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

I thank all Senators who contributed to the debate. I appreciate all of the points made. I have taken note of them but it will not be possible to respond to each of them in the time available to me.

The budget was framed to deal with three particular issues facing us this year, namely, Brexit, the Covid-19 pandemic and climate change. These matters underpin the measures in the Finance Bill.

I will try to respond to the points made in succession. All Senators accepted that this is a difficult economic time. The issues raised with regard to the warehousing of taxes were in regard to take-up and interest charges. There was also reference to a cliff edge for turnover in regard to the Covid restrictions support scheme, CRSS.There is a different cliff edge in regard to the percentage of turnover which the Government has tried to ameliorate by allowing for extra weeks when businesses reopen. That is being softened. I accept the point made. I will come back to Senators on the warehousing of taxes.

The issue of carbon tax and the alternative to cars in rural areas was raised. This is an ongoing issue. The issue raised was that some businesses are not eligible for the CRSS even though they are suppliers to a particular company. There is a difficulty in that some businesses do not have a premises that is directly affected.

Senator Bacik referred to housing. I will come back to that. She also mentioned low pay and the minimum wage increase of 10 cent per hour. The latter applies primarily in the private sector in Ireland. It may also apply in particular parts of the public sector. The increase was not solely dictated by the Government. It is important to make that point.

There was much discussion on the PUP scheme. As I have said previously, payments under the scheme were taxable from day one. I recall several discussions during the course of the summer involving several members of the Government and Opposition about the tax bill that might arise next year. During the summer, Revenue announced that people will have until 2022 to commence payments and can pay over four years. All of this debate was in the context that everybody understood the PUP was taxable. Why else did we have that debate for months? It was never an emergency payment. It was inserted into a particular section of the Act to facilitate quick payment.

There is a Schedule in the social welfare legislation that deals with social welfare payments that are exempt from tax. Only payments listed in that Schedule are exempt. The PUP is not listed in that Schedule. The PUP payment is not specifically listed in the social welfare legislation as exempt from tax and, therefore, it was taxable from day one. I know it suits a narrative to say that the Government is trying to tax the payment retrospectively but the truth is that on the basis of the social welfare and taxation measures it was taxable from day one. I know people will continue to make that point. It is not true but that will not stop people repeating it.

On carbon tax and low-income households, the budget provides three measures, the first of which is an increase of €3.50 per week in the fuel allowance. This payment is means tested, which proves it is for low-income families and not well-off people. The qualifying child dependant allowance has been increased as well for low-income families in receipt of social welfare benefits. The living alone allowance has increased by €5 per week. These three measures were introduced to mitigate the increased cost that might arise for low-income families or households because of the carbon tax. They are not geared to the well-off. They are not across the payments. Rather, they are targeted at people on low incomes. It is important to make that point as well.

On housing, many Senators spoke about the importance of home ownership. Other Senators railed against it. It is notable that some Senators are objecting to the help-to-buy scheme. During my lifetime, and that of my parents, we have always had a mortgage interest subsidy scheme. It was a fundamental tenet of every Government in Ireland for generations that tax relief would be provided to help people buy their own homes. That scheme was abolished and we now have the help-to-buy scheme, which is the same scheme in principle but with different details. The scheme is helping Irish people to buy their own home. I have heard from two parties today that they are opposed to this scheme. They made the point that it is money for developers and is resulting in increased house prices. The debate on this boils down to whether one is in favour of the people of Ireland having the aspiration to own their own homes, which the help-to-buy scheme facilitates. If one is against the help-to-buy scheme, one is not in favour of people having that aspiration and would rather see them in a dependency culture, renting from the State, an approved housing body or a private landlord. One is either for home ownership or one is against it. I am hearing a clear division in this House. I make no apology for supporting home ownership or the State assisting people to buy their own homes. I would spend any amount of money if it helped people to do that rather than pay rent for the rest of their lives.There is a fundamental difference in attitude, and I know what side of the debate I am on. I am on the side of the Irish people who want to own their own homes. Others may choose to be on the other side, and that is their right too.

The issue of farm safety was mentioned by Senators. I appreciate that. There are definitely very specific measures. It does highlight the number of farmers who have accidents, many of whom are older people at home. They may be married men or grandparents whose sons or daughters have gone out to work, and these men are trying to keep the family farm going when they are long past doing that level of work. This is unsafe when many of them are on their own. It is a big issue. Teagasc and others have a major role to play in improving farm safety. There is a disproportionate number of work accidents in a farm setting. This is because of the isolated nature of some of the people who work on their own. In some cases they are often elderly. I am aware that children also get caught up in this but it is really the older people who get caught up rather than able bodied people of a younger age.

I would say thank God for the multinational, financial services and pharma sectors in Ireland this year. They kept receipts from income tax and corporation taxes up. It gave us the money to pay the Covid restriction support scheme, CRSS, the pandemic unemployment payment, PUP, and everything that went with it. Of course, some people have an ideological issue with that as well. We were lucky to have those sectors. They are the sectors that kept employment up this year and people working in multinational sectors are, by and large, well paid where the wage or salary in those companies are twice the average industrial wage in Ireland. They are all on the top tax rate and have continued to work. Without them, on this occasion, we would not have had a fraction of the taxes that we have had to help to pay for some of the other issues.

I will pass on the matter of Taiwan and will leave that for somebody else.

These are some of the points I wanted to make. Some deal with specifics that have been raised here today such as the carbon tax and the taxation of the PUP. I knew from day one that the PUP was always going to be taxable income. Perhaps some people did not realise this. When one thinks about it, while the PUP is technically taxable it is not really taxable in reality because if a person was to earn the PUP of €350 for 52 weeks of the year, then he or she is not in the tax net. The sum of €350 per week for one year brings nobody into the tax net. In reality, the PUP is not taxable. What is taxable, however, is when people are in receipt of the PUP for a portion of a year and also have €30,000 or €40,000, for example, through their own income for the rest of the year. Of course that is going to be taxable and of course it should be. If one has lived for the year on PUP then no income tax would be payable because one has not reached the taxation threshold. That PUP is taxable is a myth and a way of spinning something. People who receive the PUP are taxed when their other income brings them into the tax net over the PUP level. It is taken into consideration for calculation of income, but no PUP payment on its own is taxable. Nobody in Ireland will pay tax who has been on PUP for the full year and has no other income. They are not in the tax net. Some people have said that the PUP is taxable but in fact tax is not paid on the PUP in practical terms. It was always included in the reckoning of income if the person has other income to tax. If there is no other income then the PUP will not ever put a person into the tax net in Ireland. I just wanted to state this on the record.

I presume my time is almost up. I believe we will be in the Seanad on Friday morning to discuss Committee Stage. We might have time to get into further detail on some of the matters. The Senators can see the position I am taking. I am supporting the measures. I am happy with this Finance Bill. Of course it could have been better. We would love to have been expansive with it but given the times we find ourselves in, with the Covid pandemic and Brexit, we had to take a precautionary approach to our budget this year. We have done as much as we can, given the year that is in it.