Pat Casey (Fianna Fail) | Oireachtas source

I welcome the Minister of State to the House. We must first compliment the Government on its management of the economy. This was noted when the 2023 budget was announced in September 2022. The Government clearly stated that if another intervention were needed, it would be in a position to so do concerning the cost-of-living crisis. This is exactly what we are doing today. We are legislating for this intervention of €1.2 billion. This will have a direct impact on families. I think more than €410 million was allocated directly to measures affecting the day-to-day lives of those families who are most vulnerable in our society. An additional €60 million was allocated to the education process, and more specifically around providing transport and reducing fees for the junior and leaving certificate examinations. This intervention was targeted mostly at families and at the most vulnerable families in our society. Everybody in the House must acknowledge this and that the Government put us in a position to be able to do it.

Senator Maria Byrne has mentioned almost everything, so we will not go back over that ground. Regarding the business aspect, however, I wish to reflect on this area. Just in case the people from The Ditch website are listening in, I do have an interest in the hospitality industry. I wish to make this point clear. The support provided to businesses throughout the Covid-19 pandemic was unprecedented and has kept a significant number of family businesses alive and in a position to continue. I must acknowledge this point. Turning to the hospitality and tourism industry and the ongoing debate concerning the VAT rate, and the current temporary reduction in the VAT rate seems to have spent more time at this level than at the 13.5% in recent years, what is needed is a wider debate. Several Senators from all parties in the House have called for such a debate on this sector and what is the correct VAT rate for the tourism industry to be in.

We have two rates at present, depending on whether we are talking about accommodation, food or alcohol or the types of activities being undertaken. Hiring a conference room attracts a higher rate than staying in accommodation. I refer to the impact on other activities in the hospitality area as well. We need to have an open discussion around this issue of VAT in the hospitality industry. Looking at the construction industry, companies operating in that area are charged a VAT rate of 23% on products coming into the country. Having worked on those products and delivered a service, be that building a house or something else, however, means that a VAT rate of only 13.5% will be charged. To a certain extent, the hospitality industry does the same thing. It takes in certain products at a VAT rate of 23%, but it is then charged the same rate on what it produces from them. This is the case, even though there is a significant labour input during that process, similar to what happens in the construction industry. I would appreciate, therefore, having a wider debate on this issue, and several of us in the House have called for this to happen.

Moving to the TBESS, it is great to see the changes made in it. One thing I highlighted to my colleague, the Minister for Finance, Deputy Michael McGrath, and this was referred to already, related to natural gas and electricity. In fairness to anybody running a business in a rural area, it will not be on natural gas. There is a certain discrimination around this issue. Businesses operating using liquefied petroleum gas, LPG, do not qualify for this scheme but they are faced with the same price increases. It may be that a scheme of this kind is being worked out at present. Hopefully, this is happening because it is not fair that businesses in this situation are being penalised for using LPG as a source of energy. I thank the Minister of State for coming in today. I support this budget. As I have said, the Government has acted very responsibly. We clearly put it on the record last year that we would intervene again. We were in a position to intervene, and that is critical.

On the point made by Senator McDowell about the money we have at the moment, I agree that we would all like to see the money spent wisely. The economy is very heated at the moment. The last thing we want is to throw more money into the economy because that will overheat it. Therefore, it is critical that we find the right projects or things for the funding we have to finance into the future.