Martin Conway (Fine Gael) | Oireachtas source

The Minister of State is welcome to the House on his first budget in his important position in the Department of Finance. I commend him because he clearly influenced the budget significantly. There is an awful lot to take from this budget that is positive.

I remember standing up in this House in 2011, 2012, 2013 and 2014 when we were increasing taxes and cutting social welfare payments. There was no room to do anything in those budgets yet they were incredibly important because during that difficult period we worked diligently to get our economic sovereignty back. Then we started building a fabulous economy until the Brexit uncertainty evolved. That was resolved, to be followed by a worldwide pandemic. We were insulated from the worst elements of that pandemic. If you talk to people in Spain, Portugal and other countries, there were no payments for businesses that were closed. They were closed unilaterally, like they were in this country, but we had supports, so many businesses were able to resume afterwards because of that prudence. That is the reason we have the budget we have today.

It is fantastic to be able to give meaningful supports to people. The various childcare initiatives and initiatives in terms of pensions are important. They will not set the world alight but will make a big difference when it comes to the cost of living, particularly in the run-up to the expensive Christmas period. It is great that we are able to do what we are doing with child benefit and electricity credits.

I very much welcome the €300 increase in the blind tax credit. That has not increased in years. For people with eyesight difficulties who are out working the same as everybody else, it assists them in dealing with the extra costs they inevitably have in transport and so on.

I am disappointed, however. I have been on record here over many years saying the 9% VAT rate should be constant and permanent. It has not happened. I welcome the €4,000 across-the-board payment to people paying rates of €30,000 or less but, going forward, we need to re-examine the 9% VAT rate for hospitality restaurants and coffee shops, though not necessarily for accommodation providers because we all see what is happening there and it is buoyant enough. A restaurant that is doing €300,000 per year in turnover should be on 9% and there should be a step up if the restaurant is doing between, let us say, €300,000 and €800,000. Beyond €800,000, they could perhaps pay 13.5%. It would give certainty to people and free up capital for investment.When we introduced the 9% rate, it meant a 4.5% saving that allowed people to invest in upgrading their facilities and services and so on.

Going forward, we need to have a very detailed discussion on tax measures when it comes to retail. Retail has changed, changed utterly. We see the prevalence of online shopping. I was saying to somebody downstairs earlier that in my home town, we used to have two shoe shops. We have no shoe shop anymore and we have not had one in a long time. In the town of Ennis there were a number of shoe shops. We are now down to one or possibly two shoe shops, simply because people are buying shoes online. That is just the reality. We are not going to change that, no matter what we do. We have to look at reorientating and supporting retail.

In his previous role at the Department of Enterprise, Trade and Employment, the Minister of State did phenomenal work with local enterprise offices, Retail Excellence Ireland and the various other stakeholder groups to develop a retail policy and strategy. Retail is changing very quickly. People have apps on their phone and they are able to click and collect. There are all sorts of things happening and we have to embrace that. There is no point in not embracing it but we need to have tax measures that reflect the new reality and the commitments that we rightly have to make when it comes to minimum wage, sick pay for workers and automatic enrolment for a pension. These are things that have to happen. In a First World country, we need to do these things. We need to think of the people who are paying the piper as well, however. That is one aspect of the budget I find disappointing. Overall, however, it is an incredible budget and everybody involved in it deserves huge credit.