Paul Gavan (Sinn Fein) | Oireachtas source

It is nice to see the Minister of State. I thank him for coming in. We are going to oppose this Bill, as I am sure he would expect us to. I will outline the reasons over the next few minutes. However, I will welcome a couple of aspects of it because I want to be balanced and fair, if I can. I particularly welcome the ring-fenced funding for childcare. My union, SIPTU, has campaigned for this for years. I was part of its Big Start campaign six years ago. The fact it has managed to win ring-fenced funding is really encouraging. It is a tribute to its members throughout the country. I urge the Minister of State and his Government to ensure this is implemented. We need a sectoral employment order to bring about a new status, dignity and decent wages for those working in the sector. Funding has been ring-fenced, which is wonderful. Let us get that sectoral employment order in place and do something transformative for childcare. I pay tribute to my colleagues in SIPTU who campaigned so vigorously for that for so many years.

As the Minister of State will know, we also welcome the extension of the employment wage subsidy scheme, albeit in a graduated form, to the end of April 2022. I acknowledge the point Senator Casey made with regard to those anomalies. We will work constructively on that issue with the Minister of State next week.

Having got the good news out of the way, I will now focus a little more on why this budget does not deliver. I do not want to correct the maths of my colleague, Senator Casey, because I was not great at maths myself, but this is actually the sixth Fianna Fáil-Fine Gael budget. Fianna Fáil backed the previous four budgets before it came to power. These did absolutely nothing for housing. Unfortunately, it was very much part of that. This is not a new Government but very much an extension of the old Government. Unfortunately, it has the same ideas and the same failed policies. The reason we will oppose this budget is that it really is out of touch with how people are struggling today. I will give the Minister of State a couple of examples. I would welcome his comments on them.

First, the real spike in energy prices is shocking. I have some details here. Over recent months, there have been more than 30 energy price rises, which are expected to increase average annual household energy bills by more than €400. In the 12 months to September, energy prices rose by 22%, electricity prices by 21%, gas prices by 14% and home heating oil prices by 46%. These prices will increase further in the months ahead, putting great pressure on the finances of low- and middle-income households. The Finance Bill could have responded to these challenges by giving workers and families support and providing an immediate cut to their energy bills. Other governments in Europe have taken this action. In Spain, where there is, of course, a progressive left government, VAT on electricity was slashed, reducing prices by 10%. In recent weeks, the Czech finance minister wrote to the EU Commissioner for the Economy seeking authorisation to zero-rate VAT on household energy bills.

Sinn Féin would immediately engage with the Commission to remove VAT on domestic energy bills for a three-month period this winter, thereby reducing the cost of lighting and heating homes for lower and middle-income households by 12%. That is what should have been done but, unfortunately, this Government is just as out of touch as the previous one. It does not seem to understand how families are being hammered by these rises in energy prices. Indeed, it has added to them via carbon taxes.

This Finance Bill comes amid a wider cost-of-living crisis, with prices rising by more than 5% for workers and families in the last 12 months. This is the biggest annual price hike in 20 years. The Central Bank expects prices to rise again in 2022, by 3%, further eating into the purchasing power of households.Budget 2022 and this Finance Bill needed to respond to this cost of living crisis. Quite simply, it did not do so. Increases in core social welfare rates have failed to keep pace with rising prices. We have, as centrepieces of this budget and the Finance Bill, a tax package that was untargeted and an irresponsible use of limited resources.

Section 6 of the Bill would increase the standard rate band by €1,500 with a €50 increase in each of the personal, employee and earned income tax credits. The change to the standard rate band comes at great cost but will provide no benefit whatsoever to 80% of taxpayers who fall below it. Overall, this tax package will provide €2 a week to a worker on a salary of €30,000 but will benefit those on a ministerial salary to the tune of €415 a year.

This Finance Bill provides tax relief to those on high incomes and even further tax relief to landlords through section 16 but offers nothing to renters. These renters have seen their rents rise to astronomical levels yet have a Government that is determined to see them rise even higher. Dublin city now has the highest rents in Europe. Where I live in Limerick, rents for a very average three-bedroom house in my village are up to €1,400 a month and this budget has done nothing to address that issue. In fact, the Government clearly does not understand the depth of the problem because it has not even acknowledged that rents need to be frozen and then reduced. The Government just thinks it is okay to reduce the cost of how much rents go up by each year. Talk about missing the point. People cannot afford the rents they are on at the moment. We need to reduce rents. We could have done that if the Government had followed the Sinn Féin proposal to, first, freeze rent for three years and then give a one-month tax relief, which would have made a significant difference. Again, and not for the first time and just like in the previous five budgets, the Fianna Fáil-Fine Gael partnership rejected that option.

I want to talk about investment funds. Under Fine Gael and Fianna Fáil the deck is stacked against renters and struggling home buyers. There are no provisions in this Bill to end the speculation and financialisation of housing that is driving up rents, locking workers and families out of home ownership, and allowing the bulk purchase of homes by investment funds. Fine Gael introduced tax advantages for investment funds that allow and encourage them to push up prices and rents. Sinn Féín would end that by the doing the following: applying the full rate of capital gains tax on the disposal of property by investment funds just like any other business; applying a 17% stamp duty surcharge on the purchase of all homes, including apartments, by these funds; and hiking the rate of tax paid on dividends to 33%. This Government carries on the tax breaks for vulture funds. I have yet to hear an explanation from this Government as to why 2,600 of the promised social housing units next year are going to come about by insisting that councils lease those homes from vulture funds as opposed to buying them. What a complete and utter waste of money. Of course what that does is create a new income stream for vulture funds and gives them incredible leverage because they will rent these houses for 25 years. What will they say at the end of that period? They will say that they are not sure whether they should give these homes back or sell them to the State and will ask what else the State will do for them. This is an incredibly ideological decision. I have always associated this hard right ideology with Fine Gael and, unfortunately, it now seems to be just as prevalent with the Fianna Fáil Party, which is a huge shame.

In my last minute I will talk about the residential zoned land tax in section 77 and related sections. The stated purpose of the tax is to encourage the activation of zoned and serviced residential development land. While the failed vacant site levy was set at a rate of 7%, this will be set at 3% of the market value of the land and will only apply from 2024 so, in other words, after this Government has pretty much finished its term.

We welcome the fact that the tax will be administered by Revenue to ensure effective enforcement and collection. This reform could and should have been made of the vacant site levy, which has now been left as an abject Fine Gael failure. Once again, this is an example of the Government not taking action. Taxing people who own vacant sites is something this Government, just like the last one, will always shy away from. The Government has scrapped the original tax, brought in a lower one and said it will not introduce that until 2024.