Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

Today, we discuss the Finance Bill 2020, which will give legislative effect to the budget for next year. The Bill has been the subject of detailed discussion in the Dáil and I expect that it will also be subject to detailed discussion and consideration here in this House. I look forward to the contributions of Senators.

Ireland currently faces many challenges. Brexit could rightly be seen as the most immediate future threat. We remain uncertain of the final outcome of Brexit but we must ensure that we are prepared for the worst-case scenario.I understand that Senators have been circulated with a section-by-section brief on the Bill, so I do not propose going into that level of detail now. I will focus on the main initiatives included in the Bill.

Climate change is another issue which might be seen as a future threat, but it is one which we must address now. In line with the programme for Government commitment, carbon tax is being increased in the budget by €7.50 from €26 to €33.50 per tonne of CO2 emissions. This increase applied to auto fuels from budget night and will apply to all other fuels from 1 May 2021. The additional revenue raised will be used to fund public expenditure measures to meet the goals set out in the programme for Government. The Bill also makes provision for the transition of our carbon dioxide-based vehicle registration and motor tax regimes to the new, more robust worldwide harmonised light vehicle test procedure emissions test from January of next year. As a result, our vehicle registration tax, VRT, regime will be based on emissions performance levels which are much closer to performance levels in the real world than is currently the case. Further measures include the extension of the nitrous oxide, NOx, emissions regime and the accelerated scheme of capital allowances for energy-efficient equipment.

Covid-19 is a present and future threat and challenge and I am confident that we will see our way past it. Last week, we saw the lifting of some of the restrictions regarding Covid, notably with the reopening of non-essential retail and services, hospitality and places of worship. Later in the month, we will see a further easing, including easing of some travel restrictions which will allow us to enjoy a Christmas closer to what we would normally have, but still short of what we would like.

The Government has taken action to ensure that the worst impacts of Covid are mitigated and that the economy is in a position to recover from the periods of restricted trade and forced closures as quickly and easily as possible. It is fair to say that the smooth reopening of non-essential retail and services was greatly facilitated by the supports the Government put in place, including the restart, restart plus and restart top-up grants, the Covid restrictions support scheme and the other supports in the form of the employment wage subsidy scheme, EWSS, and the pandemic unemployment payment, PUP. These are all parts of the broader range of supports put in place both at national and sectoral levels to help us through the pandemic.

The Government recognises that economic health and public health are intertwined and that the better our public health, the stronger our economic health will be. Therefore the Government's action has rightly been substantial and extensive. For example, as at 3 December, 41,200 employers were registered with Revenue for the EWSS. A total of €1,022 million has been paid out to 39,000 employers covering 420,800 employees. As of 4 December, 351,400 of those whose income from employment has been affected due to Covid-19 were being facilitated through the Covid-19 pandemic unemployment payment.

It is important to recognise that the EWSS is a bridge between regular employment and the PUP so the effectiveness of Government supports, including the EWSS, should not only be considered by reference to the level of uptake of EWSS by employers but also by reference to the numbers of people who continue to rely solely on the PUP. Some 75,100 employees in the EWSS in October have made PUP claims in November.

I would like to specifically refer to the Covid restrictions support scheme, CRSS. The CRSS provides support for businesses that are forced to temporarily close or to operate at a significantly reduced level because of Covid restrictions that either prohibit, or significantly restrict, customers of the business from accessing the premises in which the business is carried on. The scheme generally operates when level 3 restrictions or higher are in place and ceases when restrictions are lifted.

As of this morning, 14,000 businesses have registered 16,000 premises for the CRSS with Revenue. A further 2,800 registrations are currently at applicant registration stage. Claims for CRSS payments of €92.7 million for 16,600 premises have been made to date and €91.4 million of this has already been processed for payment. Section 11 of the Finance Bill provides for the CRSS and has been significantly improved during its passage through the Dáil.Qualifying businesses can apply to the Revenue Commissioners for a cash payment in respect of an advance credit for trading expenses for the period of the restrictions. This payment will be equal to 10% of those businesses' average weekly turnover in 2019, up to €20,000, and 5% thereafter, subject to a maximum weekly payment of €5,000, for each week that those businesses are affected by Covid restrictions. To qualify under the scheme, a business must be able to demonstrate that, because of the Covid restrictions, the turnover of the business in the period for which the restrictions are in operation, and for which a claim is made, will be no more than 25% of an amount equal to the average weekly turnover of the business in 2019, or average weekly turnover in 2020 in the case of a new business, multiplied by the number of weeks in the period for which a claim is made. As restrictions are eased and a business is no longer required to prohibit or considerably restrict customers from accessing its premises, it will then no longer qualify for CRSS.

One of the amendments to the Bill, as initiated, provides for an additional restart week, which will be payable to businesses on reopening. This recognises that businesses may take some time to reopen once the restrictions are lifted. Businesses may also incur additional costs in the form of physical adaptation of premises to ensure social distancing, getting in fresh stock or supplies and the provision of personal protective equipment, PPE, as they reopen. Another change was the inclusion of an appeal mechanism for businesses refused the CRSS. The scheme will operate from 13 October 2020 to 31 March 2021, and there is provision for the Minister for Finance to vary aspects of the scheme by ministerial order. Registration for affected businesses has been open since 1 November, and claims have been accepted by Revenue since 17 November. Payments issue within two to three days of valid claims being processed.

The Government also recently announced the provision of an additional seasonal payment of up to double the level of CRSS support, subject to a statutory maximum of €5,000 per week. This will be payable to businesses which cannot reopen through December due to extended restrictions, such as pubs that do not serve food. This additional payment will be paid for the weeks beginning 21 December 2020, 28 December 2020 and 4 January 2021. This is in recognition of the additional financial impact on those businesses of being closed at Christmas, which for many would have been a particularly busy trading period.

As I said, the Finance Bill provides the legislative basis for the budget. Tax measures announced on budget day included an expansion of the tax warehousing provisions to include the balance of 2019 income tax and 2020 preliminary tax obligations for self-assessed taxpayers whose income has been adversely affected by Covid restrictions, as well as the excess temporary wage subsidy scheme payments received by an employer which are due to be repaid to Revenue. There were no broad changes to income tax in the budget, but the Bill makes provision for specific announcements, such as equalising the earned income credit, with the PAYE credit by raising it by €150 to €1,650, and increasing the dependant relative tax credit from €70 to €245. This will ensure that the salary of a full-time worker on the top rate will remain outside the universal social charge, USC.

It is important to draw attention to something not in the budget or the Finance Bill, that is, there is no change to the rate of corporation tax. The Minister reaffirmed the Government's commitment to the 12.5% rate of corporation tax and our continued commitment to a corporate tax regime that supports economic activity and that is transparent, sustainable and legitimate.

A range of other vital measures are included in the Bill to support businesses across the economy. These are targeted at the agricultural, tourism, film, housing and start-up sectors. The Bill also provides for the announced temporary reduction of the VAT rate for the hospitality and tourism sectors from 13.5% to 9%, with effect from 1 November. This rate applies to catering and restaurant services, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, amusement parks, certain printed matter and hairdressing. Many of these businesses will be reopening with the easing of restrictions and will see the benefit of the VAT rate reduction. Noteworthy also is the introduction during the passage of the Bill of accelerated capital allowances for farm safety equipment, with particular emphasis on supporting those who have suffered life-changing injuries as a result of incidents on farms. This underlines the priority afforded to the issue of farm safety in the Government's programme.

We are going through extremely difficult and challenging times, but we are equipped to get through them because of the strong position we were in when we entered these difficult times.We face further challenges ahead, but I am confident we will overcome them. The Finance Bill always contains difficult choices between what people would like and what it is prudent to do, and we must remember that borrowings must eventually be repaid. It is right that we take advantage of our ability to borrow at low rates, but we must do so judiciously. We are beginning to see the start of the end of this traumatic time and our way to the resumption of normality next year. This will be in no small part due to the actions of the Government, including those in this Finance Bill. I commend this Bill to the House.