Darragh O'Brien (Fianna Fail) | Oireachtas source

Yes but it also means €10 less per day being spent by me, which the Government will have to factor into its figures.

There are elements of this Bill that I welcome. Like Senator D'Arcy I welcome the abolition of the pension levy, which was one of the most regressive measures introduced by this Government. It was also a very under-hand tax, with €2.2 billion taken from the pension funds that are only now realising effect in terms of the reduction in annuities payment. This was not evident to the man on the street. The taking of €2.2 billion from private pension funds was the greatest sleight of hand ever. Those who paid into those pensions were doing what successive Governments asked them to do, namely, to make provision for their retirement, and they were then hammered for doing so. In addition, the figures did not stack up in that the stated purpose of the pension levy was to bring about the 9% VAT rate. However, when one adds up the cost of the reduction in the VAT rate it does not amount to €2.2 billion. I am glad that levy has been abolished and I hope it is never reintroduced. I worry that other Governments might review that measure and see it as the easiest way of getting €2 billion, leading to it being reinstated.

Much of what was proposed in the recent budget in terms of cuts in taxation was about trying to buy the next general election. In my opinion, the Government cut tax in the wrong way. It should have reinstated the PRSI exemption of €264 because that would have been of more progressive benefit to those on lower incomes. Regardless of what Senator Michael D'Arcy said - I do not wish to criticise him in his absence - the cuts introduced benefit the higher paid four times more than they do those on the minimum wage. That is a fact. One can mess around with the figures any way one likes but that is a fact. Had the €264 PRSI exemption been reintroduced, those earning €17,000 would have benefitted more than those earning €70,000.

I welcome the reduction in the universal social charge. As a country, we must look towards phasing that downwards, although I am aware it brings in €4 billion for the Exchequer and forms a big part of what the Government requires to run the country. There were some missed opportunities, some of which I would like to highlight. I may even table amendments in this regard when we come to Committee Stage. I believe the Government needs to look again at the inheritance tax issue. Fianna Fáil put forward proposals in this regard in its alternative budget, which was submitted to the Department of Finance. The threshold for inheritance tax in respect of a modest family home in Dublin, Cork or Galway and so on is now €225,000. The rate in this regard has been increased twice since this Government took office and I understand the reason for the increase in taxes in that instance. However, when it comes to the sale of a modest family home, sons and daughters are going to be paying high rates of inheritance tax. The Government should consider increasing the threshold in this regard as it applies to sons and daughters, siblings and so on.

On the child care side, Fianna Fáil put forward the proposal that the ECCE scheme be extended for a second year in respect of approximately 6,500 children with special needs. That would cost €15 million, which is very little. I ask that the Minister take another look at that proposal. This is about identifying where we can make a difference with less money. The last budget tried to be a catch-all in terms of tax reductions. However, those reductions are not impacting on those most in need. The Government should have increased mortgage interest relief from 30% to 40%. This would have cost approximately €49 million. Had this been done, it would have benefitted the people who purchased prior to 2009, many of whom are in negative equity and have high mortgages. Nothing was done for the middle Ireland sector, which includes young families who bought houses at the height of the boom, some of whom continue to be crucified by the banks by way of variable interest rates of over 5% when the ECB rate is 0.15%. Nothing is being done to bring these banks into line. I know that the Government cannot control the banks commercially but it is scandalous that there are people who are struggling to repay their mortgages at variable rates of over 5% while the base rate is at an historic low. No one can tell me that is right. The Government could have increased mortgage interest relief.

On PRSI benefits for the self-employed, I do not know what this Government has against self-employed people. They are the people who are trying to create jobs. Many parties have put forward proposals around allowing self-employed people to pay additional PRSI which would entitle them to 12 months jobseeker's benefit or illness benefit. Nothing has been done for them. Despite the fact that the self-employed continue pay tax they are not entitled to any benefits. This issue needs to be addressed. There is another issue that needs to be addressed, perhaps by way of recommendation from the Government.

We should deal now with the issue of the local property tax revaluation in 2016. Rates in Dublin have increased by approximately 41% in 18 months. I refer to house price increases. There has been an increase of 25% nationally since May. When Deputy Michael McGrath raised this with the Minister, Deputy Noonan, last week, the Minister said he would have a look at it and suggested that it is not a big deal. The Sunday Business Postsuggested last Sunday that it is a huge deal because people in areas where house prices have increased significantly will be looking at local property tax increases of between €300 and €360 per annum. This shows the inherent unfairness in the way the tax is structured. If this was to be done at all, I suggest it should have been based on square footage rather than on values.
I ask the Minister of State to consider Deputy Michael McGrath's amendment in the context of this Finance Bill. We will revisit it on Committee Stage by way of a recommendation. If we give the Minister the power to set the revaluation aside completely, we will provide for absolute certainty in this regard. I know what the Minister, Deputy Noonan, will probably do. I expect he will wait until the run-in to the next general election before announcing that he intends to freeze the local property tax for another three years. He has tried to do something similar in this budget by saying that things have changed and they are better. Things are better and I welcome that, but we should not forget that it grates on people to hear all the time that things are better. Middle Ireland is not hearing that. There are issues with small and medium-sized enterprises and the self-employed. It is welcome that things are better, that there is stability and that unemployment is dropping, but the people who have paid for everything are getting nothing from this Government in this budget or this Finance Bill. What have we done on child care costs? Nothing. What have we done on mortgage interest relief? Nothing.
These are the areas that need to be addressed. The miserly cut in the top rate of income tax will disproportionately make higher earners better off. That is the reality of the situation. I do not mean to be completely negative about it. I welcome some elements of this Finance Bill. I will go through them in more detail on Committee Stage. I am trying to highlight on Second Stage the areas about which I have concerns. I am sure we will get an opportunity to go through the other elements of the Bill on Committee and Report Stages. I thank the Minister of State for his presentation. I look forward to going through the specific stages over the next few days.