Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State, Deputy Nash. In a general sense, our budgetary process has not fallen under the reform agenda that we all agreed to implement in 2011. A large number of measures, the costs and benefits of which and the analysis of who pays, growth effects and displacement effects are not known, are laid before us. This is almost a Finance Bill debate of 50 or 60 years ago. We should have better procedures, given what is at stake.

I endorse other Senators' remarks on the Minister, Deputy Noonan, and the role he has played. It is bizarre that, when one goes over the USC's exemption limit, every single cent of income is taxed at the first rate. This feature must be unique among our taxes to date. The income tax exemption limit of €18,000 is genuine whereas the USC limit is not. This creates a poverty trap and is onerous once people exceed the €12,000 limit. Combined with the water and house taxes, this is probably one of the reasons for there being so much public discontent. It was a savagely regressive tax, so I welcome the Minister's move to reduce it.

There is an exemption from the top rates of USC for medical card holders whose incomes do not exceed €60,000. Why are we confusing the medical card, which is means tested, with a tax avoidance card? Some of our troubles with the medical card owe to the fact that a range of benefits unrelated to medical conditions were attached to it. This matter needs to be addressed.

The exemption from income tax for those who are in other EU or European Economic Area, EEA, member states is €50,000 per year. It is €18,000 if they stay. Abolishing the ceiling of €500,000 in the special assignee programme almost seems like an invitation to tax avoidance lawyers and accountants. There will be no limit at all.

Section 19 refers to certain provisions for NUI Galway, but these would have to apply to all of the other institutions as well. We will table a recommendation on Committee Stage. Under section 20, the exemption limit for leasing land is €40,000 or €18,000 if one works. Why are such anomalies still being introduced? I welcome the reduction in DIRT for those who are saving for their first mortgages.

Without checks and balances, removing the reference period for research and development seems to create an opening that could be expensive to the Exchequer. The tax break provided to Bord Gáis Éireann and Vodafone under section 24 seems to be an indication of the lobbying capacity of interested parties rather than possessing any economic rationale.

I do not support the provisions in section 29 regarding exemption of real estate investment trusts, REITs, from DIRT. I question the value of REITs. We do not need people buying and selling property. We are trying to get away from that. We tried a property-based economy but it was not a success.

Under section 36, all carried forward capital allowances that were disallowed in prior years will become available on a phased basis. Why are we giving allowances that were disallowed in previous years? Who is doing the lobbying on this issue? It does not seem to have any economic rationale.

Section 38 gives tax breaks to energy efficient schemes. The return on these schemes has been dramatically reduced because the price of oil is falling. Why are we investing in something when we know the return is reducing?

Section 40 removes the 80% cap on the aggregate amount of capital allowances and any related expense that may be offset in any accounting period.

Again, this is another tax break which is just being given away. Why are we removing the 80% cap? We are short of money and people are marching up and down outside Leinster House to protest about water charges, property tax, etc. However, these uncosted measures are being introduced. Apparently, they are going to cost us large amounts of money.
Section 42 extends the traditional arrangements provided to companies which are changing their accounting standards in order to comply with updated Irish accounting standards. The accounting standards relating to banks in this country were null and void in the period during which those institutions went bust. The State bought several banks on the basis of accounts that were fictitious. Why are those companies to which section 42 relates not already compliant with Irish accounting standards? Why is there a need to put in place special transitional arrangements for them? Are there accounting firms which cannot get their affairs up to date and in order? We should not be catering to these companies, rather we should be ordering them to amend their standards. In that context, I ask that section 42 be reconsidered. Section 48 refers to Vodafone shareholders.
Section 50 is important in the context of the constituency the Minister of State, Deputy Nash, represents, particularly as it deals with the licensing of motor oil traders. It is time to put an end to both fuel laundering and petrol stretching. I hope that licences will be withdrawn because someone is selling petrol that has been stretched. Perhaps it should be a case of caveat emptor, with people being warned not to buy petrol at particular filling stations. It is a major scandal that this matter has not been dealt with, particularly in view of the lost of income to the Exchequer from both fuel laundering and petrol stretching.
I have never been in favour of the tax breaks relating to film production, which are being modified and maintained. The tax breaks in question illustrate the success of the relevant sector in lobbying for concessions. Such concessions are given at the expense of everyone else.
Section 77, which was amended in the Dáil, relates to land which is transferred or conveyed to a farmer who is not over 67 years of age. The original age specified was 65 years. I do not know whether we are entitled to engage in ageism of this kind. Does what is proposed breach any relevant anti-discrimination provisions? We want people to farm regardless of their age.
I welcome the measures being introduced to deal with tax avoidance. Such measures are necessary in view of the culture of avoidance which has been developed by tax lawyers and accountants. These fiscal termites have chiselled holes in the tax code. I hope we will move to a system whereby there will be low rates across the board and special concessions, deductions or allowances. If this were to happen, it would reduce the rate of return for tax avoidance accountants and lawyers. Those individuals might then engage in some productive activity, such as entrepreneurship, and stop lobbying people in the corridors of power. If the sections of the Bill which deal with tax avoidance are rigidly applied, it will put an end to this industry and provide the country with a major boost.