Ivana Bacik (Independent) | Oireachtas source

I welcome the Minister of State to the House and I welcome the opportunity to have a debate on the Finance (No. 2) Bill, particularly in the more positive economic climate. I have been debating with Senator Michael D'Arcy about whether it feels like a long three years or a short three years since the troika came to town. We are in disagreement on it but it is welcome to see them departing this weekend. It is a momentous event to regain economic sovereignty. Looking back over the past five years, when the country was staring over an economic abyss, particularly when the troika eventually came in, we have seen an immense improvement even though it is slow and unemployment levels are still too high. We are seeing positive changes, to which the Minister of State alluded, in the return to growth in the second quarter and the employment increase by 3.2% over the past year to the third quarter. We are seeing better news and it seems as if we are in changed times.

The less momentous change is the change in the budget time and the fact that we are having this debate in December, rather than having the debate on the Finance Bill. Normally, the budget would be fresh in our minds this week. The timing of the budget in October is preferable as it gives greater stability and gives people a chance to absorb the fiscal and tax changes made in the budget in advance of the Christmas period. It has led to a less fraught period around the budget.

I welcome many of the measures in the budget designed specifically as job stimulation and activation measures. It is not just about setting out tax changes but also economic policy and job creation. There are important initiatives and I take issue with the comments of Senator Ó Domhnaill about the home renovation incentive provided for in section 5. It creates excitement and positivity among small building contractors in respect of home improvement works they can bid for. People who have been putting off getting the work done will be encouraged to do so and it is about increasing confidence and getting people thinking about spending money on home improvements. Based on my conversations with people, we will see a good level of take-up.

Other speakers have referred to the retention of the 9% tourism VAT rate. The figures speak for themselves in terms of increased tourism revenue and in the number of tourists with The Gathering. We hope the momentum will keep up next year. Everyone must be cognisant of the fact that The Gathering provided a boost and let us hope that boost continues. The retention of the VAT rate in section 58 was good news for the tourism sector.

I refer to the incentive to start your own business in section 6 and the extension of the Living City initiative in section 31.

All these measures will boost confidence and stimulate job creation.

Section 77 provides for an exemption from tax for ex gratiapayments made following the Magdalen commission report to survivors of the Magdalen laundries. This is a welcome and important measure, which everyone will support.

However, I would like to devote the remainder of my contribution to section 7, about which there has been much debate. Senator D'Arcy raised the issue in the House on 22 October and I supported him on 23 October. Many of us at that stage had identified a potential unforeseen consequence of the change to the one-parent family tax credit. It is welcome, as Senator D'Arcy said, that the Minister made a significant amendment to the section in the Dáil. I acknowledge the reasons for the introduction of the change. The one-parent family tax credit is to be replaced with the new single person child care credit. At face value, a positive reason for this is that it would be a job activation measure that would assist single parents or carers with the cost of child care but it was only to be made available to the primary carer of the child. There were concerns that the credit had been claimed by multiple individuals in the past and it offered non-cohabiting couples more favourable tax treatment than cohabiting couples. A departmental note points out it could have been a perverse incentive not to cohabit. These were good reasons at face value to make the change but once one read between the lines, one could see the potential adverse consequences, most importantly, for children of separated parents where the role of the separated father in their lives could be diminished. Perhaps that is reading too much into the effect of the change but that is how it was taken.

As a feminist, it is troubling there is still an old fashioned view of a primary carer and a breadwinner, as Senator D'Arcy said. There are different models of parenting but even following divorce and separation, there are shared parenting models and both parents are primary carers. They may both work outside the home and be primary carers and, therefore, the old fashioned model which we debated at the Constitutional Convention has to be given a more inclusive reading. We have to be careful, therefore, about how we frame our legislation in that regard. I am glad for those reasons that the previous formulation, which would have restricted the tax credit to the primary carer, may be relinquished by the primary carer and the secondary claimant may be entitled to claim in respect of the qualifying child.

Like Senator D'Arcy, I have a difficulty with the tricky provision whereby to qualify the secondary claimant must prove the child resides with him or her for periods of at least 100 days a year. That may be difficult and it may undermine the positive value of the change. Could that be improved? We can tease this out in more detail on Committee Stage, as I am still grappling with it. Originally, the notion many of us had was that the credit would be shared by the parents. The Government's response is that would be difficult for logistical and legal reasons.