Michael D'Arcy (Fine Gael) | Oireachtas source

I welcome the Minister of State to the House. Listening to Senator MacSharry, it is somewhat akin to picking a football team in that no one would pick the same team or the same slew of cuts and expenditure changes. However, one point that gets lost on each budget day concerns the actual headline figures. According to the explanatory booklet from the Department of Finance, the deficit for this calendar year is €12 billion. In other words, we will have spent €1 billion more each month then we have taken in. The deficit for next year will be €9.8 billion or 5.8%. These are the real figures and they simply cannot be ignored regardless of one's desire to so do or whether the troika is present. That is completely irrelevant because even if the troika is not present, the markets will be. According to the budget for 2014, the State next year will collect €42 billion in revenue and as I stated a moment ago, will spend more than €51 billion. If one considers the tax items, the biggest category is income tax at almost €17 billion, which is coming from those were working. The next biggest tax item is VAT at €11 billion, which comes from everyone. Excise duty will raise €4.8 billion and then corporation tax will yield €4.4 billion. The latter, in conjunction with income tax, VAT and the excise duty, make up €38 billion of the €42 billion that will be collected. Those four large big-ticket items alone will do so and this simply cannot be ignored. On the expenditure side, the two biggest areas of expenditure are social welfare and health. Again, there are no circumstances in which those areas can be left to spend such quantities of money without being affected. However, the other figure that has been left out to an extent in today's conversation is the interest on the national debt, which is projected to be almost €9 billion for 2014. It is an absolutely huge amount, which is approaching what is being collected in VAT and is more than is being collected in excise duty and corporation tax. This is the reality of our current position. As to how we got there and while I am not trying to be political about this, in 2010, the previous Government ran a deficit of 30%. A banana republic would not run a deficit of 30% and the comparative analysis of the Fiscal Advisory Council of the position before the crash and our present status shows that each citizen of this country now owes more than €30,000 more than was the case in 2008. This does not include what was owed at that time but amounts to an additional €30,000 per head.

Specifically within the budget, I greatly welcome the retention of the 9% VAT rate for the hospitality sector. However, I have a concern in this regard and as the Minister of State is aware, I always raise such concerns. In this case, Senator Darragh O'Brien also voiced this concern at the time of the rate's introduction.

The 0.6% levy on the pensions sector paid for the retention of the 9% VAT rate, and that was agreed. It was agreed that it would conclude in 2014 but there appears to be some confusion about that. There is a 0.15% levy from 2015 but a concern I have is that a temporary tax measure becomes a permanent tax measure on far too many occasions. The 0.6% levy will end in 2015 but it will be at 0.6% plus 0.15% for 2014. If that is the case, that is not a clever way of doing this business. We were itemised worldwide. We were one of the few countries ever to put our hands into the pension pot and take money out. I have a concern about that and I hope the Minister of State will address it for me.

I welcome that the Minister will do the analysis in terms of the agrifood sector because it is an area that is jobs rich, in particular in the dairy sector. The arable sector is not as jobs rich as it once was because the machinery is so capable of getting over ground but the dairy sector is an area that is labour intensive. I am hopeful that we can channel the funds towards where the jobs are located in the agrisector.

The home renovation tax incentive is very welcome. There is an enormous black market in that area and it is getting bigger year on year.

On the corporation tax rate of 12.5%, I have posed the question: if we raise it a small amount would it scare the horses? That will not happen but something the Minister addressed in his statement earlier that is very important is our reputation. We have suffered reputational damage internationally because of the United States congressional hearings and because of some of our European partners who tend to be somewhat belligerent about our 12.5% tax rate.

It is important to note also that the Minister is moving towards the analysis of the stateless companies and that something will be done in that regard. We cannot do it on our own but it must be done on a global basis. It is important to put on the record of the Seanad that the US Securities and Exchange Commission has closed its review of Apple's tax filing for 2012 and it has found nothing improper about Apple's disclosures and policies. It has adhered to US laws and in terms of international laws, and it is something we should note. I welcome that the Minister is moving to deal with that.

On the two year income tax break for the unemployed, I disagree with Senator MacSharry. If people are given the opportunity to earn money by way of a two year tax break and they are not prepared to take that up, they will never do so.

The national debt peaking at 124% of GDP is a real concern. It is one of the highest internationally in western Europe. The Minister addressed the question of the National Pensions Reserve Fund having significant moneys on account. That must be taken into consideration. The levy on the banks is welcome.

I welcome the excise on the old reliables - cigarettes, wine and beer - but with a caveat. It is an issue I pushed the Minister on, in particular with regard to the supermarket trade for off-licence beers in particular. The Minister informed us that the one euro levy on a bottle of wine brought in €45 million in extra income. That is to be welcomed. If somebody wants to buy a bottle of wine the extra euro will not stop them doing that. In the same way, if a euro is put on a six pack of beer, on the 24 pack carry-out it is an extra four euro raised by way of taxation. I know there are difficulties in this area. A case in the Scottish jurisdiction that has gone to the European Court of Justice is yet to be determined but we should have been inventive in that regard. The lid tax could have been considered in that there was a prospect of taxing an unopened vessel, whether it is a tin or a bottle.

I welcome the €200 million stimulus from the sale of the licence for the national lottery. I do not see anybody here from the Department of Finance and I am wondering to whom I am making this request.