Michael McDowell (Independent)

I welcome the Minister of State. I echo what Senator O'Reilly has said about the Minister of State and his approach to debates of this kind.

I have a number of points to make in relation to this Bill that the Minister of State might not like to hear. First, whereas Senator O'Reilly calls it a prudent Bill and suggests it is a conservative measure in times of economic turbulence, I think there are aspects of the Finance Bill and the budgetary strategy of the Government that need to be fundamentally challenged. The average industrial wage in Ireland is roughly €49,000, and workers hit the top rate of tax at around €44,000. The effect of the budget put forward by the former Minister, Paschal Donohoe, was to increase the number of workers who, because of wage inflation and the like, are being pushed from the lower rate of taxation to the higher rate. His failure to index the lower tax band at the 20% rate is, in my view, inexcusable. I cannot see why somebody earning below the average industrial wage should be paying more tax as a result of so-called prudence on the part of the Government. I do not think that follows in the present circumstances. The excuse given, that there were other things the Government had decided to do, such as reducing the VAT rate in specific areas, does not excuse the increased incidence of taxation on workers earning below the average.

I look around my own part of Dublin. You can hardly move without Deliveroo people going in this direction and that. You can hardly get into a restaurant to eat. You can hardly book a restaurant to eat. The big thing, though, is that many restaurants are closing for more days in the week, not because of the VAT rate - the more money they get, the better off they are - but because there are problems recruiting catering staff and people to work in their businesses. What I find strange is that, in a thriving industry, so many premises are closed for so much of the time.

It is not just a Dublin 6 problem. I was in Sligo recently and I noticed that almost every pub in Sligo is closed until 5 o'clock in the afternoon. What is happening? Why can they not keep open? I just wanted to get lunch during a court case I was doing there and I could not get a bowl of soup in a pub in Sligo at lunchtime. It suddenly struck me that things are not healthy in the catering trade in this country. That was not to do with whether I would be charged VAT on the soup and sandwich at lunch. It was all to do with getting people to work and making it profitable to open.

I will move on to my next point. I believe that, yet again, the Government has left CAT and CGT rates at 33%.When Charlie McCreevy, way back in 2002, reduced the CAT rate from 40% to 20%, the yield went up 500% the following year. Do people understand that? Five times as much money came in when he halved the rate from 40% to 20%. That is an extraordinary figure. I believe an awful lot of transactions are held up by the 33.3% rate, which was introduced for good reason at the time of the financial crisis in 2009, but there is no reason to do it now. A reduction in those two rates of tax would free up transactions dramatically and stop all sorts of measures to avoid paying those taxes. There are so many transactions where people say to themselves that if they realise the capital gain, the State takes 33.3% immediately, so they decide not to do that.

The third point I want to make is this-----