Seanad debates

Friday, 18 December 2020

Appropriation Bill 2020: Second Stage


10:00 am

Photo of Paul GavanPaul Gavan (Sinn Fein) | Oireachtas source

Sinn Féin will support the Bill. The purpose of the Appropriation Bill is to give statutory authority for the amounts voted by the Dáil during the year as required by the Constitution. The Appropriation Bill must be enacted by the Oireachtas in December. Otherwise, there will be no authority to spend any voted moneys from the start of 2021. The amount of €69.7 billion in respect of net voted expenditure in the Bill includes the original Estimate, Further Revised Estimates and Supplementary Estimates presented to the Dáil. The final Supplementary Estimates were voted by the Dáil on 9 December.

I will not spend too much time speaking on this Bill because we all agree it has to be passed today, but I wish to raise one issue which the Minister of State should bring back. It relates to the tax reliefs that are contained in the current rules. Social Justice Ireland published an interesting piece which showed in 2016, 10% of our total tax revenue was made up of tax reliefs. Taking the figure of €70 billion for this year, if the 10% holds true, and it probably does, that is approximately €7 billion in tax reliefs. I find it shocking that there is never any information on the budgetary process about the costs of tax relief by time for each past year. They are not published.Neither is the estimated cost of tax reliefs for the year ahead. This is an important issue. We all know of tax reliefs that are unfair, in that they benefit the very well-off. I could point to pensions. Middle-income earners benefit from tax reliefs in this regard, but higher earners benefit disproportionately more. There were changes to the real estate investment fund, REIF, system in respect of real estate investment trusts, REITs, in 2019 because the Minister, Deputy Donohoe, stated that there was aggressive behaviour to avoid tax among Irish real estate funds. Those changes were welcome. Afterwards, however, The Irish Timeswrote that well-paid accountants and advisers were already working on finding the next tax ploy. We all know that these things are happening.

These reliefs are fundamentally regressive in nature. Even Departments have acknowledged that. They lead to those at the bottom subsidising the investments and savings of those at the top. This issue requires much more analysis from the Government. We are in a state where the super rich get tax breaks all the time while those on the minimum wage see a 10 cent per hour pay rise, student nurses work for free and workers across the State have no statutory right to sick pay. This is such a gross injustice. Bearing in mind the €7 billion in tax reliefs, it should not take a great deal of radical Government thinking to ensure a greater degree of equity. Loopholes and well-paid accountants are not available to low-paid workers. We need to rethink our economy and build the tax system around the basic principle of fairness that benefits those with the least through those who can pay most. The PAYE system is progressive, but the surrounding tax architecture is anything but.

That is all I have to say. We will support the Bill.


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