Tuesday, 8 October 2019
Budget 2020: Statements
I welcome the Minister of State to the House. Others have spoken about the context of this budget so I will not dwell on that. There are certain aspects of it that do need to reflect a reality of the increased risk of a no-deal Brexit. I was glad that some of the measures that had been touted regarding changes in income tax were avoided. I think that was the right decision.
Although there are measures in this budget that respond to Brexit, some of which are positive while others are missing or inadequately fleshed out, the other crisis we face, namely, climate change, is inadequately addressed in the budget. Again, we are facing a very immediate potential crisis for our economy and society from Brexit but the impact of climate change is accelerating and is not far behind.
I note that in addition to the €200 million this year, €650 million will be set aside for a potential fund for agriculture, enterprise and tourism in the case of a no-deal Brexit. I have a number of questions about this. There was some indication that the €110 million for enterprise would be grants, loans and equity. Could the Minister of State clarify the balance because it is very important that we do not simply give a huge subsidy to perhaps large industries but make sure that if those businesses continue to be successful in the future, there is potential future equity for the State?
Regarding agriculture and fisheries, there will be €85 million for beef and €40 million for fisheries. Of course, these sectors will be hard hit and need to be supported but in addition to transitioning with regard to the impact of Brexit, many of those sectors are also facing challenges and a need for transition in terms of new models of sustainability and environmental sustainability. How can we join up the funding we will rightly give these sectors in terms of transitioning with regard to the impact of Brexit to ensure that it also facilitates them to transition towards new models of a sustainable, green economy and green agricultural system?
Regarding tourism, the ports were mentioned. Again, I would like more information about our ports. I have strongly pushed for Ireland to make its ports a priority in seeking European funding. I know it does not qualify under the energy component of the projects of common interest but our ports should be a priority under TEN-T funding. How will we seek additional funding and co-financing to ensure a massive scale up of public investment and public ownership of our ports?
There are areas that were not touched upon but will suffer a very severe impact in the event of a no-deal Brexit. I would like an indication of how the balance of the €390 million in Brexit contingency expenditure may seek to address these areas. Will it be confined to agriculture, enterprise and tourism or will it branch out into areas like culture where many of our cultural practitioners will be extraordinarily impacted given that the circuit for many cultural products in Ireland is effectively through both islands? I am not talking about general funding of culture but the impact of a no-deal Brexit on culture. What about the impact on community development projects, particularly those that rely on common funding, co-funding or European funding? This is the social fabric and requires just as much investment and safety proofing as our economy and our economic structures.
I asked the Minister of State with responsibility for European affairs about research and did not get an adequate answer. In the case of a no-deal Brexit, how we will ensure that the large number of co-financed research projects under Horizon 2020 and other joint initiatives in our universities and third-level institutions are safeguarded? This includes the potential impact on staffing such as staffing needs and the visas that may be required. This is, again, around emergency funding in a no-deal Brexit scenario, not general higher education funding, which is another area in crisis that has been inadequately addressed in this budget.
It has been very well pointed out that I have supported an increase in carbon pricing to reflect the cost of carbon and the fact that the costs have been socialised when fossil fuels have been treated as a commodity for many years. However, I would expect that every cent gathered not simply through the increase in carbon pricing but through all of the carbon tax - all of the €3.35 billion - should be dedicated to either mitigation or adaptation in terms of climate change. This means every cent, not just the €6 increase. One area of environmental policy to which the Government seemed to show great dedication was recycling because the quite paltry €90 million that will be gathered through the carbon cost increase appeared again and again in the budget and again and again in the statements from the Minister for Finance, and it was very hard to see where the other funding was. A figure of €8.1 billion was mentioned in terms of national development plans. Is that just this year or over every year? What form does the €13.7 billion from State companies take?
Regarding transport, we were told that the greenways and cycling would be funded from carbon tax. What other part of the €384 million increase in the transport budget will go to sustainable transport or climate action? I welcome the retrofitting scheme for social housing in the midlands, but what other funding is to be made available for retrofitting houses? Where is the rest of the investment required to achieve our climate action plan? Why was it not more central and more visible? Meanwhile, we continue to take small steps backwards along with each step forward. While we are regenerating our peatlands, we continue on with the Wildlife (Amendment) Bill 2016 which will allow more peatlands to be misused. I also note the diesel rebate scheme for our hauliers. We are effectively giving tax relief on the purchase of diesel. I recognise that hauliers will be affected by Brexit. There may be money for them in this Brexit contingency fund, but subsidising their purchases of diesel may not be the best or most consistent approach with regard to this issue.
Many have pointed to some very disappointing small measures such as the diesel rebate. Another example relates to bookmakers. In a crisis and a time of fiscal conservatism, the budget should not provide for increased tax reliefs for betting and for bookmakers. Perhaps that funding could have been given to addiction services, given the impact gambling addiction has on society.
Betting is not the only form of gambling that has been rewarded. Other forms of speculative capital activity are rewarded in this budget through measures on stocks and shares and through the key employee engagement programme, KEEP. This scheme has been expanded again, having been expanded in the previous budget. Up to 100% of a person's remuneration for the year may be paid in shares, up to the value of €300,000, and this now extends to anywhere in the group. A whole cohort of persons can now skip income tax altogether and receive all of their remuneration in shares. That is a concern.
The other area of concern is that of the employment and investment incentive scheme. This incentive is paid on investments up to €150,000, in one instalment at the end of the first year and another at the end of the fourth year. A person will now be able to get the incentive on investments up to €250,000, which will all be paid in the first year. That cap increases to €500,000 for investments of ten years or more. Again, this is for people who are investing. It is about stocks, shares and investments in a category. The capital gains entrepreneur relief is only being examined when it should be being dealt with. I welcome the research and development measures for microcompanies. I am coming to my final points, which relate to the issue of housing.