Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The ratio of tax cuts to spending was agreed at 2:1. It was agreed in the confidence and supply arrangement between the Government and Fianna Fáil. I want to put it into context. I absolutely support the reduction in income taxes. The quantum of money raised by income taxes has doubled since 2011. In 2011, the State took in €11 billion in income taxes. In budget 2018, we are projected to take in €21.5 billion. That is the great reconfiguration in this State. The income tax payers are paying the taxes. I repeat, income tax revenue has doubled. Senator Devine and her party are entitled to their view. I disagree with her. When the actual quantity of money has doubled, the income tax payers must be entitled to earn more money. Senator Wilson has heard me say this on so many occasions when I was a Member of this Chamber, as has Senator Bacik.

There is something very wrong with a tax jurisdiction where people on the average industrial wage pay the higher rate of tax. I have tried to get analysis of this done, and I think it happens in practically no other jurisdiction within the OECD. I have also made the point on several occasions that when I am out and about trying to encourage companies to come and locate here, the first thing that a lot of foreign direct investment prospects or financial institutions talk about is the point at which one pays the higher rate of tax. Not everybody is on €100,000, €120,000 or €130,000. A lot of people are on the average industrial wage. We begin paying the higher rate at lower earnings than anywhere else, and the reduction in income tax is something I absolutely support.

I want to touch on one other point. Senator Devine spoke about how horrified she was by the stamp duty increase. Her own budget submission proposed to double it from 2% to 4%, with a tax take of €190 million. I am sure she is aware of this proposed stamp duty increase. Is she not aware of it? That was Sinn Féin's submission.

Senator O'Donnell referred to the hospitality sector. That is the hard question that we are going to have to face at some stage. We have forgone a lot of money, but it was the right policy structure at the right time. One of the things that we have to do is increase stamp duty from the emergency period rate of 2%. Stamp duty was always 6%. On some occasions it was 9% or 11%. However, it is now at the normalised rate, which is a sustainable rate of 6%. I support that. We have to get back to normalised rates. At stage we will have to move the rate of VAT in the hospitality sector back from 9% to 13.5%, to put in place a sustainable tax base that will withstand external shocks, internal shocks, and every other type of shock.

Affordable housing is something I am very strong upon. As Senator Wilson knows, I am not the most political politician Members will come across. It is very easy for people in the Opposition to beat up Fianna Fáil. It should be given credit for putting in place a structure whereby the Government is allowed to act. It is very easy to step off the pitch and say everything is wrong, but everything is not wrong. We have come from a remarkable place where we were bankrupt and this nation did not have a shilling. One of the things that I knew would happen eventually was that the lag would catch up. There is a lag in housing, homelessness and other areas because we did not have the money to invest and reinvest. A lot of people in the Opposition beat up Fianna Fáil, but it chose to be responsible and ensure that a Government is in place, and it should be commended instead of being criticised for that.

I have touched upon the Coffey report, stamp duty and lower middle incomes. Regarding IT and intangible assets, we have made a change in line with the Coffey report to bring it from a 100% deductible to a 80% deductible.We have a figure of €150 million. I think that is a low-ball figure. Senator Devine says there is €1 billion it, but there is not. If we set the rates at the levels she is talking about, the property will go somewhere else. That is what happens. It is a globalised world.

Senator Wilson referred to affordable housing schemes. Members have heard me speaking about affordable housing schemes on numerous occasions. There is an anomaly concerning people who have average earnings. Where I live, the average industrial earnings are between €30,000 and €40,000. Those people are not in the space where they can afford to buy their own home. Where I come from, a three-bed semi-detached house costs €175,000. Do the figures and work them backwards and it is clear these potential buyers need an enormous deposit. That is not always available. In many cases parents are helping and people are working hard to save that deposit, but it is nearly impossible to do so with the rents that couples now have to pay.It is nearly impossible for couples to save the deposit given the high level of rents. It is something that I pushed very strongly when I was in the Seanad and now that I am in the Department of Finance I am seeking to put in place an affordable housing scheme for people on average and low wages so that they can afford to buy their own home. Anyone who has heard the Taoiseach speak about the republic of opportunities will have heard that is one of the things he has prioritised also. How much time do I have left?