Pearse Doherty (Donegal, Sinn Fein)
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Tairgim leasú Uimh. 1:

In page 8, between lines 6 and 7, to insert the following: “Report on universal social charge

3. The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on removing the universal social charge from the first €40,000 a person earns.”.

Tá an rún seo ag iarraidh faoiseamh cánach a chur ar fáil do dhaoine fud fad na tíre seo, rud a dhiúltaigh an Rialtas seo a dhéanamh cé go bhfuil muid i gcruachás maidir le costais mhaireachtála, mar atá a fhios againn, agus praghsanna ag dul suas agus suas. Cé gur thug páirtithe an Rialtais, Fianna Fáil agus Fine Gael, gealltanais go mbeidh gearrthacha ó thaobh cánach de, níl an rud seo déanta acu mar tá an toghchán thart agus na gealltanais a rinne na páirtithe sin caite i leataobh. Tá pobal na tíre caite i leataobh fosta. Bhí praghas de €9.4 billiún ar an cháinaisnéis. Is é an rud a rinne an Rialtas, na páirtithe seo, ná gur fhág sé oibrithe níos measa i mbliana ná mar a bhí siad anuraidh. Is iad sin fíricí an scéil seo. Faoin leasú atá á chur chun tosaigh ag Sinn Féin, beidh tuairisc ag amharc ar an chéad €40,000 d'ioncam a shaothraíonn duine ar bith sa tír seo a bheith saor ón USC. Cuirim i gcuimhne don Tánaiste agus Aire Airgeadais na laethanta a chaith sé ag iompar na gcomharthaí ag rá go raibh Fine Gael chun deireadh a chur leis an cháin seo. Tharla sé seo roimh thoghchán difriúil. Tá a fhios againn cad a tharla leis an ghealltanas sin fosta. Gan athrú suntasach a dhéanamh ar chúrsaí cánach, cuirfear níos mó brú ar phobal na tíre seo agus níos mó cánach orthu. Ní m'fhocail féin amháin iad seo. Is é sin a méid a bhí le rá ag an Tánaiste roimh an toghchán. Molaim an leasú seo don Teach. Thabharfadh sé faoiseamh do dhaoine, go háirithe agus muid ag déileáil le cruachás na gcostas maireachtála, mar atá a fhios ag pobal na tíre seo.

Amendment No. 1 is about providing real substantial tax relief to workers right across the State, something that the Government chose not to do in this budget. With a budget of €9.4 billion, only Fianna Fáil and Fine Gael could manage to actually leave workers worse off. This measure is about ensuring that the first €40,000 that anybody earns would be exempt from USC, a measure which is targeted. Although everybody who earns up to that amount would benefit, it cuts off at €40,000, which is appropriate in my view. It would benefit people by up to €746 which would make a real difference, particularly in a cost-of-living crisis as people see prices continue to increase as the Government sits by and does nothing. Indeed, it does worse than that because in this budget €9.4 billion is being expended and yet workers are being left worse off.

I am sure the Minister does not need reminding of this. He has probably got pictures on his phone or pictures at home of himself and his colleagues holding banners promising to abolish the USC. Does the Minister remember that one? Then again, he will recall that that was before an election and he and his colleagues have a bit of a habit here; they make commitments before an election and break them after an election. Now the abolish-the-USC banners have been put to one side.

Before the most recent election they promised to index tax relief, something that was not done in this budget. The Tánaiste, himself, made it very clear in the run-up to the election when he said with regard to not adjusting income tax: "That's the equivalent, we just need to be honest, of saying there will be tax rises". That is exactly in his own words the effect of what he is delivering here to workers who are toiling to build this economy. These workers are struggling as a result of this Government that has sat by and allowed a rip-off to take place in many areas. We see it in insurance, banking, energy and other areas. The Government itself has made matters worse through increasing costs on individuals: the increase in student fees, another broken promise; increases in petrol and diesel; increases in home heating oil; and increases in local property tax. Increases after increases have been placed on the shoulders of ordinary working families.

That is why so many people - over 300,000 people as we know today - cannot pay their electricity bills. It is why one in four households in the State cannot pay their gas bills. Regardless of what the Government says it has done and I am sure the Minister will trot it out again, the reality is as we stand here never in the history of the State have there been more people who cannot afford to keep the lights on and the heating on because they cannot pay their electricity and gas bills.

Today is about giving the new Minister for Finance, Simon Harris, an opportunity to live up to his words, for him to be honest and say that actually not adjusting income tax bands is, in his own words, the same as saying there will be tax rises. I do not believe that is the case. I do not believe we should be seeing tax rises. What we need to see is relief for people at this point in time. That is why we need the first €40,000 that people earn to be exempt from USC, providing targeted support for individuals during this cost-of-living crisis.

There are many measures, which the Minister will be well familiar with, through which revenue can be generated to fund this proposal. For example, I do not believe that we should be providing in this budget the €2.5 billion in tax cuts that have been handed out to landlords, developers, investors and others. Those are the priorities of the Government. My priority is looking after ordinary working people. My priority is putting it to the Government that it has again broken its promise and commitment to the Irish people and to Irish workers. As there is no upcoming election, however, Fine Gael and Fianna Fáil do not care. Unfortunately, that is the evidence before us, evidence in black and white in this Finance Bill.

Simon Harris (Wicklow, Fine Gael)
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In the first place, this amendment has nothing whatsoever to do with indexation. It is a proposal from the Sinn Féin Party that we should carry out a report on removing people from the universal social charge. We do not need any reports in relation to this. We need to follow very carefully the advice and analysis available to those of us in government and to those in this House about the volatile economic situation in which we find ourselves geopolitically. On the day when the Irish Fiscal Advisory Council published its latest assessment and highlighted the need for anchoring down our public finances and our taxation plans in a multi-economic framework, the idea that Sinn Féin would propose this without any reference to that is interesting in itself.

Of course, the budget did not do what the Deputy suggested. The budget actually endeavoured to save people's jobs in rural towns and villages. I think Sinn Féin supported the 9% VAT rate on hospitality. In fact, I think it proposed extending it to more sectors. Sinn Féin is in favour of that and that is one of the things we did. The second thing we did was to reduce the cost of building apartments, not for developers but for people to live in them. I remind Deputy Doherty that funnily enough people cannot live in homes if they are not built.

Yesterday, in Dáil Éireann bizarrely Sinn Féin voted against a resolution that would have allowed approved housing bodies, many of which I am sure Sinn Féin Members meet, to actually benefit from that reduction. The next time they meet an approved housing body or one of the charities that help us build homes, they should let it know that Sinn Féin voted against it benefiting from that. Sinn Féin also voted in this House yesterday against young people being able to benefit from help to buy on those apartments that are built at a reduced rate. I accept that we have a difference in policy on the 9% VAT rate on apartments. However, Sinn Féin is being so partisan that when the Government has made it clear that we want to reduce VAT on apartments, it would not then make sure that at the very least that could be extended to include social housing, affordable housing, houses built by approved housing bodies and student accommodation. Had a majority of people in this House agreed with the Sinn Féin position - thank God they did not - the effect of Sinn Féin's vote yesterday would been no benefit to student accommodation, no benefit to approved housing bodies, no benefit to social housing, fewer apartments built in our country and an inability for first-time buyers to access the help to buy scheme on any of the extra apartments that will be generated.

We have very different views on how Deputy Doherty presents the budget we delivered to this House. This is Report Stage of the Finance Bill. I was very clear when I took up this role last week that we were going to continue in a stable manned with the policies outlined by the Government in the budget. We have taken a number of measures to assist people in relation to energy bills, including reducing VAT for the next number of years on energy bills. That was meant to be a temporary measure. We are rolling that out for several years because energy bills are too high. We are reducing the public service obligation, PSO, on similar bills, and expanding the fuel allowance to more people than ever before. Deputy Doherty talks a lot about working people. We are making sure that for the first time if someone is on the working family payment they can now benefit from the fuel allowance payment, which is up to around €1,000 during the fuel season.

In terms of the actual amendment, the USC yield was €5.7 billion in 2024. It has a yield of €5.6 billion forecast for 2025. In fairness, I know the Deputy has costed his proposals in his alternative budget. I am advised by Revenue that it is estimated to cost €1.44 billion in the first year and €1.65 billion on a full year basis. At the moment, it is estimated that 29% of all taxpayer units will currently not be liable for any USC. So, already 29% of taxpayer units are not liable for USC from next year. This proposal would obviously significantly narrow the tax base further and would mean around 63% of taxpayer units would not be liable for the USC at all.

Deputies will recall that during the economic crisis, it reached a point where 45% of all income earners were exempt from income tax. So, we would be going much higher in terms of the percentage of the population exempt from the USC than we had the percentage exempt at income tax at the time of the financial crisis.

There are commitments in the programme for Government I intend to deliver. This Finance Bill is one of five that will be delivered over the lifetime of the Government. We took decisions this year. I accept they were not universally popular. They were decisions to try to protect jobs and build more homes. In the years ahead and in forthcoming budgets, we will be working on delivering commitments around tax reform, including in the areas of income tax.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister introduced the issue of reducing the cost of apartments. He wants to get real. This is not about reducing the cost of apartments.

Simon Harris (Wicklow, Fine Gael)
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It is.

Pearse Doherty (Donegal, Sinn Fein)
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In fairness, Paschal did not even claim that.

Simon Harris (Wicklow, Fine Gael)
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It is a viability measure.

Pearse Doherty (Donegal, Sinn Fein)
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That is a different thing.

Simon Harris (Wicklow, Fine Gael)
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Reducing the cost of building.

Pearse Doherty (Donegal, Sinn Fein)
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No, it is not. Jesus Christ, that is not the same thing. This is about making sure there is a profit margin for developers so that they build them. The Minister's predecessor - maybe he should pick up the phone to him - was not even suggesting this would reduce the cost. It was not an affordability measure. So, this idea that Simon Harris somehow thinks this €2.5 billion of a tax cut is about reducing the cost. He would want to get real. It is not. That is not what it is about.

Simon Harris (Wicklow, Fine Gael)
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I did not say that.

Pearse Doherty (Donegal, Sinn Fein)
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Let me finish. Please, stop interrupting. I did not interrupt the Minister once. He says this is about ownership of apartments. Some 96% of apartments built in this city do not actually come on the market. They are rented out at astronomical prices. The Minister makes a virtue of the fact that he forgot about the fact there is forward funding arrangements for apartments. The Government rushed through an amendment last night as if this was what it was all about. This was all about developers. Does the Minister know what operational profits were generated by the two biggest developers in this State last year? If he does, I will give way to him. Their operational profits were 20% and 21%. That is the type of profits that were generated. We see reports from Britain which talk about how developers are land hoarding, deciding where and when to build and using their market dominance to squeeze new measures out of governments, and that is what has happened.

The Minister is the person who campaigned to abolish the USC. He is the person who gave a commitment that he would reduce people's tax every single year over the next five years in the election. He lied to the public. That is what happened because this Finance Bill does not provide that commitment. What he should be doing is making sure people have relief during a cost-of-living crisis but he has decided to prioritise developers, investors and the profits of big companies over ordinary people. That is wrong, and I am calling him out on it.

Simon Harris (Wicklow, Fine Gael)
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Deputy Doherty has decided to continue to ignore the reality with his fanciful economic ideology of the fact that there are at least 42,000 apartments in this capital city that have planning permission today that have been deemed not viable to build. I want to build them while Deputy Doherty wants to continue to call people names. It makes sense to try to ensure those apartments are built because where are the young people going live if they are not built? It suits Deputy Doherty for the housing crisis to continue. We are trying to fix it. Sinn Féin oppose every single measure. Yesterday, when we brought in a measure to try to extend the benefit to approved housing bodies, to extend it to student accommodation and to make sure young people could benefit from the help to buy, Sinn Féin voted níl agus níl. That was Sinn Féin's decision, not ours. We have very different views in relation to this and I am very happy that we do and I am very happy to continue to debate that.

On this amendment, the Government's position is clear. The programme for Government outlines where we want to go with taxation over the lifetime of this Government. The Finance Bill before the House is instalment one of five. I intend to make further progress with taxation measures over the lifetime of this Government and I believe, as do my Government colleagues and as did my predecessor, that the prudent thing to do at the start of a Government is to make sure we increase housing supply because of the housing emergency and to make sure we enact a promise that we made to the hospitality sector and the 190,000 people working in it to help protect their jobs and the viability of their businesses in rural towns and villages right across this country.

Pearse Doherty (Donegal, Sinn Fein)
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What does the Minister say about the promise he made to workers when he begged them for their vote? He promised he would cut their taxes. In his manifesto, he campaigned on that and he broke that promise over and over again. With this vote, he now has the opportunity to do something that is positive, that is progressive and that is about reducing the burden on people here and now. The Minister says he wants to do this, that, and the other. Fine Gael has been in government for 14 years. It is the party that has created the housing crisis. The solutions they come up with, over and over again, dig deep into the pockets of workers and provide these benefits to developers and institutional investors. It has failed in the past and it will fail in the future.

What the Minister should be doing is building public houses on public land. That is what he should do and with this amendment the Minister can live up to the promise he made - one of many promises he broke to the public - and do the right thing. He should do as he said before the election and reduce taxes on workers. He should be honest. As the Minister said, if you do not adjust income taxes, it is the same as saying there will be tax rises. That is what he is delivering to people today who cannot even afford to pay their electricity and gas bills. Shame on the Minister.

Simon Harris (Wicklow, Fine Gael)
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You see-----

Pearse Doherty (Donegal, Sinn Fein)
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You do not have time.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Gabh mo leithscéal.

Pearse Doherty (Donegal, Sinn Fein)
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You are here long enough, you should know.

Simon Harris (Wicklow, Fine Gael)
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The Deputy is wrong. When you run the economy well, wage growth counts-----

Pearse Doherty (Donegal, Sinn Fein)
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I am not wrong.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Gabh mo leithscéal, a Aire.

Pearse Doherty (Donegal, Sinn Fein)
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You have no time.

Simon Harris (Wicklow, Fine Gael)
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It is going to be a long night if the Deputy is going to be so rude the whole time.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Tá sé in am anois an leasú seo a chur. Is féidir leis an Aire agus an Teachta Dála na fadhbanna atá acu a réiteach thar na gcéad píosaí eile. Tá cúpla uair a chloig againn istigh anseo.

Verona Murphy (Wexford, Independent)
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7 o’clock

Members have been asking about when the voting block will be. It is not anticipated before midnight and there probably will be further divisions on amendments to this Bill. Deputies should keep any eye on proceedings.

Gerald Nash (Louth, Labour)
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I move amendment No. 2:

In page 8, between lines 13 and 14, to insert the following:

"Report on taxation and cost of indexation 4. The Minister and the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation shall include in their Summer Economic Statement in each year a report setting out the estimated cost to the Exchequer of adjusting—

(a) tax rate bands and tax credits and allowances in relation to income tax, and

(b) benefits and allowances payable under the Social Welfare Acts,

to reflect any changes in the All Items Consumer Price Index numbers published by the Central Statistics Office in the 12 months before the date of the Statement.".

As discussed in reference to the previous amendment, middle-income workers, especially those who expect to receive modest pay increases of 3%, 4% or 5%, will, in effect, see tax rises next year because of the failure of the Government in the context of October's budget and the provisions in this Bill to index tax bands and credits to accommodate and take into account those pay increases. As outlined, commitments were made by the Tánaiste in the context of the general election campaign 12 months ago. Indeed, there are references in the programme for Government to the ambition to introduce indexation for working people over the next few years.

The reality is that because there is no form of indexation in the Finance Bill, there will, in effect, be tax increases for a whole swathe of middle-income workers next year. In the context of the cost-of-living crisis we are experiencing, it will be a particularly challenging year for those workers. The reality is that if the Government, during the next four years, is to meet the commitments it made previously, it will require a very significant amount of heavy lifting in budget 2027 and beyond. That is if it does what it committed to do, which is to move to index tax bands and credits incrementally over the next few years.

Of course, budgets and Finance Bills, and politics more generally, are about choices. With the limited resources available to the Government this year in the taxation space, it decided, in its wisdom, to introduce an untargeted VAT rate cut for the hospitality sector. That particular cut will disproportionately benefit larger organisations operating in this country. The Government further decided, in its wisdom, to introduce VAT cuts that would have a substantial cost to the Exchequer and would involve a very large wealth transfer from working people to the developer sector. Those cuts, the Government hopes and says without necessarily any evidence to back it up, are designed to boost apartment supply and the viability of the sector. We all know they are about boosting the bottom line of development companies.

In recent years, I have, for good reason, made the proposal set out in my amendment No. 2. It is a responsible proposition. Some of the countries against which we like to compare ourselves have automatic systems of indexation built into their systems of governance and financial planning. Indexation is done routinely and annually. What is also done routinely is indexation of social welfare payments. If we commit to indexation in the context of the tax system, the corollary must be that we do the same when it comes to core weekly social welfare rates to ensure nobody is left behind. I have listed the countries that do this routinely on Committee Stage and in other forums. They do so on the basis that it gives certainty to governments, workers and employers. The budget in October was marketed by the Government as a pro-business budget. What will happen next year, as a result of the Government's failure to implement indexation this year, is we will see increased wage demands on the very same employers it says it wants to support. That will be the reality.

I have requested this measure time and again. I did it again this year on Committee Stage and am doing so now on Report Stage. My proposal is that the best mechanism for setting out a commitment to indexation is the summer economic statement. If there is another mechanism to do it, I am all ears. I am open to persuasion on that. Indexation would give certainty to workers and the economic planning systems in this country. It also would ensure that, every year, when we engage in the process in the run-up to the budget and then get to debate the budget, we would be doing two things, namely, indexing tax bands and rates and indexing social welfare rates.

Then, we would have a genuine discussion and open public debate in this House about how we raise revenue to provide the resources we need to expand our public services. We would also then have a genuine discourse about other priorities in terms of taxation, tax and spending, accepting that indexation would be done as a matter of course in the context of the personal tax system for PAYE workers and social welfare, which is an area I accept the Minister is not responsible for. It is a point worth making that when we index tax, we should also, from the point of view of social and economic equity, index core social welfare weekly rates.

Simon Harris (Wicklow, Fine Gael)
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I thank Deputy Nash for this proposal. I have heard him talk about this time and time again, and for good reason. I fully accept that budgets are about choices and we will have rigorous debates in this House about whether our choices are right. I contend – the Deputy will have a different view – that the choices we made this year were about trying to boost economic resilience, protect jobs and stimulate housing supply. We have had that debate and we will continue to have that debate.

I wish to make a couple of points. I understand that the absence of indexation of income tax credits this year has an effect on workers within our country. I also, however, have to read and marry that alongside the fact that wage growth is still expected to take place in our economy next year at such a rate that we still expect that all income earners who experience wage growth will see a net increase in their after-tax income. That is a point worth making and monitoring in the time ahead. Obviously, I have made comments in the past in relation to indexation and those comments are accurate when it comes to not indexing. The issue of wage growth and how that interplays is also a fair point.

I reiterate that this is the first of five budgets to be delivered by the Government. The Government and I, as the new Minister of Finance, remain committed to standing by the programme for Government commitment to make progressive changes to income tax - I have to say the next few words - if the economy remains strong. We all want it to remain strong. We have spelled out in the programme for Government what we will do and what we will defer doing if times become more difficult.

On the broader issue of automatically indexing credits and bands, it is worth pointing out that no Government has done this to date. One can say that is a good or bad thing, but the reason we have not done this traditionally as a country is that it does not allow the flexibility to adapt spending as necessary to match the level of resources available in any given budget. There is an argument that it actually restricts the ability of a Government to target resources where the need is greatest. However, the programme for Government makes some commitments in this area. It commits to “implement progressive changes in taxation if the economy remains strong, including indexing credits and bands to prevent an increase in the real burden of income tax.” It also states, “In the event of an economic downturn and unexpected deterioration in the public finances ... [we would] postpone changes to income tax credits or bands, as we did in Budget 2021”. I am happy to engage further with the Deputy on this in the time ahead. In fairness to Deputy Nash, he has acknowledged already that some of his request goes broader than my direct ministerial remit for the purpose of this debate in terms of what would be included in the summer economic statement. Some of the items he referenced, as he said himself, are the responsibility of other members of the Government, but I understand the broader thrust he is trying to get at.

My Department provides regular updates regarding the indexation of the income tax system. In recent years, information on the indexation of tax credits and bands has been included in the annual tax strategy group paper on income tax. Most recently, the budget 2026 strategy paper set out information relating to indexing the income tax system, including the estimated cost to the Exchequer. The costs used in this publication were taken from the Revenue Commissioners’ ready reckoner publication. This year’s annual progress report also included projections of wage growth to estimate the yield from non-indexation of the tax system. In other words, this is an affect of how much additional revenue the Exchequer would receive from the fiscal drag if income tax bands and credits were not adjusted to keep pace with wage growth.

I understand that the tax strategy group paper on social protection included similar budgetary options for consideration in that space. It is our view, and certainly the Department’s view, that the information requested by the Deputy in relation to the specific amendment on indexation is already regularly addressed in the variety of areas I have outlined. This is a practice that I will request the Department continues to consider as part of future reports as well as any other useful information we can provide in this regard. While I am not in a position to accept the Deputy’s amendment as is, I am happy to see if we can constructively engage on this in the time ahead.

Gerald Nash (Louth, Labour)
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I move amendment No. 3:

In page 8, between lines 13 and 14, to insert the following:

“Report on employee share ownership trusts 4. The Minister shall, within 12 months of the passing of this Act, lay a report before Dáil Éireann on any proposals to amend Chapter 2 of Part 17 and Schedule 12 of the Principal Act, relating to employee share ownership trusts, so as to facilitate the establishment of a greater number of such trusts and their smooth and efficient functioning.”.

My colleague, Deputy Lawlor, will be contributing to this debate as well. He has done significant work in this whole area of employee share ownership trusts, ESOTs. In my view, this is an underdeveloped area of the Irish economy. We have looked very closely at this area and I know the officials in the Department have as well, based on the discussions we had on Committee Stage with the Minister’s predecessor. Officials have looked at this in the Department. I know the Department of enterprise is looking at this whole space of employee share ownership trusts as well. Deputy Lawlor will speak much more eloquently than I on this particular issue, given the experience he has on the matter.

We know that our indigenous enterprise sector could do better. There are challenges when indigenous enterprises and high-potential start-ups seek to scale up. In the engagements I have had over many years with business owners in my constituency, and from the period I spent in the Department of enterprise, I am familiar with the challenge to raise revenue and expand. The options are limited for people when they want to sell their business on. There is often an ambition to keep the business and ownership in Ireland, but those prospects can be very limited and limiting.

In my experience, entrepreneurs who run and develop these companies, especially in the tech sector and so on, are often quite socially conscious and understand that their staff are a key component of the development and evolution of their business. Therefore, when they scale up, they want to see their staff succeed as well. One of the barriers to ensuring that staff can have a function in owning part of the company is the taxation treatment of members of employee share ownership trusts. Significant work has been undertaken in the UK in this regard and improvements have been seen in the landscape there in recent years. This is an area ripe for further focus from the Department of Finance and the Department of enterprise. It is an area that the Labour Party is interested in. We see this, in many ways, as the next frontier in the development of, dare I say it, stakeholder capitalism and evolving that idea of workplace democracy to meet the needs of the 21st century. This meets the needs of companies and staff and it helps to retain good, skilled staff in very competitive environments. This is an area we wish to see further explored by the Department and the Minister during his term.

George Lawlor (Wexford, Labour)
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I thank Deputy Nash. I spoke very briefly to the Tánaiste during the week on this. We had a good meeting with the Minister, Peter Burke, on the whole area of employee ownership trusts. My next step was to meet the Minister’s predecessor, but unfortunately he has gone to pastures new.

Gerald Nash (Louth, Labour)
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Paschal’s new pastures.

George Lawlor (Wexford, Labour)
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Yes, Paschal's new pastures.

Certainly, this is a win-win scenario. Looking at the statistics, every working day this year, an Irish company has been sold into foreign ownership. If you contrast that with the UK’s situation, ten companies per week transfer to employee ownership trusts. The very simple reason they do that is because the taxation situation is much more favourable in that regard. There is only one company in Ireland that has decided to dodge the tax pitfalls – not the tax, but the tax pitfalls – and work around it. It is called Wolfgang Digital, owned by Alan Coleman. That is the only company at this point in time that has decided to enter an employee ownership trust. To date, he has reported an increase in productivity and a much greater interest among the workforce in terms of the company itself.

The famous John Lewis company in the UK is an employee ownership trust, EOT. That is an example of the type of company that we need to be retaining in Irish ownership. Alan Coleman has told me that once you reach a particular turnover threshold, the phone calls come from all over the world in relation to buying out the Irish companies. With the geopolitical situation at the minute and the changed world in terms of economics and trade, it is imperative that we do all we can to retain Irish companies in Irish ownership. This is tax neutral, relatively. The fact that it is not happening, it is tax neutral and ensures that Irish companies stay in Ireland and the workforce have an interest in extra productivity to do that. There is a number of areas that need to be looked at but, as I said, it is tax neutral.

In the area of capital gains tax relief, we would be asking to introduce, as is the situation in the UK, full capital gains tax exemptions for business owners who sell a controlling stake, typically 51% or more, to an EOT. That is similar to the UK model. We would remove discretionary trust taxes to eliminate the punitive taxes applied to employee ownership trust structures, which currently treat them like discretionary trusts rather than succession vehicles. The area of succession is also a difficulty here, where there is no interest within the family in the ownership of the family business any longer. That is where EOTs could come to the fore also.

We need clarity on any anti-avoidance rules. We need to provide clear guidance so that employee ownership transactions are not penalised under existing anti-avoidance legislation. Of course, there also is employee incentives with annual tax-free bonuses being made available. There are also PRSI and USC adjustments.

Essentially, this is a tax neutral proposal, which I believe will give tremendous clarity to companies which find themselves in a situation where they are being approached and bombarded from outside the country by agencies which are only interested in the profit margin that they can achieve by purchasing the Irish companies. I think it would receive cross-party support in general.

As I said, the meeting with the Minister, Deputy Burke, was very successful, and his next recommendation was to square it up by meeting the Minister for Finance in regard to the proposals that are required. I believe it is something that we can benefit from. I urge the Minister to support it.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I briefly want to speak in support of this amendment. As the Minister knows, Irish start-ups receive a huge amount of support through Enterprise Ireland and through mentoring. A massive number of the founders of Irish start-ups put up a massive amount of their heart and soul into building up an enterprise, company or business. There are huge success stories from that. Then what happens is they get to a certain scale after maybe 20 years of doing that and it is no longer sustainable for the person who founded it to do it. They want succession and who is knocking on their door but these international private equity firms.

When they are sold to the private equity firms, which is usually what happens, there are different outcomes but sometimes it is an asset stripping or a market charge stripping. The long-term planning and sustainable planning that went into that start-up from the founders is sometimes thrown out the window. We do not necessarily get the value from that mentoring support in subsequent years. It is a real economic loss to do the job so well as a country in terms of supports to the founder and to get us to that point for an awful lot of that to be eroded. Different companies go different ways but that is what can happen.

What this does in terms of where it has happened and the one recent example in Ireland is that it leads to substantial increases in terms of productivity because the people who are working in the place are extra invested. They own it. In terms of problem solving, you hear from different businesses that problems they have not been able to solve for a number of years are solved because there is extra buy-in from the employees who now own the company. You get that extra buy-in and resourcefulness in terms of solving problems and productivity. That is a win-win for everyone. It is good for the economy as well.

I think this makes sense in terms of promoting better workplace democracy and it is better for employees. It helps to retain skills and it is better for the economy as well. We have an issue, as the Minister knows, in terms of productivity in our economy. We have some strong sections of our economy in terms of productivity but some weaker sections as well. Anything that is going to drive up productivity and make a better workplace for the people working in it is to be welcomed and supported.

Simon Harris (Wicklow, Fine Gael)
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I thank Deputies Nash and Lawlor for tabling this amendment. I acknowledge that Deputy Lawlor had an initial conversation with me on it this week. I appreciate his genuine interest and expertise in this. I also find myself in much agreement with some of the points Deputy O'Callaghan made in terms of how we keep companies that we as a country invest so much in getting to that point in Irish ownership. It is a real policy issue that deserves genuine consideration. I am pleased the Deputy had a constructive meeting with my colleague, the Minister for enterprise, in relation to that. I also thank Deputy Nash for acknowledging the work that my Department has carried out in this area and the work the Department of Enterprise, Tourism and Employment also has. That is a recognition by us that these are issues that merit consideration.

The Deputies will be aware that last year, an independent review of share-based remuneration was carried out by Indecon on behalf of my Department, which was published last year. This review, which included a public consultation, considered EOTs, and makes a recommendation pertaining specifically to this matter, suggesting that there is "merit in considering reforming the taxation of employee ownership trusts in line with the treatment of such arrangements in the UK." The Deputies have contrasted the current situation here with the situation in the UK in their comments.

The term employee ownership trusts does not appear in Chapter 2 of Part 17, or Schedule 12 of the Taxes Consolidation Act. However, as alluded to by the recommendation of the Indecon review, preferential tax treatment exists for EOTs in the UK. Preferential tax treatment is not available for these structures in Ireland. That is the issue people are trying to tease through.

I want Deputies to know consideration is being given to all recommendations arising from the review, and my officials have engaged with relevant stakeholder groups in this regard. As was discussed on Committee Stage of this Bill, Department officials have met with representatives of the Irish Pro-Share Association, IPSA, to discuss industry proposals on employee ownership trusts in recent months. Following these discussions, I am informed by officials that changes to discretionary trust tax, capital gains tax, which was referenced here, and to the close company surcharge, have been raised by stakeholders as potential necessary amendments to the tax acts to facilitate EOTs.

As part of any consideration of amendments to the tax Acts in light of this recommendation, we need to analyse and evaluate both the potential benefits and Exchequer costs of implementing changes to facilitate the establishment of EOTs, in line with my Department’s guidelines for tax expenditure evaluation. Generally speaking, and I will make this point alongside what I have already said, the Deputies will appreciate the decision to adopt an EOT, or similar structure, is a strategic decision for any individual business or company. Many other factors can also influence this decision that are ultimately outside my remit or the remit of my Department.

My sense in terms of how we best take this forward now is that, given that the Indecon review of share-based remuneration considered and made recommendations on EOTs, and that my Department is currently engaging with relevant stakeholders in this regard, I am not sure it is necessary to carry out a further review on this matter. However, I accept it is necessary to have further engagement on the matter. I would be happy to meet with Deputy Lawlor, as he requested. I am happy to engage with interested Deputies, including the three who have spoken on this amendment and to keep them up to date with our stakeholder engagement.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Bogfaimid ar aghaidh go dtí leasú Uimh. 4, arising out of committee proceedings. Amendments Nos. 4 and 11 are related and will be discussed together.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 4:

In page 8, between lines 13 and 14, to insert the following: “Report on supportive measures for rental property activation in areas impacted by defective concrete blocks

4. The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on supportive tax measures for rental property activation in areas impacted by defective concrete blocks.”.

Amendment Nos. 4 and 11 are related. Amendment No. 4 is looking for the report, which is an additional way to ensure that if amendment No. 11 was ruled out of order we would be able to discuss this matter. I will focus my remarks on amendment No. 11 because amendment No. 11 is the substantive one. This deals with the issue of defective blocks and the crisis and nightmare people are facing across this State in many counties, including most dominantly in my own County Donegal.

When I say it is a nightmare, there probably are no words to describe what families are going through when they are living with the impact of defective blocks and their house crumbling before them, the scars their young children will have to bear, the challenges in terms of relationships and mental health and the financial pressure bearing down on these families as a result of a scheme that does not meet the cost of rebuilding a home. Those personal stories have been told over and over again. People have had to open up their hearts and homes and talk about the personal strain and their mental health challenges to try to convince Government to do the right thing and still the Government will not provide 100% redress.

I was speaking to somebody recently who is in the process of rebuilding their home. They told me they do not have the final figure but between €80,000 and €100,000 is the amount they will have to get themselves. The stress and pressure this is putting on people are unimaginable. This has happened because there was no regulation at the time, which allowed products on to the market that built homes that are like Weetabix crumbling in your hands.

This amendment deals with one small part of this. As homes are being demolished, people have to find other accommodation. When thousands of homes in Donegal have to be demolished, there is a serious accommodation crisis in the first instance. This amendment does not try to displace anybody in the rental market. That would be wrong. It would not be appropriate. It would pit affected homeowners against those seeking rental accommodation who are also under pressure in my county and others. What this is focused on is trying to release into the market homes that may be holiday homes or vacant properties that are not let out.

I was dealing with one case. This is what we do. Families come to us in desperation. They tell us they cannot find anywhere to live and their house has to be demolished at a certain time. We are literally phoning around people who may have a holiday home or maybe a mother, father, brother or relative died and the house is left empty to ask them whether they will rent their house to this or that individual. In many cases, it is really challenging. That puts another burden on these families.

This amendment would exempt from income tax the rent that would be received by an individual who rents a house to somebody availing of the scheme and who is in the process of demolishing and rebuilding their home. As the Tánaiste knows, there are significant gaps in the support provided to families in this situation but there is support of €15,000 for rental accommodation. It does not meet the costs any more because it takes quite a while to demolish and rebuild a home. That money comes out of the overall cap that is available. This is aimed at doing two things. First, it will, hopefully, suppress the cost that would be charged by these homes. Second, it would not include new build houses, new build rental stock or any property that was rented in the past three years. It is fair.

I raised the issue of the accommodation recognition payment, ARP, scheme. I have issues with this scheme and how it is applied. If I look at what is happening in County Donegal, there are 2,100 Ukrainians who avail of the ARP scheme in the county. That is 2,100 homes in the main - because most of them are in their own properties - and they are competing with the rental market. There are no provisions like the ones I built into the amendment in the ARP scheme. In fairness, the Minister and the Government have acknowledged belatedly that there is an issue with the rental market as a result of that scheme. There are 2,100 individuals who are able to avail of the scheme and the State pays the rent and the landlord is tax exempt on that rental income.

We have a humanitarian crisis involving people living with defective blocks. As more and more of these houses have to be demolished in Donegal, Mayo and elsewhere, it would make sense to target homes that are not on the market. They can only be vacant homes that are not being rented out or holiday homes. I hope that after the house is rebuilt and the family moves into the house, the individual might decide to continue to rent out the property under normal market circumstances, which would increase the housing stock as a result.

This is a serious issue. It is one small part of the overall nightmare families are experiencing in relation to defective blocks. Even if there was 100% redress, and we in Sinn Féin will continue to campaign for 100% redress, we would still have an accommodation crisis. That is what we are trying to deal with in this amendment. How do we incentivise more properties coming onto the market without competing with young families? People coming to my clinic are telling me they are being evicted, have been given notice to quit and cannot find rental properties. This is about making sure we do not affect them and looking specifically at homes that are not on the market. It is a fair thing to do. There is precedent for it in the ARP scheme. It would be time-limited obviously because these houses have to be demolished and rebuilt and it will have an automatic sunset clause when the scheme comes to its conclusion.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I ask the Tánaiste to think about this amendment because we in Sinn Féin are trying to find practical solutions. I have been trying to find practical solutions to this situation with pyrite and defective concrete blocks for over a decade. We keep presenting solutions to Government that are not accepted, so I ask the Tánaiste to look at this amendment. It makes sense. It is time-limited. There are homeowners who are in a position to rebuild their homes but they do not have alternative accommodation. This is particularly the case in coastal areas like Mayo, Donegal and Sligo. There is a high number of short-term rentals in these areas that could be used were we to incentivise the landlords to let out the homes. It is a time-limited situation, lasting for however long it takes to rebuild the homes.

People from Mayo gathered outside the Dáil yesterday. I am not sure if the Tánaiste met any of them. I know one mother and her children. The Tánaiste will hear the story about how the cracks in the wall are so wide that rats and mice are coming through the wall and the family has had to vacate the home urgently. There are families in dire humanitarian situations. This is a tiny thing that needs to be done. I ask the Tánaiste not to continue turning his back.

We have been a 100% redress party from the beginning. We fought to put the first place in place and when it was introduced, we sat down with the action group in Mayo and worked out over 20 things that could be done to that scheme that would have alleviated a lot of the problems we have spoken about since and would have given people 100% redress to allow them to rebuild their homes and lives. I remind the Tánaiste that many families have one, two or three children with disabilities. They are trying to manage all of this. I have seen the mental and physical health of the homeowners deteriorate over the years. In his new role as Minister for Finance, I ask the Tánaiste to take this in hand. We are continuously presenting the Government with the solutions about how to deal with the defective concrete blocks scandal. We have to remember that this was avoidable in the first place. It should never have happened. We need a full public inquiry into what went on here. When we have one, the Tánaiste will see that it could and should have been avoided. There are things that can be done now. I ask the Tánaiste, in his role as Minister for Finance, to focus on the solutions that have been presented to him and, once and for all, let these families get on with rebuilding their homes and lives that have been destroyed through no fault of their own.

Charles Ward (Donegal, 100% Redress Party)
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As the Tánaiste knows, I am living this experience so I can tell him at first hand what is happening on the ground. There is a humanitarian crisis in Mayo and a potential humanitarian crisis in Wexford and Limerick.

Yesterday, a pyrrhotite issue emerged in Wexford. Geographically, we are at opposite ends of the country but we have the same problem. Within a mile of where I live, there are 200 houses currently affected. If the scheme happened in the morning, we would have absolutely nowhere for the people to go, and I am in a small area. In Deputy Doherty's area in west Donegal there were not that many people with defective homes two years ago but there are hundreds of them coming from the west and south of Donegal. The number is multiplying and we have absolutely nowhere for people to go. I am pleading with the Minister to look upon this as a humanitarian crisis and to please do something about these amendments. We have a humanitarian and homelessness crisis heading towards Donegal and the rest of the country.

Simon Harris (Wicklow, Fine Gael)
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I thank Deputies Doherty, Conway-Walsh and Ward for this amendment. Let me first read out some of the factual answer for the record and then I will try to engage on some of the issues being raised. Two amendments have been grouped and we are discussing amendment No. 4, which calls for tax-based measures to support rental property activation in areas affected by defective concrete blocks. Deputy Doherty referred to amendment No. 11 as the substantive amendment in terms of its effect being the disapplication of income tax, USC and PRSI from rental income received by a landlord where a property is being let to a person who is an applicant under the defective concrete blocks scheme.

I appreciate there are real, unique difficulties faced by homeowners forced to vacate their homes temporarily because of this issue. That is probably an understatement. I did not meet people yesterday - I was not in a position to do so – but I have met people in Donegal who are affected by this. I cannot imagine the horror people are facing. This is the reason the defective concrete blocks scheme provides for up to up to €27,500 for alternative accommodation costs, storage costs and immediate repair works for eligible relevant owners who are yet to receive a determination in respect of remediation options and grant amounts. I also acknowledge these homeowners may face great difficulties in the face of shortfalls in the local rental accommodation supply. That is the issue the Deputies are trying to constructively engage on.

We are committed to trying to address issues with this scheme. Even today at Cabinet, we had proposals in relation to legislation on defective concrete blocks that will come to the House next week. We have approved the priority drafting of the remediation of dwellings damaged by the use of defective concrete blocks (amendment) Bill, which will include details of the wider group of relevant owners who can avail of the increases. A number of additional amendments to the legislation are also proposed, including changes to payments of ancillary grants, whereby they can be applied for when the remediation grant determined has reached the scheme cap, which I think is part of the issue the Deputies were raising.

I do not want to misrepresent Deputy Doherty, but one of the issues I think I heard him mention was that some of the schemes in place to enable people to rent a place tax-free up to a certain amount are no longer proving effective, or as effective, because people are there much longer than that amount of money would cover. He referred to a figure of €15,000.

Pearse Doherty (Donegal, Sinn Fein)
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That is part of it.

Simon Harris (Wicklow, Fine Gael)
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That is a point that merits further consideration by us. While I am not in a position to accept the amendments, there is the legislation coming forward next week and there is also the commitment in terms of the planned review of the scheme. The Minister for Housing, Local Government and Heritage will, as required by section 51 of the 2022 Act, carry out a review of the operation of that Act. Legally, that has to start by June of next year and I believe it is now likely to start earlier than that as a result of the National Standards Authority of Ireland, NSAI, standards. I will certainly constructively engage, as part of that review, with the Minister on the issues that have been raised in the House this evening.

Pearse Doherty (Donegal, Sinn Fein)
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I note the Minister said he would constructively engage, and I hear that. There is legislation coming up. He indicated he is going to oppose the amendments, which I am really disappointed with. I raised this with his predecessor and it is a sensible solution that does not cost the State any money because it is trying to release properties into the system that are not currently in it. As I said, I hope it would have a long-term impact in that, after the homes are rebuilt, it would encourage people to rent out these properties.

I have talked to so many people. Deputy Conway-Walsh made the point that in Donegal, Mayo and other counties, there are a lot of vacant properties and a lot of holiday homes as well. I have talked to people and really pleaded with them to consider renting out a property for 18 months to X, Y or Z and they are just not interested. It made sense to them in a way because it was not a long-term rental lease. This is about trying to see if we can just nudge them across the line. There is going to be a major crisis.

I mentioned the ARP for two reasons. The first is that there is a precedent and it is always easier to convince government to do something when there is a precedent. However, the Government needs to recognise this issue. I know people who rent properties under the ARP scheme and I know why they do it. Under that scheme, even with the reduced cost, it is the effective €1,200 rental income. That is higher than the rent in Donegal. People have to make a decision at the minute about who to rent to. Do they rent to a family who cannot pay €1,200 or do they rent to a Ukrainian family which means they will get the benefit of €1,200 because it is tax-free and they will not have a registered tenancy and all the rest? There is a displacement here, so the Government has a serious issue. As I said, there are 2,124 properties rented in Donegal under the Ukrainian scheme and that is supported by the State. Is the Minister going to make a decision tonight – or did he do so previously given that this amendment was notified to him – not to support this? This a humanitarian crisis these individuals are in and this is about trying to find a solution to try to release properties. It is a nightmare for these families and an ounce of compassion would mean people would support this.

Rose Conway-Walsh (Mayo, Sinn Fein)
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To continue on that, the Tánaiste really needs to get that this is not just business as usual but a humanitarian situation. The bottom line for me in Mayo, right from the beginning when I first saw people's houses collapsing, was that nobody would be left behind or locked out of this scheme because they could not afford to get into it, could not find an alternative property or whatever else might lock them out. We cannot leave people behind in this situation because it was not their fault. It was not their fault there was no regulation or there was light regulation. Indeed, I query the regulation in place right now. That is why the Minister for housing needs to look at having proper oversight of the quarries currently supplying aggregate and materials being used to build houses. We are trying to deal with an immediate humanitarian situation here. In any other country in the world, this is the way it would be looked at. We are one of the richest countries in the world. I ask the Tánaiste to have some compassion and common sense. What is being proposed here also makes economic sense.

Charles Ward (Donegal, 100% Redress Party)
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I will give the Tánaiste a quick example. Solomons Court in Letterkenny has 1,400 houses and every single one of them has defective concrete. Some 15 have been remediated. With some, that involved full demolition and with others, it was partial remediation. However, the majority of people there are stuck because they are in a town and if 500 of them want to go into this scheme and get on with their lives - they have been living this for the last 12 to 13 years - there is absolutely nowhere for them to go. We have to make provisions and realise this a humanitarian crisis. Large numbers of people are going to need to move. In Donegal, 25,000 will potentially have to move. Where are we going to house them? That is how serious this is.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I wish to speak in general support of the amendment. This is a dire situation families are in due to a lack of regulation and oversight. There is nothing more traumatic than for people to see their homes crumbling in front of them and to go through all this stress over years. They need somewhere to live when these works are taking place and their houses are being demolished and rebuilt and I do not hear from the Tánaiste what the Government's solution is. If the Government is not supporting the amendments, what is the solution? What is it going to do about this? This has to be tackled. People need a place to live in when they have to move out of their home.

Simon Harris (Wicklow, Fine Gael)
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In truth, this is not about compassion, from our perspective. We feel very seriously and strongly about what people are enduring in relation to this situation. The time available to me is not enough to outline a number of the measures we tried to take to assist.

These include significant changes to the current scheme, more legislation to come forward next week, and the review of the scheme that is to take place next year. I hope it will be as early as possible next year. I am genuinely grappling constructively with the point the Deputy made on the idea of the ARP. It is not an unfair point. That scheme is administered by the Department of justice. My Department carries out the tax treatment element of the scheme. It is open to other Departments to consider schemes in relation to this area. I will engage constructively with those line Departments in relation to that. There is going to be a review of the scheme and there will be legislation next week. I will engage constructively with the Minister, Deputy Browne, in this regard. If a Department brings forward a scheme, my Department engages with regard to the tax treatment of that scheme.

On the ARP more broadly and with regard to people from Ukraine, we are reducing the level of income that can be generated from that scheme. I would like to see us continue in that direction in light of Deputy Doherty's legitimate points regarding the effect this scheme is having on the rental market. We will engage constructively on this. There will be legislation in the House next week. There will also be a broader review of the scheme. As recently as today, we were considering how we can make further improvements in relation to this horrific humanitarian situation.

Pearse Doherty (Donegal, Sinn Fein)
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I will reiterate the point. This is the unfortunate reality. I understand that people want to make profits and all of the rest but, if you are a landlord in Donegal, you can rent to a Ukrainian family and are guaranteed the money because the State provides it. It is the equivalent of €1,200. It is different if you rent to a family whose home is affected by defective blocks. On the €15,000, that €15,000 comes off the money the family has to use to rebuild their home. If it takes 18 months to demolish and rebuild their home, they cannot do €1,200. It is too much. It is way above the market rent in Donegal.

I have stood in many of these homes. We talked about compassion. When I stand in these homes, I think about myself and my kids. A lot of TDs think like that. We step into the shoes of the person we are talking to. I have been in homes that no family should be living in. I have been in homes whose owners have told me they cannot use any of the plugs in the kitchen and have had to move stuff into another room, an old bedroom or something like that, because every time the plug goes on, the fuseboard trips. You can see water ingress. In some cases, you can see daylight. Nobody should be in these homes. Why are they in these homes? There are a number of reasons. One is the scheme itself but, in some cases, there is no other accommodation. I am not saying this is a silver bullet. I have never suggested it is. However, if this releases one, two, ten or 20 properties and takes a bit of the nightmare away for individuals, we will have done a good job. It is so much wider than this. There should be proper planned accommodation and a phased rebuild of houses. I am not even going to argue for that at the minute. I am arguing for this part.

The Minister has not given one reason not to support this amendment now. I recognise that he has said he will engage constructively but he has not offered one reason not to support the amendment now. The families affected by defective blocks deserve the same treatment as other people in my county and elsewhere when they are going through this nightmare. I will push amendment No. 11 when we come to it.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Tá baint ag leasuithe Uimh. 5 agus 6 le chéile agus pléifear le chéile iad.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 5:

In page 8, between lines 13 and 14, to insert the following: “Report on rent tax credit

4. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on the rent tax credit operating in the absence of a cap on rents, making a direct comparison between the amount of the credit and rent increases across the State for each year that the credit has been in operation.”.

This is another area where the Minister broke a personal promise he made to the electorate. I am sure he will acknowledge that if he wants to be honest with the House tonight. He made a commitment that the renter's tax credit would increase by €100 each year. In his first budget, he decided to break that promise to the people. It is the wrong decision but there is a wider issue in relation to the renter's tax credit.

When I argued for the introduction of the renter's tax credit and convinced Government there was a real issue in that its housing policy had resulted in runaway rents and had put huge pressure on individuals, the argument I heard from the Minister's party and from Fianna Fáil was that if you reintroduce the renter's tax credit, it would end up in the pockets of landlords. There was merit to that argument. The Commission on Taxation and Welfare looked at the old renter's tax credit, which was introduced in the 1980s and only phased out a number of years ago. The argument for its introduction at that time was that there was pressure on elderly persons who were renting. The commission found that it ended up pushing up rents, with the benefit ending up in the pockets in the landlords, so there was merit to that argument. That is why, when I argued for the renter's tax credit, I always made it clear that a two-pronged approach had to be adopted. A renter's tax credit needed to be introduced but there also needed to be a ban on rent increases. Without a ban on rent increases, all you are doing is putting more profit in landlords' pockets because that is where it ends up.

The statistics show that to be the case. We do not even have to go back to 2020 or 2021, when it was introduced. If we compare the first quarter of this year with the last quarter of 2023, we will see that rents increased by a sum in excess of the renter's tax credit. If the Government had banned rent increases at the end of 2023, without even introducing a tax credit, tenants would be better off today than they are with the renter's tax credit. That is why this amendment looks at the real cost of the renter's tax credit with reference to the increase in rents.

I am the person who convinced the Government to introduce the renter's tax credit but it made a half-arsed job of it because it only introduced half of the policy. Perhaps that was by design because, in introducing only half the policy, the Government transferred taxpayers' money into the pockets of landlords. Landlords will benefit again next year as the result of what one of the professors called the stupidest tax measure in the history of the State. The Government increased tax credits for landlords and, as a result, one in four of those eligible for that credit, over 40,000 landlords, will not pay a penny in tax. It is amazing. Under Fianna Fáil and Fine Gael, we have tens of thousands of landlords who do not pay a penny in tax because of all of the tax incentives. The Government introduced more incentives, even though all of its advisers said that it was not the right thing to do, that a lot of landlords were not even paying any tax and that this was not the reason landlords were selling up, as they were selling up because prices had gone through the roof, which was obviously a consequence of the Government's own policy. Over and over again, they argued against the introduction of this measure but the Government introduced it anyway.

Let us go back to tenants. Tenants are being fleeced left, right and centre. I do not know where the endpoint is. On some occasions, Government Ministers have been embarrassed into saying that rents should actually decrease. I am not sure if that is the Minister's position. Does he want to see rents come down? There is no policy here. The Government has no plan to do that but it is introducing new legislation to allow rents to increase every six years, even in rent pressure zones.

This is about identifying that the measure that was introduced, which I campaigned on for a number of years before the Government eventually acceded to half of it, is not working because the Government only introduced half of the measure and that rents are increasing at a faster rate than the benefit of the credit itself. There is a requirement to increase the renter's tax credit, something the Minister personally promised the people he would do. Lo and behold, he is now the Minister for Finance and the Tánaiste and, if everything goes according to his plan, he will be Taoiseach. In addition to the Minister's promises in respect of tax cuts, a childcare plan within 100 days and a reduction in student fees, he is also breaking this promise to the 300,000 renters out there.

8 o’clock

They are not getting the €100 that Simon promised them because the Government has decided to put €2.5 billion into the pockets of developers, landlords and investors instead. They are the priorities the Government has chosen in this budget. They are the wrong priorities and that is why I propose this amendment.

Mairéad Farrell (Galway West, Sinn Fein)
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Over the past ten or 11 years that I have been a public representative in Galway, every single year the rental situation gets worse. Over the past five years - between 2020 and 2025 - rents have increased by 75% in Galway city. In the past 12 months alone, rents in Galway city have increased by 12.6%. The average monthly rent is now €2,300.

As an Teachta Doherty said, our amendment is something for which we had campaigned for a very long time, but we were always told by the Ministers that it would only increase the money going into the pockets of landlords. We have always said that it had to be combined with a ban on rent increases. We now have a situation in Galway city whereby for people who come to my clinics and have a notice to quit, the reality of the situation is they are not going to find a place to rent in Galway city. That is unless they have a very high income or they know someone who might be willing to rent to them. The reality is that for most of them it is not going to be possible. People are deeply concerned about that because it means their children have to move school or they have to commute long distances for schools and that kind of thing.

This is really serious policy that, if done correctly, can work effectively, but if it is not done correctly it has serious consequences. This is my first time addressing the Minister as the new Minister for Finance. I wish him the best in the role. I hope that perhaps he can lead from the front today by accepting this amendment.

Simon Harris (Wicklow, Fine Gael)
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I thank Deputy Farrell. The Deputies are requesting a report on the rent tax credit operating in the absence of a cap on rents, and making a direct comparison between the amount of the credit and rent increases. They suggest that the rent tax credit should be complemented by rent caps. There are currently certain limits to rent increases. Rent increases in a rent pressure zone cannot now exceed general inflation. The ESRI published research in 2022 on the positive impact of rent pressure zones. This research found a clear downward trend in rental inflation following the introduction of the rent pressure zone legislation. We have now taken a decision as a Government to ensure that rent pressure zones cover the entire country. When the Government came to office people were wondering if we would continue rent pressure zones but not only did we continue them, we have extended them to the entire country. That benefits counties including Deputy Doherty's that were not previously covered by rent pressure zones.

The CSO consumer price index shows that private rents increased by 3.2% on an annual basis in October 2025. This is the tenth month in a row in which the rate of rent inflation has either decreased or remained stable. I know that rents are extraordinarily high for people, but it is now the tenth month in a row in which the rate of rent inflation has either decreased or remained stable. Other steps are also being taken to enhance the security of tenants. They include the introduction of tenancies of minimum duration and further restrictions on no-fault evictions. As Deputies will be aware, we have introduced new comprehensive rental reforms, which will take effect from next March for new tenancies.

More broadly, the Government recently published the delivering homes, building communities action plan. Additional supply over time will help to moderate the housing costs in both the purchase and rental sectors. That is why the focus has to continually be on supply. This year, the Government has allocated €6.8 billion to capital expenditure on housing delivery, a more than sixfold increase in just a decade. This will help to moderate the housing costs in both the purchase and rental sectors as additional supply comes on stream. To date, more than 4,500 new cost-rental homes have been delivered since the launch of this tenure through various different channels, including local authority delivery, approved housing body delivery, LDA delivery and through the cost-rental tenant in situ scheme.

In relation to increases in the credit, for the years 2022 and 2023 the rent tax credit was valued at a maximum of €500 per single individual and €1,000 per jointly assessed couple. For the years 2024 and 2025 the rent tax credit is valued at a maximum of €1,000 per single individual and €2,000 per jointly assessed couple. The Finance Bill extends the relief for a further three years. We should remember that the relief was due to end but we are now deciding to extend it in this legislation before the House for a further three years. In 2023, which is the latest year for which data are available, 315,000 taxpayer units benefited from the credit. That equates to almost 400,000 individuals benefiting. The extension of the credit in the Bill before the House tonight represents a commitment of approximately €350 million per annum in terms of support for renters.

The programme for Government commits to "progressively increase the rent tax credit". That remains a commitment in the programme for Government. The priority this year was to extend the credit for a further three years. I intend to consider further increases to the value of the credit as part of each forthcoming annual budget and finance Bill.

Pearse Doherty (Donegal, Sinn Fein)
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Maybe I missed it, but did the Minister explain why he broke his promise to the electorate that he would increase the renter's tax credit by €100? He was going to extend it and increase it by €100. Did I miss that part or did he just avoid explaining why he broke another promise to the electorate? I will give him an opportunity to respond to that.

Simon Harris (Wicklow, Fine Gael)
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One day, if Deputy Doherty can ever form a Government or can find people in this House who wish to form a Government with him, he will realise that you go out to the people and seek a mandate from the people on your manifesto. You get as many votes and seats as you can in Dáil Éireann. If you do not have enough seats to form a Government, you then seek other parties in the Dáil to work with you. You then sit down together. You bring your policy proposals and they bring their policy proposals and you agree a programme for Government. The programme for Government is then the contract between the people and their Government and the contract between the Government and the Civil Service. It is what we answer for in this House. The programme for Government is very clear in its commitment to progressively increase the rent tax credit during the lifetime of this Government.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister did not answer.

Simon Harris (Wicklow, Fine Gael)
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That is the answer.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister gave me a lesson on how governments are formed, which I well know.

Simon Harris (Wicklow, Fine Gael)
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Deputy Doherty has not done it yet.

Pearse Doherty (Donegal, Sinn Fein)
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He did not even state whether he actually asked for it. Was it the case that Fianna Fáil got its way on not increasing the renter's tax credit - the promise that the Minister broke? Did Fianna Fáil also get its way on the promise that the Government would bring a childcare plan within 100 days? Did Fianna Fáil also get its way on the promise the Minister broke - to reduce income tax for people every year? Did Fianna Fáil get its way on that one? Did it get its way on college fees as well? What about the promise that, if Fine Gael was elected to government, people's energy bills would be cheaper? They have gone up.

Did Fianna Fáil get its way on everything? Is Fine Gael so impotent that Fianna Fáil just ran roughshod over it, or is it just that the election is over, Fine Gael does not care, it is in government, happy days, and will get its way in looking after the big boys? The landlords are going to get looked after under the Government's policy. One in four of them do not even pay tax. Developers will get €2.5 billion of a tax cut. Happy days. Two banks made a profit of €5 billion last year. They do not pay taxes. That is who we are going to look after. We can forget about the promises Fine Gael made. It is either that Fine Gael's negotiations skills on the programme for Government are really shoddy or it is just a case of this is what Simon does. He makes commitments during election periods or times he is under pressure - we know about other commitments such as on scoliosis, among others - but he has no intention of ever fulfilling them.

Mairéad Farrell (Galway West, Sinn Fein)
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Is the Teachta pressing the amendment?

Pearse Doherty (Donegal, Sinn Fein)
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I am.

Simon Harris (Wicklow, Fine Gael)
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He put a question to me but he did not wish me to answer it.

Mairéad Farrell (Galway West, Sinn Fein)
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I apologise but my understanding is that the time for discussion of the amendment has concluded.

Simon Harris (Wicklow, Fine Gael)
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The Acting Chair is grand. I say this just for the people watching at home. I did not have an opportunity to answer the question.

Mairéad Farrell (Galway West, Sinn Fein)
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I have to go by the procedure.

Simon Harris (Wicklow, Fine Gael)
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That is fine.

David Cullinane (Waterford, Sinn Fein)
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It will be a long night.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 6:

In page 8, between lines 13 and 14, to insert the following: “Report on rent tax credit

4. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on the changing real value of the rent tax credit in relation to rent prices and the decision not to increase the rent tax credit.”.

Simon Harris (Wicklow, Fine Gael)
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I move amendment No. 7:

In page 13, between lines 23 and 24, to insert the following: “Amendment of section 477C of Principal Act (Help to Buy)

5. Section 477C of the Principal Act is amended, with effect as on and from 26 November 2025, in subparagraph (ii) of the definition in subsection (1) of “qualifying residence”, by the substitution of “paragraph (c) or (cac), as the case may be, of section 46(1)” for “section 46(1)(c)”.”.

This amendment, much of which we probably discussed in recent days, endeavours to address an issue that arises with the help to buy scheme, as a consequence of the reduced rate of VAT applying to apartments. At present, section 477C of the Taxes Consolidation Act 1997 defines "qualifying residence" as one in respect of which the construction work is subject to the 13.5% rate of tax as specified in section 46(1)(c) of the Value-Added Tax Consolidation Act 2010.

Consequent to the application of the 9% VAT rate to the construction of new apartments, which will be discussed further at amendment No. 31, it is necessary to amend the definition of "qualifying residence" to reflect the change to the rate of VAT. This amendment will ensure that apartments subject to the VAT rate of 9% will remain within the scope of the help to buy scheme.

Mairéad Farrell (Galway West, Sinn Fein)
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Amendments Nos. 8 and 9 have been ruled out of order.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 10:

In page 13, between lines 23 and 24, to insert the following: “Report on relief on medical expenses

5. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on the inability of persons without the adequate tax liability to benefit from relief on medical expenses, making reference to the substantial burden facing individuals using home dialysis.”.

I brought this amendment forward on Committee Stage of the Bill. It deals with the issue and unfairness that exists in relation to individuals with health challenges. I am involved with this issue because a connected person, a family member of mine, is on home dialysis. I will declare that in the first instance, even though they would not benefit from this amendment if it were there. It did get me thinking about the number of people who are on home dialysis and how the State supports some of them but does not support others. I made the point to the previous finance Minister that, rightly, the Houses of the Oireachtas identified that those who are participating in home dialysis needed support from the State and the support was offered through the taxation system.

Currently, there are 344 people who avail of home dialysis. This could also be replicated with other issues like continuous ambulatory peritoneal dialysis, CAPD. You could argue that the support provided through Revenue for a parent with life-limiting conditions where the travel expenses are also provided as flat rate expenses could also be affected.

For the sake of this argument, I will focus on home dialysis. There are 344 individuals who are currently involved in home dialysis. We probably think that is not a huge number of people in the State. However, the fact that they are doing dialysis at home saves the HSE €10 million per year. It is a huge amount of money being saved as a result of the fact that technology and healthcare have changed and allow for that care to be provided at home. It prevents 51,000 visits to our hospitals, hospitals that are already clogged up and overcrowded in many cases. It saves the individuals 300,000 hours of their time either travelling to the hospital, waiting in the hospital, getting dialysis in the hospital and so on. Those 344 individuals include 16 children. The issue is that, through the tax code, there is a flat rate expense regime that recognises that if you are availing of home dialysis, there is an additional cost burden on your household. You have to be hooked up to the dialysis machine for between and eight and nine hours depending on your circumstances. It is running through electricity and pumps. Therefore, there is a flat rate expense of €4,425 provided. There are also issues with laundry and clothing. For that reason, there is a €2,305 flat rate expense provided for individuals. There is also a €370 flat rate expense for telephone calls. Overall, there is a flat rate expense of €7,100. You do not obviously get all of that. It depends on your tax rate and, therefore, you get a portion of that. However, you can get up to close to €3,000. That helps people, particularly as electricity prices are going through the roof. The problem is that if you do not have a tax liability, you get nothing, and that is wrong.

I started the conversation by saying there was a recognition, even though it is a small number of people, that they should be supported through the tax code. They are supported to the tune of a couple of thousand euro per year, and rightly so. That is a huge saving to the State. However, if you are the mother and full-time carer of one of the 16 children getting home dialysis and you do not have a tax liability, or you are working but it is part-time and you do not have a tax liability, you get nothing. There are two problems here. Maybe the tax code is not the way to support these individuals and it should be done through direct grants, which I think there is a strong argument for. I understand why we would introduce credits like this, in that they are better than nothing. You could introduce a scheme that allowed for these types of support to be refundable, which is within the gift of Revenue, which is an excellent organisation and refunds taxes all the time. I did my tax returns recently, and I encourage people to do them. You get a nice amount into your account. Most people overpay tax and do not claim health expenses and so on, so I encourage people to do that.

Going back to this issue, these are big numbers. It is saving the State €10 million. It is 51,000 visits to the hospital. We are dealing with 344 people. Most of those are able to avail of the tax benefits, but others are not. That is not right. The system is not fair for those individuals. Within the collective wisdom of this House, we are surely able to recognise that it is appropriate to give people support, and we now need to make sure everybody availing of this scheme is able to benefit from it.

The reason it was brought to my attention is a family member is doing home dialysis, but through networks and the rest, you hear that some people are not able to get any support because they are part-time working or they might be too sick to work. They may be waiting for that transplant and may be at a weak stage. There needs to be something done. I argue strongly that we make this tax relief refundable. It would not just apply to dialysis. CAPD obviously has a similar situation. Most people do not even claim this relief. However, if you have a child with a life-limiting condition, there is an expense for the trips you do to your hospital appointments, which are unfortunately too frequent for many of these parents. Some of these parents are the full-time carers of the kids and do not have a tax liability.

On the tax code, if it is not refundable, it is not the way to sort this and we should move it to a grant system, for example, in terms of the living donor scheme, which is part of this legislation. The living donor scheme is administered by the HSE with a grant available for expenses if you miss work and so on. The taxation code exempts that payment from income tax. We need to do something with regard to that.

David Cullinane (Waterford, Sinn Fein)
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We have seen over the past ten years real improvements in healthcare technology, which are bringing tremendous benefits for patients and real opportunities for more care at home. I am sure Deputy Harris saw some of that when he was Minister for Health, and some of that evolving. However, it has changed and expanded exponentially over the past four or five years. We now see the HSE rolling out virtual wards and virtual beds where patients can be monitored at home. All of that is for the good.

The issue Deputy Doherty raises relates to home dialysis, which is a success story. We have 344 patients treated annually. Approximately 110,000 home dialysis treatments per year are carried out at home. That saves the HSE a lot of money. It obviously saves thousands of visits to hospital for the patients in the first instance. It also means that patients are not going into hospitals.

I have spoken to healthcare practitioners and people in the HSE on the wider issue of treatment at home where it is possible, where patients can be monitored and treated and do not have to go to hospital. That is what we should strive for if the technologies are there. They told me that one of the huge benefits of home dialysis was that it reduced the risk of infection for those patients, because people can get an infection or pick up an illness if they go into hospital. If you are on dialysis, that is the last thing you want, particularly now when we are coming into the flu season and there are respiratory illnesses.

There are a lot of benefits, and we want people to avail of and benefit from this. Obviously, if you are getting home dialysis, by its nature, your house has to be extremely warm. That requires a lot of extra power and electricity. The tax return benefits some of those patients and that is great. It does help and is a generous payment. However, as Deputy Doherty said, there are some patients who do not benefit, whether they are pensioners, people who may not be working or those who are carers. There is a range of people who stay at home, for example, single parents. There are categories of patients who are not covered by this.

Deputy Doherty outlined some alternative ways in which we could compensate people. Maybe it does not have to be a tax credit. You could look at a refundable tax credit. What the amendment is asking for is that the Minister would look at this issue and come back with a report with different options. One of them could be a grant system that might work. It is reasonable that we would want to be fair to everybody. If there are those who are probably the most deserving and most in need but are not getting the financial support, it does not make sense. At a time when we want more people to be treated at home and to reduce the need for people to go to hospital where we can, which would mean these patients would save the State millions of euro every year as estimated by Deputy Doherty, then it is important for us to make sure they are properly looked after.

We have made our point. I hope the Tánaiste will accept the amendment, and if he cannot, I hope he will accept the thrust of the arguments we have put forward in a constructive way. We hope it is something he will look at in the future with potential alternatives to ensure every one of those patients is covered and given the support they need.

Simon Harris (Wicklow, Fine Gael)
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I acknowledge the very constructive way Deputies Doherty and Cullinane are engaging on this issue. While I am not certain an amendment to the Finance Bill is the way to go about this, I am willing to work with them and maybe the relevant Oireachtas committee, at which I think Members had a decent discussion about this on Committee Stage. From listening to the two Deputies, I think they are pondering how best to address this issue. We have requested more information from the Department of Health because I accept there is a gap here.

Deputy Doherty made a fair point about living donors. Section 5 of the Finance Bill relates to compensation payable to a living donor of a kidney or part of a liver under conditions defined by the Minister for Health. This is a payment that is exempt from various taxations and the likes but it is a Department of Health scheme. The Deputies have been at this a long time, but these are generally schemes devised by parent Departments and then my Department advises or assists on the tax treatment piece of the schemes. It is not a matter of passing it to another Department, but it is a discussion for maybe the Department of Health and my Department to have together.

On the refundable tax credit - I say this to be helpful on an important matter - the Deputies will be aware that, in advance of budget 2024, the tax strategy group looked in its series of papers at the whole issue of refundable tax credits and outlined its concerns, not only about it being a fundamental change to the personal tax system but, on the other hand, that it would not necessarily assist as many people as we would like in the way we would hope. Based on that, I am not sure this is the best way to go.

The Deputies have already acknowledged that there is a tax relief available where an individual proves that he or she has incurred costs in respect of qualifying health expenses. Specifically for home dialysis patients, tax relief may be allowed in respect of the following expenses: electricity, laundry, protective clothing, telephone and travelling. The flat rates available for kidney dialysis patients are operated by Revenue on an administrative basis and are updated annually in line with the consumer price index. Relief is calculated on these flat rates at the standard rate of income tax. Separate to this administrative practice, an individual may claim for the actual vouched costs of healthcare necessarily incurred by them, subject to relevant conditions being met. That, however, is not the point the Deputies are making. The point they are making has to do with people who do not reach the threshold of actually paying tax. Once I get more specific information back from the Department of Health on home dialysis patients, we will forward that to the committee.

If taxpayer units with no income tax liability could claim tax relief in respect of health expenses incurred for home dialysis or other health expenses, it would effectively introduce a system of refundable tax credits. That is a debate to have. I think the Deputies are okay with that; we are not sure we are. It could open this up to many more areas. What would be the cost to the Exchequer and so on?

We have a bit of thinking to do on this. As was committed to on Committee Stage, the Department of Finance has sought clarification as to what direct expenditure supports are in place, or indeed could be put in place. Once we have that, I will immediately furnish it to the committee, and I am happy to engage on this further in the time ahead.

Pearse Doherty (Donegal, Sinn Fein)
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I thank the Minister for his response. I brought this into the Finance Bill because this is where you prompt the debate and so on. As I mentioned to his predecessor, Paschal, the intention here is for Ministers to actually start this conversation. I am not on the health committee, and there is a wider issue in terms of public expenditure.

This issue really makes sense. I do not have the data for the 344 individuals, and we only know about them in terms of home dialysis, but there are people with CAPD as well. They are entitled to this relief, which costs less than €1 million, but the HSE estimates that they are saving the HSE over €10 million, so this makes sense in the first instance.

Another issue was raised with me. As the Minister knows, these reliefs are claimed in arrears. For this year, you go through home dialysis but it is next year you can claim this. There are people out there who cannot wait, even if they are working, even if they have the tax liability and so on. The refundable tax review by the tax strategy group is way broader than what would be health-related issues, but it is possible to do something with refundable tax credits. I understand that the Government may be reluctant to go there because it opens up the door for other arguments. I would make those arguments, but anyway. I genuinely think that these health measures should be universal. You cannot have a situation where two neighbours are both availing of home dialysis and, because one is working more than the other and has a tax liability, they can get support of €2,800 and the other cannot. It is not fair. It is not appropriate. Both have the same costs. Therefore, I note what the Minister has said but I ask him to genuinely take this issue forward with his colleague to see if we can address this.

Mairéad Farrell (Galway West, Sinn Fein)
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You will have two minutes to conclude, Deputy.

Simon Harris (Wicklow, Fine Gael)
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I am happy to genuinely engage on this and engage with my colleague, the Minister for Health. The Deputies would expect me to say this as a finance Minister, but my sense of this is that it is probably something in the direct expenditure and mapping out space and probably a broader whole-of-government discussion, which I am, of course, a part of, as to how we support people in these situations and whether the tax system is the best way to do it. I take the point. There is a gap no matter how we take this forward.

I say the following just to be helpful because the point Deputy Doherty made about people having to wait to get the credits is a real fear people have. I am advised that taxpayers in receipt of PAYE income now have the option to claim tax reliefs in respect of their health expenses during the year via Revenue's real-time credit facility, which can be accessed through a taxpayer's MyAccount. If the taxpayer is putting in a real-time claim, he or she is required to provide receipts at the time of the claim via the receipts tracker. I say that just to be helpful to people who, as the Deputy says, may need to recoup that benefit more quickly.

Pearse Doherty (Donegal, Sinn Fein)
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That is helpful. The beauty about flat rate expenses is that they are flat rate expenses. Revenue has determined the figure and you do not have to provide the receipts, although you can be called on by Revenue to provide receipts. Actually, a question I must put down is how many times Revenue has asked for the receipts from individuals. I have never been asked so far, although they are all there.

David Cullinane (Waterford, Sinn Fein)
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Maybe next year?

Pearse Doherty (Donegal, Sinn Fein)
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There you go. Róisín will kill me. Many people do not claim this. I would really encourage people, particularly in terms of the cost-of-living crisis, to claim for the flat rate expenses if they are on home dialysis, if they have a child with a disability or a life-limiting condition, if they are making those journeys, if they or a family member has CAPD, or if they have health expenses or other expenses that they have not claimed for.

I will finish on the following. It is something I will revisit. I said this at the start and I just want to make the point again. I have focused on home dialysis, but this is broader than home dialysis. There are a number of health-related schemes. You could actually argue that all tax credits should be refundable and so forth. We could have that argument about the rent tax credit and so on, but I think most people will recognise that there is a uniqueness in relation to health issues and that there should be a differentiation based on your income and the support should be available to you regardless. This is not just about dialysis. It relates to other health-related schemes as well. We should make sure that nobody falls foul of the rules simply because they are too sick to work and to have a tax liability, they are caring for somebody else in a full-time position and do not have a tax liability, or their employment does not allow them to earn enough to have a tax liability.

Mairéad Farrell (Galway West, Sinn Fein)
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Are you pressing the amendment, Deputy?

Pearse Doherty (Donegal, Sinn Fein)
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No, I will withdraw it based on what the Minister has said.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 11:

In page 18, between lines 26 and 27, to insert the following:

“Amendment of Principal Act

13. The Principal Act is amended by the insertion of the following section after section 216F: “216G.(1) In this section—

‘qualifying residence’, means a residential premises situated in the State constructed prior to 2023 which has not been subject to a rental agreement in the three years prior to the year of assessment;

‘relevant income’ means all income arising in respect of rent paid under a rental agreement from a relevant person for the use a qualifying residence;

‘relevant person’ means a qualified applicant under a scheme administered by the Minister for Housing, Heritage and Local Government and known as the Enhanced Defective Concrete Blocks Grant Scheme;

‘rental agreement’ means an agreement or arrangement under which one party grants to a qualifying individual the right to occupy all or part of a dwelling, subject to the payment of money;

‘residential premises’ means a building or part of a building used as a dwelling.

(2) (a) This subsection applies to an individual who has relevant income chargeable to income tax.

(b) An individual referred to in paragraph (a) shall be—

(i) an owner of the qualifying residence, and

(ii) a natural person.

(3) Relevant income shall be exempt from income tax and shall not be reckoned in computing income for the purposes of the Income Tax Acts.”.

Pearse Doherty (Donegal, Sinn Fein)
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9 o’clock

Tairgim leasú Uimh. 12:

In page 28, between lines 19 and 20, to insert the following:

"Report on the restriction of share-based remuneration to SMEs 19. The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on the impact of the PRSI exemption for share-based remuneration for large corporations on the sustainability of the social insurance fund.".

Molaim leasú Uimh. 12 ó thaobh PRSI agus nach bhfuil PRSI i bhfeidhm ó thaobh íocaíochta atá déanta do chomhlachtaí móra nuair atá scaireanna tugtha dá chuid fostaithe in áit airgid thirim. I propose this amendment in relation to restricting the PRSI exemption to SMEs and not having the PRSI exemption available to large corporations. This is brought forward on the basis of the sustainability of the Social Insurance Fund, which is obviously very important. It is important that fund is replenished and that we have an adequate amount in that fund to meet the needs of workers and citizens in the future.

This amendment is about share-based remuneration and we have seen a number of reports done by the Department of Finance and, indeed, by Indecon on behalf of that Department on share-based remuneration and looking at international practices or competitors, what is available and what is not available. The Indecon report which focused on this was published last year. The Department of Finance found that some countries treat benefit accruing from share-based remuneration as taxable salary and is subject to social security contributions. Those countries include Lithuania, Estonia, Latvia, Israel, the United States, Germany, Poland and Italy. It found that attractive tax advantage schemes are provided for small enterprises in many important competitor countries and they included Portugal, Denmark, France, Spain, Britain, Germany, Italy, Sweden and the United States. The Indecon review on taxation of share-based remuneration found that:

... detailed analysis suggests that aspects where Ireland’s approach is out of line with some competitor countries include lower eligibility levels, the treatment of benefit in kind and the tax treatment of restricted stock units. Ireland’s PRSI exemption however appears generous compared to many countries where such exemptions are more focused on SMEs.

We also see the value of share-based remuneration schemes has increased substantially in the past number of years. For example, in 2019 the value of share-based remuneration schemes stood at €945 million whereas the last figures I have data for shows that has more than doubled in those four years. In 2023 it reached over €2.1 billion. Where has that growth occurred? It has occurred in the multinational, the large company, sector where it has gone from €749 million - that is €749 million out of €945 million, so it was always those companies that dominated the area, which was understandable - to nearly €1.8 billion. Obviously, we imagine the figures for 2024 and 2025 will have further increased.

What is this about? It is about ensuring that share-based remuneration can continue and that it is there. There are very strong arguments for share-based remuneration in relation to investment and buy-in of staff and so on. It is actually asking whether we need to exempt PRSI for share-based remuneration for large multinational companies, many of which are in scope of pillar 2, which means they have turnover in excess of €750 million, or whether it is better to ensure, given the Social Insurance Fund and making sure it is sustainable, that those larger companies continue to do share-based remuneration but have to pay PRSI on the share-based remuneration, although not small and medium enterprises where we would like to encourage more of that type of activity.

The figures for micro-companies and small companies are quite small considering the value of the share-based remuneration scheme - it is growing for small businesses but staying static for micro ones.

That is what the amendment is about. It is not about eliminating it completely. Rather, share-based remuneration would continue to exist and would be an issue for companies. It is about ensuring that the PRSI exemption does not apply to large corporations and the benefit is restricted to SMEs. This issue was identified by the Department of Finance in the Indecon review commissioned by the Department just two years ago. The report identified that we are a wee bit out of line and more generous compared with other countries. That is okay. Sometimes we can be more generous. We have to have tax advantages. I am all for that, tax sovereignty and all the rest. However, there is an argument that this generosity does not need to be extended to large corporations. The Social Insurance Fund is important as we have an ageing population. This is one way to ensure that funds are maintained and replenished.

Simon Harris (Wicklow, Fine Gael)
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I thank Deputy Doherty. I will emphasise some of what he said. My Department commissioned Indecon Economic Consultants to carry out an independent review of the share-based remuneration scheme. The review made a number of recommendations pertaining to share-based remuneration and the PRSI exemption. The review found that the PRSI exemption is regarded as an important support for SMEs and other businesses in Ireland. We are all in agreement on that.

Recommendation 1 of the review suggests that a cap on the level of the employer PRSI exemption should be considered as part of the process of determining future policy in this area. It is important that we get these calls right, in particular given the volatility in terms of trade and investment currently in the world. We are considering how best to determine future policy in the area. We are considering all of the recommendations made in the review and as part of these considerations, my Department has started engagement with relevant stakeholders. We intend to continue to do that and then decide how to respond to these recommendations. For that reason, I do not consider it necessary to carry out a further report on the PRSI exemption for share-based remuneration at this time. I want to assure the Deputy that work on considering how to respond the recommendations is under way.

Pearse Doherty (Donegal, Sinn Fein)
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We have raised the issue of share-based remuneration for a number of years in terms of restricting the measure to SMEs. We have since had the reports. In the finance committee, I mentioned that we have waited for four years for the Credit Review Bill to be given a statutory footing. It was announced on 6 July by Government that Cabinet had approved putting the Credit Review Bill on a statutory footing. Today, we finally had Committee Stage, which coincided with the Finance Bill. It is ridiculous that this is happening four years later.

The slow pace of Government is frustrating. What was more frustrating was that just as we were on section 2, the Finance Bill clashed with it, which was a major problem for me because my amendments had to lapse. It is an example, with respect, of a Government decision with press all over the place. Everybody reported it and agreed with the Credit Review Bill being put on a statutory footing; there is no issue there. I had ideas to strengthen the Bill, but it took four years to bring it to Committee Stage and it will probably not pass into law until next year, which is really frustrating.

I have raised the issue of share-based remuneration over a long period. The Department has had a report for a couple of years. Why does it take so long to make the decisions that are required? Decisions have to be made. I understand the Minister is new to the brief and all the rest, but his party has been in government and he has been in senior positions during those times. It is very frustrating. The public constantly tell me that it is frustrating that the Government takes so long to make decisions and effect change. Saying that the Government will not accept the amendment because it is considering a report which was published a year and a half ago is an example of a Government go-slow.

Simon Harris (Wicklow, Fine Gael)
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I do not want to be overly argumentative because we have a lot to get through, but the amendment is only looking for another report. I am simply saying to people watching that we do not need another report about the report. We need to consider the recommendations of the report. This is an important area to get right for the reasons the Deputy referenced, including competitive advantage that matters to this country in terms of attracting jobs and keeping investment in the country. We will make decisions on the recommendations. We will complete our engagement with stakeholders and I will keep the Oireachtas and relevant committee up to date on our deliberations.

Pearse Doherty (Donegal, Sinn Fein)
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As I mentioned, the Minister is new to the finance brief. However, he may or may not know that the only way for us to put down this amendment-----

Simon Harris (Wicklow, Fine Gael)
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I do acknowledge that.

Pearse Doherty (Donegal, Sinn Fein)
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-----is to seek a report and all of his predecessors would acknowledge that what is behind the amendment is a proposal to restrict the PRSI exemption to the Social Insurance Fund. If we put down an amendment that gave effect to that without seeking a report, it would be ruled out of order by the Ceann Comhairle, and that is no fault to her. They are the rules of the House. That is why it is required. My issue stands. We have campaigned on this for quite a while. It makes sense. I am frustrated by the go-slow nature of the Government. The Credit Review Bill is one example of this. I will press the amendment.

Verona Murphy (Wexford, Independent)
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Amendment No. 13 arises out of committee proceedings. Amendments Nos. 13 to 15, inclusive, are related. Amendment No. 14 is a physical alternative to amendment No. 13. Amendment No. 15 is a logical alternative to amendment No. 13. Amendments Nos. 13 to 15, inclusive, will be discussed together.

Simon Harris (Wicklow, Fine Gael)
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I move amendment No. 13:

In page 29, to delete lines 25 to 28 and substitute the following: “ “ ‘relevant state’ means, as regards the years of assessment 2012 to 2025, the Russian Federation, and as regards the years of assessment 2012 to 2030, the Federative Republic of Brazil, the Republic of India, the People’s Republic of China or the Republic of South Africa, and includes—”.

While taking this Bill on Report Stage having not taken it on Committee Stage, I want to acknowledge that this issue arose on Committee Stage. From my recollection, Deputies O'Callaghan and Nash and perhaps others highlighted this matter. I thank them for that. While there is a grouping of amendments, on this occasion we are all trying to achieve pretty much the same thing.

The foreign earnings deduction, FED, is an income tax relief available to employees who are tax resident in Ireland but who travel out of the State to temporarily carry out duties of their office or employment in certain qualifying countries. By incentivising employees to make overseas trips, the deduction aims to support Irish businesses seeking to develop and expand exports and business in new and emerging markets.

The Finance Bill 2025 provides for a number of amendments to the scheme, including a five-year extension to the end of 2030 and, in view of further encouraging market diversification, it also includes an increase to the maximum potential level of relief as well as its extension to the Philippines and Türkiye. As indicated on Committee Stage, officials engaged with the Department of Foreign Affairs and Trade and, following that Department’s analysis and recommendation, an amendment is now being brought forward to rightfully remove Russia as a relevant state for FED.

I would note that in 2023, the last year for which Revenue data is available, there were no claims for the deduction for business travel to or time spent working in Russia. The effect of this amendment will be that from 1 January 2026 it will not be possible to claim relief under the FED in respect of time spent working in Russia, bringing the relief into line with the wider Government and Irish policy in this area. As this Report Stage amendment is now being introduced, I will not accept the other amendments. We are all endeavouring to achieve roughly the same thing.

Edward Timmins (Wicklow, Fine Gael)
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I thank the Minister and wish him the best of luck in his new role. I first brought this proposal to the finance committee a few weeks back. To me, it is a glaringly obvious thing to do. It should have been done years ago. Russia clearly should not be part of the FED scheme. What we are proposing here aligns with EU policy and sanctions. I give my full support to the Minister's proposal. I welcome the extension of the FED to the Philippines and Türkiye. Perhaps we should consider other countries in South America or elsewhere so that people could avail of this measure in next year's finance Bill.

Pearse Doherty (Donegal, Sinn Fein)
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I welcome the Tánaiste's response to this issue. In fairness to his predecessor, Paschal Donohoe acknowledged there was an issue. It was a mistake for the Government to bring forward an amendment to the Finance Bill that included Russia, as Deputies Timmins, Nash, Cian O'Callaghan and I highlighted. As the Tánaiste said, there was unanimity on this issue and it is to be welcomed that Russia is not included.

There is a broader issue with the foreign earnings deduction. It has been expanded repeatedly. I have a map of the world in front of me that is nearly covered in terms of the locations to which the relief applies. There will be a need for a review of how it is working. There are changes in the Finance Bill in terms of the dates on which people must apply and so on. I have acknowledged that there has been a bit of tightening up in respect of issues with the scheme. However, a company does not have to be involved in exports at all to avail of it. If I set up a company in Donegal selling Irish flags but production was based in China and an employee of mine was in China looking at the production of those flags, I could avail of the scheme. That is not what it should be about. The scheme is about opening new markets and assisting companies to access those emerging markets. Further tightening up is needed.

I support the scheme but did not support Russia's inclusion in it. As I said, there is a wider issue in terms of how it has expanded to take in different footprints around the globe. The argument could be made that there is a reason for that but we need an overall look at the scheme with a view to getting back to the fact it is supposed to be export-orientated and supposed to be looking at new markets, but that is not a requirement or condition for application.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I welcome that the Tánaiste has brought forward this amendment. I ask for a couple of clarifications. First, why has it taken this long for Russia to be taken off the list? Why did it remain on it in 2022, 2023, 2024 and 2025, given the invasion of Ukraine started in 2022 and there have been brutal attacks on civilian populations there? Second, does the amendment the Tánaiste has brought forward mean people will still be able to claim the relief until the end of this year? Why is 2025 included for claims? I acknowledge that he said the latest data show no claims were made by Russia, but why make provision for people to be able to claim this tax relief this year, given that sanctions have been in place for several years? What is the logic for doing that and how does the Tánaiste justify doing it?

Gerald Nash (Louth, Labour)
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Far be it from me to answer a question for the Tánaiste but it would be technically difficult to make that change mid-year. That aside, the case is well made for removing Russia from the scheme. As Deputy O'Callaghan and others have said, we are concerned that it has managed to remain as a state covered by the scheme despite the illegal invasion of Ukraine and the illegal activities and war crimes being perpetrated against the Ukrainian people by the Russian state. The Tánaiste said that in the year for which we have the most recent data, no claims were made in connection with Russia. That in itself is interesting.

Deputy Doherty made the relevant point that we must remain vigilant about this particular scheme. It covers an extensive number of countries and should be open to regular review. The Deputy's point about companies not involved in exports being capable of benefiting from the scheme is interesting in that the scheme is principally designed to support businesses that are operating or seeking to operate in new and emerging markets. Its purpose is to encourage market diversification. That is why we must be vigilant and must continue to review schemes like this.

To build on a comment made by Deputy O'Callaghan, I am intrigued as to why Russia has remained in the scheme for so long, given what we know, what the people of Ukraine are experiencing and that the international community has turned its back on Russia and is treating it as the pariah state it is. We have the sanctions regime and various other measures being taken against the Russian state because of what it is doing to Ukraine. Will the Tánaiste elaborate on how this scheme managed to escape the net? One would imagine that when the scheme of sanctions and other measures were introduced, a very extensive audit would have been undertaken by the Government of all measures applying to Russia and where any benefits might accrue to Russia, that would be a red flag. It is curious this provision has remained in place for so long. The Tánaiste might be able to elaborate on why that is the case. It may just be a sin of omission. I accept and completely understand that errors are sometimes made. For the most recent year for which we have figures, no recipient with any links to Russia was captured by the scheme, and this may well have been also the case in 2022 and before then. That may be why Russia has remained as a country included in the scheme. Perhaps the Tánaiste is in a position to address those points.

Simon Harris (Wicklow, Fine Gael)
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Those are all very fair points. My first response to the question of why Russia was included until now is that I do not honestly know the answer. I do not want to mislead the Dáil but what I can imagine from my involvement in past postings is that as the sanctions regime evolves and do-not-travel notices are issued, we are constantly looking at both the domestic and European levels for more opportunities to tighten up in terms of sanctions that can have an impact economically on Russia. As I said, based on the latest Revenue data, this scheme did not seem to have any Russian claims in 2023 and, therefore, it probably was not seen as particularly, or in any way, impactful as an economic sanction because it was not truly being utilised in that year. If there is any other relevant data from Revenue, I am happy to share it with the finance committee.

Deputy O'Callaghan asked an interesting question that I, too, asked, which is why the exclusion is only taking effect from 1 January. The answer is that it would be very difficult to implement a retrospective application. Therefore, we consider a prospective amendment in the Finance Bill, applying from 1 January, is the most practical way to give effect to the provision because of potential legal issues considered in implementing it. It is appropriate as well considering the no previous claims for Russia in 2023.

I take the Deputies' points regarding the deduction scheme. I am happy always to keep it under review and it is important that we do so. We published the foreign earnings deduction review on budget day. It found that the policy objective to support Irish businesses seeking to develop exports to new markets remains valid, particularly considering emerging challenges, heightened levels of uncertainty across the global economy and trends towards geoeconomic fragmentation. As colleagues will be aware, the report contained a number of recommendations. We also shared a note with the finance committee relating to any potential concern about misuse of the relief. We reaffirmed to the committee that it is considered that the relief is being availed of appropriately.

I acknowledge the Opposition Deputies who raised this issue on Committee Stage. I acknowledge, too, my constituency colleague Deputy Timmins, who also highlighted it. I welcome this rare moment of unanimity in the House on this matter.

Verona Murphy (Wexford, Independent)
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As amendment No. 13 is agreed to, amendments Nos. 14 and 15 cannot be moved.

Verona Murphy (Wexford, Independent)
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Amendment No. 16 in the names of Deputies Cian O'Callaghan, Doherty and Farrell has been declared out of order.

Verona Murphy (Wexford, Independent)
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Amendment No. 17 arises out of committee proceedings. Amendments Nos. 17 and 18 are related and will be discussed together.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 17:

In page 33, to delete lines 30 to 32, and substitute the following: ""(II) €10,000 for each of the years of assessment 2023 to 2028 (both years inclusive)",".

These proposals apply to benefit-in-kind. There was an issue with a number of previous Finance Bills when the Government tried to do what it is doing here, which is reform the benefit-in-kind scheme.

This will ultimately lead to a tax increase for many workers who are availing of company cars. The solution at that time was to introduce a €10,000 offset that allowed for the original market value, OMV, of the car to be reduced by €10,000. The Government now plans to phase that out from 2026 onwards, reducing it to €2,500 in 2028. The impact of this will be a tax increase. That is the impact of this. It is going to be a tax increase for employees. I am opposed to this section and, therefore, I have proposed these amendments to ensure that this tax increase will not be felt during these years. That is the subject of amendments Nos. 17 and 18.

Simon Harris (Wicklow, Fine Gael)
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I will take amendment Nos. 17 and 18 together. These amendments relate to the temporary reduction applied to the original market value of cars in categories A1 to D, inclusive, and all vans for the purpose of determining the benefit in kind, BIK, payable. The amendments seek to keep the OMV reduction at €10,000 until 31 December 2028, in contrast to what we believe to be the tapering out of the relief provided for in the Bill as it stands.

The Government remains committed to the environmental rationale behind the current emissions-based vehicle BIK regime, which has been in operation since the start of 2023. Temporary changes were made in 2023 in light of the inflationary context at the time. It is now appropriate that these changes are gradually phased out and we are trying to avoid a cliff-edge approach in this regard. As part of this Finance Bill, the OMV deduction is being extended for three further years of assessment on a tapered basis to the end of 2028. The OMV will be reduced by €10,000 for the 2026 year of assessment, reducing thereafter to €5,000 for the 2027 year of assessment and €2,500 for the 2028 year of assessment.

With the temporary changes made to the BIK regime in recent years, there has been a level of uncertainty for employers when it comes to planning long-term fleet investments. A more strategic approach is required to give policy certainty to employers and employees. The tapering out of the temporary universal relief and the introduction of a new BIK rate for zero-emission cars provide greater long-term certainty in this area. The gradual phase-out of the relief will ensure that by 1 January 2029, BIK will revert to the structure as initially legislated for in the Finance Act 2019.

The large-scale transition to electric vehicles is crucial to Ireland meeting its national and EU emissions reduction targets. We often talk about climate action and the importance of transitioning in this House. Continuing to subsidise fossil-fuelled vehicles through the BIK system is incompatible with such ambitious climate action targets. The OMV relief is being extended on a tapered basis in order to provide more time for employers to provide a lower emission car to employees over the next number of years in order to reduce the BIK liability. For the reasons outlined, I do not propose to accept these amendments.

Pearse Doherty (Donegal, Sinn Fein)
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I understand the Government’s point that this is reverting back to the original provision in the Act. When it was tried originally, obviously, there was huge uproar at what the Government was attempting. The Minister stated that this is for environmental reasons and so on, but this applies to electric vehicles and electric, carbon-neutral vehicles as well. Will it not increase the tax liability on individuals who are driving the cars that fall into that category as well?

Simon Harris (Wicklow, Fine Gael)
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There is a further offset for electric vehicles to try to incentivise the transition to them as well. I take the point the Deputy makes. What we are trying to avoid is a moment of cliff edge. You could have a cliff edge in the here and now or in 2028 but we are trying to adopt a gradual, tapered approach to provide that policy certainty and, over time, incentivise and enable people to move to the lower emission vehicles.

Pearse Doherty (Donegal, Sinn Fein)
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I hear what the Minister is saying regarding tapering, but that can be translated into different language. It means that, for individuals, they will see their tax increase in 2027, 2028 and 2029. It will continue to go up because the OMV will basically increase each of those years because the offset is being reduced. It also applies to carbon-neutral cars, which means we are going to tax individuals.

I have said before to the Minister that when you look at motorists and what is happening at the minute, the Government has increased tolls. It decided not to offset those increases. The Government has increased the cost of petrol and diesel in this budget. Over and over again, we have this penalty for people who cannot pay their motor tax. I have raised this continually each year and I am going to raise it now with the Minister for the first time. That is a bygone day. That motor tax penalty comes from the days when tax discs had to be posted out and we did not even have computers or the Internet. That is how far back that goes. It is ridiculous that people are penalised because they cannot pay motor tax in one go, particularly now that motor discs are being got rid of. This needs to be got rid of as well. This is another penalty that is going to be on drivers. I do not agree with it and I will push it to a vote.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 18:

In page 35, to delete lines 10 to 13, and substitute the following: “ “(B) €10,000 for each of the years of assessment 2023 to 2028 (both years inclusive)”,”.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 19:

In page 35, between lines 16 and 17, to insert the following:

“Report on costs of increasing standard fund threshold to €2,800,000 25. The Minister shall, within one month of the passing of this Act, prepare and lay before Dáil Éireann a report on the costs of increasing the standard fund threshold to €2,800,000 taking account of behavioural change, clearly outlining the cost to the Exchequer, as well as the number of likely beneficiaries.”.

I have raised the issue of the increase in the standard fund threshold from €2 million to €2.8 million on numerous occasions. I am sure the Tánaiste stands by the answers that have been given. He claims that the cost of this measure will be €10 million. I made the point in the finance committee that it will be laughable if this cost is €10 million. It is not going to be €10 million. It will be multiples of that. When I pushed the Department on this, it told me that it was based on no behavioural change. It was based on existing claimants. Of course, there will be behavioural change. If the standard fund threshold is increased from €2 million to €2.8 million, it will be the biggest tax break for an individual that I have ever seen in a finance Bill. No tax break in my recollection benefited an individual to the tune of €320,000. That is what people will be able to gain from this measure. Of course, there will be behavioural change. Wealthy people will put more into their pensions as a result of this. If someone with spare cash goes to a financial adviser, the first thing the adviser will say is, "Have you maxxed out your pension?" because that is the best way to gain wealth. For every euro a person puts in, for every €100, for every €10,000, the Government will give him or her 40% of that back in tax relief. That is the first thing an adviser will say. After that, they will talk to the person about investing elsewhere and so on.

People with wealth will max this out. If I were in this position, had a pension of €2 million and had wealth at my disposal, of course, I would put the money in here because I would get 40% of it back, could draw down €200,000 of it tax free and €300,000 at a 20% rate and, after that, pay tax on a pension. This measure is only available to people who already have gold-plated pensions. The standard fund threshold is currently €2 million, which means that someone retiring at the age of 66 can get a pension of €85,000 and still be under the standard fund threshold. They could have a pension of €85,000 every single year and have a tax-free lump sum in excess of €100,000 and still be under the standard fund threshold. This wee tax break that Fine Gael and Fianna Fáil introduced that would benefit an individual to the tune of €320,000 is only available to people who already have pension pots in excess of €2 million. These people are already entitled to more than €85,000 of an annual return. Most people - my constituents and those of the Tánaiste - do not have a whiff of €85,000. This is not about supporting them because they are not getting to that point. This is about people with serious wealth who will now be able to avail of this tax break for only wealthy people.

The Tánaiste claims it will cost €10 million. It will not cost €10 million. This is the nonsense we have from the Government about budgeting. I have made this point on numerous occasions. I have attended the Committee on Budgetary Oversight. Some of the stuff coming from the Government at the minute in terms of budgeting is ridiculous. I have been doing this as an Opposition spokesperson for a decade and a half. There is less transparency from the Government now than ever before. That is just fact. The budget book presented by the Government has less information that would allow us to decipher what is going on than ever before. Standstill costs always used to be there and be clear. They do not exist any more in terms of the budget book. It is worse than ever. What the Irish Fiscal Advisory Council called the Government out on is true. It makes budgeting meaningless when the Government introduces a budget on budget night and says a measure like this will cost €10 million when it will cost multiples of that. Worse than that is when the Government introduces a budget and every year for the past five years, we know there will be billions more spent outside of the budget cycle. It is pathetic budgeting. We are talking about 12 months ahead. Of course we understand it in respect of things like the Covid pandemic or a flood of people fleeing war but the €2 billion on additional Estimates this year is not about any of those unforeseen things. Many of them were foreseen but were overruns or badly budgeted for or things like this. There is a wider issue about the standard fund threshold. This is a tax break that the Government has decided to prioritise and that will only go to people who already have gold-plated pensions. It is not about somebody who is working in the local shop or a butcher or nurse. They are not benefiting from this. This involves people who have wealth and will decide where to put it.

A further issue I wish to raise is one I have been raising since 2018. I put down a parliamentary question. I raised the issue of a pensions loophole and in fairness, the Government closed it last year but people with serious wealth benefited from that scheme. It took me two years to convince the Government to close it down. There is a serious amount of transfer relating to pensions that is plain to see. Financial advisers are advising people to transfer their pensions to Malta because there are tax advantages in doing so. Someone can transfer their pension to Malta if they want to. It is legal to do so but only under certain circumstances. It is illegal to do it for tax purposes. That has to be clamped down on. It is happening, just like the loophole I raised a couple of years ago. Financial advisers are telling people to do it. That is what is happening at the minute. It has been pointed out by the Department and other practitioners. This is happening.

10 o’clock

It is happening in a big way. It is people with serious wealth who are not happy with even the regime here and want more tax reductions. As I said, it is illegal to do it if you are doing it for tax purposes.

Thomas Gould (Cork North-Central, Sinn Fein)
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I spoke to a woman in my clinic on Monday who told me she is worried and anxious. She said she is nearly getting panic attacks because she does not know how she, her husband and her three kids are going to get through Christmas and what they are going to do in January when Christmas is over. They are doing everything now. She said they are watching the children in case they touch the heaters in the house yet here we have tax breaks for people who do not need them, that is, for people who are on gold-plated pensions and wealthy people. Ordinary hardworking families are getting no break from this Government.

This budget has completely left ordinary workers behind. Who wanted this measure put into the budget? The only people who could have looked for this were the rich, the wealthy and those who want to maximise the money they can make and the money they can save. This is when ordinary families are worried about putting on the heating and getting presents for Christmas. They are not worried about gold-plated pensions. Does the Tánaiste know why? It is because they will never have them. The cost-of-living crisis is destroying families and at the same time, the Government thinks to give tax breaks to the wealthy - gold-plated pensions, jobs for the boys, Galway tent, here we go again - while people are talking about how they are going to give their kids a good Christmas.

The Government has stated it is €10 million but we know it is going to be an awful lot more than that. This time next year, if God is good, the Tánaiste and I are going to be here and I am going to ask him how much it cost us. If it is more than €10 million then will he say he will get rid of it? There is no justification for giving people who have gold-plated pensions more money. Where is the justification? I have people who worry about how they are going to look after their kids. I was at a housing committee meeting last week where Clúid was before us. We were talking about energy poverty and EnergyCloud. It is a great idea. The witnesses were telling us people were choosing between turning on the heating and paying their rent. That is not me. There were Government TDs and Senators at that meeting where we were told people were making that choice. You have to do both of them. You just have to. You are going to lose your house or you are going to freeze; it is one or the other. Then at the same time the Tánaiste comes in here to talk about giving the wealthy more money. We all make mistakes in life. We are being genuine here. This is a measure that should not be in this budget. We have seen child poverty double in the last 12 months according to the statistics. At the same time we are saying to the lads and the girls who have loads of money to come on in and we will give them more of it. For the love of God.

We try to be constructive. I have been listening to Deputies Doherty and Farrell trying to be constructive all night. We can make this a better budget. Even if we disagree with major parts of it we could still help improve it. I ask the Tánaiste to take on board this recommendation because giving rich people more money cannot be justified.

Simon Harris (Wicklow, Fine Gael)
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I thank Deputies Doherty and Gould for their contributions. I should point out for clarity these changes in relation to the standard fund threshold were legislated for in the Finance Act 2024. It set out three specific aspects of the SFT regime, one of which was a technical change. The then Minister for Finance did not bring forward further changes to the standard fund threshold above and beyond what was legislated for and outlined last year. In many ways - not to speak for his thinking but I was privy to it as a member of the Government - that was because we did not have an income tax package in this year's budget and it was important to have a balanced approach. Future changes to the SFT will be considered in the context of annual budgets during the lifetime of this Government.

For context, I remind Members the SFT was reduced to €2 million in 2014 and has remained at this level since then. During that time there have been significant changes across a range of economic factors, including consumer price inflation and wage inflation. The then Minister therefore considered a targeted and focused examination of the current calibration of the SFT should be carried out. It was not carried out by the Government but by an independent expert, Dr. Donal de Buitléir. He was appointed to lead the examination with support from the Department of Finance. It looked at the current pension landscape, the current calibration of the SFT and the potential impact on recruitment and retention in the public service. I am not being argumentative but when we talk about these people, this is about roles in the public service and making sure we can recruit and retain people in the public service, including in senior positions involved in the security of the State and the running of public services.

The purpose of the amendment, and of the identical one proposed on Committee Stage, is to require the preparation of a report on the costs of increasing the SFT to €2.8 million. My understanding is my predecessor explained there are difficulties in costing the changes to the SFT, perhaps for some of the reasons the Deputy outlined, in particular that information on the numbers and values of individual funds or on individual accrued benefits in pension schemes are not generally required to be supplied to Revenue. There is, therefore, no underlying data available to Revenue on which to base reliable estimates. The Minister made that clear on Committee Stage. Consequently, the Department prepared indicative estimated costs based on the information available and shared those with the Deputy and others in the House in response to parliamentary questions, most recently on 21 October. The then Minister also gave a perspective on these costings during the Committee Stage debate, including a commitment to provide whatever information could be gathered in relation to the number of persons in 2023 who have availed of the option to pay it over 20 years. In this regard information was supplied by the NSSO on this matter. The information that was supplied is independent of politics and is the best information available.

Using the model, the indicative estimated costing of increasing the standard fund threshold is as follows: for 2026, the indicative costing is €10.5 million, for 2027 the indicative costing is €14.5 million, for 2028 the indicative costing is €8 million and for 2029 the indicative costing is €5 million. While the change in the SFT for 2030 is not set and will depend on the changes in earnings over the period from 2025 to 2029, an estimated cost of €500,000 has been included in the costing for this change. I would note that these estimated costs do not take account of behavioural changes - which is a legitimate point the Deputy raises - and are based on a reduction of the current CET yield. Any assessment of behavioural changes would be highly speculative and I am not convinced of the value of such an exercise.

I will be considering the future impact of the SFT recommendations in the context of future budgets.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister reached for public sector workers in relation to this massive tax break. A figure of €320,000 is unheard of. When you think about it, most people in the country do not earn anywhere near that and this is a tax break worth €320,000 to a really wealthy individual. It is unbelievable. The de Buitléir report, which the Minister may have had a chance to read-----

Simon Harris (Wicklow, Fine Gael)
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I have.

Pearse Doherty (Donegal, Sinn Fein)
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-----actually dealt with how we deal with public sector pensions, especially the issues with members of the Garda and fast-accruing pensions. The way he suggested doing that was to change the valuation rate for defined pensions. That is not what the Government has done, so do not be going into the box and saying this is about gardaí and all the rest and public sector pensions. If the Government wants to deal with public sector workers, de Buitléir has proposed a change to the valuation rate, which used to be a factor of 20 and is now a range of factors on a sliding scale. I raised this with the Minister's predecessor in relation to the appropriateness of that valuation factor and how many people outside the public sector have defined benefit schemes. These are questions we would need to tease out. I would argue there are ways, because we differentiate in the tax code in terms of the standard fund threshold and the chargeable excess already. There is already a differentiation between private workers and public sector workers and we can take that further in relation to exempting the income above the standard fund threshold for public sector workers. As such, there are a number of ways the Government could do this if it wants to genuinely deal with the issue of the very few public sector workers who are in that category of pensions in excess of €90,000 in the first instance.

That is not the issue here. The issue here is that the Government has brought forward a massive tax break for wealthy people. Taxpayers' money is going into these people's pockets to supplement gold-plated pensions.

Thomas Gould (Cork North-Central, Sinn Fein)
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I do not think the Tánaiste answered the question. I asked him where was the tax break for ordinary workers in this budget. There was none. There was naught for ordinary workers. How can the Tánaiste then justify giving a tax break to people who have gold-plated pensions anyway? As Deputy Doherty has outlined, this is a tax break of €325,000. I do not know who is watching here tonight but ordinary families are talking about the cost-of-living crisis, filling cars with petrol or diesel, the increase in the cost of home heating oil and not being able to pay for their electricity or struggling to do so. People are counting every cent when they go to the shops. You see them adding everything up on their phones or other devices because they can only buy so much. No breaks were given to those families in this budget. How can the Tánaiste justify doing this at the same time? I know he is new in the job but he has been in politics and this Government for a long time. I am sure there is nothing in this budget that he is not 100% across and that he does not 100% support.

I will ask my question again. Ordinary people out there might be watching this. They might not. They might be at home worrying like that lady I spoke to on Monday who is on the verge of panic attacks. Do you know what she said to me? She told me she cannot tell her husband because she does not want to worry him because he is going out to work every day. She is looking after the kids and working part-time. She is now looking at how she could work full-time. Ordinary people cannot keep a roof over their heads if they do not have two jobs. I was talking to a woman on the phone a while ago. She is in arrears with her HAP. She pays €130 a week in rent but she has to pay €490 as a HAP tenant. She is in arrears and could be out of her house in a month-----

Verona Murphy (Wexford, Independent)
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The Deputy's time is up.

Thomas Gould (Cork North-Central, Sinn Fein)
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-----and the Tánaiste is giving tax breaks.

Verona Murphy (Wexford, Independent)
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Deputy Gould, your time is up. We have a long night ahead of us. Before the Tánaiste speaks, I will ask Deputies to stay on point. This is an amendment they are speaking to.

Thomas Gould (Cork North-Central, Sinn Fein)
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There is an amendment. We are giving tax breaks but not to ordinary people.

Verona Murphy (Wexford, Independent)
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It is an amendment and not an opportunity for general cross-party questioning.

Simon Harris (Wicklow, Fine Gael)
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That is largely the point I was going to make. I am not unsympathetic to the important issues Deputy Gould raises. I see them in my own constituency. I deal with people like that every day in my role as a public representative in Wicklow and a Member of this House since 2011. That is why we took a number of measures to address child poverty and working family poverty in the budget. I will not have time to outline them and it would not be relevant to this amendment to do so but we took a number of decisions in respect of the working family payment, payments in relation to children and increases to social welfare. We made sure that all of the new expenditure measures in the budget were progressive. As the Deputy would acknowledge, we also did not bring forward additional legislative measures in this Finance Bill for some of the reasons he has mentioned such as the pressures that other workers in our economy are other. I will make any future considerations in relation to the SFT in the context of future annual budgets.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister did not have to bring forward other amendments in respect of the SFT. The Government has legislated for it to increase every year. That is why people are getting this €320,000 tax cut from Fine Gael. I must have missed that promise the Minister made. Which plinth was he standing on? During which press occasion during the general election campaign did he tell people he would provide a €320,000 tax break to people who have gold-plated pensions? I did not see anything like that in the run-up to the election.

Simon Harris (Wicklow, Fine Gael)
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It was legislated for.

Pearse Doherty (Donegal, Sinn Fein)
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It was legislated for in the Finance Bill just before the election, during the campaigning. That was a promise the Minister did not even make, but it is one he kept. He broke all of his promises to ordinary people. I will press the amendment.

Simon Harris (Wicklow, Fine Gael)
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I move amendment No. 20:

In page 36, to delete lines 19 and 20.

I believe this to be largely a technical or cleaning-up amendment. As Deputies who addressed this Bill on Committee Stage will recall, there was a commencement provision included in section 28 to allow for state aid approval for the extension of the scheme as it comes under the agricultural block exemption regulation. The commencement provision is no longer required as the necessary consent from the European Commission for the extension of the measure has now been received. Therefore, this amendment removes the commencement provision because it is no longer required. The extension of scheme will now take effect from 1 January 2026.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 21:

In page 43, between lines 34 and 35, to insert the following: “Report on policy objectives and financial safeguards for Living Cities Initiative

30. The Minister shall, within 1 month of the passing of this Act, prepare and lay before Dáil Éireann a report on policy objectives and the financial safeguards that are in place given the scale of the reform and expansion of the scheme in terms of eligibility and granting access to developers to the scheme.”.

This amendment relates to the living cities initiative. This initiative has never taken off. If I am right, it was the brainchild of John Moran when he worked with the then Minister, Michael Noonan. He is now the directly elected mayor of Limerick. I could be wrong on this but I think it was focused on Limerick, inner-city Dublin and Georgian buildings. It did not really take off. Nearly every single Finance Bill was amended to expand the scope and criteria. The scheme has had an extremely low uptake. It is now being expanded again to include five other towns. From recollection, I believe that includes a town in my own county of Donegal. I have made the point that, based on the criteria, an argument could be made to allow Ballybofey, which probably has more vacancies than any other town in the county, to benefit from the initiative. The real issue here is that the scheme is being massively expanded. It is no longer just for Georgian buildings or buildings built before 1914 or whatever it was. It now applies to buildings built before 1974 or 1975. It was a date in that range. In some cases, there is no time limit whatsoever.

When we debated this many years ago, the then Minister, Michael Noonan, said that with things like this, you bring them in, you review them, and if they are not working you get rid of them. He was making the point that you have to take a risk with some of these schemes. That is fine. I understand that you have to take a risk with schemes but you also have to ensure there are safeguards in place. The amendment is based on the scale of the reform, the expansion of eligibility for the scheme and developers being granted access to the scheme. That was an anti-avoidance measure. It was explicitly made clear that developers would not be allowed in this scheme. They are now being allowed in the scheme under the amendment included in the Finance Bill. We need to ensure that there are financial safeguards and that the objectives are met. I want to see a report in relation to that. What assessment is going to be carried out in that regard? What early warning signals will let us know if this expansion is being exploited in a way that does not meet the objectives of the scheme? When are we likely to see some concrete data in relation to all of that?

Simon Harris (Wicklow, Fine Gael)
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The Deputy's initial analysis is somewhat right. He has the corporate memory to be able to go back to the then Minister, Michael Noonan. This scheme has not seen a very significant level of uptake. We have been trying to examine ways in which more people could benefit from this scheme, which brings properties back into use. Across the political spectrum, we all share the objective of trying to use every bit of underutilised capacity we can to provide housing. The Bill provides for substantial changes to the living cities initiative. The Deputy has noted the scale of the reform and the expansion of the scheme. These are significant changes but they are consistent with our policy intent. The changes were carefully considered and have built-in restrictions to limit the amount of relief that can be claimed. There is a €300,000 limit placed on an undertaking, which may include a business or landlord, availing of the scheme by the state aid de minimis regulation. To facilitate greater uptake of the measure, the Bill removes the restriction on connected persons to broaden the reach of the relief.

This will mean that a person connected with a developer of rented residential or commercial property within the scheme will be in a position to retain the property for the purpose of letting, but it should be noted that the state aid cap will still apply over a rolling three-year period.

In addition, the relief for income taxpayers is within the scope of the high earners' restriction, and any capital allowances remaining unused at the end of the tax life of the building will be terminated. A number of other features of the scheme implicitly set an upper limit on the Exchequer cost in respect of residential premises, including that the local authority must issue a letter of certification confirming that the cost of the refurbishment seems reasonable.

It is a good question as to what towns are included or not included. Many Deputies have made representations for other towns to be added, although not on the record of this House. There are always compelling cases. Considering that this is a significant expansion, what we have decided to do is to utilise the towns identified as the five regional centres in the national planning framework. This is a scheme that I would not rule out extending to further areas in the future. That is the rationale behind what we are doing. I believe there are enough safeguards built in. As the Deputy rightly implied, as the take-up has been so low to date, the policy aim has been to increase uptake in the first instance. We will monitor it and see how it goes this year and in future finance Bills.

Pearse Doherty (Donegal, Sinn Fein)
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I will leave it at that.

Verona Murphy (Wexford, Independent)
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Amendments Nos. 22 and 23 have been ruled out of order.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I move amendment No. 24:

In page 64, between lines 4 and 5, to insert the following: “Report on tax expenditures for property developers

42. The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on the fiscal and housing-market effects of tax reliefs and incentives available to property developers, and on alternative approaches to achieving housing-supply objectives without such tax expenditures.”.

The situation with tax expenditure for property developers is that profits in Glenveagh more than doubled in the last year. The CEO of Glenveagh properties saw his salary increase by 80% in 2024 to a whopping €2.7 million. At the same time we see people struggling with the cost of living and more than 5,000 homeless children, yet the prioritisation here is tax expenditure that boosts the profits of developers. The wrong choices are being made here and the wrong priorities. Tá na tosaíochtaí míchearta ag an Rialtas.

We need to have a review of all the tax expenditure. We have had multiple tax expenditures for developers over the years and it is clear they are not working. We are seeing profits increase, house prices and rents increase, and homelessness increase. While these measures are very costly, it would be much better to invest the money directly in more affordable housing rather than measures that boost profits for developers who already have very high profits.

The fact that profit levels in the two publicly listed companies are 20% and 21% and that we see growing tax expenditures that will boost those profits further is completely unjustifiable. The former Minister for Finance, Paschal Donohoe, when pressed on this in the committee, said that further tax expenditure in terms of VAT reduction would lead to an increase in further profits for developers. He was very upfront about that, and that it would not lead to more affordable housing. He said that the way he was going to boost viability was by increasing profits for developers even further, when we know the profits are already at very high levels - 20% and 21%.

The problem with a lot of these tax expenditures as well is that they are not connected with affordability conditions. They are not tied in with making housing more affordable. That is why this review is needed urgently. As the Tánaiste knows, a huge amount has been invested by the Government in housing, through a range of measures, including tax expenditures, but it is clearly not working and we are not getting the value for money that is needed. We are taking an approach that is way out of kilter with other European countries in terms of putting so much into tax expenditures. Most other European countries that are more successful in providing more affordable housing use the money much more directly to help build affordable homes rather than by having indirect tax expenditure measures.

As I am sure the Tánaiste knows, tax expenditure measures should be targeted and very carefully used. When they are too wide, and they go on for too long in any sector, there is a huge amount of deadweight and waste. That applies in the housing sector the same as any other sector. That is simply considered to be, in terms of good governance, a good use of resources. They are considered to be the basics. A very wide approach is being taken by the Government in its approach on housing and tax expenditures. I understand that there is a need for action in this area, but the resources are not being used well.

I recently mentioned to the Tánaiste what the spending review from the Department of public expenditure said about these approaches. It said the tax breaks are priced into what developers bid for land, thereby increasing bidding rates and displacing any savings in costs achieved elsewhere. The reviews done by the Department of public expenditure and reform should be taken seriously by the Government. That is its Department giving it advice about how best to use public resources in this area, and for some reason it is not being taken on board in terms of this measure.

The fact that those kind of spending reviews have not been taking place in the last few years is highly problematic as well. Detailed spending reviews used to be carried out by the Department of public expenditure and reform and then published, but that practice stopped in recent years. That needs to be addressed as well.

As I said already to the Tánaiste in recent days, we have a situation where profits are up, subsidies are up, tax expenditures are up and productivity in the sector is going down, as is the investment in productivity year after year. That is not right and it does not make sense. That should be ringing alarm bells for the Minister in terms of his approach not being the correct one. If that was happening in another sector, he would rightly point it out as being the wrong approach. I urge him to accept this amendment.

Simon Harris (Wicklow, Fine Gael)
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In the early days of my time in this office, I agree with the Deputy's broader point on spending reviews, not monetising every problem and making sure there is value for money. I will engage with colleagues in relation to that as well.

I also acknowledge, and Deputy Doherty made this point earlier, and I was not saying it to be discourteous, that the way the rules of this place work is that people request reports by way of an amendment, but often they do that to vocalise their opposition to or, the odd time, their support for a measure coming forward. I do not believe a report into this matter in the Finance Bill per se is the best way to proceed.

Let me deal with the substance of the issues Deputy O'Callaghan raises and share my perspective on them. We do take all decisions regarding taxation measures in line with our Department's tax expenditure valuation guidelines. These guidelines do make clear that any policy proposal that involves tax expenditure should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is deemed more efficient than a direct expenditure intervention. I have been making this point. We know we have different political viewpoints on this but we do have a significant number of apartment developments or planning permission for apartments. In this city alone there are more than 40,000 that people who build apartments have deemed unviable to construct currently. What we are trying to do here is reduce the viability gap through a number of ways. This is just one way by which we are trying to do it.

The guidelines on tax expenditure valuations were most recently updated in 2024. They also set out the criteria that should be considered as part of the reviews of tax expenditures as well. Targeted tax incentives to encourage people to build more apartments and increased capital investment in infrastructure to support new schemes form the main housing measures of budget 2026.

The root cause of viability issues in relation to apartments is structurally high costs. Accordingly, sustainable progress on improving viability requires a relentless focus on cost reduction that maximises private sector participation. We can all have our views on the profit levels of companies and everything else, but at the end of the day, we need these companies to build apartments. That also has to be effected. If they are not building today, they have decided it is not viable to build from their commercial proposition. Do we do something to make it viable or do we just not concern ourselves with that? I believe we seek to make those developments viable because we want people to have an opportunity to be able to access those homes.

Where data exists in relation to the Exchequer cost of tax relief for housing market development, its is publicly available and is included in the Department of Finance report on tax expenditures published annually in advance of the budget, as well as in Revenue's publication on the cost of tax expenditures. The Finance Bill 2025 provides for the changes to the tax system announced on budget day that are intended to complement direct expenditure and capital investment in housing. Going forward, as data becomes available for these new schemes, it will be included in my Department's annual report on tax expenditures. In line with my Department's guidelines for tax expenditure evaluation, any expenditures that are expiring will also be subject to detailed review. These reviews are published by my Department.

As the Deputy reminded us, my predecessor committed to continuing to review the interplay of different tax schemes. I, too, commit to doing that. Having regard to the fact that indicative costings have already been prepared and published for the new measures - and, as stated, these will be included in the annual report on tax expenditures going forward and as data becomes available - I do not believe that an additional report is specifically necessary at this time. However, I am happy to engage with the Deputy on the thrust of what he is trying to get at, which is to look at the interplay between the different tax schemes and the benefit involved in terms of advancing the policy objectives. I will undertake to do that. I will also undertake to engage constructively, no doubt at the Committee on Finance, Public Expenditure, Public Service Reform and Digitisation and Taoiseach, as this issue arises in the period ahead.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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On the spending reviews that have been stopped, we need to do something to fix that because those reviews are important in terms of value for money. I understand there is work going on, but that the results of that work are not being published to the same level as previously. As a result, we are not seeing the benefit of that analysis publicly.

Of the 90,000 planning permissions that are not being built out, more than 40,000 are in Dublin. The latter mainly relate to apartments. The one thing that has worked in the context of getting movement on apartment planning permissions that have been there for years but that have not been acted upon does not relate to the different tax expenditures. Where that has worked - it can be seen in large-scale developments like Clongriffin, where apartment planning permissions were not getting built out for years - is where the LDA has come in and built out planning permissions quite fast, incidentally. These are developments which have stalled for well over a decade or almost two decades. They are being built out now quite fast by the LDA. We can debate the affordability of those apartments, but they are certainly somewhat affordable. They are below the full market price. That is working. The money that is going into that is working, whereas there is no evidence that any of the money that is going into the various different tax expenditures is delivering. Not only is what the LDA is doing delivering in terms of build-out, but, as I said, there is an affordability element as well. That is worth thinking about. That is why this review is needed urgently, namely within three months. If the Tánaiste was in a position to state that the Department is doing the spending reviews and the proper analysis that it used to do and publishing the results, he would have a case not to accept the amendment. However, that is not happening.

Pearse Doherty (Donegal, Sinn Fein)
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I raised this issue earlier. We have later amendments in relation to the reduced VAT rate on apartments that have been ruled out of order. This amendment from Deputy O'Callaghan deals with the tax reliefs that have been brought in by the Government for property developers.

The former Minister made the claim at the start of the debate on this Bill that this measure was designed to reduce the cost of apartments. Nothing could be further from the truth. It is not about reducing the cost of apartments. I will again put on the record what the former Minister had to say only two weeks ago when he debated this issue with us at the finance committee. He stated:

If we were to bring forward a measure like this, which would also be an affordability measure, logically, it could not be a viability measure at the same time. It cannot be both.

He was open, transparent and, indeed, honest. This is not about reducing the cost of apartments. It is not about affordability. The former Minister made clear that it cannot be both; it is about viability. What does viability translate as? It means that profits for developers have to be sufficient for them to decide to build out at this point.

I have made the point that there is good research - this does not mean to say that it applies here - in Britain that looks at the market dominance of a number of players and how they use that dominance in terms of land hoarding, building selectively, releasing certain properties at certain times and squeezing the UK Government for more incentives. By God, did developers here squeeze the Government and get what they wanted. We talk about finance measures and an element of deadweight, basically, the effect of the measure and that maybe 30% or 40% of the activity that it is hoped to bring about would already happen even without the tax measure. Has there ever been a tax cut like this where 100% of the expenditure for next year, namely €250 million, is considered deadweight? Every apartment that will be the subject of reduced VAT is viable. Every one of them is currently under construction. The former Minister told me that, since it was introduced on budget day, this measure has already cost over €20 million. That is what it costs per month.

It is not even just next year that the deadweight will apply. It will continue into 2027. The vast majority of the €390 million that this is going to cost in 2027 relates to apartments that are already under construction. We know that because apartments cannot be built in a year. It just cannot be done. On average, it takes two years to build apartments. VAT is paid, obviously, at the point of sale in arrears. Therefore, the vast majority - if not all - of any benefit that will be accrued next year or the year after will be in respect of apartments that are either under construction or about to go to construction. That is the level of deadweight involved. That is the amount of money we are talking about.

I have called those in this Government serial wasters in the past. My party president has raised the issue of more waste that we have seen in terms of steps in a public park that cost more than €700,000. There are many examples of this but, by God, what we are discussing here takes the biscuit. The Government is giving €640 million next year and the year after in a tax break to developers for apartments that are already being built. There are 18,000 apartments being built at present. Apartments that were sold last week benefited from this tax break. Apartments that are going to be sold next week will benefit from it. There are viable. If they were not viable, they would not be being built.

The Tánaiste is talking about a measure and disclaims the fact that this is not about selective release, house prices, pushing up prices, etc. Let us pretend that is not the case for a moment. The Tánaiste is talking about a measure that is about releasing new apartments into the system. Of the €1.5 billion that this measure is going to cost for the three years that it will be in existence, however, over €600 million will go into the pockets of developers who are already building apartments. The Government has not even attempted to hide whose side it is on.

I made the point earlier that these developers are making huge operational profits. The two largest companies in the State are publicly listed. Thankfully, they have to publish their accounts. We can see their operational profits of 20% and 21%, respectively. That is not somebody scrapping to get by; it is a massive transfer of wealth. The Government does that. The Tánaiste will defend this at a time when the Government screwed over so many people in the budget, when it left people so much worse off, when it refused to deal with the cost-of-living crisis, when so many people are under pressure with their energy costs, when so many are under pressure with their petrol and diesel costs and when so many are finding it tough to put food on the table because of grocery price increases. Of course, the Tánaiste has to balance the books. Of course, he has to make sure that the Government's priorities are to the fore. Of course, there is not an endless amount of money available to the State. However, the Government made choices. It made the choice to put €250 million into the pockets of developers next year in respect of apartments that they are already building. The Government made the choice to put €390 million into the pockets of those same developers the following year for apartments that are currently under construction. Those are the wrong choice. They are the choices of Fine Gael and Fianna Fáil. They are the choices of a Government that does not have the backs of ordinary workers, because it has screwed them over. Again, the Government's priorities are clear. There are always winners and losers.

Under Fine Gael, the winners in this case with this measure are the developers.

I missed the press conference before the election where the Minister promised hundreds and hundreds of millions of euro to developers. Was that just a wee side, secret, private deal with them? The Government broke all its public promises to renters, on childcare, and to the people who wanted the income tax relief it promised them.

Thomas Gould (Cork North-Central, Sinn Fein)
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The two previous speakers have summed up how we are giving massive tax breaks to developers. Hundreds of millions of euro in tax breaks are being given for apartments that are nearly built or are under construction. The Minister is an intelligent man. Why would the Government give someone a tax break when that property is already viable to be sold? Developers and builders do not construct apartments and apartment blocks if they are going to lose money, especially when we know they are making massive profits. The Minister is an intelligent guy and has an intelligent Department around him. I am trying to figure out the logic. The Minister is sitting there and this Government is sitting down and putting this plan together. Who came up with the suggestion, "Let's look after the developers. They're not making enough money"? Who suggested that €750 million?

Sometimes, when you talk to ordinary people in the street, they can get their heads around €1 million because they think of the Lotto being €2 million or €5 million this week. It is now €500,000 to buy a house, when you think of it. People can just about visualise what a million or millions are, but when you talk about hundreds of millions and €750 million, that is money people cannot get their heads around. They certainly cannot get their heads around how this Government chose to give those tax breaks on properties that were already profitable. I will ask the Tánaiste one straight question. Does he not accept that the apartments that are under construction and nearly completed were profitable? I am asking him honestly, man to man, if he does accept that, how can he justify giving them hundreds of millions of euro? How can he justify that?

As Deputy Doherty said, that commitment was never stated before the election. Can you imagine if that commitment was made four weeks before the election? Members of the Government parties came out and said they were building 40,000 houses, which they knew in their heart and soul was not right. They knew that in their heart and soul when they were doing their press conference. It was not us saying it. The ESRI, the Central Bank and people on the ground were saying it. The Department knew it because it is getting the figures in. The Taoiseach or the Tánaiste talked about Deutsche Bank or somewhere. Then, when they come in here, they use the ESRI and the Central Statistics Office when they are trying to justify certain things. Last year, when they were campaigning, which is a year ago now, they said they were going to deliver 40,000 houses, which the dogs in the street knew they were not delivering. Why did they not tell the people well before the election that they were going to give €750 million to developers who are already making vast profits? It was because they would have been run out of the boxes.

There is a question here of the Tánaiste's honour. He and members of this Government made comments during the election that were not true, or they withheld information from the public. They come in here and slag us and say, "Well, ye didn't get elected this time." At least we were open and honest with voters about what we were going to do. People might say they did not agree with it, but at least we put down on paper where we stood. The Government hoodwinked the public. Does the Tánaiste think he can justify that to the ordinary man in the street who cannot buy a house? I know families who have split up because he is going to live with his family, and she is going to live with hers, because they are trying to put a deposit together to buy a house. People are coming to me just when they have their mortgage approval, have saved hard and done everything right, but when they go to buy a house they cannot because house prices are going up faster than they can save. Does the Tánaiste think about whether he told them the Government was going to give developers and speculators vast tax breaks?

People trusted the Government and it betrayed the trust of ordinary people. People are suffering now. Every day, those people are heading to Australia, Canada and all over the world because they do not see a future here. It is obvious where the Government's priorities lie, looking after the big developers and not ordinary, hardworking people who are, as a previous Tánaiste said, getting up early in the morning. The other question people ask me is why they are getting up early in morning because they cannot buy houses, cannot look after their families and are crippled by the cost-of-living crisis.

Simon Harris (Wicklow, Fine Gael)
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I will endeavour to keep to the amendment at this late hour of the night. I have plenty I could l say about general election promises in other parties' manifestos and where the average price of €300,000 for a home in Dublin is, etc., which was promised by Sinn Féin. We will return to all that another day.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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We are not in government so we are not breaking our promises.

Simon Harris (Wicklow, Fine Gael)
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You dropped the promise and clarified it after-----

Pearse Doherty (Donegal, Sinn Fein)
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No, we did not.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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We are not in government.

Verona Murphy (Wexford, Independent)
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Stick to the debate, Deputies.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The Tánaiste is encouraging it.

Simon Harris (Wicklow, Fine Gael)
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We will return to all that another day. I am just making the point-----

Pearse Doherty (Donegal, Sinn Fein)
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Do you want a shovel?

Simon Harris (Wicklow, Fine Gael)
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I am making the point respectfully-----

Verona Murphy (Wexford, Independent)
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Please, Deputy Doherty. Respectful, please.

Simon Harris (Wicklow, Fine Gael)
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I am making the point respectfully that I sit here and hear wrongful framing and misrepresentation of my party, our manifesto and the general election. I look forward to debating that. As the leader of Fine Gael, I will debate that with the leader of Sinn Féin in due course. I look forward to that opportunity.

In relation to the amendment before the House, I do not have a huge amount more to add other than to say that I agree on the need for spending reviews. The Minister, Deputy Chambers, does too. It is something I will take away from the points put forward by Deputy O'Callaghan.

While some have been pining for Paschal this evening, and there has been a little bit of "Paschal said this and Paschal said that", Deputy Doherty made the point about budget books being different in the past. I will constructively engage with him and Deputy O'Callaghan on that. Transparency and maximum information for the Oireachtas is a good thing in how we make sense of policy decisions, and each of us doing our job as well.

I accept there are many different views on the VAT measure but, from our perspective, it is a measure around viability and supply. The people will judge, at the end of the term of this Government, whether it has had the desired effect or not. It is about reducing the cost of building apartments. That does have benefits for housing supply. I should say, because a lot has been said about people trying to buy homes, that we are, thankfully, this year seeing the highest number of first-time buyers in this country since 2007. We are living through a housing emergency but that statistic should not be ignored.

Verona Murphy (Wexford, Independent)
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I ask for reasonable discourse from everybody.

Pearse Doherty (Donegal, Sinn Fein)
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I will. I will make the point, first of all, that I am not sure whether the Tánaiste withdraws the fact that it is about affordability, or does he agree with his predecessor that it is actually about so-called viability?

Simon Harris (Wicklow, Fine Gael)
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It is the viability.

Pearse Doherty (Donegal, Sinn Fein)
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Okay, but you cannot have it both ways. You cannot make it up as you are going along, in fairness. It is too big an issue.

Simon Harris (Wicklow, Fine Gael)
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Exactly.

Pearse Doherty (Donegal, Sinn Fein)
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The Tánaiste did not address the fact that these companies are making huge profits in the first instance. I challenge the Tánaiste on this because he gave the impression in his comments that I was misrepresenting the promises he made to the electorate. In his response, will he explain? Did he not make the promise to reduce tax each year to workers? Did he not make the promise to provide a roadmap on childcare within 100 days? Did he not make the promise to reduce third level fees, which went up €500 compared with last year? Are these promises he did not make? Am I imagining things? Are the records and videos all false and AI generated?

Verona Murphy (Wexford, Independent)
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They are not part of the amendment.

Pearse Doherty (Donegal, Sinn Fein)
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The Tánaiste introduced this subject.

Simon Harris (Wicklow, Fine Gael)
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I actually did not, in fairness.

Pearse Doherty (Donegal, Sinn Fein)
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You did.

Simon Harris (Wicklow, Fine Gael)
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I responded to a mirage.

Pearse Doherty (Donegal, Sinn Fein)
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You introduced the subject that you did not make these promises. He introduced the subject.

Verona Murphy (Wexford, Independent)
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Please.

Pearse Doherty (Donegal, Sinn Fein)
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I just wanted to remind the Tánaiste of the commitments he made-----

Simon Harris (Wicklow, Fine Gael)
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Thank you so much.

Pearse Doherty (Donegal, Sinn Fein)
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-----to the public that he is breaking, and the commitment he never made to developers, at least in public, that the Government was going to stuff hundreds of millions of euro into their pockets through a reduced VAT rate.

Simon Harris (Wicklow, Fine Gael)
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The Deputy should withdraw that.

Pearse Doherty (Donegal, Sinn Fein)
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The Tánaiste did not answer the question from Deputy Gould-----

Simon Harris (Wicklow, Fine Gael)
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Withdraw that slur. I did not make----

Pearse Doherty (Donegal, Sinn Fein)
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-----in relation to whether he believes that the 17,000 or 18,000 apartments that are being built are actually viable. If so, then why has the Government decided to provide hundreds of millions of euro into the pockets of developers for valuable apartments?

Thomas Gould (Cork North-Central, Sinn Fein)
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I would like that question answered.

Simon Harris (Wicklow, Fine Gael)
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Yesterday, when we took a financial resolution in this House-----

Verona Murphy (Wexford, Independent)
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I am sorry, Tánaiste, Deputy O'Callaghan is in possession.

Simon Harris (Wicklow, Fine Gael)
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-----I responded and the record of the House shows the response.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I thank the Ceann Comhairle.

Verona Murphy (Wexford, Independent)
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Excuse me.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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It is my amendment.

Verona Murphy (Wexford, Independent)
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Yes, it is.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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I welcome what the Tánaiste said about spending reviews. On the profits, profit levels are 20% and 21%. The Minister's predecessor is on record saying that this will increase viability and output, and increase profits. That is what we were told in Committee. How high does he think the profits have to go? Profit levels of 20% and 21% are double what they were in the previous year for one of those companies. How much higher do they need to go to make this viable? Does the Minister accept that these measures will increase profits even further? Of course when the private sector is involved in construction, it is going to have to have a profit level, but 20% and 21% does not need additional tax relief.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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11 o’clock

Tairgim leasú Uimh. 25:

In page 68, line 26, to delete “appropriate,”,” and substitute the following: “appropriate,

(vii) a condition that the qualifying company shall, in respect of the qualifying film concerned, comply fully with the Copyright and Related Rights Act 2000 and the Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019,

(viii) a condition that the qualifying company shall make every effort to ensure that performers, writers, composers, artists and other film workers resident within the jurisdiction will not be subject to lesser terms and conditions regarding the licencing or assignment of their intellectual property rights than persons resident outside the jurisdiction engaged in similar roles when employed on the same qualifying film, and

(ix) a condition that the qualifying company shall not require performers, writers, composers, artists or other film workers to sign away their rights to future residual payments for their work on a qualifying film, or to agree to a so-called ‘buy-out’ contract, as a pre-condition of working on the qualifying film,”,”.

Guím gach rath ar an Tánaiste ina phost nua. Tá súil agam go ndéanfaidh sé beart de réir a bhriathair. Níl mé chun dul sa mhéid a bhí an Teachta Doherty ag rá leis, ach tá jab mór roimhe agus tá súil agam go mbeidh tairbhe ann do phobal na hÉireann uilig.

This amendment is very specific. It deals with the section 481 tax relief. We have what is no longer a fledgling film industry; it is there. The Minister, in particular, will be aware of the benefits of the film industry in his county. However, there have been quite a lot of issues from a worker's point of view as to whether we get the best benefit for our buck. Tax relief is tax forgone by the State, and that means we need to make sure we are getting the full benefit. This amendment does not deal with some of the practices that have undermined workers' rights, including their protective rights. The amendment deals specifically with the contracts workers are being forced to sign. They are being asked to sign away their rights and being encouraged to bypass the European directive and Irish law, otherwise they will not get the work that is front of them. The proposal is to change the conditionality that exists for the section 481 tax relief, that is, the certification that is required to be filled in and the additional conditionality included in that, which would mean that the companies that are trying to flaunt the law in Ireland by offering lesser conditions for workers in this field would not be able to continue to do so.

I was not able to speak on this amendment when Paschal Donohoe was before the committee. In rejecting the amendment in committee, he outlined that he did "not believe it is appropriate for legal rights to be linked to only one set of circumstances where a company avails of a tax credit". It is extraordinary that the Government would oppose an attempt to ensure that a basic requirement, compliance with the law, should be a condition for receiving tax relief and that Irish workers should not face worse conditions on an Irish State-supported film than co-workers from abroad. The amendment I have set out would ensure that certificates required for the section 481 tax relief could only be issued to qualifying companies that do not treat Irish performers any worse than their peers from other jurisdictions doing the same work, to companies which comply with copyright legislation and to companies which do not engage in the practice of so-called buy-out contracts.

Serious concerns have been raised by Irish Equity over contracts being drawn up by legal advisers at the request of certain producers which both agents and the artists are required to sign in order to get work with the excuse that particular clauses are required in the interests of legal certainty. These contracts appear to be worded in a manner that sets out to diminish the Copyright and Related Rights Act and the EU copyright directive. A performer cannot agree that a sum of money amounts to a proportionate remuneration without knowing what is proportionate in advance of revenue being earned. The aim of requiring such agreement is to protect any future claim and possibly also any contractual adjustments based on subsequent revenues, and this is contrary to Article 20 of the EU copyright directive. Building in buyouts as a norm for performers and creators undermines the directive.

Transparency mechanisms should also be agreed to adapt the remuneration to subsequent revenues and trigger revision of the initial contract when revenues are disproportionately higher than the remuneration initially agreed. Terms of use must be defined in order for the assessment of the projected revenues to be properly made. There are more questionable clauses contained in those contracts that demand that artists sign away their rights for a period of ten years' unlimited use for a fixed amount. This is a buyout contract and will not provide any structure that will allow equitable or proportionate revenue share going to those artists for the ongoing exploitation of their production and their contribution.

We have also been provided with a casting advice note for a television series which was being produced or is being produced here at present, a co-production in receipt of section 481 relief. The Irish producers are using the 2016 SPI Equity indigenous television agreement which, in fact, ran out in 2019 and as a result is no longer fit for purpose, nor is it compliant with current legislation. There is a wider issue of productions marketing themselves as Pact or Equity equivalent or claiming to be in line with the Equity rate without providing the appropriate contract. This is not the same as operating under an actual registered collective agreement such as the Pact-Equity agreement itself and that distinction matters. The casting advice note specifies that the contract would be for a ten-year worldwide licence. It states:

...the Company shall have the right to use Artist’s name, voice and likeness in connection with any merchandising relating to the Series and no royalties or other additional compensation shall be payable in connection therewith.

It goes on to state that:

No additional compensation if render services on a Related Production during the Dates of Engagement. If outside of Dates of Engagement, services shall be subject only to Artists prior professional commitments (notified to the Company in advance)(Artist shall use best endeavours to accommodate Company’s schedule). To maximise effectiveness of any Related Production (and, thus, the Series), Company is entitled to use extracts from the Series within any Related Production at no additional cost.

I will continue in my second contribution.

Ruairí Ó Murchú (Louth, Sinn Fein)
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Ar dtús guím ádh mór ar an Tánaiste ina phost nua. Dúirt an Teachta Ó Snodaigh an fhírinne gur post an-tábhachtach é.

I am speaking in support of Deputy Ó Snodaigh's amendment. I, Deputy Ó Snodaigh and a number of other Deputies, including Deputy Boyd Barrett, have spoken over many years about section 481. As positive as it has been in providing tax credits and ensuring we have a thriving film industry, there are particular issues with workers' rights and copyright. We believe we need to look after those who work to make films happen. We are talking about cast, crew and writers. Particularly when we are talking about writers and those who have been involved in the creative process, we need to ensure they are not forced into foregoing rights that they should have and they should not forego moneys and remuneration that should be due to them. I have made the case many times before and I will reiterate it.

We need to look at the whole sphere in relation to section 481. We all see the positives but we have all heard many cases of how people basically get employed. There have been many court cases over when an employer is not an employer. That is when it becomes a designated activity company, DAC. The whole idea is that the producers draw down the section 481 relief but then a DAC is formed and it exists for the period of the project. A particular issue relates to who can be chased down or held accountable about workers' rights. This is probably being rectified at this point in time through these court cases but I believe the State needs to make sure it steps in to ensure that workers' rights are upheld and that the working time directive and other workers' rights, which were hard fought for, are enforced when to a degree there is nobody to hold accountable to enforce them. That particular issue needs to be dealt with.

As others have, I have used the analogy of 1913 in the sense that this is a case where if somebody is to be employed, a head of department - I think that is the term - makes the call. Deputy Ó Snodaigh and I have had a number of meetings with those who have been aggrieved in relation to this. The idea is that the person who shouts too loud and looks for their rights too much will not get the phone call. The belief is that there is a serious issue with blackballing and that needs to be dealt with.

The whole idea with section 481 is that we have a thriving film industry that provides really good employment where people have their absolute rights. If we do not do that, we will have an issue with the product that is produced. There have also been complaints about the ratio of those who are in training to those who have a huge amount of experience. We have heard of instances where reshoots have had to be carried out, sometimes even abroad. Section 481 will always be worthwhile, but the State needs to ensure that we are getting a bang for our buck and that the film industry is protected. We cannot have a case of too many people taking too many shortcuts and actually undercutting the industry and undercutting the rights of workers in delivering this.

I would like to think that there would be a decent hearing of this amendment and that we would look at it as a possible solution - a small solution - in relation to the particular issues we are talking about. A wider conversation is needed and there is an absolute need to look at section 481 from the point of view of securing workers' rights and making sure we have a sustainable and thriving film industry that works for all involved into the future. I would have serious concerns. This issue has been brought up many times before and has not been resolved yet.

Simon Harris (Wicklow, Fine Gael)
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I thank the Deputies Ó Snodaigh and Ó Murchú for their good wishes. I acknowledge the input of Members of this House, including those I just mentioned, on matters concerning the audiovisual sector in recent years, including through the examination at the Committee on Budgetary Oversight.

My officials have directly engaged with all relevant representative bodies in the sector, including those representing crew, cast, and producers, to understand the issues affecting the audiovisual sector and to try to chart a pathway forward. The attention brought to issues in the sector by representative bodies, and by Members of this House, has contributed to real progress being achieved on many fronts. A key point for all of us to understand is there is a copyright directive on related legislation, which established overarching principles, in this case, the right to appropriate and proportional remuneration. The details of what exactly that entails, for example, the balance of remuneration between upfront daily rates and potential profit sharing post-release and differences between large and small productions need to be agreed between representative bodies in the industry with the overarching protection of the legislative proposals. In January 2025, an interim set of guidelines relating to copyright was agreed by a number of stakeholders in the sector in Ireland. This is a very welcome development and one I hope will lead to a permanent agreement in the sector. It is my understanding that stakeholders still continue to work proactively together and the group is working collectively on the next level of detail on the operations of the oversight committee, which will result in the implementation of these guidelines and a best practice approach to reporting. An Irish negotiated agreement, built upon the foundations already laid with the agreement of the interim set of guidelines is the best course for the sector to take.

Copyright law falls within the remit of the Department of the Enterprise, Tourism and Employment. Copyright is relevant for many workers in the film sector, whether they are authors, producers, broadcasters and performers, and there are complex legal issues involved. Deputies may be aware, from previous discussions in the House and during Committee Stage of this Bill, and what I just outlined a moment ago, that a process is under way to address these issues. An independent facilitator was retained by Screen Ireland in 2023 to meet with a group of key stakeholders to identify and understand issues relevant to the digital Single Market directive, referred to as the copyright directive. As a result of that we have gotten to the point in relation to interim best practice industry guidelines while they pursue a path towards a collective bargaining agreement. There are clear precedents for this form of progress in the sector. Deputies will be aware that there has been significant progress in the terms and conditions provided to film workers over the last number of years, including negotiated crew agreements for film and construction crew. For example, the construction crew agreement, in addition to setting pay rates, provides for the extension of coverage for pension, sick leave and other benefits to industry construction workers under the construction workers pension scheme. It also provided for the establishment of a joint monitoring structure that helps to ensure the agreement is appropriately implemented.

It is appropriate for legal rights to be linked only to one set of circumstances, and I know that is not what the Deputies are hoping to achieve. We should not link legal rights only to a situation where a company avails of a tax credit. It is very important to recognise that the laws that underpin copyright apply regardless of whether a company applies for section 481, and they must apply equally. A company cannot choose to disapply the provisions of the copyright directive just because it is not applying for an allowance under the section 481. I acknowledge the constructive way in which this was put forward. I also acknowledge the work in this House and by Members, including Deputy Ó Snodaigh, has been very helpful in this regard but I am informed that good progress is being made and I do want an Irish negotiated agreement. We will continue to monitor this closely.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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On the last point, in some ways I agree with the Minister that laws cannot be disapplied but the problem is the frustration for people when the law is being ignored. The point Deputy Ó Murchú was making is that one of the problems is that to avail of section 481, companies are set up, which then disappear, so the Minister does not have recourse to chase after them after the fact. When artists try to start a process - and the courts move very slowly - at that stage the production is completed and the vehicle that was set up to avail of section 481 has disappeared. It is quite clear.

Very few artists have the luxury of being able to challenge what is put in front of them. They are asked to sign away their rights, and I can quote contracts that artists have been asked to sign where they specifically state the artist acknowledges that the "fees payable herein constitute a complete buyout of all rights contemplated hereunder". That is a buyout and that is contrary to law, but artists are not going to be in a position if they want an income there and then or over the following couple of months to waive that because the contract I am referring to also states: "No artist can render on-camera services until the artist agreement has been signed by the artist". They are being held at ransom: "Sign this, or you will not work." That is not the type of industry we want.

I will come back to another point, which shows that there can be discrimination between people employed in England to work in Ireland and people who are contracted directly here.

Ruairí Ó Murchú (Louth, Sinn Fein)
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In fairness, Deputy Ó Snodaigh has synopsised well. A designated activity company is set up. It might be the same producer. Those involved may employ the same people for a number of years but they are seen as the employer and then they suddenly disappear. Therefore they cannot be held to account. I have outlined the particular issue is if somebody does try to raise a head of steam on issues that might pertain to the ratio or the work practices.

We want to make sure we have decent work practices and that we ensure the product delivered is good and ensures a sustainable film industry. We need to find a means of dealing with this. We cannot have a scenario of people being blackballed when just looking for the enforcement of their rights. Deputy Ó Snodaigh referred to disapplication. We are dealing with a scenario where there is no real application at this point in time. Again, there are disputes even regarding what agreements have been made in the industry and who has a right to make an agreement. That is for another day. Whatever happens with this amendment, we really need to deal with this particular issue. We need to make sure we have a sustainable film industry and that means we have to look after workers' rights. We need to make sure people are not being forced into scenarios where they are signing away their residuals. We are talking about rights and ensuring we have people who we want to see in the creative process. At this point in time I have real deep worries. We need to make sure we find the means of dealing with this. This is step in the right direction, but even if this is not supported by Government, we do need a long-term solution.

Simon Harris (Wicklow, Fine Gael)
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I thank the Deputies. We have a thriving audiovisual and film sector. Deputy Ó Snodaigh made that point. It is a good thing for our country, but at the same time we also want to make sure it is working well and working well for workers and that workers' rights are always to the fore. We have seen genuine progress in stakeholders engaging with the interim guidelines and I would like a full Irish negotiated agreement.

I understand why the Deputies are bringing this up, and they are quite right in bringing it up in the Finance Bill because of the application of section 481. However, the issues the Deputies are rightly highlighting relate to employment rights. We have taken a number of steps in previous Finance Acts to reinforce the importance of adhering to employment rights legislation, including the Finance Act 2018, which amended the certification process to require that an undertaking for compliance with all relevant employment legislation is signed, that a skills development plan for workers on the production submitted and agreed, and the certification process provides that the Minister for culture, after considering the application applying a set of tests may issue a cultural certificate as well. A lot of this also falls down to how we ensure that rights are upheld. Certainly, on the foot of this debate, I will send a copy of the transcript to the Ministers for Culture, Communications and Sport and Enterprise, Tourism and Employment because organisations in the State have a statutory obligation regarding employment legislation and workers' rights.

I acknowledge the point about when a production is finished, the company can disappear.

My understanding is that the DAC must stay in existence for at least 12 months after the end of the production. Valid issues have been raised. I do not wish to link the issue of legal and employment rights to the application of section 481 of a Finance Act, but I do not dismiss the points the Deputy has made and I will undertake to carry out the actions I have set out.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I hear the reluctance, which has been there all along, to add conditionality to section 481. There is an acknowledgement of changes in a flourishing industry. We need to make sure that while it flourishes the message goes out from here, from the Government and from Revenue that any attempts to mislead will not be tolerated in any shape or form. This applies to only one or two companies, but it seems to be a habit to try to bypass the EU copyright directive in any way or force artists to waive their hard won rights or to waive their rights to income because a lot of this concerns residuals. If a film is successful, money comes back from it being shown over and over again. Artists have residual rights to their own work. The EU directive sets out in black and white that performers have a right to equitable remuneration which cannot be waived. That is the intention of the amendment. The contracts I quoted very clearly demanded the waiving of those rights. At least this issue has been given a hearing. If it continues in the way it is going, we will be back to this again next year if there has been no movement. We will deal with this again if Equity and other representatives of performers are able to show us that artists are being asked to work under worse conditions than those employed on the same production in England and who have the rights that pertain in England rather than those which pertain here. That means they work under lesser conditions. I am glad we have had the debate and I welcome the commitments the Minister has given.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 26:

In page 86, between lines 35 and 36, to insert the following:

“Report on taxation of bailed-out banks

50. The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on the amount of tax revenue lost as a result of bailed-out banks facing no restriction on their ability to off-set corporation taxes using historic losses related to the crash and making specific reference to the number of years the bailed-out banks will be able to avoid tax into the future as a result of these deferred tax assets.”.

This amendment relates to the fact that the banks in the State pay little or no tax as a result of a measure introduced by Fine Gael a number of years ago. As the Minister may recall, during the financial crisis, the Minister for Finance at the time, Brian Lenihan, introduced, through the NAMA Act, a measure that would ensure that banks would only be allowed to carry forward 50% of their losses, recognising, as he did at that time, that despite the fact the banks were about to incur tens of billions of euro in losses they would some day be profitable. I think it was in the Seanad he said at the time that as soon as the banks were profitable they should pay tax to the Irish taxpayer. We know that was the case for a number of years. The Fine Gael and Labour Government changed the rules to allow them to carry forward 100% of their losses. The Minister may say that is what happens with all normal companies in the State. That is fine, but these are not normal companies. These are companies that only exist today because the taxpayer was forced to rescue them at that time and the Minister for Finance made it very clear in legislation that they should be treated differently and only allowed to carry forward 50% of their losses.

In terms of what we allow in respect of carrying losses forward, we are out of kilter with competitors across the OECD. In some cases, there is a limit whereby companies can carry losses forward for ten years or cannot carry forward 100% of the losses all of the time. We do both. We allow for an undefined period of time. Companies can carry forward losses for eternity if the losses are there. We also allow them to carry forward 100% of losses.

It is a wider point, but the reality is, as I mentioned, that banks in the State such as AIB and Bank of Ireland made €5 billion in profits between them last year and did not pay any tax to the State on that level of profit. That is absolutely appalling. Much of the profit being made is being made as a result of the interest rate environment and is off the back of the fact that they charge higher mortgage interest rates than our European competitors or the EU average. It is because people are being fleeced as a result of bank charges and so on.

To add insult to injury, banks are not paying tax on that level of profit, which is not acceptable. I ask the Minister to provide clarity on the situation with AIB. We know Bank of Ireland will be able to carry forward losses for another three years until the end of 2028. It is likely that it will not be 2029 or the following year until Bank of Ireland is paying taxes because its losses can be carried forward. That is two decades after the crash.

Permanent TSB is worse. It will be able to carry forward losses for another 12 years. It will be 2037 before Permanent TSB will have to start paying tax. I do not have the figure for AIB. Perhaps the Minister will enlighten us as to how long he will allow AIB to not pay taxes in the State.

Thomas Gould (Cork North-Central, Sinn Fein)
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I remember the financial crisis and the destruction that came. People lost businesses and homes. Some lost everything. There were marriage breakups. In some tragic cases, people died by suicide as a result of the financial crash. Fast forward to 2025 and the banks are making vast profits. Where is the fairness? Where is the justice? The people at the heart of the financial crash who were bailed out by the State – every man, woman and child bailed out the banks – are allowed to write off 100% of their losses until they run out of losses for which they can claim. Ordinary people could not do that.

In 2009, Phil Hogan was the Minister for housing and €1.6 billion was given to local authorities in central Government funding. In this budget, €670 million is being given, almost €1 billion less than in 2008 and 2009. The Minister will ask what this has to do with anything. I will tell him. People in every local authority area in the State are living in apartments and houses with windows that leak, doors that do not close properly, mould, damp and leaks. People are living in cold houses. Rents in Dublin increased this week.

The Minister will ask how this is related. If we collected tax from the banks, we would be able to give local authorities the funding they need so that people would not live in cold and damp houses. We would be able to give people money for energy credits so that they could keep the heating on this winter. When people ask what this has to do with anything, it has to do with everything because if the banks paid tax on the profits they are making it would fund energy credits and there would be no need for students to have to pay an extra €500. The Government may have been able to deliver childcare at a cost of €200 per week in the budget, a commitment it gave. By allowing the banks to claim 100% on their losses, we are denying people in this State money which is badly needed.

I hold a clinic every Monday. Originally when I started it was 12.50 p.m. and now it is 1.50 p.m. and stretches to 3 p.m. I spend the whole of Monday dealing with people. A major issue outside of housing is housing maintenance.

There are people living in substandard accommodation. I know volunteers who fix up people's houses because local authorities' staff were slashed during the austerity years and they do not have the funding to put into accommodation.

Local authorities get blamed for a lot but this is about choices. The Government chose to give the banks tax breaks. A choice was made not to tax them properly on their profits. That means ordinary men and women, who are struggling with the cost-of-living crisis arising from Government decisions, very like other decisions that were made earlier in regard to developers and banks, have to pay. People ask what is the difference. The difference is we are standing here wanting equality. We want the banks to pay their fair share. Is that too much to ask? Is it too much to ask the Tánaiste and Minister for Finance that the banks pay their fair share? If ordinary men and women must pay their fair share, why should the banks not have to do so? We could use that money in so many good ways that would help people. It is about quality of life. The Government's choices are negatively impacting on people's quality of life. I ask the Tánaiste to reconsider.

Simon Harris (Wicklow, Fine Gael)
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The restriction on the amount of loss relief available to NAMA-participating institutions, which was introduced by the National Asset Management Agency Act 2009, as Deputy Doherty correctly recalls, limited the offset of losses carried forward to a maximum of 50% of the trading profits for each accounting period. The cap only affected the timing of the relief; it did not affect the overall quantum of relief, with restricted losses in any given year being carried forward to subsequent years. The only remaining NAMA-participating banks are Bank of Ireland and AIB. As tax losses forward are included as a deferred tax asset on a company's balance sheet, this restriction meant those assets would have stayed on the bank's balance sheets for longer.

When the restriction was introduced in 2009, the Government had limited involvement in the banking system. However, by the introduction of the Finance Bill 2013, the State had acquired substantial shareholdings in the banking sector, specifically, 99.8% of AIB and 15% of Bank of Ireland. Furthermore, as a result of the EU's capital requirements directive, CRD, IV rules, deferred tax assets in respect of trading losses were no longer to be considered core tier 1 capital. Taking these factors into account, the restriction no longer served its original purpose and, indeed, worked against the Irish taxpayer. It created the risk that the accounting value of these tax losses could be reduced on foot of auditor recommendations, which would impact negatively on the State's equity investments. It increased the risk the State might have had to put more capital into one or more of the participating institutions as a result. That was the advice available to the Government of the day. The repeal of the loss restriction shortened the timeframe over which the losses were likely to be used and greatly reduced the deduction from capital required under CRD IV. It put the institutions in a stronger position when being assessed by regulators and investors and reduced the risk of a future requirement for State support.

Deputy Doherty asked a specific question about the length of time for which AIB intended to utilise the losses. The information available to me, according to the most recent financial statements for the year ending 31 December 2024, is that Bank of Ireland projected it to be utilised in full by the end of 2028, Permanent TSB in approximately 12 years and AIB in less than ten years. However, it should be noted that this is tied to growth and a decrease in growth will result in the utilisation period increasing by approximately one year. That is the latest information available to me.

As Deputies are aware, corporation tax relief is a long-standing feature of the Irish corporate tax system. It is a standard feature of corporation tax systems in most OECD countries. It recognises that a business cycle runs over several years and beyond and that tax income earned in one year will not allow relief for losses incurred in another. In 2018, officials from my Department produced a detailed technical note for the then Committee on Finance, Public Expenditure and Reform, and Taoiseach on the subject of both bank losses and corporation tax losses more generally. The technical note considered in some detail the potential implications of restricting the use of losses carried forward or the introduction of a specific time limit on loss relief as they might apply to Irish banks, the wider banking sector or, indeed, the corporate sector as a whole. Among other considerations, it examined the possible effect of such a restriction on consumers, with the probability that an increased cost base for the banks would be passed on to consumers in the form of higher fees and interest rates on loans or lower deposit rates. It also considered potential effects on competition within the banking sector in Ireland, which is a factor of increasing relevance as banks have since left the Irish market. The paper also noted potential negative consequences for capital levels in the banks, with possible resulting regulatory impacts.

In the case of the banks, it is also important to acknowledge that the value of these tax losses to the State has been and will continue to be realised through share sales. The banks' share prices recognise a certain value for the tax losses and, as such, the State receives value for the balance of tax losses if share sales are completed. As we all know, the State retains approximately a 57.5% shareholding in Permanent TSB.

Reference was made to what other countries do. While other jurisdictions may have restrictions on loss relief, direct comparisons are of limited value. This is due to the tax system in Ireland being a scheduler system of taxation in which income and gains are divided into different categories based on resource. Under this system, losses carried forward can only be used against profits from the same source. In many other jurisdictions, the tax system allows losses carried forward to be used to produce taxable income from other income sources. Therefore, Ireland's loss relief system includes features that are more restrictive than in other countries, notwithstanding that we do not have a cap or a sunset clause.

I say all this in full acknowledgement that this was an extraordinarily painful time in our country for which many people - in fact, almost every person in every community in the country - paid a heavy price. Deputy Gould is right to remind us of the human cost and consequences of the failures of our banks in the past. The decisions made by Governments at that time, with the Deputy referencing from 2013 onwards, were guided by the best advice available, which was given to Governments by the Department of Finance and others, in terms of how to endeavour to provide some degree of protection to the taxpayer in what was a most horrifically difficult period.

Pearse Doherty (Donegal, Sinn Fein)
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I intend to press this amendment. I do not dispute the history the Tánaiste outlined. The issue of capitalisation of the banks or the State having to provide additional capital, which was the excuse used at the time, does not pertain any more. The paper he referenced is a number of years old. The idea in it was about dividends to the State as a result of our shareholding and also recognising asset value. There is no asset value to be recognised now in AIB or Bank of Ireland. We do not get any dividends from them and the State is about to disengage entirely from Permanent TSB as well.

This is about ensuring banks that are absolutely creaming it off the back of the Irish public and making €5 billion in profits pay a portion of tax. It is reverting back to what the late Brian Lenihan proposed, which was that as soon as they were profitable, they should be paying tax. It is unbelievable that there will be no tax paid. I understand how it works; if it is 50%, they will have the deferred assets for longer, but the fact is there will be no tax. We would be looking at AIB, 25 or 26 years on from the financial crisis, still not paying a cent in taxes, while making billions of euro in profits every year. It is ridiculous.

Thomas Gould (Cork North-Central, Sinn Fein)
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The question is whether what is happening is fair. I do not think it is. At this stage, after all these years, the Government cannot stand over what is being done. It is wrong.

Simon Harris (Wicklow, Fine Gael)
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The advice available to me is that the proposed amendment would possibly have a negative effect on consumers. I accept that is not Deputy Doherty's intent but there is the probability of an increased cost base for the banks, which would be passed on to consumers in the form of higher fees and interest rates on loans or lower deposit rates. Therefore, our view, as per the advice available to me, is that the effect of this, albeit inadvertent, would be negative for consumers in Ireland. That is not something I want to do.

Pearse Doherty (Donegal, Sinn Fein)
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That is the most ridiculous comment. I presume the Tánaiste was handed it in good faith but it was obviously provided by bankers or people sympathetic to them.

Simon Harris (Wicklow, Fine Gael)
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That is not true.

Pearse Doherty (Donegal, Sinn Fein)
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Let me finish.

Mairéad Farrell (Galway West, Sinn Fein)
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This is not an over-and-back exchange. Remarks should be addressed through the Chair. Please continue, an Teachta Doherty.

Pearse Doherty (Donegal, Sinn Fein)
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If I may finish, it is obvious the advice was given to the Tánaiste by bankers or somebody who is sympathetic to their situation. What does it translate to? If we ask banks to pay corporation tax on their €5 billion profit, they will increase the charges on Irish people. That is what the Tánaiste is saying. It is why the Government does not want to do anything and will allow the banks not to pay tax for another decade in some cases. That is the threat.

God forbid we ask banks that are making €5 billion profit to pay the appropriate level of tax that everyone else pays. Indeed, under this measure, they would still be able to reduce their tax significantly because they would be able to carry 50% of their losses forward. It is just unbelievable that this has happened. The Government will not do it to banks, but it will put up the price for ordinary people. Motorists will have to pay more for home heating oil, petrol, diesel and the local property tax. They will have to pay more for bloody everything but when it comes to banks that are making €5 billion profit, the excuse the Minister for Finance is using to not do what I and Sinn Féin are asking is that he is protecting the public. He is not protecting the banks but, rather, the public - wink wink, nod nod. That is why he is allowing these two banks that make €5 billon profit to pay no tax. Some banks will not pay any tax for another ten years. Honest to God, Waterford WhispersNews would not have a look in.

Mairéad Farrell (Galway West, Sinn Fein)
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I apologise but there is a way that this is done. The Minister will have another chance to come in on another amendment.

Mairéad Farrell (Galway West, Sinn Fein)
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Amendment No. 27 has been ruled out of order.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 28:

In page 91, between lines 1 and 2, to insert the following: “Report on legislated increase to rates of Mineral Oil Tax

53. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the legislated increase to rates of mineral oil tax, including an analysis of the distributional impact.”.

I have raised and referenced over and over again the issue of the continued increases in the carbon tax by this Government on petrol, diesel and home heating oil. This week, we see that the cost of a fill of home heating oil has gone up by €80 as a result of external factors, but that does not take away from the fact that the Government has been instrumental in pushing up the cost of a fill of home heating oil by a significant amount, €220, in terms of carbon tax so far. Worse than that, the Government plans over the next five years to increase the cost of a fill of home heating oil by another €150.

I have made the point that there are two ways to bring taxes in. Taxes are brought in either to raise revenue for the State to provide services that are required by its population and people or to affect behavioural change. Alternatively, they can be brought in for behavioural change, which is absolutely valid. I have agreed with it on different occasions in different areas, such as the sugar-sweetened drinks levy or the plastic bag levy. There are examples where it can work and all the rest. Increasing carbon tax on home heating oil, however, just makes homes and households poorer. That is the reality of it. That is the effect of it at this point in time because people do not have the resources to provide the alternative types of heating that are required. That is the reality.

We also see it when it comes to petrol and diesel. I come from and represent a Border county. It has been pointed out by Fuels for Ireland and others that the difference between the cost of a fill of home heating oil in Lifford compared with Strabane is €300. It is mad. What makes that difference? All the same global factors that are pushing up home heating oil prices, such as the war in Ukraine and the illegal invasion by Russia, are also pushing prices up in Strabane. The reason there is a €300 difference is that Fianna Fáil and Fine Gael have decided to increase taxes significantly on the cost of trying to keep your house warm. In my county, two thirds of people rely on home heating oil to keep their house warm in winter. Across the west of Ireland in counties like Galway, Roscommon, Mayo and Leitrim, two thirds of people - over 1 million households across this State - are being penalised as a result of the Government’s measures.

We see increases over and over again, not only with home heating oil but also with petrol and diesel. It could be argued that it is about trying to get people into electric vehicles, as if everyone has €40,000 or €50,000 to spend on a new electric vehicle, even if the infrastructure were there for them in areas. For those who can afford it and make that change, it is excellent. The Government is way off its targets in this regard, however. It is aiming for 1 million new electric vehicles by the end of 2030. I could be wrong on this because I have not really looked in detail at the figures but probably every single car in the State, from now until then, would have to be an electric vehicle for us to actually meet that target. It is so far off. The reality is that people do not have that type of money to make that type of investment.

We have seen petrol prices sky-rocket during the illegal invasion of Ukraine. They went up to €2.20 per litre and measures were introduced by the Government that brought them down below €2. It did not force people to stay at home, go off the road and all the rest, however. Indeed, the number of cars on the roads is actually increasing. This experiment happened in the last couple of years. Again, behavioural taxes work if alternatives are available and affordable to individuals. This is putting the cart before the horse.

I call this the Healy-Rae amendment. I was telling Deputy Danny Healy-Rae that he was going to be the star of the show in relation to this. Maybe he will come into the Chamber, wherever he is. This is the Healy-Rae amendment because, by God, the Healy-Raes gave it hammer and tongs on the issue of petrol and diesel. I must say, if awards were going – Miriam Lord gives out awards every year - the “brass neck award” has to go to Deputy Danny Healy-Rae. Did the Minister hear him on the Order of Business today? He stood up and asked the Taoiseach whether there was any chance he could do something about the cost of petrol and diesel, as well as the carbon tax and all the rest of it. Just this week, he voted against measures from Sinn Féin that would actually reduce carbon tax. I am sure he will trot out later not knowing what is happening and vote again with and in support of the Government, as his brother, the Minister of State, Deputy Michael Healy-Rae, will do. They will vote to put up the price of petrol and diesel on farmers, motorists and commuters in County Kerry and elsewhere because that is the reality of them. They got their 30 pieces of silver and they have sold their soul and abandoned any integrity they had on this issue. I will press the Healy-Rae amendment tonight.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am very pleased that Deputy Doherty has put down this amendment because it will give those Deputies whom I hear in my constituency and right across the constituencies, particularly rural ones, regularly talking about the unfairness of carbon tax and the lunacy of increasing the price of petrol, diesel and home heating oil at a time when people are at the pin of their collar.

My fundamental difficulty with carbon tax is that it does not work. It does not bring people to alternatives because for many of them, the alternatives do not exist. For people who live where I live and work anywhere beyond walking distance, they have no choice but to use their car. If they are lucky enough to work in Dublin city centre in a nine-to-five job, they can drive into the nearest town and get a bus to and from work, but God forbid they work the nightshift in a hospital because there is no public transport available to them and they have to drive to Dublin. If they work anywhere other than the artery from Letterkenny and Derry to Dublin, there is no public transport available for them at all. They have no choice but to use their car. That is also the case if their children are taking part in any after-school activity, if they have a hospital or health appointment or if they want to go to watch their local football team play in game, usually home or away. They have no choice.

What is the alternative? It may be to purchase an electric car, but most of the people I represent do not have the funds to purchase one. The car is not a luxury or something they can just decide to leave at home. Rather, it is an essential part of their life. It is the exact same as a light switch in their home and the water coming out of their tap. It is something they need in order to run their family. What are we, as legislators, doing in this House? We are making their lives more difficult. Carbon tax does not help the environment; it makes people’s lives harder. Increasing it at this time is absolute folly and cannot be justified by anyone.

For the past five years before the last election, Fianna Fáil and Fine Gael representatives in my county and right across the place were saying it was those dastardly Greens who were forcing them to do it. They said they were in government with them and that they were insisting on carbon tax increases every year. During debates like this every single year, you could hardly hear yourself with Deputies Michael and Danny Healy-Rae and the Rural Independents slamming the Green Party for forcing poor Fianna Fáil and Fine Gael to make people’s lives harder.

12 o’clock

The Green Party was given its answer by the electorate and Fianna Fáil and Fine Gael can no longer hide behind its skirts. Tonight, Fianna Fáil, Fine Gael and Independent TDs will have an opportunity to say whose side they are on. Are they on the side of making people's lives harder or on the side of making people's lives just a little more tolerable by not increasing the essential cost of using their car each day to go to work, drive their children to school or whatever the case may be? We will find out fairly soon. There will be an opportunity for people to put their money, and their vote, where their mouths have been for the past five years or more.

I know what the Tánaiste will say in his response. He will say the carbon tax funding is ring-fenced and kept aside to support vulnerable people through hardship schemes and other social welfare benefits. He is actually going to tell lies and mistruths. He is going to repeat the mistruth-----

David Maxwell (Cavan-Monaghan, Fine Gael)
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Deputy Carthy should withdraw that comment.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I will rephrase it. He is going to say, in the same way many representatives in this House say, that, in fact, the money from the carbon tax is used to support farmers under environmental schemes.

Mary Butler (Waterford, Fianna Fail)
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Deputy Carthy is Mystic Meg.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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What is not said is that the Government agreed at an EU level to a multi-annual financial framework that actually fleeced farmers. Whatever funding is reimbursed through the carbon tax, and I contend it is very little, does not make up for the shortfall. We do not have a good rural environment protection scheme, REPS, like we had in the past. We have an agri-climate rural environment scheme, ACRES, that farmers find very difficult to enter and, if they do get in, find it very difficult to receive payments. The Tánaiste should not give us the folly that the carbon tax pays for the fuel allowance and other supports. Those supports should and could be in place without increasing the carbon tax this year. The carbon tax is supposed to be an environmental tax but it does not work because the alternatives are not there.

I say categorically that no person who represents a constituency, knowing their constituents are finding it very difficult to meet the cost of groceries, energy and virtually every single thing, on the back of a budget from which those people who are struggling got no support, can stand over the fact those working families not on social welfare and who are not mega-wealthy developers got nothing-----

Mary Butler (Waterford, Fianna Fail)
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That is not true.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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They got nothing in tax, energy credits or any other supports. They got nothing. Members opposite voted for a budget that gave them nothing. Worse than that, they are about to vote to make their cost of driving to work even more expensive.

I commend Deputy Doherty on tabling this amendment. I absolutely look forward to the people of Ireland seeing how their Teachtaí Dála vote. They are the messengers of the people but the question is whether they have actually heard the message from the people that they cannot take any more burden.

Simon Harris (Wicklow, Fine Gael)
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The Deputy presumed to deliver my lines. Let me have a go at responding to him. First, as we have discussed, and I understand and acknowledge that this is how the rules of the House work, nobody is about to vote on anything other than an amendment to have a report on mineral oil tax. We need to be honest about the effect of this. No matter what way anybody votes, this is an amendment to request a report on mineral oil tax. It will not help anybody tomorrow in Cavan-Monaghan or elsewhere across the country.

Mineral oil tax comprises a non-carbon and a carbon component, commonly referred to as the carbon tax. Legislation passed by this House provides for multi-annual increases to the carbon component of the mineral oil tax. I assume the Deputies are requesting a report on legislated increases in the carbon tax, including a distributional impact analysis of same. As they will be aware, the programme for Government committed to continue with the planned carbon tax increases, aligning with recommendations from the Climate Change Advisory Council and scientific experts, and to use the resulting revenues raised to support climate action measures and ensure the most vulnerable benefit from those measures and are protected from unintended impacts of the tax increase. This includes funding for retrofitting but also agri-environmental schemes, alongside targeted social welfare and other initiatives to prevent fuel poverty and ensure a just transition. These measures are designed to be progressive.

To give effect to the programme for Government commitment to protect the vulnerable, a targeted package of social protection interventions has been developed. This was informed by ESRI research that was commissioned to address this specific issue. The allocation from within agreed expenditure allocations for 2026 is more than €1.1 billion, which is an additional €163 million on the previous budget. A total of €350 million of this is allocated to targeted social protection interventions.

The Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation issues an annual publication on budget day entitled The Use of Carbon Tax Funds. This contains further detail on these allocations and includes information on the programmes funded from carbon tax revenues. Analysis undertaken using SWITCH, the ESRI's tax and benefit model, to simulate the impact of the carbon tax increase and the compensatory welfare package, estimates that the net impact of the combined measures is progressive. Half of households are better off due to the measures part-funded by additional carbon tax funds, with households in the bottom four income deciles benefiting the most.

Furthermore, as part of budget 2026, my Department published the Beyond GDP - Quality of Life Assessment report. This publication complements economic and fiscal analyses with an assessment of qualify-of-life indicators. The report looks at a wider set of indicators that contribute to well-being, such as environmental, income and wealth distribution, and equality indicators and documents, to see how Ireland is performing in these areas. The taxation of fossil fuel products was also recently examined in the tax strategy group paper, Energy, Environmental and Vehicle Tax, published by the Department of Finance in July. All budget day publications and tax strategy group papers are publicly available. Therefore, I believe there are sufficient reports available in this area and there is no need for an additional report.

As my colleague, the Chief Whip, pointed out, there are lots of benefits in this budget for people and families right across the country. Deputies opposite seem to find that funny but I do not think it is funny at all; it is important.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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If we do not laugh, we will cry.

Simon Harris (Wicklow, Fine Gael)
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It is about the record level of funding for disability and health services, making sure we were able to increase the State pension and ensuring more people qualify for the carer's allowance. People in the Deputies' constituencies benefit from those measures.

Simon Harris (Wicklow, Fine Gael)
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No matter how much they wish to reduce the budget to a conversation simply about one element of economic policy in terms of the cost of living, every measure in the budget, right across Departments, is about trying to help people in this country. Indeed, there are many measures in areas Deputies highlighted and where they asked for increased spending. They have seen today, with the publication of the national development plan and revised plans for transport. Tomorrow, in regard to childcare, which the Deputies regularly raise with me, I look forward to seeing very significant capital investment in State-led childcare funding, and more disability capital funding as well.

Pearse Doherty (Donegal, Sinn Fein)
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Do not get me started on disability services. The Government is breaking the law every day.

Simon Harris (Wicklow, Fine Gael)
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As Deputies would expect, I reject how they frame our budget.

Pearse Doherty (Donegal, Sinn Fein)
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I will press the amendment.

Verona Murphy (Wexford, Independent)
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This debate is due to end at 12.28 a.m. We will probably get to discuss one more amendment. I suggest that it would probably be safer for Deputies to stay and that we move into the voting block from here.

Amendments Nos. 29 and 30 are out of order.

Simon Harris (Wicklow, Fine Gael)
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I move amendment No. 31:

In page 97, to delete lines 36 and 37, and in page 98, to delete lines 1 to 19 and substitute the following:

“ “Supply and construction of housing as part of a social policy.

9B. (1) In this paragraph—

‘apartment block’ means a multi-storey building that comprises, or will comprise, not less than 3 apartments with grouped or common access;

‘completed’ has the same meaning as it has in section 94.

(2) The supply of immovable goods, as part of a social policy, which are or, when completed, will be—

(a) one or more than one apartment, used or to be used for residential purposes, in an apartment block, or

(b) an apartment block, used or to be used for residential purposes, but excluding any part of the apartment block that is not used or to be used for residential purposes.

(3) Services consisting of the development, until completed, of immovable goods to which subparagraph (2) applies.”,

(ii) in Part 3, by the substitution of the following paragraph for paragraph 14 (amended by subsection (1)(b)(ii)):

“Housing.

14. The supply of immovable goods used or to be used for residential purposes, other than immovable goods to which paragraph 9A or 9B(2), as the case may be, applies.”,”.

As I noted earlier, this section which was amended on Committee Stage provides for a temporary 9% rate of VAT in respect of the supply and construction of apartments and apartment blocks, as per our social policy. The temporary 9% rate of VAT on the supply of apartments came into effect on budget night, but the extension to the construction of apartments and supply and construction of apartment blocks, including student accommodation, came into effect today. The 9% rate will apply until 31 December 2030.

The VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law is required to comply. In general, the EU VAT directive provides that all goods and services are liable to VAT at the standard rate, which, in Ireland is currently 23%, unless they come within provisions that permit the application of a lower rate. Under the EU VAT directive, member states may apply a reduced rate to the supply and construction of housing as part of a social policy. Ireland has currently two reduced rates – 13.5% and 9%. In order to stimulate the development of apartments, which is high-density housing, it has been decided, on social policy grounds, to apply the second reduced rate of 9% to the supply and construction of apartments and apartment blocks.

The legislation around VAT and property is complex. As such, I am bringing forward some further amendments to this section to ensure that the text is in line with VAT legislation and that it achieves the policy intention of the measure. It should be noted that the amendments brought forward on Committee and Report Stages do not increase the estimated cost of the measures because the changes do remain in line with the original policy intention. As data on actual sales of apartments is received, the Estimates may be revised over the coming years. My officials will continue to monitor the relevant data as it becomes available.

Affordability and the chance to own a home lie at the heart of our housing policy. The Government has introduced a comprehensive implementation strategy, which is in place to support the various affordable housing schemes now being delivered by a range of partners. A record €6 billion capital investment in housing was announced in budget 2025. This is made up of €3.1 billion in Exchequer funding, €1.25 billion allocated to the Land Development Agency and €1.65 billion for the Housing Finance Agency. This is the highest ever capital investment in the history of our country. In order to meet the housing needs of our people, however, there needs to be private sector involvement too. Private sector involvement is not a dirty phrase. It is important as we seek to increase the supply of homes right across this country. That is what this VAT measure does. It endeavours to reduce the viability gap that those who build apartments face when considering whether to advance projects across the country that have planning permission but where the sale of apartments may not have been deemed viable. That simply is what this is about.

Over the course of the past number of days we have taken measures to ensure that this reduced VAT rate applies to student accommodation, an issue that I know is very important to the Minister for further and higher education, making sure that the lower rate of VAT will also apply to purpose-built student accommodation and to approved housing bodies. This measure, which is consistently and constantly misrepresented by others, will actually have a benefit for people building social and affordable homes and student accommodation.

We have also made a change in the resolution that came before the House yesterday - obviously, it is linked to these VAT amendments - to make sure that the help to buy scheme can continue to be accessed by first-time buyers who are purchasing apartments that have been built at the lower rate. This measure cannot be seen in isolation. It is one of a number of measures we are taking to reduce the viability gap. While we are living through a housing emergency and while many measures to address that are being taken to address by the Minister for housing, Deputy Browne, and all of Government, it is worth noting that we have seen the highest number of first-time home buyers this year since 2007. This latest measure needs to be seen as part of the overall policy jigsaw that has been put together to significantly increase supply. I commend the amendment to the House.

Pearse Doherty (Donegal, Sinn Fein)
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I am glad the Tánaiste has changed his tune and stated that this is a viability measure, because he started off this evening by saying-----

Simon Harris (Wicklow, Fine Gael)
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No, I did not.

Pearse Doherty (Donegal, Sinn Fein)
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-----that this was to reduce-----

Cormac Devlin (Dún Laoghaire, Fianna Fail)
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No, he did not.

Simon Harris (Wicklow, Fine Gael)
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Read the transcript.

Pearse Doherty (Donegal, Sinn Fein)
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The record of the House will show it, folks.

Pearse Doherty (Donegal, Sinn Fein)
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I wrote it down because it was so laughable. The Tánaiste stated that this is about "reducing the cost of building apartments".

Simon Harris (Wicklow, Fine Gael)
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It does reduce the cost of apartments.

Pearse Doherty (Donegal, Sinn Fein)
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It was only when we pointed out that Paschal Donohoe made it very clear that this is not about affordability or reducing the cost of apartments-----

Simon Harris (Wicklow, Fine Gael)
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It does reduce the cost of apartments.

Pearse Doherty (Donegal, Sinn Fein)
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I cannot hear the Tánaiste.

Simon Harris (Wicklow, Fine Gael)
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It does reduce the cost of constructing apartments.

Pearse Doherty (Donegal, Sinn Fein)
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This was not about reducing the cost of apartments. This was about so-called viability.

Maybe this time next year the Tánaiste will be able to show me one apartment that is going to be sold, either in this city or anywhere else in the State, that was not viable at this point. This measure is going to cost us €250 million next year. Every apartment that is going to be sold next year - in the context of a measure that will cost €250 million - is already under construction. This is the biggest tax deadweight measure ever introduced.

Deputies:

Hear, hear.

Pearse Doherty (Donegal, Sinn Fein)
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One hundred per cent of it is going to developers who are already building these properties. Apartments that were sold last week benefited from this. The Tánaiste told us that this has already cost us €20 million since it was introduced on budget night. This is about filling the pockets of developers. It is doing what Fianna Fáil and Fine Gael do. At the same time, those in government have shafted ordinary people during a cost-of-living crisis. Shame on them all.

Deputies:

Hear, hear.

Verona Murphy (Wexford, Independent)
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The-----

Simon Harris (Wicklow, Fine Gael)
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The 15th report.

Verona Murphy (Wexford, Independent)
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-----the time permitted for this debate-----

Verona Murphy (Wexford, Independent)
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Excuse me, sorry.

Verona Murphy (Wexford, Independent)
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I ask for decorum, please. It is very late. The time permitted for this debate having expired, I am required to put the following question in accordance with an order of the Dáil of 25 November: "That the amendments set down by the Minister for Finance and not disposed of are hereby made to the Bill; Fourth Stage is hereby completed; and the Bill is hereby passed." Is that agreed?

Pearse Doherty (Donegal, Sinn Fein)
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No.

Verona Murphy (Wexford, Independent)
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This Bill, which is certified to be a money Bill in accordance with Article 22.2.1° of the Constitution, will be sent to the Seanad.