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

I thank the Senators for their contributions. I remind people that it is ten years and ten days since the introduction of the bank guarantee, the worst political decision in the history of the State.It cost €64 billion gross and, according to the former Governor of the Central Bank of Ireland, Mr. Paddy Honohan, €37 billion net. Whether we like to hear it, that is from where we started. That is ground zero. Budget 2019 is the first balanced budget since that era. It has been particularly difficult for some people who were much more badly affected by the downturn than others. Some lost their businesses or homes, while others will lose their homes in the future. None of us can forget the difficulties people have faced, are facing and will face in the future. As public representatives, we must never lose sight of those who, unfortunately, find themselves in a worst case scenario. However, we have come a long way to be able to balance the budget. Not alone have we done that, we have also reduced the 2018 deficit by 0.1% or €350 million and are a year early in so doing such that rather than the deficit being 0.1%, it will be zero. That is from where we have come and where we are going.

I wish to touch on some of the issues raised and only have a short time in which to so do. On the issue of the self-employed raised by Senator Ray Butler, they are entitled to be in receipt of a social protection payment, as are employees. That will happen in 2019. Perhaps it might have been done some years ago, but at least we are doing it now.

Senator Michelle Mulherin raised the issue of pyrite. A sum of €32 million has been allocated in budget 2019 for 460 homes affected by pyrite. The Senator has been described to me in many ways, but “determined” describes her best. She has pursued this issue with a sharp determination and was correct to do so. The State is intervening to help people who have been affected by this issue. Better standards should have been in place. The Senator deserves much credit for her work on the issue.

I am particularly pleased by the beef environmental efficiency pilot project which will be expanded to include the dairy sector. Senator Ian Marshall, a fellow dairy man, is present. Although we have less stock than we did 25 years ago, we now must deal with the huge impact of climate change, of which we were unaware 25 years ago. I believe in the expansion of the dairy sector, but we can expand the dairy and beef sectors with better stock. We can produce as much product with fewer animals through better genetics and feed values. The improvements in technology and feed will also help to reduce methane emissions. That is the future. It is not only about stock numbers. Farmers will have to farm better than before and be prepared to change their work practices. Just because things were done in a certain way three, four or five years ago does not mean that we will continue to do it in that way. The industry is changing very quickly as the technology to facilitate such change is available.

I point out to Senator Jennifer Murnane O’Connor that we are spending €17 billion on health services, which is a significant amount of money. There will come a point at which we will not be able to keep spending money and will, instead, have to bring efficiencies and rationalisation to the health sector, in which there is enough money. If one factors in the private spend on health services in Ireland, we have one of the highest expenditure figures. It is important to note that a huge number of people enter the system and receive an excellent service at every level. Others do not and that is the area in which we must improve. It is not good enough that nobody is accountable to those who receive a poor service. The buck must stop somewhere.

Senator Gerald Nash questioned the logic of cutting income taxes. I have outlined previously in the Seanad the doubling of the income tax take from €11 billion to almost €22 billion over a six-year period, which is unheard of in any jurisdiction without being accompanied by riots, chaos and carnage. The Government got on with making that increase, as did the workers of Ireland. I do not apologise, therefore, for removing as many as possible - approximately 60,000 - from the higher tax band. To put the matter in context, the limit has been increased by €750 to over €35,000. It is my strongly held view that we should raise it to €40,000 as quickly as possible because the average industrial wage in Ireland is approximately €36,000 but for a person who works 40 hours per week it is €44,000. People earning the average industrial wage for a 40 hour week pay tax at a rate of 50% on approximately €10,000 of their income. It is hugely expensive for those in that bracket to work. It is a tax wedge which is doing damage. I do not apologise for the fact that €291 million will be forgone.

The USC rate changes will impact on approximately 1.5 million workers. On the homecarer's tax credit, an issue about which I am very passionate, 85,000 families with a stay-at-home parent will benefit from the €21 million allocated. Some 230,000 people will benefit from the €27 million allocated for the earned income credit for the self-employed. The raising of the point at which people move into the higher tax band by €750 will benefit 60,000 people. Some 61% of households will benefit from income tax reductions of €291 million. Senators must remember that the amount collected in income tax will decrease by €291 million after a period in which we increased the quantum over a six-year period by €11 billion. I do not apologise for giving some workers a small reduction in the amount of tax they pay.

On tax incentives for landlords and lone parent families, it is something we could consider. I do not know if it has been done, but I will look into it.

I point out to Senator John Dolan that we are now spending €2 billion in the disability sector. I am very pleased that we are spending more in it than we were. There could always be more, but the Minister, Deputy Paschal Donohoe, has ensured the budget is sustainable. We cannot spend more than what we predict we will collect next year. Some €700 million of the €1.1 billion collected in corporation tax arises from an international readjustment of how corporation taxes are calculated and will not recur. Therefore we will not allocate such an amount next year. It is prudent to do this, rather than pretend it will be available next year. Of the €700 million, €500 is going into the rainy day fund, while €200 million is going towards meeting the overrun in the health budget. It is the right thing to do. The health budget is also being funded from €250 million arising from under-expenditure in other Departments, as well as a third source.

Senator Rose Conway-Walsh is correct that two banks will not pay corporation tax for the next 13 and 20 years, respectively. Deferred tax assets are available to all companies, not just banks. We cannot change the provision for one sector only. If it were to be changed for the banks, it would also have to be changed for everybody else, which would cost a lot of money. We do not want to do so. Of course, the €100 million bank levy has been in place for several years. It is a matter for the Government to consider the matter on each appropriate occasion.

A split approach is to be taken to betting tax which is to rise from 1% to 2%.It is bringing in half of the amount. The other half comes from an increase in betting tax and the duty on the commission earned by betting intermediaries or exchanges from 15% to 25% for online betting, which is very good. I have huge concerns about gambling addiction and, in particular, online betting.

Senator Rose Conway-Walsh referred to the modest tax reductions, on which I touched earlier. However, her party's proposed tax increases of €3 billion are not modest at a time when we have increased the income tax take from €11 billion to €22 billion.