Rónán Mullen (Independent) | Oireachtas source

I welcome this Bill in that it gives businesses and particularly small and family-owned firms, some clarity in relation to the reopening post-Covid. Earlier this afternoon I welcomed the introduction of the Companies (Rescue Process for Small and Micro Companies) Bill, and this Bill provides some welcome supports which will hopefully help to minimise the number of businesses that are threatened with failure over the coming months and years. However, I do worry that the sheer scale of the challenges facing the economy over the next 18 months are being underestimated. We have been borrowing the equivalent of €1.5 billion per month throughout the crisis to pay for the various supports which are in place. This has acted as an economic comfort-blanket of sorts, but it has also acted as a comfort blanket to the Government and the political system. There will eventually come a point where this cannot continue, and I worry that the political and economic awakenings will be very rude indeed, and that we are not preparing ourselves sufficiently for that.

Clearly, as we recover, small enterprises, particularly those in hospitality and tourism, have to be our focus, because they are areas of huge potential job creation. The Bill extends the Covid restrictions support scheme until September, and the employment wage subsidy scheme until the end of the year. I welcome this, but again I do worry about what will happen when these schemes come to an end. We need to be careful that this will not be like hitting a brick wall for some businesses. Businesses need to be eased back to normality, with supports being tapered to the greatest extent possible.

I particularly welcome the idea of the business resumption support scheme, which will allow businesses in effect to claim an advance tax credit of up to €15,000 to deal with reopening expenses. This is exactly the kind of cushion we need to be putting in place to ensure soft landings and that there will be no cliff-edge when other supports are ended.

The warehousing of tax liabilities will be extended by the Bill, continuing until the end of 2021.As I said earlier this afternoon on the Companies (Rescue Process for Small and Micro Companies) Bill, this only puts off the evil day for a significant number of companies. Eventually, these will need to confront their existing tax liabilities and we need to consider whether we are doing enough to ensure small businesses will not be pushed to the brink of danger by having to do so.

The continuation of the reduced 9% VAT rate in hospitality is to be supported. The decision to increase that rate back to 13.5% in late 2018 was ridiculous and something that I opposed at the time. It was a simple revenue grab. It was an increase in stealth taxes to fund runaway Government spending in a range of areas and fill out the coffers ahead of a looming general election. Increasing taxes on a sector that supports so many jobs and where prices paid by consumers are so competitive was a strange move. The spectre of Fine Gael, a party that professes to support small enterprises, presiding over and defending increased taxes on a sector almost entirely made up of such businesses, seems strange. Sadly, it took the onset of the Covid-19 crisis to convince the party of the errors of its ways. The 9% rate will allow the hospitality sector to be more competitive on prices or to retain more of its takings, so that is clearly the right thing to do. The rate should be retained long after the crisis has passed.

I listened carefully to Senator Sherlock, as always. I always think that her contributions are thoughtful. I do not like to see any situation where people take advantage of the housing crisis and economic situation to create a future for homeowners that involves them having poorer facilities than what they deserve and I worry about that.

The 10% rate of stamp duty for vulture funds and the Bill's provisions for this apply to funds that will buy up multiple units in new developments, with an exemption for those units which are leased back to local authorities. This proposal was in the news last week and led to much of the usual sloganeering. I wonder why it caused such a stir. The reality is that we have a serious housing shortage. I agree that local authorities need to build more houses themselves but that will take time. It makes sense in the short term to incentivise the leasing of properties to local authorities at fair rates. It is not a long-term solution but it is not one that we should turn our nose up for ideological or populist reasons. I am not suggesting that those are the reasons of any particular reason. I am not convinced by the reasons put forward to oppose that measure. It seems that it is a small price to pay if it increases the number of units available to the councils in the short term.