Aideen Hayden (Labour) | Oireachtas source

I also welcome the Minister of State to the House. He is always very welcome and we appreciate his frequent visits to the House.

It is worth reflecting that history matters. With regard to budget 2014, the Bill contains the measures that were announced, in the main, on budget day. We stand on the cusp of exiting the EU-IMF bailout programme on 15 December so it is important to examine the measures before us in a broader context. First let us consider the exiting of the bailout and look at the difficulties that we have endured as a nation. The Irish people have made great sacrifices over the past number of years. It is also important to acknowledge that the economy is improving, we are creating jobs at a rate of 3,000 per month, reducing unemployment, retail sales figures have increased by more than 5% and there is renewed confidence in the housing market as mentioned in the newspapers recently. That confidence may be a mixed blessing. We are making progress on mortgage arrears and, thankfully, there are more visitors to the country now than in the past number of years.

I wish to draw attention to the fiscal assessment report prepared by the Irish Fiscal Advisory Council which criticised us in the past. Therefore, it is important to note its comment that, "Good progress continues to be made in bringing sustainability to the public finances and in restoring the borrowing capacity of the State."

The Minister for Finance has mentioned a projected growth of 0.2% in 2013 and 2% in 2014. We are turning the corner but we must acknowledge the risks. In the past week we have heard about the prospect of a patent cliff damaging export potential. However, there are green shoots in the bio-pharmaceutical sector and we are more than holding our own and increasing job creation in the sector. When examining the Finance Bill and its measures we must acknowledge that IFAC has identified budget risks in the group forecast. It has also stated that the risks are tilted on the downside and that we are on the right path. As a Government we are sometimes very willing to examine specific issues. I shall raise a few issues during my speech later because I am not entirely happy with the Finance Bill. However, it is important to look at the big picture and acknowledge what has been achieved.

As Senator Michael D'Arcy mentioned, there is further hope on the horizon following the Bank of Ireland's announcement that it intends to buy back its preference shares worth over €1 billion. I hope that sum will be available to us for further capital investment in the economy. There is more buoyancy in terms of the European element, particularly the recovery of the UK economy. I hope that we are on track to exit austerity in the same way that we will exit the EU-IMF bailout programme.

We must recognise that we have done a lot, particularly in this budget, by not taking more from the economy than necessary. It was critical that we did not take out €600 million. I am a member of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform and attended meetings where I listened to both perspectives, the employer perspective and union perspective, who urged the Government to take no more than necessary. Not taking out more was critical to domestic confidence in the economy. The retention of a buffer of 0.3% in order to get us over the line to exit the bailout was also important. As I said at the beginning of my contribution, history matters. We have done the right thing for the economy and Irish people and the Finance Bill should be considered in that context.

I shall now deal with the detailed provisions of the Bill. I welcome some sections but have concerns about others. With regard to sections 5 and 6, I welcome the home renovation incentive announced on budget day and the measures contained in the Bill. The measure ticks a number of boxes. Despite the anger felt towards the construction sector post the demise of the Celtic tiger we all now realise that the sector has suffered greatly with the recession. There are many construction workers in receipt of social welfare payments and that number is stubbornly high. The current state of the construction sector is unsustainable. Its reduced size and capacity is not consistent with the size of the economy. A construction sector of around 10% would be an appropriate size for the economy and its necessity to grow.

Cynics have said that the home renovation incentive measures are designed to take people out of the black economy. Most people are compliant and want to deal with a builder who can give a guarantee and will be in existence in six months' time. The measure is important but I ask that the Minister keep the minima and maxima under review and monitor whether it delivers for the construction sector and the needs of the economy in terms of thermal efficiency.

I have one issue with the measure. The incentive, as currently drafted, is only available to owner-occupiers and owner-occupied properties. Most of the worst properties in the State are in the rental sector which, as the Minister of State will know, constitutes over 20% of the overall housing sector. I know that the Society of St. Vincent de Paul and Threshold have serious concerns about fuel poverty and poor standards of accommodation. I ask him to consider the rental sector. Better standards are required from landlords but we must be fair to them and ensuring they are encouraged to improve rental properties. The State has spent a significant amount of money on improving council houses, for example, in order to bring them up to scratch. I ask the Minister of State to consider extending the measure to the rental sector with a view to improving standards.

Section 6 could play a critical role in encouraging former construction workers to return to work thus taking advantage of the economic recovery and measures such as the home renovation incentive. That is a very important measure. The requirement of 18 months has been reduced to 12 months, which is most welcome.

I echo Senator van Turnhout's concern about section 7. I have had a lot of experience dealing with people who live in single parent scenarios. In other aspects of the social protection and tax codes we give lower rates of payment to people who live together thereby acknowledging that there are extra costs for people who live separately. We must be conscious of the fact that in a marital breakdown situation it is not possible to get consensus in many scenarios. Arguments over who gets what, where the children go and will go, when, why, where and wherever can sometimes be an unnecessary source of discord in a very traumatic situation. I again argue that we need to monitor the measure, to keep it under review and to say that we are prepared to revisit the mater, as we have done with other Government measures, if we discover that it does not work and is detrimental to childhood and family life.

Section 8 refers to the ceilings that were introduced for private health care. I must be honest with the Minister of State, I am a great believer in the poetry of Yeats who said that this is "no country for old men." I hope that is not the situation. I want us to move into a new tomorrow post-troika where older people here do not have to worry about the amount of money they must pay for private health care. I hope that the public health system will be so good that older people will no longer need private health care. As Senator Michael D'Arcy mentioned, 47% of people will be unaffected by the measure in its entirety and the remaining 53% will be marginally affected. Again, we need to keep the measure under review. If it has an unnecessary or unavoidable consequence on the number of people in private health care then we will need to reconsider. At the same time we must move in the direction of providing free overall health care, as we did in this budget, for the under-6s.

Section 23 deals with the deposit retention tax. We have moved positively, over the past number of budgets, to increase rates of capital acquisitions tax, capital gains tax and to bring capital taxes more in line with income taxes. It has always been my view, as I have mentioned on a number of occasions, that somebody who works in a supermarket for an extra hour should not pay more taxes than somebody who makes a share transaction on the Stock Exchange. The same must be true for deposit interest retention tax and it must fit in with all of the other taxes.

My concern about the 41% is that it does not discriminate between people on higher incomes and those on lower incomes who, if subject to income tax rates, would be paying a much lower rate of tax. The Minister should look more closely at the overall rates of all of the taxes, capital and otherwise, to ensure they operate in a consistent fashion.