension of a reduced rate of VAT on electricity and gas until the end of October. It would be fair to describe this as the Government's signature or headline cost-of-living measure announced last month to support households with their energy bills. It is important to lay out how little support this measure will actually provide, however. The Minister for Finance confirmed to me that the VAT extension will benefit the average household with its electricity bills by a total of €38, or less than €5 per month. The VAT extension will benefit the average household with its gas bills by only €3.25 per month. At the same time, the Government is going to increase gas bills with another carbon tax hike in May. Therefore, let us be clear. The Government made a decision last month not to provide any meaningful support to households with their energy costs until October at the very earliest. Even at that stage, we do not know if it will come up with anything. This is despite the fact that households consume as much, if not more, electricity in April, May and June as they do in October, November and December according to the Central Statistics Office, CSO.

As energy prices remain high, disrupting household finances and undermining living standards, it is worth considering the action that is being taken in other European countries to support families. Governments across Europe have capped the price of electricity so that their citizens can afford to run their homes. In Germany, the Netherlands, France, Poland, Austria and elsewhere, that is exactly what they have done. They have protected their citizens. This Government refuses to take similar action, however.

This section needs to be put into context. The support it offers household is minimal and throws into sharp relief the inaction of the Government in comparison to other European states in response to the energy crisis. I want to touch briefly on the decision to extend the reduced rate of VAT for the hospitality and tourism sector. I made it clear in a debate I had with the Minister earlier in the year that the reduced rate should be extended if it were found that failure to do so would have a negative impact on employment in the sector. In a written response, the Minister for Finance made it clear to me that the Department compiled a ministerial briefing, including an economic assessment, regarding the VAT rate in the sector. It noted that "the reduced rate is both regressive and very costly, and that this cost represents a transfer from taxpayers to the sectors which it covers."

In addition, the Minister said the Government accepted this assessment and the view was there was no case for the temporary 9% rate to remain. I ask the Minister to publish this briefing because the discussion surrounding this measure will re-emerge on the date it is due to revert to 13.5%, as that approaches at the end of August. We need full transparency. He should publish the assessment and let us have a proper informed discussion in relation to the appropriate rate.

I will conclude with some remarks on the TBESS. It is widely accepted that this scheme, as it was introduced, is a failure. As of 19 February, only €34 million had been paid in claims under the scheme, despite an allocation of €1.2 billion. I, therefore, welcome a number of changes that have been made to the scheme in the legislation. We have been calling for this scheme to be changed. Reducing the energy cost threshold from 50% to 30% means that businesses who experience significant energy cost increases but did not reach the threshold now will, and will be able to submit claims backdated as far back as September of last year. The amount of relief is also increasing from 40% to 50% and the monthly cap will increase from €10,000 to €15,000, but only from March. While welcome, this increase in relief under the scheme is not being backdated to September. I am interested to know why this decision was made given that the allocation for the scheme is unlikely to be fully drawn down even with these changes.

Finally, I want to express my incredulity and disappointment that despite the repeated calls made in the past six months, we do not have an energy support scheme for businesses that rely on oil and liquified petroleum gas, LPG. It is absolutely scandalous. The Government has knowingly abandoned businesses in my county of Donegal and right down the west coast that do not have piped gas as a source of their energy. The Government has just left them high and dry. We were told there was an announcement that this was going to be rectified and there is nothing in this Bill to deal with this. It is not acceptable. It is completely unjust and it is unfair. Areas that are particularly economically depressed are the worst hit. The Minister needs to sort this out quickly. We were told that the Minister for Enterprise, Trade and Employment, Deputy Simon Coveney, and his Department are examining options but it is simply too slow and not good enough for those businesses that have been locked out of TBESS.

There are elements in this legislation that I welcome but there are also sections that expose the weak response of Government on the issues bearing down on households.

5:25 pm

Photo of Mairead FarrellMairead Farrell (Galway West, Sinn Fein)
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The Bill will, of course, make the required changes that were identified as a response to the cost-of-living crisis. My colleague, Deputy Doherty, has mentioned this. We had heard time and time again that things could not be done but we kept raising them. I welcome that we are having this discussion. The Bill also includes provisions to amend the TBESS. I will speak to these issues as well as to others that are timely and necessary.

The first issue I will address is excise duty and VAT. Households are continuing to struggle with sky-high energy bills. I constantly have people in my clinic, as does every other Member in this Chamber, who are struggling with energy bills. I have had renters in to me who live in a house that has been separated into flats, which means the energy credit had to be split several ways between the various renters occupying the property. Suffice it to say it did not go very far.

Section 2 deals with the mineral oil tax and section 3 deals with VAT. Section 2 extends the reduced rates of excise duty applying to petrol and diesel but with staggered increases. I will not run through the timeline of different rate increases but I will flag that the increases will be in excess of the reduction the Minister previously brought in. This is due to the coming increase in the carbon tax. We had urged him to extend this reduction but that has clearly fallen on deaf ears. Under section 3, he has extended the reduced rate of VAT for electricity, gas and for the hospitality and tourism sectors. That would keep the lower VAT rate of 9%, reduced from 13.5%, in place until 31 October. While the lower rate is preferable to the higher rate, in the grand scheme of things it needs to be recognised that over the past two years, the cost of electricity and gas has more than doubled.

Coupled with rising rents, rising food costs and other service cost inflation, it is hardly surprising that many people feel their general quality of life is deteriorating. According to Department of Finance figures, the VAT reduction will reduce gas prices for households only by approximately €26 from March to October. This works out at only €3.25 per month. In this day and age, €3.25 in Dublin would not even cover the cost of a cup of coffee in most places. The coming carbon tax increase will also increase the price of gas by €17. The increase in carbon tax due on home heating oil and gas in May will also offset the minor reduction this measure was designed to achieve. We had urged the Minister to extend the reduction of the rates of excise on petrol and diesel beyond February. It is a missed opportunity as it could have counteracted the carbon tax increases

Section 5 deals with the TBESS and the various modifications being made to it. First, there is the extension of the scheme itself, which will be extended beyond the 30 April deadline to 31 May, with the potential to extend it again. It will reduce the energy costs threshold for the scheme and will increase the level of relief from 40% to 50% of the eligible costs, subject to the monthly limits provided for under the scheme. People welcome these changes but I am really disappointed that a scheme has yet to be established for those businesses that rely on oil and LPG. This issue comes up continually with me in County Galway because many people rely on them. I have been raising this for quite some time with the Minister and with other relevant Ministers. In his opening statement, the Minister said that something is going to come and something is going to happen, but the reality is that businesses have closed as a result. I am dealing with businesses that have to remain closed for part of the week or several days of the week. This does not only impact on the services they provide; this also impacts the entire rural community because it impacts on employment and on the general services in the area. The Minister said that he is looking at it and that it has been flagged to be looked at for some time now, but we need action on it now or it will just continue to impact on these businesses that will be forced into closure as a result. We can see the number of businesses that have been closed as a result.

We are discussing this because we know that people are struggling as a result of the cost-of-living crisis. We have been clear in our critique of the Government's response to this. Earlier I referred to the deterioration in people's quality of life as a result of the impact of increases in costs. One of those costs is something that is going to be debated again later this evening, which is the impact of the cost of housing and the precarious nature of the cost of housing. This is really impacting people's lives. We hear about accidental landlords but we do not hear enough about accidental tenants. This is very strange. Let us consider the number of accidental tenants, those people in my age group, who want to buy a home and who are simply not able to do that. A large number of people do not want to rent but they have no other choice. As a result, they are stuck on the rental hamster wheel and are constantly required to run faster and faster. They are constantly living in fear that they might receive a notice to quit and they will be unable to find somewhere else that is affordable, or even find anything at all. Now the Minister will get rid of the eviction ban before he has even put in place measures that he feels will help. Given the failure of all the schemes I have seen up to this point, I am not hopeful in any way, shape or form. We know, and the Minister has said that he sees it, that the number of homeless people will increase as a result. I raise this because all of this is linked. Even before we had the invasion of Ukraine and even before we experience the huge increase in the rate of inflation, the cost-of-living crisis in the State was horrendous because we had some the highest rents in Europe and because people did not have security of tenure in their homes It is only getting worse. The Minister is about to create what Fr. Peter McVerry has described as a social "catastrophe". That is on this Government's head with the decision it will make later tonight and tomorrow. I am really thrown by that and by this Government.

The Government is ready and willing to see people thrown out on the streets, which we know is going to happen. In Galway city and county, for example, there is not enough emergency accommodation to actually deal with people who will be in that position. There is simply no room for people at this point. We know how much people are struggling. A recent report from Barnardos confirmed that people are struggling to put food on the table for their children. People do not have any buffer but even if they did have a financial buffer, at this point there is literally nowhere to go. What do they do? We have not had a response from Government on that at all. I really am shocked in relation to this.

The reality is that this is the result of policy over a number of years. We saw it when Fine Gael welcomed the vulture funds to Ireland. We saw it when huge numbers of local authority staff were laid off, which had a serious knock-on impact that we are still seeing in the context of housing maintenance across our housing stock. We saw tax break after tax break being introduced for a whole variety of investment fund-type vehicles. The Government has presided over property prices going back above Celtic tiger levels and rents reaching the highest point ever. Now we are hearing about difficulties in the banking sector and I have to say I have an awful sense that we have come full circle here.

I am glad the Minister listened to us in the sense that he felt that something needed to be done. I did fear that nothing would be done. That said, there are serious issues here and the Minister has both the power and the opportunity to help people. He knows, having worked with me previously, that there are times when I agree with him and times when I do not agree with him but see his point of view. On this issue, however, I just do not get it. I really hope the Minister changes his mind.

5:35 pm

Photo of Gerald NashGerald Nash (Louth, Labour)
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The issue of the day is housing. On 31 March, the Government will bring an end to its five-month stay on evictions. We vehemently oppose this move which will be catastrophic for countless numbers of renters who, if they are made homeless, will have nowhere to go. In my home town of Drogheda, which is Ireland's largest and most populous town that has yet to be designated a city, there are four properties to rent on www.daft.ietoday. This Government has done next to nothing to put any contingencies, mitigations or ameliorating measures in place for those who may lose their homes even though it has had five months to do so.

The Government is saying, and the Taoiseach said it again today during Leaders' Questions, that it is considering taxation measures aimed at small landlords and that they may be announced in budget 2024 in October. I am no cheerleader for landlords of any description. I am only repeating the commitments the Government has made and has yet to deliver on. I say this because we have a Finance Bill before us but even with the controversial ending of the eviction ban coming in next week, the Bill contains no such measures. Why not? The Government is still considering what it might do, five months after the introduction of the original eviction ban and several months before budget 2024 happens. What is the Government going to do in the meantime? This is a missed opportunity for it to do the things it has commented upon in the media in recent weeks. It is difficult to take the Government seriously when it refuses to do something it could have planned for over the last five months and chooses to kick the can down the line for another few months while people are put to the pin of their collar and when we know there is going to be a serious wave of evictions experienced in this society, in every community across the country, over the next few months.

The measures underpinned by this Bill and the total package of cost-of-living measures the Government announced last month are too little, too late for struggling households across the country. The fact that the Minister has had to produce another Finance Bill so soon after the last one is a frank admission that budget 2023 has let too many people down. The economy is doing well and that is, of course, a good thing and something of which we should all be proud. Ireland is not in recession but too many households are. There are record numbers of people at work but over 20% of them are on low pay. For far too many people, this economy is not working in the way it ought to work. We have a record Exchequer surplus and very high tax revenues built on the backs of hard-working people but too many of those same hard-working people cannot afford to buy a home or find a place to rent and if they do, from late next week, they might find themselves on the streets because of the ending of the eviction ban. The self-congratulatory mode of the Government needs to stop. As I have said it before, one cannot eat good GDP figures and good Exchequer figures will not heat one's home. It is what we do with taxpayers' hard-earned money that matters. Short-term measures, such as those contained in this Bill, simply do not go far enough in the context of the extent and nature of the problems householders are experiencing.

It can be difficult to be proud of a society that tolerates 1 million of its citizens living below the poverty line. Politics is about choices. What is interesting about this Bill and the other so-called cost-of-living measures announced recently is not what is in them but what is not in them. There is nothing in the recently announced measures for the low paid. We recommended an increase in the national minimum wage from €11.30 to €12 because with inflation, the incomes of those on the minimum wage are falling in real terms. None of the measures announced in recent weeks or the provisions in this Finance Bill addresses that issue. Of the over €1.25 billion in the Government's recent package, our estimate is that less than half went to people on social welfare. We need real and long-lasting measures that increase the income of low-paid workers and those on social welfare on an ongoing basis. That is why social welfare payment rates must be indexed. The Labour Party would have approved a full double payment of social welfare as well as a full extra month of child benefit. We would have added €8 per week to all social welfare payments which would, in effect, result in a €20 increase based on the figures last September, before the budget. That is a proven way to address poverty. We wanted additional support for lone parents and we called for the extension of the fuel allowance to recipients of the working family payment. The Government has not acted on that issue and has again failed to address the cost-of-living crisis for the least well paid and least well off in our society.

This Bill will make very little difference for many people. The Government will tell us that it is about giving effect to measures to reduce the cost of living but in fact, it is fundamentally about correcting mistakes the Government made in the budget. In February, when the Government introduced its mini-budget that was not a mini-budget, I said the measures were proof that it had got its September budget wrong. Should we congratulate the Government for seeing the error of its ways and trying to fix the damage with this Finance Bill or criticise it for getting it so badly wrong in the first place?

Let us start with TBESS. The measures in this Bill will see the scheme extended until the end of May and the threshold for qualification cut from a 50% rise in energy costs, as it stood a year ago, to a 30% rise from now on. The level of relief will increase from 40% to 50% of eligible costs, with payments now capped at €45,000 instead of €30,000 where the business is carried on from more than one location. All of these are welcome measures, particularly for small businesses, but as with everything in the Government's mini-budget that is not a mini-budget, it is case of too little, too late. The Government is introducing these changes to TBESS because the original scheme was an unmitigated disaster. The Minister put on record earlier the drawdown from the scheme which comes in at about €60 million at this point. The House should not take my word for it, in terms of my critique of the scheme. The Department of Finance itself said in its review of TBESS that the scheme has, to date, "seen a relatively lower level of uptake than would have been initially expected and budgeted for". That is Civil Service speak for it being a disaster. Why was there such a low take-up of the original scheme? A survey conducted by the Kildare Chamber of Commerce gives us some clues, although the experience of the scheme has been common right across the country, including in my constituency of Louth and east Meath.

The survey of 300 businesses found that 76% of Kildare Chamber of Commerce members were not able to avail of the scheme, despite 50% of its members reporting energy bill increases of 40% or more over the past year. Some 30% of respondents blamed the complexity of the application process for them not using the scheme and a similar percentage indicated their energy costs had not increased by the required amount, while 20% stated their businesses fell outside the scope of TBESS. However, 43% stated they were very concerned about rising costs and nearly two thirds expressed the view that the supports would not be enough to cushion against rising costs. The truth is the original scheme simply did not work. It was poorly designed, thought-through and executed and now the Government is scrambling to try to put it right after suffering a massive backlash from SMEs the length and breadth of the country.

While the Government, to be fair, has identified and acknowledged the error of its ways in relation to TBESS, it has decided to double down on the 9% special VAT rate for the hospitality sector. It decided to extend the rate until the end of August at a time when the industry is benefiting from a post-Covid lockdown boom. The Labour Party called on the Government to at least use the special rate for the tourism and hospitality sector as leverage to improve working conditions in the industry for long-suffering employees. This is the worst paid sector in our economy and the sector that reports some of the most egregious working conditions in society. We made that call with good reason and a wealth of research behind it, which shows this is an industry that needs to pull up its socks in terms of how it treats its workers. I hope it will use the extension of the special VAT rate to make progress on that issue, rather than simply pocketing the extra profit it will bring.

In November 2022, the Joint Committee on Tourism, Culture, Arts, Sport and Media published a report on working conditions and skills shortages in Ireland's hospitality sector. The report found that employees in the sector may be subject to poor working conditions. Employers, in some cases, do not adhere to the minimum protections for employees that are set out in a whole range of different areas of employment legislation. Employees in the industry report a lack of appropriate pay and adequate break times. They also report instances of bullying, harassment and other harmful workplace behaviours, including, in particular, ill treatment of migrant and female employees within the sector.

Research conducted by Fáilte Ireland, the State’s own agency, in September 2021, found that 52% of the tourism and hospitality employees surveyed who were paid by the hour earned between €10.01 and €12 and that pay was generally a source of concern among surveyed workers. This is hardly an industry we associate with the concept of a living wage.

The Unite the Union’s research, Hidden Truths: The Reality of Work in Ireland's Hospitality and Tourism Sector, which was published around the same time, found that 55.6% of respondents were paid less than €12.30 per hour. In addition, 50% of respondents reported they did not receive tips and-or were unaware of tipping practices in their workplaces. I acknowledge, however, that improvements have since been made in relation to the legal status of tips and tip practices. Moreover, 75% of respondents reported that they did not receive premium payments for Sunday work and 77% of respondents reported that low pay was the most significant problem facing the sector. Unite states there is resistance to increasing wages for the sector. It believes the so-called crisis in sectoral recruitment has potentially been exaggerated to justify maintaining current low-wage rates in the face of rising inflation. The Irish Congress of Trade Unions, ICTU, states that 41% of those in the sector work part time and this proportion has grown to 51% over the course of the pandemic. For ICTU, this is a demonstration of growing precarity in a sector that we know is synonymous with precarity and insecurity generally.

I return for a moment to the Fáilte Ireland survey from 2021, which reported that 33% of respondents desired job security and longer term contracts. There is therefore a desire in the sector for better pay and improved conditions. There is the employment law legislative framework to enable employers in the sector and trade unions representing workers to come together under the 2012 Industrial Relations (Amendment) Act. However, certain actors in the tourism and hospitality sector maintain their policy of vetoing the operation of a joint labour committee. The Government fails to use the position it enjoys as a result of the extension of this very generous and costly subsidy to this sector. The Government should focus on working with the sector to make this extended subsidy a condition of it participating in the joint labour committee to improve, on an agreed basis, the pay and terms and conditions in an industry that is associated, as we know only too well, with insecurity and precarity, often with exploitation and certainly with low pay. As I have reminded the Minister time and again with regard to the temporary wage subsidy scheme, TWSS, and the employment wage subsidy scheme, EWSS, hundreds of millions of euro of taxpayers’ money is being used to subsidise businesses that often do not need a subsidy. This is cash with no conditions. If a party on the left was making a proposal for such a scheme, it would be described as bananas and we would be called irresponsible and imprudent. How does the Minister explain that?

This Bill will also extend the temporary reduction in the VAT level on domestic electricity and gas bills until the end of October. That measure was welcome but it was temporary, and it amounts to little more than a sticking plaster on a gaping wound. What we really need is for the long promised but yet to be delivered windfall tax on the super-normal profits of energy companies, which have been raking in the cash while families and individuals struggle to pay their escalating bills. According to reports in the media, the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, brought a memorandum to Cabinet today on the design of the windfall tax. It would be useful if the Minister for Finance put on record a timeline for the introduction of the relevant legislation because we are far behind the curve in introducing the windfall tax and the solidarity tax on fossil fuel operators. The experience in Europe has been that many of the countries we like to compare ourselves with introduced large windfall taxes on the excess profits of energy companies last November and December. They have been enabled to do so since the fourth quarter of last year following a decision of the European Commission, yet, as usual, Ireland is the laggard.

The Minister referred to the benefit-in-kind, BIK, regime, which was another mistake in budget 2023. Time and again, Opposition representatives and indeed some of the Minister's Government colleagues in Fianna Fáil and Fine Gael have pointed out the difficulties many workers would experience as a result of the changes introduced on 1 January to the benefit-in-kind scheme for company vehicles. We welcome the Minister's U-turn on that scheme. I am glad he thought this through and has made the necessary changes, at least for now. A couple of weeks ago when the Minister made the initial intervention, Charlie Weston, a business and consumer journalist, writing in the Irish Independent, called the measures on benefit-in-kind in the Finance Bill a temporary climb-down and "an embarrassing U-turn". I tend to agree with him. The Minister doubled down on this and his predecessor, the Minister, Deputy Donohoe, doubled down on it previously. The original changes to the scheme which were implemented in January meant that BIK more than doubled for some of those who were given a vehicle by their employer because they have to travel for their jobs. There was - as the Minister knows and has heard at his parliamentary party meetings - a massive backlash from the estimated 150,000 drivers of company cars. I recall that vehicle leasing firms reported some workers were actually handing back their company cars or were buying them out so they could use them as private vehicles. They were then claiming the mileage instead because it was a more cost-effective way to do their jobs.

We look forward to seeing the Committee Stage amendments the Minister is proposing. We are aware of their nature, which the Minister outlined earlier. In his press statement a couple of weeks ago, the Minister provided some details on how he intends approaching the issue. The correction to these poorly thought-out measures comes better late than never. The Minister has belatedly recognised that the changes Fine Gael made in 2019, which went live on 1 January, had the potential to harm workers. These are workers, let us remember, who had no choice but to drive a company vehicle. The imposition of the extra cost from the start of this year was a bridge too far for thousands of workers who saw any benefit from budget 2023 disappear in a puff of smoke as a result of these changes. I and my party colleagues across the country, including Councillor John Maher in Cork, with whom the Minister will be familiar, have been at the vanguard in raising this. We received numerous calls from constituents who have been unfairly levied thousands of euro because of the introduction of this change to the BIK regime.

It had particular consequences for people who predominantly live in rural areas and had to rely on private cars provided to them by their companies to do their jobs.

While we welcome many of the changes the Minister has proposed in this Finance Bill, we are incredulous that he has decided not to introduce some of the changes he has been commenting on and proposing through the media on the housing situation. That is incredible given that the issue du jour, the topic on everybody's lips, is the eviction ban and the availability of rental accommodation over the next period. It would be helpful if the Minister explained to the House the reason he has failed to use this opportunity to introduce the changes he said he would introduce. The public and this House are entitled to an explanation.

5:55 pm

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Carlow-Kilkenny, Fianna Fail)
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This Bill legislates for measures that were part of the cost-of-living package announced last month. In my constituency of Carlow-Kilkenny we speak about social protection and in that regard I mention the €410 million worth of measures provided in that area. I mention the €200 working family payment for families who have not received the lump sum on their primary payment to be paid in April. There will be one €200 lump sum paid to them, even if a person receives more than one qualifying social welfare payment. People receiving child benefit will receive an additional lump sum of €100 per child in June 2023 and there will be an additional €100 payment for each child for whom the back-to-school clothing and footwear allowance is to be paid in 2023. For a child aged from four to 11 years, the payment will be €260 and for those aged between 12 and 22, it will be €385. Parents have told me this is really welcome.

One of the biggest issues I have dealt with, one which I have raised numerous times, is the need to recognise the importance of the school meals programme. I note the completion of the roll-out of the hot school meals programme to all the remaining DEIS, primary and special schools this year. It is important that no child is hungry in school, which may be through no fault of the family as they may not have enough food. Children being fed in school is important. I recognise that the Government plans to seek approval to extend this scheme into non-DEIS primary schools. That too is important. I have been speaking to schools about this in recent weeks and it is a good and welcome move for them, and even more so for schoolchildren. Families who might be going through hard times know that at least their children are in school and getting hot meals under this programme.

The Minister spoke about €60 million in funding for education. I have spoken to him about Carlow having the South East Technological University, which we are so proud of. All funding for measures in education is important. I will mention Carlow College, St. Patrick's again so that the Minister will not forget the issue of its integration into the South East Technological University. I welcome the reduction in fees, which will cost €49 million. Approximately 148,800 children are transported daily to primary and post-primary schools. I mention the waiving of entry examination fees for approximately 135,000 students registered to take the 2023 leaving certificate and junior certificate. That is important and goes a long way in helping families. It also takes the pressure off them. Students sitting the examination this year will not have to pay these fees, which in 2019 were €116 for the leaving certificate and €109 for the junior certificate. All of these measures are welcome.

I want to talk about the extension of the 9% VAT rate for electricity and gas. It is proposed to extend this rate until 31 October 2023, at a cost of €115 million. Previous speakers have spoken about wanting to do more. The Minister wants to do more. I tell people every day in my constituency that if we could do more, we would. That is important. I know the Minister has a budget that he has to work from. The matters that keep being raised with me are information and the schemes themselves. I ask that when announcing schemes more information and communication are provided.

The temporary reduction in the VAT rate in the tourism and hospitality sector from 13.5% to 9% is being extended from 1 March to 31 August 2023, at an estimated cost of €300 million. This is a major issue. I know from speaking to hoteliers that it is another help to them because we all know it has been hard for people. I was speaking recently to a few people about the experience of being a first-time Dáil Deputy. Did anyone think three years ago that we would have had Covid, Brexit and a war in Ukraine? I am sure Opposition Deputies realise that too. Those issues created huge challenges for the Government. I speak to people daily and I see that things are hard but I also realise the challenges the Government is facing. We have to ensure we look after the most vulnerable as well as businesses. We must do our best to support as many people as we can.

Previous speakers raised the TBESS. That scheme was introduced to support qualifying businesses over the winter months with increases in electricity and natural gas costs caused by Russia's invasion of Ukraine. I see the challenges facing the Government. Previous speakers mentioned the further extension of the six agri-tax reliefs. That is also important. I would love to do more, as would the Minister, but we need to at least try to do what we can to help people who need help. The Minister spoke about the temporary change in the BIK regime for vehicles, which was another huge issue and one I raised with him.

Many Government Deputies have spoken to the Minister and the Minister for Public Expenditure, National Development Plan Delivery and Reform, Deputy Donohoe, about the issues in our areas and nationally. We want to do more, as does the Minister. Housing was raised today and I have had a lot of people coming into my office to discuss mortgages and the lack of housing supply. I understand that and I know the Minister has given a commitment on the need to build houses. The lack of supply is the biggest issue we face and I know the Minister is committed to addressing it, as is the Government. We need to build houses faster. There are many good housing initiatives and it is important we highlight them. I thank the Minister. A lot of work has been done but there is a lot more to do.

Photo of Ruairi Ó MurchúRuairi Ó Murchú (Louth, Sinn Fein)
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I have no doubt the previous speaker will have even more people coming to her office in the next while with housing issues. That is the only thing that is definite. We often talk about unintended consequences but the Government is taking action today and beyond that will have definite consequences. Nobody has been able to answer where people in housing need, who are facing eviction in April, May, June and beyond, will go. I have yet to see any solutions to this.

We are dealing with a non-budget or a non-mini budget. It represents an acceptance by the Government that we are in a cost-of-living crisis and we need to take action. In this State, our biggest problem is accommodation, whether that is the cost of mortgages, rent or buying a house. Meeting the criteria required to do so will probably become more difficult in the next while. The measures on the VAT rate on electricity and gas providers will not provide the supports required by households that continue to experience sky-high energy bills.

There will be an increase in carbon tax on home heating oil and gas bills in May. We give with one hand and take with the other. We called for reduced rates of excise on petrol and diesel to be extended beyond February, in order to provide support to those who need it and who do not have a huge amount of choice. It is all well and good talking about alternatives and making alternative choices, but you need to have those choices in the first place.

We welcome the changes to the TBESS. There were huge issues with the scheme and that was the reason such a small number of people engaged with it, because of both the criteria and the means of application. There are still major failings with regard to LPG and oil being locked out. I said previously that I thought this could have been a means of dealing with some of the issues faced by those with district heating systems, like Carlinn Hall, which has huge costs at this point in time.

I have already spoken about the cost of mortgages. Our party has been straight with regard to the need for targeted and directed supports in the short term. That goes without saying but given the day and week that is in it, I also checked daft.ielike other speakers. In Dundalk, there are six houses available at this point in time. In Dundalk and the surrounds, there are ten houses on daft.ie. People in my constituency office say estate agents are telling them straight out that they are dealing with people facing eviction who are already on their books. They say they will try to do something for them but they cannot. Louth County Council will say the same.

The Government has come up with solutions like the tenant in situscheme. Whatever about the in situscheme for cost rental - we will see what that looks like - there are a huge number of people who cannot avail of the in situpurchase scheme for those on a HAP tenancy. There will be a room too many or a room too few or they might not be long enough on the housing list. Unless those criteria change, that is not going to cut the mustard. Louth County Council is processing 20 applications at the minute and its target is 30. That is not going to change anything given the need that is there. We need to get real about this. The sensible thing would be not to lift the eviction ban until such time as these proposed measures are in place.

6:05 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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I have said it before and I will say it again: the cost-of-living package represented by this legislation is completely inadequate. It is a further indication of this Government being out of touch with the real lives of so many people across the country. Up and down the country, so many workers and families are struggling to keep their heads just above water and this package is insufficient to ease that burden. I honestly do not know which is more difficult to accept - that the Government genuinely believes this package will help struggling workers and families or that it knows it is not enough and yet continues to defend it. How many more times do we have to come into this Chamber and remind the Government of the fear so many people are living in? Workers and families need to know how they will pay their soaring bills, not just this week or next week but next month and in the months that follow. They cannot possibly manage without greater support from this Government and yet the Government continues to let them down.

The very reason the Government has had to introduce a new package of measures is because it did not do enough in the budget last October. This is just proof of that. The Minister would do well to reflect on that. Instead of learning from its mistakes, the Government is repeating them. At the time of that budget, I pointed out its many flaws. What was billed as a giveaway budget disproportionately benefited the better off. Tax cuts and an array of universal lump sum payments were the key measures in the budget. These one-off payments may have created the impression that the most vulnerable in society were being taken care of but that charade was quickly exposed. The budget lacked the permanent distributional measures required to have a lasting impact. That is now plain to see. While temporary supports were welcome, they alone could not provide sustainable relief to the countless households that can no longer afford necessities such as food, fuel, energy and rent.

Let us take disability supports as an example. The Government's budget only provided for a €12 weekly rise in core welfare payments and a one-off lump sum payment for disabled people. Does the Government honestly think living with a disability is a one-off or temporary expense? I do not believe it does but the temporary nature of that payment was completely misjudged. In fact, it was insulting. This package was an opportunity to address that failing. In our alternative budget, the Social Democrats proposed a €20 cost-of-disability payment which we believe should be increased every year. We see this as a crucial step in addressing the significant additional costs of living with a disability, which the Government's own report put at between €9,000 and €13,000 a year. A one-off payment cannot even begin to address the systemic poverty, exclusion and disempowerment experienced by so many people with disabilities in this country.

The real tragedy, however, is that the budget, or this additional package, could have made a real and substantial difference to so many people's lives. Never before has a Government had so much money to invest - money that could have been used to begin lifting people out of poverty, to tackle those structural problems of high levels of poverty and exclusion in our society, to tackle the issues of low pay and poor working conditions and to improve our public services. Instead, short-term thinking was chosen over long-term reform.

Another failing of this Government is its inability to act decisively and quickly when it comes to addressing energy companies' bumper profits. The Minister for the Environment, Climate and Communications announced his intention to introduce a windfall tax back in August of last year and the EU authorised it that September. Yet we have still not legislated for such a windfall tax. We have not even gotten sight of the draft legislation. Other EU countries such as Germany and Spain have already introduced a windfall tax. Italy's was introduced in March of last year and it had collected €4 billion by December. We are told that our windfall tax will be used to fund further energy supports. That is certainly welcome but this long-standing commitment from the Government should have been acted upon long before now. Can the Minister please provide a definitive timeline for the introduction of this legislation, given that it has now been approved by the Cabinet at last? This measure is urgently needed to curtail obscene profiteering from the war in Ukraine but it alone will not solve the problems facing families and workers.

Last month, the Social Democrats tabled a motion calling for a windfall tax and, crucially, a targeted energy price cap. Our proposal was modelled on the German energy price cap, which caps prices at between 70% and 80% of average energy usage. This will continue until April of next year in Germany. Unlike an unlimited cap, this targeted cap would not disproportionately benefit wealthier households and would incentivise energy conservation.

Another proposal the Social Democrats are calling on the Government to consider seriously is the introduction of a social energy tariff. This has been proposed by the Society of St. Vincent de Paul and would specifically target households on means-tested social welfare payments. This would provide support to those who need it most. It would be a very targeted measure, ensuring that well-off households or those with second homes are not to benefit.

This Government cannot continue handing out lump sums to all and sundry. It needs to narrow its focus before the number of struggling households continues to grow any further. I have said this on a number of occasions. Are there any grounds at all on which the Minister can defend a decision to give those lump sum payments to, for example, everybody in this House? We do not need it. If we are honest, Deputies, Ministers of State and Ministers did not need those payments. There are many people in this country who earn an awful lot more than anybody in this House, even including Ministers, and yet they got that payment as well.

Why is the Government doing that? Why is it giving money to people who do not need it when there are so many people in this country, families especially, who are struggling just to get by and put food on the table? Earlier this month, the Society of St. Vincent de Paul published an energy poverty report which found that the number of people unable to heat their homes adequately had doubled, to 377,000, since 2021. How can it be a fair decision to give lump sum payments to people who do not need them because they are well paid? I do not mean that not everybody has got an increased energy bill. Of course we have all got those, but there are many people who can absorb those increases in energy bills and did not actually need that payment at all. In many respects it was an absolute waste of public money, given that 377,000 people are living in abject poverty in respect of their inability to provide enough food and heat their homes. The same report found that a further 98,000 people had gone without heating since 2021. This figure has increased to almost 454,000 people currently. The average annual electricity bill increased from €1,000 in the spring of 2020 to over double that, at €2,100, in February of this year. Workers and families cannot continue to absorb those costs because too many are at breaking point. An ever-increasing number of people throughout the country are now living in fear. They are living in fear of the next electricity or gas bill, or the next trip to the supermarket. Now on top of all of that is the huge fear of eviction.

Ireland is one of the richest countries in the world and yet so many parents are struggling. They are struggling for the very basics in life. Some 30% of parents are skipping meals so that their children have enough to eat. When the Taoiseach took up office last December, he promised to do everything in his power to tackle child poverty. Looking at this latest package, those words ring hollow. He hardly needs a special unit in his Department to understand that the best way to reduce child poverty is by targeting increased resources at the most vulnerable and disadvantaged children in our society. Some 50% of those living in poverty are lone parents and their children, including people with disabilities and their children, yet they have been almost completely ignored in this package. The qualified child payment was increased by a measly €2 per week in the last budget, an increase so small in the context of an €11 billion budget that it borders on insulting. This latest package was a chance to right that wrong for the poorest children in our country. At the time of the last budget, the Society of St. Vincent de Paul pointed out that growing up in poverty is associated with the worst outcomes across all key aspects of a child's life. Both the Society of St. Vincent de Paul and the Children's Rights Alliance have repeatedly said that the qualified child payment is a crucial intervention to tackle child poverty but it needs to be greatly increased. There was a measure there for the Minister of State. He could have done a huge amount to tackle child poverty by following the advice of the agencies which know most about the difficulties faced by children living in poverty and yet he chose to spread the resources far too thinly, making little or no difference to those children living in the worst circumstances in this country. What further proof does this Government need that it must intervene to improve the weekly incomes of poor families with children?

Ultimately, it is seems that evidence alone is not enough for this Government. Regrettably, it seems it is aggressive lobbying that moves the needle around here. We saw this play out over the 9% VAT rate for tourism and hospitality last month, which is now being extended until September 2023 as part of this package. I appreciate that this is a vast sector and many small businesses are genuinely struggling but it is difficult to justify an extension of this rate for all businesses in this sector. Could a distinction not have been made between accommodation and other hospitality business, for example? Many people find it difficult to stomach the excuse that this would be an administrative burden. Why could that not have been dealt with? That is no excuse for providing this kind of largesse to a very large sector, many of whose members did not require this funding. The prices many hotels are charging per room, especially in cities, are truly eye-watering. Some of the price gouging that went on last summer was reprehensible. It appears that this Government's concerns are completely misplaced. Where is its concern for workers in this sector who are some of the lowest paid in the State? Did the Government demand any assurances that pay and conditions would improve if it continued to give hotels such favourable treatment? Many hotels in particular are booming. The very least this Government could have done was to make sure this success was represented in better terms and conditions of pay and work for those working in the hospitality sector. After all, it is not of course the workers who have the ear of this Government.

Finally, I reiterate my disappointment at this package of measures. There are many things this Government could have done to truly address the crisis in which many of our people are living. It could have dealt with the scourge of low pay, or narrowed the gap between core social welfare rates and the soaring cost of living. Instead, it opted to leave low-paid workers, households reliant on social welfare payments, pensioners, lone parents and carers living below the poverty line. If we talk about fairness and inequality, it has to mean something. This Government must approach and provide sustainable supports and long-term solutions to the inequality which is all too evident in our society. This package is undoubtedly a missed opportunity.

6:15 pm

Photo of Louise O'ReillyLouise O'Reilly (Dublin Fingal, Sinn Fein)
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I am grateful for the opportunity to speak on this legislation. I will confine my words in the main to section 5 of the Bill, which amends sections 100 and 101 of the Finance Act 2022. The sections in question provide for the TBESS, which was announced as a flagship support for SMEs in budget 2023. The escalating energy crisis posed a direct threat to the viability of many small businesses and, as such, a scheme was needed to help to guide them through this crisis in the hope that the situation would stabilise in time. It was clear once the scheme went live that there were interlinked problems caused by the qualifying threshold being too high and the relief too low, as well as the exclusion of businesses depending on LPG and oil. As a result, SMEs and microbusinesses struggled to access the scheme and many were excluded from it. This was evidenced by a low take-up by businesses of the €1.2 billion support scheme. According to figures published by Revenue, as of 9 March €56 million had been approved under the scheme, with €49 million in claims paid out. It is welcome that the Government realised the scheme was not working and brought forward changes in line with what Sinn Féin and others had called for. However, the lowering of the threshold, the increase of the relief rates and the raising of the payment limits have to ensure the support fund achieves its aim of providing much-needed assistance to SMEs and microbusinesses that are struggling with energy costs.

There are additional structural issues which also need to be addressed. Businesses have said that the application process is too convoluted. The guidelines explaining the scheme run to over 100 pages and the process itself takes hours and often necessitates paying for an accountant. If a person has to pay for an accountant and is already struggling to pay his or her bills, it is clear how this would add additional pressure. These structural difficulties have not been addressed. I urge the Minister of State to speak to small businesses, as well as business groups like ISME, the Family Business Network and the Small Firms Association, about how the process can be simplified and shortened.

I note the senior Minister, who is not with us anymore, mentioned in his speech:

.... a separate scheme will be considered for businesses that use oil and liquefied petroleum gas, LPG. The Minister for Enterprise, Trade and Employment has committed to exploring options for such a scheme and to revert to the Government on this matter in due course.

Nothing urgent is coming out of that at all. The Government is saying that it might do something in the future at some unspecified stage. This issue has been raised by Sinn Féin and others for months. The Minister is well aware that there are people who are excluded from the scheme and businesses that may fail because they are excluded from this scheme, yet there is an utterly nonchalant approach from the Government to a serious matter. I ask the Minister of State to clarify how long "in due course" is. Businesses need to know and want to understand what "in due course" means and when they can expect that time to have run out.

We have tried to encourage the Government to have empathy, sympathy or indeed a small amount of understanding of what people are facing as a direct result of the housing crisis created by the Government's policies. The Government is not listening to that. Perhaps it will listen to powerful lobbies like the business lobby. IBEC, Chambers Ireland and others say that the housing crisis created on the watch of this previous Government and not addressed on the watch of this Government is impacting not just their capacity to attract staff but also their capacity to retain staff. It is hurting our competitiveness and businesses' capacity to do business. They cannot recruit workers because they cannot find anywhere to live. Perhaps if the Government is not minded to be empathetic or sympathetic, it might look at the bottom line and the fact that its housing crisis is starting to impact on the productivity of this State. Perhaps that might spur it to do something about it.

6:25 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I have a list of speakers to come in. I will give them time to come in. In fairness to the senior Minister, he understood there was a list of speakers to come in.

Photo of Christopher O'SullivanChristopher O'Sullivan (Cork South West, Fianna Fail)
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I want to, and it is important for me to use this slot to discuss and outline the experience of a seventh-generation family-run hotel in Clonakilty. I want to outline the disgusting and despicable treatment that this family-run business experienced at the hands of one our pillar banks, AIB, and an unscrupulous vulture fund, Everyday Finance. Unfortunately, the experience that I will outline reflects the experiences that many businesses, farmers and individuals have at the hands of some of the pillar banks and especially at the hands of vulture funds. There is a lack of engagement, communication, flexibility and a complete lack of respect when they are dealing with individuals, businesses and farmers.

In this case, the business in question took out a 30-year loan in 2007. It never once defaulted on its repayments. Everything was going perfectly to plan. Then the financial crisis hit and this loan was later quickly reduced to a 12-year term and restructured to have a new repayment plan with absolutely no negotiation or communication. This family business, being honest and well run, and always doing everything by the book, did what it could to meet the repayments for this restructured loan. It sold assets in order to meet the repayments and went along with the restructuring of the loan. During this entire process, there was no consultation, communication or engagement from the pillar bank, AIB. It restructured the loan. Later, the business found out with no communication or consultation whatsoever that its loan had been sold to a vulture fund, Everyday Finance.

After that, there was a list of demands for repayments but the vulture fund would never explicitly outline how much they needed to repay or what level of finance was required to settle or restructure the loan. That was despite several efforts from the family behind this business to contact Everyday Finance to find out exactly how much was needed in order to settle the loan. No figure was given. Therefore, the family, who were trying to do the right thing, to settle and to get on with running their well-run business were left completely in the dark with regard to what they owed. It has got to the point where receivers have been sent into the business. They march into the premises with lists of demands. They march into this seventh-generation family-run hotel with no communication and with no permission asked. The way this family and business are being treated is disgraceful.

The sad reality is that this honest, hard-working family, who employ 70 people in their hotel, O'Donovan's Hotel in Clonakilty, run it like clockwork and are trying to do their best to settle a loan that was restructured without their permission, had its term shortened without their permission and was sold to a vulture fund without any communication. They are trying to do their best to settle but are getting no answers. The way these banks and vulture funds treat hard-working, honest people is a disgrace. This goes for farmers too. Many are in similar situations. It also goes for individuals who are given a list of demands and whose properties are entered without permission or communication.

This is not the way to do business. Businesses, individuals, and farmers, have been through enough and have done everything they can to keep things ticking over, to make an honest living, and to make repayments. They get absolutely no respect in their treatment by pillar banks and vulture funds. What I am asking for, is that once and for all we put in place a series of measures to protect hard working businesses such as the O'Donovan's Hotel in Clonakilty and all the other businesses from these unscrupulous vulture funds that are only interested in one thing, which is money and profits. I do not know whether it can be done in the Bill, through policy or through other legislation. There is absolutely no sympathy and no consideration given for the stress these families are going through and the mental impact experiences such as this are having on them. I ask that the experience I shared today of the seven-generation family-run hotel in Clonakilty is not allowed to happen in the future. I ask that we do everything possible to keep these incredible businesses that are the lifeblood of town centres right across Ireland going and that we do everything we can to protect and support them.

6:35 pm

Photo of Verona MurphyVerona Murphy (Wexford, Independent)
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I apologise for being late; it was due to the late delivery of the Government amendment. I welcome the Government decision to bring this Bill forward and to extend the time these tax reductions, and other supports, will be in place. However, while I agree in principle with the extension of the tax reductions I take major issue with the way the Government has decided to reapply the excise duty reductions on fuel. This is technical so I hope the Minister will listen intensely. This is dealt with in section 2. The explanatory memorandum states that section 2 provides for:

"an extension to the current VAT inclusive per litre reductions of 21 cent in respect of petrol; 16 cent in respect of diesel; and 5.4 cent in respect of Marked Gas Oil which were due to expire on 28 February 2023 ...

On 1 June the rates will be restored by 6 cent for petrol, 5 cent for diesel and 1 cent on [Marked Gas Oil] MGO. These rates will be in place until 1 September, when the rates will increase by a further 7 cent, 5 cent and 1 cent per litre for each of petrol, diesel and MGO respectively. The remaining balance of the reductions, amounting to 8 cent for petrol, 6 cent for diesel and 3.4 cent for MGO will be restored on 31 October."

We have a Bill before us claiming that the reductions were 21 cent for petrol, 16 cent for diesel, and 5.4 cent for marked gas oil. This appears to be at odds with a Government press release dated 9 March 2022, which stated:

"Excise duty will reduce by 20 cent per litre of petrol ...15 cent per litre of diesel. There will also be a reduction of 2 cent in the excise duty charged on marked gas oil. These reductions will take effect from midnight tonight and will remain in place until the 31st of August ..."

Many people would look at this and conclude that the Government are trying to pull a fast one and increase the excise duty by more than it was reduced. I am asking that, whether it is the case that the Government is trying to cod the people, we need an explanation and clarity on whether the excise duty is being increased by more than it was reduced. It is very important the Minister address this matter in his closing remarks.

Further to this, I received correspondence stating that on 1 January 2024 there will be an increase in the price of base product of 3.89 cent plus VAT, which is a total of 4.79 cent, on diesel, 4.59 cent plus VAT, or 5.65 cent, in petrol due to the content of biofuel, or an alternative fuel to diesel, being added to a diesel product. This has taken no account of the percentage of biofuel per litre, but it is being taxed as if it is diesel.

The other issue I will raise is hydrogenated vegetable oil, HVO. I have raised this previously and it is worth highlighting again. HVO is a low-carbon fuel and is obtained by processing different substances. It has similar chemical and physical properties to diesel, but is fossil free and low carbon by comparison. It can be blended and used in any proportion with diesel, or on its own in a traditional diesel engine. There are a couple of reasons this fuel source is not more widely available. It is currently more expensive to produce and buy than ordinary diesel. Some studies have shown that consumption is slightly higher. The production of the type of crops necessary to produce this fuel type is currently insufficient. The Government needs to make the fuel source tax free to help to make its price more competitive and to drive demand. The market, in turn, will react by producing more of the crops necessary. This helps support the agriculture sector as well. It is amazing that the use of this fuel source has not been incentivised more by the Government. Even if someone decides to use a higher proportion of HVO in their fuel, the Government still charges the full carbon tax even though their carbon emissions will be greatly reduced by the level of HVO content, if the level of HVO content in the fuel increases. The Government likes to refer to a just transition but when it comes to climate-related issues such as HVO being fossil free, I am afraid that what I have outlined does not sound like a just transition. I ask the Minister to address those issues in his closing statement.

Photo of Thomas GouldThomas Gould (Cork North Central, Sinn Fein)
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I welcome the opportunity to speak on the legislation. It is really disappointing that once again we are discussing financial issues without any real plan to give people certainty regarding their electricity bills. There was a bad cold snap in March and this caused a lot of fear and anxiety for many people. A cap on energy prices would have given them certainty about their next bill. It is vital to note that the TBESS is not running as it should. My colleagues, Deputies Doherty and Farrell, outlined earlier the mistakes the Government should have overcome so that businesses who badly need support and help would have gotten it. To allocate €1.2 billion and not deliver the scheme is a failure of the Government that affects many businesses that struggled to get through Covid-19, and once they got out the other side, struggled with the energy crisis. When the Government parties said they put a plan in place, it was out of the reach of so many ordinary businesses. This sends the wrong message to people. To give an example of how tough businesses are finding it from my own city of Cork, on St. Patrick's Street, which is the main street, one in five buildings is empty because the cost of business is to high. One in eight units are empty on Oliver Plunkett Street. A lot of businesses in Cork are not even talking about making a profit; they are talking about surviving so they need support. If the Government is really serious about supporting businesses and making it affordable for them and if we are trying to get more tourists and businesses into the city, the city needs to be vibrant and supported. Empty shop after empty shop is not attractive and that will not encourage people to come in and to spend their money. We need ideas that are outside of the box. Some are solutions such as meanwhile use, above-shop living, and cultural takeovers. They could transform Cork and other areas. It would be a welcoming environment and positive use rather than having buildings lie empty and unused.

I regularly speak to business owners based in Cork who tell me they are being crippled by energy bills. Once again the Government is failing to support them. The scheme does not apply to those who use oil or LPG. Where are their supports? This is another missed opportunity and another missed Finance Bill where the Government could have done so much more to support businesses but it has failed once again.

6:45 pm

Photo of Carol NolanCarol Nolan (Laois-Offaly, Independent)
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I welcome the opportunity to speak on the Bill. It provides for the further extension of six agri-tax reliefs currently due to expire on 30 June 2023, and that extension is certainly welcome. In the brief time I have I will focus on just two sections of the Bill.

The first is section 2. It provides for amendments to the rates of mineral oil tax, MOT, and for an extension to the current VAT prior to an incremental restoration of the full rates to 31 October. The reply to a recent parliamentary question I submitted revealed that in the full year from the restoration of the full rates of tax, the Government will take in a staggering €700 million in excise duty and tax. In this scenario the Government-backed increases will yield €478 million in respect of diesel, with an additional yield of €35 million in VAT. The yield for petrol is estimated to amount to €159 million, with VAT bringing in an additional €35 million. These figures reflect the enormous tax burden coming down the tracks for farmers, drivers, hauliers, transport operators, school bus providers and many others. It is unconscionable that this is set to take place at a time other energy costs are fracturing the capacity of businesses and households to stay afloat. I see in my constituency of Laois-Offaly nearly every day of the week businesses closing their doors. They urgently need more supports. Unfortunately, we recently lost one great family business in Birr, Milne Foods. It was disappointing to see that businesses such as Milne Foods did not get enough supports from the Government to keep them afloat and retain them in our towns.

The second part of the Bill I will focus on relates to the section 1 provision for an extension of the young trained farmer stock relief. While that is certainly welcome, it can only be seen as one angle of support to address the ongoing crisis relating to generational renewal. Macra na Feirme recently pointed to an Irish Farmers' Journalsurvey, which found that 46% of farmers surveyed had not identified a successor. That is a profoundly alarming finding and indicates to us clearly that the scale of the challenges before us will not be addressed by tinkering with the tax system of reliefs, necessary and welcome as they are. Irish farming will face a serious crisis and yet another crisis in the coming years if the issue of generational renewal is not addressed, taken seriously and tackled with the urgency it demands. It should be tackled with the same urgency as green policy. Green policy is driving our farmers off the land and putting off many young farmers from being successors. The green policies are like green medicine being forced down our throats and the throats of farming families.

Photo of Richard O'DonoghueRichard O'Donoghue (Limerick County, Independent)
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The Government has been forced to bring in amendments in respect of the treatment of BIK, whereby a person driving 50,000 km in a company car with an emissions rating of 120 g per kilometre will now pay BIK at 12% rather than 15%, and the value of the vehicle will be reduced by €10,000. When people were buying electric cars, the Government said they would be exempt from BIK. Now we have companies that invest in electric vehicles and the people driving them are handing them back because of the current rates and asking the company to pay them mileage because of the tax regime for this. They are buying diesel or petrol cars, running their own cars and getting paid mileage because of the system that has been put in place and because the Government did something but did not do enough.

The Bill extends the current rate of VAT per litre reductions of 21 cent on petrol, 16 cent on diesel and 5.4 cent on MGO until 23 October. Those reductions should never be reversed because the Government has made billions of euro off road users. It has targeted people in small businesses and put them out of business because of the situation with rural transport. In doing so the Government will drive up inflation again because this country, since there are no alternatives, is run on fossil fuels. Whether it is the farming sector or the transport sector, getting food to the shelves depends on transport. The Government has taken in enough taxes - 50 cent on petrol and 44 cent on diesel - and now, because it took a small piece of it off, it wants to put it back on again. It is taxing businesses out of business.

I welcome in the Bill the VAT rate on electricity at 9%, but the Government's coffers are not down because, with the inflated cost of electricity and the reduced VAT rate of 9%, its funds are still up on when the rate was 13.5% two years ago. It will actually have more in the coffers now at 9% than when the rate was 13%. Instead, what the Government needed to do was tackle the providers. Even though electricity cost only 50 cent per kWh, the Government put a cap of €120 per Mwh on market revenues. The providers are still making 120% or 130% on the cost of producing electricity, again putting businesses out of business.

Finally, I welcome the extension of the reduced VAT rate on hospitality. It should stay at that rate because if the Government increases it, people will not be able to afford dinners. It will increase the cost of a dinner for a normal person by €1.50.

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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I am glad to have this opportunity. The cost of electricity is very punitive and is hurting many people, especially those in rural Ireland, because they have no options when it comes to electricity for heating and all the other appliances. They find themselves hit so hard. The Government has been asked several times to put a cap on this and it will not do it. I honestly believe now that the Government is satisfied with the way things are going because it is getting more tax out of it. The more profit and the more VAT collected by these companies and handed over to the Government in tax, the better it is doing, at the expense of people, especially elderly people, who really need electricity. Then the Green Party's leader, the Minister, Deputy Eamon Ryan, had the gall to try to stop people cutting turf. Those are the people who have a bit of heat, and I will stand by them for as long as I am elected here. I appreciate those people who do their best in the summer months to collect enough turf to tide them over until the winter. A lot of this winter was very cold and people who did not have a fire certainly would not want to be perishing with the cold. Fuel poverty is a big thing, and they are driven to it by the cost of everything, including the cost of heating oil.

The big gripe I have is about green diesel. Green diesel, before the war, which has been blamed for everything, was 38 cent a litre. Then it went up at the same rate as white diesel, maybe, and was at approximately 90 cent per litre for a number of weeks. Then, all of a sudden, it was driven up to €1.40 a litre and it is still hovering around €1.20 a litre all the time. That has the effect of driving up the cost of agricultural produce because you cannot do anything on a farm without a tractor. The sooner the Government realises that when it drives up the farmer's costs, it drives up the cost of the food being put on the consumer's table or the housewife's table, the better. Then the Government says that it will claw back the increases on road diesel and petrol. That will hurt every man, woman and child working in rural Ireland, hitting rural Ireland more than any other place.

6:55 pm

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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On behalf of the tourism capital of the western world, County Kerry, and its capital, Killarney, I am glad VAT was retained at the lower rate for the time being. I will look for that to be kept for the foreseeable future, and into the future, because it is so important. I welcome the lower rate on behalf of people working in tourism, including operators, in County Kerry who give much-needed employment and are the flagship for tourism in this country.

On the company car users who are supposed to pay more in 2023 for the privilege of being given a car through their work, the old system was done away with by this Government and a new system based on a combination of bands, CO2 emissions and annual mileage was brought in. However, once the new rules were introduced in January this year, there was a massive backlash. I was inundated by people in businesses in County Kerry who said this was totally ridiculous. People who benefited from benefit-in-kind, BIK, in the past were outraged. Yes, the Government did a U-turn and that was welcome but, unfortunately, the way the BIK bands have now been set up means it is getting extremely complex. Each band does not come with a fixed, taxable percentage. Instead, the bands are further broken down by annual business mileage, in other words, bands within bands. For God's sake, why does the Government have to over-complicate everything, when a perfect system was there previously that people were happy with? It was this obsession with electric cars. The Government has already heard, and I will put it on the record too, people are now saying they want to go back to the old system of using their own car and being paid mileage because such a mess has been made of it. It is like everything. When the Government does not know what it is doing, would it not leave a thing alone? If the men and women in the Government do not have the personal experience, stay away from it, say they do not understand it, are not able to figure it out, and leave it alone. That would be the right thing to do.

I welcome the fact some of the agricultural measures are continuing because they are very important. I also welcome a number of reliefs that were set to expire on 30 June but since the EU revised agricultural block exemption regulation comes into effect on 1 January 2023, can now be extended in line with the budget 2023 announcement. On those agri-reliefs, when it comes to young farmers, we have to do everything we can to try to encourage the transfer of farms and make it attractive from a taxation point of view to do so. We want to make it acceptable, proper and right for older people, if they wish to retire and pass on the baton to the new, younger farmers. We want to make sure that every relief will be there, but the Government did not give a relief when it insulted farmers, forestry men and agricultural contractors by giving a miserly reduction on agri-diesel in comparison with what it did for diesel and petrol. Again, the Government showed it had no understanding whatsoever of farming, agriculture or contracting, including what it costs a contractor to fill a tractor with diesel every day and try to make a day's hire on top of that. The Government does not have a clue. It does not understand the cost of that.

Photo of Michael CollinsMichael Collins (Cork South West, Independent)
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Many areas where people are struggling were not covered by the Finance Bill, for example, energy costs. While the Government has given a rebate on electricity bills on two previous occasions, which was very much welcomed, there is no doubt about that, it is desperately needed still. On further energy savings for businesses, they are getting a few quid but it is nothing when bills are €10,000. Businesspeople are saying to me that is putting many of them out of business. They need further, serious aid. The Government needs to tackle the energy companies. It is failing in its duty to do that. It is as if the Government is aiding and abetting them in this.

The fuel allowance is coming to an end as far as many elderly people are concerned. I plead with the Minister of State to extend it for an extra period because a lot of people are still feeling the cold and found it very difficult this winter due to the price of fuel.

I appreciate that the VAT rate for hospitality did not go up from 9% to 13.5%. That would have finished many cafés and restaurants. The Government needs to look at that matter completely. Some people are price gouging, such as hotels in the city, and may be making fortunes but ordinary people on the ground, for example, ordinary family-run hotels in west Cork are not doing that. The current VAT rate needs to continue.

I am very saddened that the reduction in excise duty on fuel will end, as if fuel was not dear enough. The Government always grabs and looks for a tax take on fuel so it can get its pet projects across the line in so many places.

The means test for carer's allowance should be abolished. This is an area the Government needs to look at. If an elderly person is being 100% looked after at home by his spouse, just because her husband is working somewhere else - or the other way round - she cannot get carer's allowance because of her husband's income, even though she is carrying out the work at home. It is outrageous and not fair.

On other issues, such as roads, an independent report on west Cork roads shows living proof that County Cork is getting the least amount of funding for roads and for many other grants that are going. Nothing has been done on bypasses for Inishannon and Bandon, the northern and southern relief roads, or Bantry and other such areas.

One issue that has already been raised is that of the vulture funds. While this is not the proper debate to bring that matter up - it should be brought up during questions - I will raise the issue of O'Donovan's Hotel in Clonakilty and the crisis situation it faces. I met with the family that owns the hotel. It is a brilliantly run hotel that, along with other brilliantly run businesses throughout west Cork, has been absolutely destroyed by the bank, initially, and then everyday finances. The Government should stand up and support these businesses. I plead with the Minister of State, and I will plead further with other senior officials in the Government, to step in and put everyday finance into the proper place it should be, tell the vulture funds to back off, and sit the hell down and talk to these people, because they are trying to rip the heart out of Clonakilty. They will not be allowed do that. The people of west Cork will stop them if the Government fails in its duty to do so. It supports these vulture funds. There is no point in Government Deputies screaming in the Chamber against this when they support these vulture funds in the first place by supporting the banks to do this, even though the Government is the majority shareholder.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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I too am delighted to speak to the Minister of State. No disrespect to an tAire Stáit but cá bhfuil an tAire, an Teachta Michael McGrath? Tá sé as láthair.

I welcome the extension of the current reliefs for agriculture. I also welcome the continuation of the 9% VAT rate but the Government has to be more selective in future. The people who engaged in price gouging, or docked people money and intend to rip them off again, who are mostly confined to the cities, should be dealt with. We cannot have one-size-fits-all.

What the Government did regarding BIK is another disgrace. I raised this at the Joint Committee on Finance with then Minister for Finance, Deputy Donohoe, and he treated me with total disdain. All I wanted was a review of BIK. Many people are out there, especially in businesses, who the Government expects to force to buy fleets of company cars. Businesses are on their knees. They are below their knees, in case the Government did not know. How can they be forced to buy a fleet of electric cars just to suit the Government's fantasy projects? In many parts of the country, business employees would be stuck on the road for hours because there is no place to charge these cars. The infrastructure is not there. I do not know when the Government will realise that.

Why is there inertia regarding the windfall tax on the big companies? When the Finance Bill came in and the budget was announced, the usual suspects were up at midnight that night. The Minister is now talking about September or, hopefully, the end of summer for when the windfall tax will be introduced but it will only be €400 million to €700 million. Gouging and kiboshing by big companies has gone on and they have the Government in their pockets but it will not tackle them. This is happening across the economy. I do not know why the Government will not deal with that. It is inertia and inability to do so.

On the banks we bailed out, it was not "we". I voted for the bail-out, which was the biggest mistake I ever made. The bail-out was not a mistake because I called it a clean-out but I voted to protect the banks on that fatal night, bigger fool that I was. The gouging and blaggarding that our main banks and the vulture funds are now giving our citizens is nothing short of a disgrace. The then Minister for Finance, Michael Noonan, did not want to know about it at the time and successive Ministers also did not want to know about it. It is sickening, despicable and outrageous behaviour that these funds can buy people's loans and sell them off. Businesses I am dealing with now do not even have bank managers any more. These are faceless entities. I am not talking about the hard-working staff who work in banks - I cannot say "tellers" because they are not there any more - the work done by ordinary people. The obscene salary increases were the last desperate act their friend, then Minister for Finance, Deputy Donohoe, did before he left office in order to give them back their bonuses. They needed the €1.5 million. My God, what kind of Ireland have we?

We are then facing the eviction motion and the shenanigans and games going on here. It is really political posturing. The sooner the Government gets up, packs up its bags and goes off with its bedfellows, the better.

Go into the hills somewhere, call an election and let the people who want to govern and represent the people who have elected them to this House to do so, rather than looking after the real estate investment trusts, REITs, banks, big conglomerates and vulture funds. That is wrong; it is rotten.

7:05 pm

Photo of Martin BrowneMartin Browne (Tipperary, Sinn Fein)
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Let us remember the many cases when the Government was pressed by the Opposition to take numerous measures in the interests of the hard-pressed public at a time of high inflation and general global turbulence. With regard top mineral oil tax, referred to in section 2, the reduced rates of 21 cent per litre of petrol and 16 cent per litre of diesel are due to continue until the end of May, at which stage they are scheduled to increase. Petrol will increase by 6 cent per litre and diesel by 7 cent per litre. On 1 September, there will be further increases and on 31 October, prices will go up again.

It must be noted that Sinn Féin called for the excise rates on petrol and diesel to be extended beyond February and kept under review. We now know that if the reduced rates lapsed at the end of February, at current per litre costs, we would now be paying approximately €1.86 and €1.82 per litre for petrol and diesel, respectively. Thanks to the Government, people will notice that the recent excise rates will increase by more than they were reduced. This is because the Government has seen fit to increase the carbon tax on petrol and diesel in October 2023.

This is not the only area in which households will be hit with the consequence of carbon tax increases during a time of financial constraint. The Bill also provides for an increase in the carbon tax on home heating oil from 1 May. This will increase the price of a 900 l fill by another €20, meaning that since April 2022, the Government will have increased the cost of filling a 900 l tank by €39.

In response to the cost-of-living crisis, the VAT rate on electricity and gas was reduced from 13.5% to 9%. While this reduction will continue until October, the Department of Finance has calculated that the extension will only reduce electricity prices for households between now and then by €38, or €5 per month. This is because the Government has refused to act like many other governments across Europe to reduce the cap on electricity prices to protect households. When many people opened their electricity bills in the new year, they saw how that was reflected in their charges.

Last year, when I raised the concerns some Tipperary businesses had expressed for their future I was dismissed by the current Taoiseach who spoke about the TBESS. The scheme proved to be less than successful, in large part because the energy cost threshold was set at 50%. It is welcome to see the threshold has been reduced to 30%. I urge the Government to speed up work to get a scheme together that includes businesses that are reliant on oil and LPG.

Given the manner in which inflation is being addressed through increased interest rates for mortgage holders, we need to see the introduction of a targeted and temporary mortgage interest relief scheme to support homeowners who are struggling to make ends meet. Sinn Féin proposed such a measure. I have spoken to many people about it and I appeal to the Government to act swiftly on the matter.

Photo of Joan CollinsJoan Collins (Dublin South Central, Independents 4 Change)
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I will speak to what should be but is not in the Finance Bill. Inflation and prices have risen this month, despite the Government’s assurances that inflation would reduce during the year and its decisions to start removing the few supports people had to help them during the cost-of-living crisis. The Government seems to think that fiddling around with VAT and excise rates, while removing the payments that were vital for many to scrape by this winter, is enough for the thousands of people around this country who have seen their wages and savings decimated by the massive increases we have seen in food and energy prices. Prices are still going up and energy companies are still not passing on the drop in the price of wholesale energy. Many people are now looking down the barrel of eviction from rented properties or major increases in their mortgages as the ECB continues to increase interest rates. Wage growth during this crisis has hovered at about 4% while inflation has reached almost 10%, with food prices increasing by 16%. A wage rise below inflation is a wage cut. That is if one is even lucky enough to get that. Hundreds of thousands of people were struggling to get by before the cost-of-living crisis. Now we are in a worse situation, yet the Government is offering people nothing in real terms. There will be no further supports, as the Minister announced, until budget 2024.

The Government ignored calls from groups like Age Action and Social Justice Ireland for proper increases for those receiving social welfare. The increases in the most recent budget were just over half of what people needed just to stand still. The Government failed to listen to calls to extend the fuel allowance to those in receipt of working family payments and has for years ignored calls to have a social welfare system properly benchmarked to a decent standard of living and properly indexed to inflation.

The once-off payments, while welcome, did not do nearly enough to combat the sheer immiseration people were subjected to during a decade of austerity caused by the greed of the big banks and now during a cost-of-living crisis caused by the greed of big energy corporations.

We heard the Taoiseach back in February saying we did not have the finances to implement more support for people this spring. This is despite the fact the Government has €5 billion in budget surpluses and has dragged its feet time and again on implementing a windfall tax on the corporations whose skyrocketing excess profits have caused the inflation and price increases. As other Deputies have done, I call on the Minister to provide a timeline setting out when the relevant legislation will be introduced in the House.

Almost 250,000 people on tracker mortgages are seeing their monthly payments balloon every month as the ECB increases its interest rate. The average tracker mortgage has increased by €1,600 over the past eight months. In the near future, we will see more than 50,000 people coming off fixed rate mortgages and their yearly payments could rise by as much as €6,000 a year.

People are struggling to pay rent and mortgages, pay for food and keep their houses warm. When will they get the extra help they need or, as it has done with the eviction ban, will the Government let thousands of people fall off a cliff?

The Government stated that ending the eviction ban and having thousands of people potentially face homelessness was in the public interest. It is leaving thousands of people to struggle to keep their homes warm and keep food on the table, while the corporations, which have made billions of euro off the crisis, are allowed to walk away and get off the hook. Is that also in the public interest?

Photo of Marian HarkinMarian Harkin (Sligo-Leitrim, Independent)
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This Bill, I presume, is seen as a further response to the continuing cost-of-living crisis. In 2022, inflation stood at over 8% and is expected to be well over 7% this year. It may increase further, an issue I will come back to later. That amounts to 15% in total, which makes a significant difference to families, individuals and businesses. Food inflation is even higher, at 16.3% year-on-year, and is now at a 15-year high. That means that a couple of baskets of groceries costing €78 this day last year would cost €90.71 this year. We are seeing fuel inflation running at record levels and families and businesses struggling.

The Bill has a number of positive aspects which I support. Equally, there are serious gaps which I will highlight. I see it as a strength and not a weakness to amend and improve the Finance Bill. Nobody is perfect, no decision is perfect and context means everything. In that context, this is a positive move. It was clear from the beginning that TBESS would not work. Very few businesses availed of it. The changes the Minister has announced are very important and will make a real difference. Many business owners who contacted me in recent months could not avail of the scheme. The extension of TBESS to May 2023 is important, as is the decision to amend the threshold for the average increase in the per unit cost of electricity from 50% to 30% to qualify for the scheme. That is positive for many businesses, as is the fact that the change will be applied retrospectively.

The Minister is also raising the cap from €10,000 to €15,000 for a single business, and from €30,000 to €45,000 for a business with multiple premises, from 1 March. As I said, businesses will appreciate and welcome this, but I have one small concern. I have not had time to read the Bill in detail, but the Minister stated earlier that “the Bill provides for a new time limit for making claims under the scheme, which will be two months from the end of the specified period rather than four months from the end of the claim period to which the claim relates.” If, however, a person wanted to claim back to September, two months later would bring us to the end of October, so a further four months would bring us to the end of February, but that was three weeks ago. If that is the case, businesses will need more flexibility given that, for a start, many of them will not even be aware of these changes. If they have to claim back to September, therefore, some of them will miss out on this. As I said, I am simply quoting from the Minister's contribution and perhaps my interpretation of what he said is not correct, but if it is, I think he will need to look again at the number of months permitted from the end of the claim period to which the claim relates.

It is deeply disappointing the Minister is still considering a separate scheme only for businesses that use oil and liquefied petroleum gas, LPG. He told us the Minister for Enterprise, Trade and Employment is "exploring options”, but it is way too late. The costs are hitting businesses hard now and I think the Minister, Deputy McGrath, will agree we need immediate action. It is too late for Ministers to be exploring options.

The Minister told us earlier about the phased restoration of the rates of excise duty on petrol, diesel and marked gas. By 31 October this year, there will a 5 cent per litre increase in the rate for marked gas and oil, a 16 cent increase per litre for diesel and a 21 cent increase in the equivalent rate for petrol. That will hit the transport sector hard and it will be a body blow to motorists and road hauliers. Not only will it hit those sectors hard, however, but it will drive inflation higher. Earlier, I said the expected inflation rate was about 7.5%, but because of these increases that will feed into higher costs for transport and so on, the price of every type of good that is transported will increase, which means the inflation rate for food will be higher and the expected rate of inflation will definitely increase. I would have thought the purpose of this Bill was not so much to decrease the rate of inflation, given I am not sure the Minister can do that since it is the job of the ECB, but certainly not to add to it. I honestly believe, however, that those changes will add to the cost of inflation, which means we are likely to see further rate increases from the ECB if inflation keeps rising, a point I will return to when I talk about mortgage holders.

I was pleased to see the continuation of the 9% VAT rate for the hospitality and tourism sector. While there is no doubt there has been evidence of price gouging, as we saw in Dublin last weekend, huge numbers are employed in that sector in the regions, where it is one of the most important sectors after agriculture. Small restaurants, cafés and family hotels make a huge difference to the local economy, so from that perspective, I was glad to see the Minister held that rate at 9%.

The gaping hole in this legislation is the fact there is no reference to housing. Every one of us in this House will be able to recognise we are in the middle of a housing crisis. Nobody will deny that. I supported a Sinn Féin motion a few weeks ago that looked for a targeted mortgage interest relief measure. It was a modest measure that would make a real difference to some mortgage holders, who have seen six rate increases by the ECB. Arising from those increases, they see similar increases in their mortgage repayments. We are looking at increases of somewhere between €300 and €500 per month in mortgage repayments for many householders, the same people who are dealing with the unprecedented inflation rates in food, fuel, goods and services. The Bill was an opportunity to assist certain mortgage holders, most especially those whose mortgages were sold to vulture funds, who are now paying mortgage interest rates of up to 9%. In fact, I heard to an economist yesterday saying some mortgage holders whose mortgages had been sold to vulture funds could find themselves paying mortgage interest rates in double digits. I come from a generation that remembers double-digit interest rates for mortgages, but I never thought I would see them again. Whether or not that comes to pass, and whether they will be 9.5% or 10.5% as the year goes on, I cannot say, but it is highly likely some mortgage holders will find themselves paying mortgage interest rates in double digits, and we know the significant pressure that will put on those people as they struggle with increasing inflation. The Bill was an opportunity to help some of those mortgage holders in a targeted, limited way but it has been missed. As I said, Sinn Féin put forward a proposal, and while the Government did not have to take it, it could have devised a proposal itself that would have targeted those most in need, and I am disappointed that is not in the Bill.

Of course, all anybody is talking about today is the fact that if the eviction ban is lifted, many families, individuals, children, people with disabilities, people who are ill and many others - there is a long list but I will not go through it - will find themselves looking for emergency accommodation in the near future, and many counties have little or no emergency accommodation. The reason I say they will be looking for emergency accommodation and will not be able to get a place to rent, whether an apartment, a house or whatever, is that before I came to the Chamber, I checked, as did some other Deputies, how many rental properties, according to Daft.ie, are available right now to rent in the constituency I represent. In the entire county of Roscommon, there are 13 properties to rent, while in Sligo, there are 21. In Donegal, a large county, there are 57, and in Leitrim, four properties are available to rent. If the lifting of the eviction ban goes ahead, where are people in Leitrim, Sligo, Roscommon and Donegal going to go? Where are they going to find rental accommodation? This is a real crisis and for some people, it will become a real emergency.

I proposed, with some of my colleagues, that we extend the eviction ban to June 2024 to give the Government a chance to build and refurbish homes, and not have winter evictions this time next year. Accompanying that, the suggestion I made was that there would be a similar relaxation of the requirements for planning permission to refurbish existing buildings or new temporary buildings, that is, modular homes, as already exists for providing accommodation for Ukrainian refugees.

If public authorities and local authorities could refurbish derelict or empty buildings and install modular homes for the next 15 months without having to seek planning permission, significant numbers of homes could come on stream. That is what is important. It is what really matters. It would mean more homes would be available for families. There has been relaxation in the planning laws in the context of providing accommodation for Ukrainian refugees. The Government needs to consider doing likewise in the context of providing accommodation for everybody who needs it. That would make a big difference to the numbers. I believe it makes sense. If I am wrong, the Minister is free to tell me so.

In the context of the Bill, a tax package to entice landlords to stay in the market would be welcome. Corporate landlords enjoy a very favourable tax rate but small incidental landlords pay the full rate of tax. They have offsets but they pay the full rate of tax thereafter. I have spoken to landlords. There is a worry that more of them will leave the market. A tax incentive should be extended to encourage them to stay in the market and all the stops should be pulled out on everything else, including the planning requirements in the specific areas of public authorities and refurbished or modular houses. If the planning requirements in that regard are relaxed, it will bring more houses on stream and the pressure will ease and a Government might find itself in a position to lift an eviction ban knowing there was enough supply, or a reasonable amount thereof, in the market for people to be able to rent homes, rather than the current situation where there are currently four properties for rent in County Leitrim and 21 in County Sligo.

There are good proposals in the Bill but there are also glaring gaps. The real gap is housing and, because of that, I am disappointed with the Bill overall.

7:25 pm

Photo of Peadar TóibínPeadar Tóibín (Meath West, Aontú)
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The cost-of-living crisis is burning away in communities throughout Ireland. It is having a material effect on the lives of so many in terms of nutrition and mental health. It is even resulting in people, especially older people, being forced to go to hospital because they do not have proper food or heating. It has been a particularly difficult experience in rural and regional Ireland, where many people feel that they are being attacked by a Dublin-centric Government. Farmers have been particularly hard hit by the cost-of-living increases. The price of the fuel on which they depend for work, transport and heating has gone through the roof in recent times. Many people increasingly believe this is a south Dublin-centric Government. There are ten counties, most of them in Connacht and elsewhere in the west, that do not have a Minister, yet all four Deputies representing a constituency in south Dublin are Ministers. The cost for the family shop is now €1,000 higher than it was last year - an incredible inflation rate of 16.3%. We forecast that increase. We said that if the Government did not get to grips with the inflation being experienced by farmers, particularly in the context of fertiliser, that inflation rate would transmit to inflation in the cost of food on supermarket shelves within six months to a year, and that is what has happened.

What has frustrated me in the past year is that the Government has made money out of the cost-of-living crisis in terms of fuel taxes. A reply we received several weeks ago to a parliamentary question stated that the Government is taking in more in VAT on fuel and energy than it did in the previous four years. It is incredible that in a cost-of-living crisis the Government is taking more out of people's pockets on fuel than it did previously. For example, the yield from VAT on electricity reached record heights of €381 million, an increase of 40% in the space of a year. The yield on petrol is €299 million while VAT on diesel resulted in €382 million and solid fuel in €61 million. On average, the VAT take on fuel increased by nearly 30% in the middle of a cost-of-living crisis under Fianna Fáil, Fine Gael and the Green Party. In fact, the total cost of the energy credit is less than the increased amount of taxes achieved by the Government and the increased profits at Electric Ireland. The Government has taken more money out of pockets during this cost-of-living crisis. It is incredible. Of course, it also increased the carbon tax.

In addition, the wholesale prices of gas and electricity have collapsed yet the Government has not moved on a proper windfall tax. Surely this Bill should have been the location for a proper windfall tax. The Government, however, is saying that it will happen in a number of weeks. The motto of this Government should be mañana, on the horizon, some time in the future.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I thank all the Deputies who contributed to the debate. There is an overall context to the Bill, namely, the announcement by the Government to bring forward a package of measures totalling more than €1.2 billion. Had we not brought forward the Bill, a range of tax reductions would have expired overnight at the end of February. The principal reason for bringing forward the Bill is to extend a number of those measures and provide for a phased restoration of some of the rates. Of course, these measures sit alongside a range of other expenditure measures the Government brought forward in the budget and when we announced this overall package in February. Colleagues are well aware of the content of all those measures, including the social welfare measures that were announced which will take effect in the coming weeks.

All of that comes alongside measures announced in the budget last year, some of which have come into effect, with other such measures being introduced during the year. We have already introduced the reduction in childcare costs. That has been warmly welcomed by many families and parents and has resulted in an a reduction of 25% on average. We introduced the income tax changes from 1 January. This month, we are paying the fourth electricity credit against every domestic electricity account in the country and introducing a number of measures to reduce the cost of healthcare, for example, with the elimination of some hospital charges. In education, many colleagues have welcomed the extension of free hot school meals to all DEIS schools and the permanent changes to the school transport fares, as well as the reduction in public transport fares. There is also the increase in the back to school clothing and footwear allowance. I make those points to highlight the context that the Bill sits alongside a range of other measures. This is not the totality of the Government's response to the cost-of-living problems and challenges that many people are facing.

In essence, the Bill provides for the extension of the lower VAT rate on domestic gas and electricity bills to the end of October and the extension of the lower rate of VAT in tourism and hospitality to the end of August. It provides for a phased restoration of excise duty on petrol, diesel and marked gas oil and it introduces a number of changes to the TBESS. I acknowledge the remarks of colleagues in respect of that scheme. I will touch on a number of those measures before I address other points. As regards the issues raised by Deputies Mairéad Farrell, Ó Murchú and Doherty, TBESS only applies to the metered supply of natural gas and electricity. The scheme is designed around determining increases in unit prices and the actual consumption for the period of the scheme based on information made available through electricity and gas maters. It is not possible to calculate oil and liquefied petroleum gas, LPG, usage in the same manner as for electricity and metered gas mains.

That is why my colleague, the Minister, Deputy Coveney, is now following up on that issue. The Government has made a decision to introduce a grant scheme for businesses that are using oil and LPG, the details of which will be provided as soon as possible.

With regard to Deputy Nash’s comment on the complexity of the TBESS, it is designed to be as inclusive as possible and covers businesses of all sizes and sectors that meet the qualifying criteria. The system that is being built to administer the scheme has to accommodate the huge diversity of businesses and their energy arrangements, for example, billed customers, pay-as-you-go customers, new customers, a variety of billing cycles and billing rates and so on. Therefore, to ensure equity in the system, insofar as is possible, like must be compared with like. Comparing claim periods and reference periods that are calendar months means that bills and amounts may need to be apportioned. This apportionment had to be legislated for and necessitated a number of formulas to work out various calculations. The important thing for businesses to note is that Revenue's portal will carry out those calculations and the business is simply required to input the data from the bill or statement and retain that record. Revenue has published detailed operational guidelines on the TBESS, which are available on the Revenue website. These guidelines include screenshots to ensure they are as complete and user-friendly as possible.

Deputies Nash and Shortall suggested that a joint labour committee, JLC, be established. JLCs are set up by the Labour Court following an application from either the Minister for Enterprise, Trade and Employment or a trade union or organisation that represents workers or employers involved in the sector. In the first instance, the establishment of a JLC is a matter for my colleague, the Minister for Enterprise, Trade and Employment. I would also note that establishing a JLC is not a solution in and of itself. The effectiveness of such a committee would be determined by how the various parties engage with it. There can be no guarantee that it would be a success. In summary, I do not feel that making financial support contingent on the establishment of a JLC would necessarily achieve the aim of the Deputies, that is, to improve work conditions and pay across these sectors.

I will address the point made by Deputy Harkin on the TBESS. She raised a very valid question about the change we are making to the timeline for applications. To clarify, the effect of the change is that businesses will have two months after the end of the scheme to claim all the way back. The four-month rule has been removed and the situation is being approved for businesses. They will have two months following the ending of the scheme. The date of that has yet to be finally determined but they will have two months and they can claim all the way back to 1 September 2022.

With regard to Deputy Shortall's comment on the 9% VAT rate on hospitality and accommodation, it is possible to change the VAT rate for hospitality or accommodation without reference to the other. The respective costs of extending the 9% VAT rate to the end of August this year would be €212 million for hospitality, €61 million for accommodation and €27 million for the remaining sectors. If accommodation reverted to 13.5% while hospitality was kept at 9%, however, this change would have to apply to all accommodation, including bed and breakfast accommodation and small hotels, because of the principle of fiscal neutrality, which requires universal application to a sector. As I said previously in response to queries across the House, I am advised by Revenue that there would be significant practical operational concerns in having different VAT rates applying to hotel accommodation and meals given how the sector operates with various packages ranging from bed and breakfast accommodation through to all-inclusive board and lodging packages. I am advised that this could lead to the underpaying of VAT because the charge for accommodation and meals would have to be apportioned. The views of Revenue would undoubtedly provide opportunities for tax planning, which would be difficult to police and would give rise to administrative and operational complexity as well as increased risk of avoidance and scope for manipulation of the VAT system. We made the decision to extend the 9% rate for this sector to the end of August to give the sector and all the businesses in every region in Ireland certainty that it will continue until that time. As I have said on the floor of this House on a number of occasions, it will revert then to the normal rate of 13.5% from the end of August. It is important that I provide clarity and give certainty to the sector on that issue.

There have been a number of comments regarding windfall gains in the energy sector. EU Regulation No. 1854 of last year on an emergency intervention to address high energy prices came into force in October. It seeks to address the issue of windfall gains by collecting and redistributing proceeds from these gains by means of a temporary solidarity contribution based on taxable profits in the fossil fuel production and refining sectors, which will apply for 2022 and 2023. A cap on the market revenues of some generators such as wind, solar and oil in the electricity sector will apply for the period from December 2022 to June 2023. Proceeds from the cap on market revenues are expected to be collected in September 2023 and will be used to support electricity customers in mitigating the impact of higher electricity prices as set out in the European Council regulation. The proceeds from the temporary solidarity contribution are expected to be collected in September this year and September next year. The European Council regulation allows for these proceeds to be used in a wider range of areas including to financially support energy consumers to reduce energy consumption or to promote investments in renewable energy.

I would point to the press release that was issued by my colleague, the Minister, Deputy Eamon Ryan, following the Cabinet's decision today to approve the general scheme of the energy (windfall gains in the energy sector) Bill 2023. The general scheme will be the basis of primary legislation, which will be brought to the Government before being published and introduced in the Oireachtas. It is intended, to answer the question put by a number of colleagues, that this legislation would be enacted before the summer recess. I do not have time, unfortunately, to go through all the other issues that were raised.

I again thank colleagues for their broad support for the Bill. Others would like to do far more in the Bill, and I acknowledge those points. I thank the members of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach for facilitating the swift passage of this Bill. It is important that we are in a position to give permanent legislative effect to the extension of these tax measures into the future. I understand we have a date for Committee Stage of this Bill next week. I look forward to going into more detail on a whole range of measures set out in the Bill at that point.

Question put and agreed to.