Kieran O'Donnell (Fine Gael) | Oireachtas source

I welcome the Minister, Deputy Donohoe, as a former Member of this House and commend him and his officials for the fantastic work they do on behalf of the people and the Government. I wish him continued success.

I will deal with the budget in a structured and overarching way. I always assess budgets under a number of headings, including fairness. Ultimately, a Minister is responsible for dealing with issues with limited resources and has to consider how to use them in the most productive way. Parties have different philosophies. My personal philosophy which is very much in the mould of Fine Gael is to promote the creastion of an environment that is pro-enterprise, in which people can work and create jobs. In doing so they provide the necessary taxes for the Exchequer which allow the Government to deal with the most vulnerable and provide services. In the context of social welfare benefits, they allow it to deal with those who are most vulnerable or going through a difficult time. They allow it to put in place infrastructure for schools, health, education and myriad social services which have to be paid for. How are they paid for? They are paid for from taxes. That is my philosophy. I look to see if the budget is fair and believe this one is. It provides for increases in social welfare payments and reductions in taxation, not by as much as I would like, but it was done within the available resources. I favour the policy put forward by the Taoiseach, with the Minister, at the Ard-Fheis in which we aim to apply the standard rate of tax to an income of €50,000 or less for a single person and €100,000 for a married couple, while at the same time reducing USC and increasing the tax bands.

The two other areas with which I want to deal are Brexit and competitiveness as they are interlinked. I woke up at about 3 a.m. and thought the house was going to collapse. I am sure many others experienced the same. There were terrible storms. When I got up in Monaleen in Castletroy where I live, it was sunny, as it is every morning. The clouds had passed, but we have a cloud that is Brexit. I expect it to pass and that we will have very mild drizzle and a couple of sun showers, but, equally, we may have torrential rain. We must prepare for a hard Brexit and for that to happen we must be competitive. However, we are not competitive on the European and world stage in the rates at which people pay tax. Tax rates for the squeezed middle are too high when one considers people who are looking to purchase a house or educate their children. They move into the higher rate of tax on an income of just over €35,000 which is not big money. We need to change this incrementally. For the past two years the Government has provided for an increase in credits of €1,500, but I have no doubt that the Minister would have liked to have done a little more. If we are to compete on a stage with, for example, the United Kingdom and Germany where people move into the higher rate of tax at a much higher level, we will have to be competitive and it is not just about fairness. It is also about ensuring we can operate post-Brexit, while at the same time not losing sight of the fact that, when one knocks on doors and speaks to people, tax rates are too high for the squeezed middle. We will have to find a mechanism over time whereby we will do it in a sustainable way. That is why I very much favour moving to a figure of €50,000 for a single person and €100,000 for a married couple. With it has to come prudence on the spending side. It is about achieving efficiencies and ensuring people get value for money. For many years the Minister and I served together on the Committee of Public Accounts. A person earning just above €35,000 pays tax at the marginal rate of 40%. It would be too high at 47.5%.

It is critical that as a country we remain competitive and ensure costs will be kept to a minimum. It is also important for mobile workers, multinationals and Irish companies that in exporting to export markets that Ireland be competitive. I came from the ranks of the self-employed. I was self-employed as a chartered accountant for the bones of ten or 12 years and the self-employed were my bread and butter. It is critical that we try to achieve parity on earned income as quickly as possible. That is the intention. Feeding into this is the fact that one pays tax at the marginal rate at a figure of €35,000. Ultimately, we do not want the self-employed to be hampered by tax in creating jobs. We need to make sure that when they take people on, they will have more disposable income. If people pay tax at the standard rate on a higher income, it will make us more competitive.

I will address local issues in Limerick. The Minister referred to the increased tax credit for the film industry. In Limerick we have Toy Studios which are state-of-the-art. They were pioneered by the local authority, Limerick City and County Council. Recently there was a preview of Nightflyers on NBC.I suspect that the Minister, as a science fiction buff, would have enjoyed it very much. The Minister was namechecked on the night and I have no doubt he will be invited to a preview. Ten episodes will be broadcast on a science fiction channel in America and it is hoped that they will also be broadcast on Netflix shortly. The film tax credit is very worthwhile.

I welcome last week's significant announcement relating to a fund of €13.5 million for both rural and urban regeneration, with €7 million for rural areas and €6.5 for urban areas, including city centres. Ten projects in Limerick will be funded, including Murroe community hub which is to receive €3.8 million. I have worked with that organisation for many years and the new hub will be a blueprint for rural regeneration. The hub is in a rural setting but has an urban theme because Murroe is a satellite of Limerick city. I expect it to be an enormous success. There are seven projects in Limerick city that will receive funding. The opera centre site will receive €1.84 million while O'Connell Street will receive almost €1 million. It is important that I do not leave out any of the projects. The world-class waterfront project and a virtual reality centre will receive €1 million and the Georgian quarter project will also receive significant funding. I would like to discuss the latter with the Minister at some point in the future to ensure that people come to live in the city.

I commend the Minister on this year's budget. I see it as part of the continuing process of building a competitive Ireland that is fair. The budget aims to look after people, particularly the vulnerable, ensure that people are not penalised by taxes on work and provide public services. Brexit looms and we must ensure that we maintain our competitiveness.