Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Recommendations Nos. 1 and 2 are related and may be discussed together by agreement. Is that agreed? Agreed.

Alice-Mary Higgins (Independent)
Link to this: Individually | In context | Oireachtas source

I move recommendation No. 1:

In page 7, between lines 19 and 20, to insert the following:

“Report on evidence for special rates of VAT 6. The Minister shall, within three months of the passing of this Act, lay before both Houses of the Oireachtas a report on the evidence base for the extension of the 9 per cent rate of VAT on the supply of certain goods and services in the hospitality and tourism sectors, which shall include analysis of the financial health of the sectors and profits in the sectors over the last three financial quarters, as well as the cost to the Exchequer of extending the 9 per cent rate.”.

Recommendation Nos. 1 and 2 relate to the extension of the special 9% rate of VAT for the hospitality and tourism sector. Recommendation No. 1 seeks a report which gives more information on the evidence base for the extension of the special 9% rate, including analysis of the financial health of the sectors and profits in the sectors over the last three financial quarters, as well as the cost to the Exchequer of extending the 9% rate.

It was absolutely right and proportionate that significant State support was extended to many sectors of the economy during the Covid-19 pandemic in order to mitigate its effects. However, it is important that we apply scrutiny when we are looking at certain very profitable business sectors. I realise that hospitality is a very broad spectrum. There are potentially profitable sectors within hospitality. In particular I am thinking of the hotel industry, which is being subsidised by the State despite significant profits. We need to remember that tax reliefs and tax breaks are public expenditure. In that context, I request that when we are making those decisions, we have the best possible evidence base.

I know these are only recommendations and will not likely impact this Finance Bill, but we need to ensure we apply nuance within a measure. Having a more detailed analysis of the sector might allow us to look at, for example, what aspects of the hospitality industry are extremely profitable and what aspects need support.

I will give the example a particular hotel group which was in the news last week, the Dalata Hotel Group. I simply picked this example because it is in the news. It reported the revenue per available room had increased by 28% on the 2019 levels. That is not simply recovery; that is an increase of 28% compared with 2019 levels for a particular hotel chain. That is the kind of nuance we might need to apply on these measures to ensure we are not subsidising very profitable large international hotel chains. The hotel group has seen its revenues boom and, in that context, where is the evidence to support it being subsidised by a tax relief?

Recommendation No. 2 calls for another report.This is about ensuring we have the best evidence base so that we can make better and more detailed and nuanced financial decisions. Recommendation No. 2 proposes a slightly different report. It relates not to the short term but, rather, to the longer term in the context of the impact of the 9% tax rate on the hospitality and tourism sectors since its introduction, "with particular analysis of the impact on wages of workers in the sector, prices for consumers, and profit margins for providers". I, like others, supported the introduction of the 9% rate, but, at the time, we were talking about engagement with what were then joint labour committees, for example, as well as employment standards, and whether we would see a knock-on effect whereby giving this public subsidy to a sector would not simply benefit the shareholders or owners of companies but would also have a significant benefit for those working in the sector. It was about genuinely supporting part of the fabric of society rather than simply supporting people to be in employment. There was a concern that when the State showed generosity to the hospitality sector, even going back to the period post 2008, opportunism was evident in some cases, such as when the roll-out of no-fixed-hours contracts accelerated in certain parts of the hospitality industry and there were poor practices. We are now seeing the beginning of a positive move in that regard. I acknowledge the positive steps taken recently by the Oireachtas towards ensuring fair play and conditions for workers through the passage of the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022, for example. I commend Senator Gavan on bringing forward the original legislation that prompted the Government to bring forward its own legislation, which is very welcome, in respect of the payment of tips and gratuities to hospitality workers.

There has been progress in that area but it would be useful to have an analysis of how the reduced VAT rate of 9% was passed on. We have heard reports regarding the boom compared with pre-pandemic levels. If we had that analysis, it would be useful. We could consider how to continue to provide supports, such as through a reduced rate of VAT, possibly with conditions attached thereto. It is important that workers, customers and communities benefit, as well as company owners or shareholders. If the sector is to continue to receive targeted support, let us make sure the prosperity is reflected across the board.

I have other facts and figures relating to this area. Through the recommendation, I am looking for the Government to do its own research rather than us having to piece this together. Research carried out by Fáilte Ireland in 2022 found that 42% of hospitality and tourism workers did not return to their pre-pandemic employers, while almost one third of workers chose to leave the sector, largely due to pay and conditions. The health of the sector is impacted by the failure to have good and secure working conditions. The Irish Examiner reported in 2022 that the average rate for a hotel room in Ireland increased by 30% from 2019. The recommendations call for a distributional analysis to provide clear evidence in respect of this measure. It should not be a tool that is bluntly applied. Rather, we must ensure it is being used to best effect and in the best possible way to the widest benefit. In that regard, I hope the Minister of State will consider agreeing to either of the recommendations.

Maria Byrne (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I understand from where Senator Higgins is coming with regard to hotels that have put up their rates but that is not the case for all hotels. I have had many dealings with small hoteliers and others in the hospitality industry. Yesterday, I spoke to a small hotelier who is so grateful that the 9% VAT was kept and for the supports that have been in place. He believes that if those supports were not in place, his business would not have reopened after Covid. While acknowledging that the reduced rate will be phased out, he believes it has helped to keep his business afloat and to keep people in employment. He employs approximately 80 people in the hotel. Without the reduced rate, he would not have been able to keep those employees on board because of the costs. He is very grateful for the reduced rate. It has been well spent.

I understand that it is to be phased out. The Minister of State, Deputy Richmond, and I were in Limerick recently to meet 38 businesses, some of which are in the hospitality industry. They included pub owners, small hoteliers and large hoteliers. Some of the bigger businesses are showing a profit but these supports have kept the smaller ones afloat. Three businesses on my street that were in the hospitality industry did not reopen after Covid for various reasons. Although the reduced rate has helped many businesses, it has benefited smaller businesses to a greater extent. The extension of the supports has helped those businesses to try to get back to where they were previously. Although I understand from where Senator Higgins is coming with regard to the bigger hotels and profiteering, keeping the supports in place was the right decision. It should be kept under review.

Pat Casey (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As all present are aware, I am involved in the industry. The picture portrayed by Senator Higgins is not true across the board. There is a need to put that on the record. Sadly, VAT is a blunt instrument. It is very inflexible in terms of how it can be applied. The reduced rate was brought in to make business viable. It was not necessarily brought in for it to be passed on directly to the customer. We need to consider what the industry has gone through in the past two years. When one looks past the big chains and the big hotels based in cities to more rural locations with hotels that depend on seasonal business, it is a completely different picture. I refer to tax warehousing. How many small and medium-sized hotels, restaurants and coffee shops had to put their tax into that warehousing because of their inability to pay it back? How much of that is still owed by those businesses?

I have no problem with a report being prepared. If analysis is carried out, we will probably be able to fine-tune things or get a better understanding of the situation. Regrettably, however, there is not the flexibility to apply VAT at a particular rate to a hotel in Dublin but at another rate to a hotel in Wicklow. A holistic approach has to be taken in the context of VAT. On several occasions, I have called for a wider debate on the hospitality industry and the correct VAT rate for the industry. Those in the sector operate in a very high-cost economy here in Ireland. All the input costs are extremely high. That has an effect on the selling price, which has an impact on customers.

With regard to staff, I cannot agree with the broad statement made by Senator Higgins. I lost most of my staff when Covid came. The fact that they did not return was not down to pay; it was because they went home to their own countries, those economies took off and there was no need for them to return to Ireland. It was not all about pay and conditions. I had an incredibly loyal bunch of staff whom I had no choice but to let go. They went home and did not return to Ireland. Senator Higgins suggested that was purely because of pay but there are other conditions that affect whether staff leave the industry and do not return to it. If we had the reports suggested, it is possible that we could analyse this a bit better.

Paul Gavan (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister of State is very welcome to the House. I take on board the remarks of Senator Casey. It is a valid point. There is a difference between the smaller hotel chains and employers and the big chains that are really cleaning up. We know they are cleaning up because their profits are published. I failed to get a hotel room for tomorrow night, when the Bruce Springsteen concert is on. The prices being charged in this city are outrageous. I support recommendation No. 2, in particular. Senator Casey has made the point that good information is always useful. It will help us make clear decisions. There is a point I always make about the hotel sector and Senator Casey will not be surprised that I make it again. In fairness, I think he has agreed with me. That sector needs a sectoral employment order, SEO, to put a base of decency at the floor to address the issue of low pay. It is not the only issue or the only reason people move but it is an issue and has been for some time.

I used to try to organise hotel workers. There are plenty of good employers out there and I am sure Senator Casey is one of them. I do not doubt that but it was noticeable that any time I tried to organise workers in hotels into trade unions, they were fired. That includes in Limerick. They were driven out. The best way to deal with low pay, terms and conditions - because sometimes, as Senator Casey said, it is not just the pay but the conditions, hours and so on - is to put in place an SEO like that done for early years educators. That is the model. If we are giving significant subsidies to the hotel sector, which we certainly are, the least the Government should do is ask the employers to engage in a process. The reason we do not have an SEO is the employer groups, specifically the Irish Hotels Federation, refuse to engage in talks. That is not acceptable to me and it should not be acceptable to the Government.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will leave the question of the sectoral order to the Department of Enterprise, Trade and Employment as it relates to it. I will observe that the Low Pay Commission pays a strong role in wages across every sector. We have had legislation on payment of wages in tips and on sick pay. There have been a number of increases in minimum wage. I note the foregoing in respect of pay, which is a hugely important part of what Senator Higgins is raising in terms of the analysis of the report.

On VAT, the application of State supports to this sector and the extension of those supports, I suggest this is a good moment in that conversation coming out of the pandemic and being at 3.9% employment, which is a record low since the early 2000s. It is a very happy balance of a conversation to have survived the pandemic with the employment wage subsidy schemes and VAT support schemes and to be in a balanced discussion about a six-month window of additional support to that sector. The Minister, Deputy Michael McGrath, has been clear the extension is until the end of August and no further. The sector is on notice of that, which is important.

Application of State supports, as is reflected in this report, is nuanced. VAT, as the Senator said, is unfortunately a blunt instrument, the parameters of which we do not necessarily control because they are tightly controlled at European level for good reasons. I understand it is not permissible to attach conditions, make further nuances within it or apply it to this or that part of a sector. It would be wonderful if we could, but it is not that way. We have to take a broader perspective on the whole industry. There is a huge difference between large hotel groups and small bed and breakfasts in their ability to manage their recovery and in their capacity to buy products in bulk, warehouse funds and treat tax differently, as well as in their revenue and ability to manage and warehouse it in different ways. They are very different cost operations. We would not like a scenario in which we had withdrawn supports and discovered that, while big businesses maintained profitability and viability, it was at the expense of brilliant hospitality services around Ireland who offer something genuine, smaller and different. The value of the extension of the reduced VAT rate is the additional support it provides to surmount the difficulties the sector went through during the pandemic, which were more acute than many other sectors and take longer to recover from, even with the employment wage subsidy continuing as it did. That additional support helps protect smaller providers, which are a point of differentiation in the tourism industry. For that reason, it was a well justified political decision. However, it is clear we are back at full employment and the extension of the VAT rate cannot be justified past that. There is merit in looking at the sector overall to find ways to support it, having regard to what I have said about the different sizes.

By way of evidence base, the Department did an assessment of this in 2018 which resulted in the VAT rate going back up to 13.5%. The pandemic considerably changed that position and the Department did another assessment in January which provided the basis for the decision to bring it back to 13.5% overall. However, we have to look at the sector in all its complexity and make sure we are not cutting off too soon and have viability for all the businesses.

I will not accept the recommendations. I will, however, point to the existence of those other research papers should the Senator seek further information.

Alice-Mary Higgins (Independent)
Link to this: Individually | In context | Oireachtas source

The reason I do not oppose this section is I think there is a question of ensuring, going into this summer and thinking of seasonal locations and operators, that there is no negative impact in the immediate future. When we did a blunt financial analysis, both times it led to the VAT rate going up but what is needed is a sectoral analysis that is more nuanced and would include the sectoral employment order issue as well as looking at how we support seasonal operators, small businesses and those in the hospitality sector who are not in the overnight business but in the ancillary businesses, including those parts of the industry related to just transition. We are hoping to find some space in terms of just transition within the hospitality sector for areas that would have been engaged in other employments that cannot continue. There is a lot happening.

In laying out these points, I am trying to point to the need not to simply have a discussion in August again. If this is about to expire at some point, it is important to have a plan for what comes next and, as the Minister of State has outlined, that what comes next recognises the diversity of actors and needs in the sector and does not end up simply serving the largest and most profitable actors.

I am happy to withdraw the recommendations for now. I wanted to make sure we have that discussion. There is great expertise and I encourage that it not become a siloed conversation, whereby the conversation about sectoral employment orders only happens in the Department of Enterprise, Trade and Employment and that about VAT only happens in the Department of Finance; meanwhile, we have tourism, culture and just transition. There is a need for a holistic approach to the hospitality industry and a joined-up strategy. If this is a blunt instrument, especially if it is one that is on the way out, we must look to other effective instruments we will bring in to strategically help the industry in the future. I acknowledge there are many reasons people have left but this has been reported as one of the key reasons by research based on speaking to those who have left the sector and remained in Ireland.

I hope we have opportunities for engagement and do not find ourselves at the next crisis point discussing VAT on its own again. I know that is not the Minister of State’s intention, but we have seen it wax and wane: 14%, 13.5%, 9% and back. There is an opportunity to use this time constructively.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate the Senator’s point about the divisions of Government. There is nothing more frustrating than somebody saying that is the responsibility of a different Department. I understand that. However, there are many tools that can be used. Tax is one of them. Subsidies and grants are another piece in relation to tourism and can be more targeted and beneficial to achieve the things the Senator is talking about in relation to just transition and other things. Unfortunately, this is a Finance Bill.

Alice-Mary Higgins (Independent)
Link to this: Individually | In context | Oireachtas source

I move recommendation No. 2:

In page 7, between lines 19 and 20, to insert the following:

“Review of impact of 9 per cent VAT rate for hospitality sector

6.The Minister shall, within three months of the passing of this Act, lay before both Houses of the Oireachtas a report on the impact of the 9 per cent VAT in the hospitality and tourism sectors since its introduction, with particular analysis of the impact on wages of workers in the sector, prices for consumers, and profit margins for providers.”.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Recommendation No. 3 in the names of Senators Higgins and Ruane has been ruled out of order as it is not relevant to the subject matter of the Bill.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Recommendations Nos. 4 to 6, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.

Alice-Mary Higgins (Independent)
Link to this: Individually | In context | Oireachtas source

I move recommendation No. 4:

In page 8, between lines 5 and 6, to insert the following: "Report on increase in rate of Vacant Homes Tax

7.The Minister shall, within three months of the passing of this Act, lay before both Houses of the Oireachtas a report on options to increase the rate of tax from 0.3 per cent of the value of a property to a rate of 5 per cent of the value of a property.".

I may have to leave shortly. If I do Senator Gavan will move the other recommendations in my name.

Recommendations Nos. 4 to 6, inclusive, relate to the vacant homes tax. Recommendation No. 4 calls for an increase in the rate of the vacant homes tax from 0.3% to 5%. This was the rate proposed in our Derelict and Vacant Sites Bill 2017. Back in 2017 the Civil Engagement Group and the then Green Party Senator Grace O'Sullivan had been calling for action in respect of vacant and derelict sites. We have all seen the pictures from around the country of vacant and derelict homes. The 0.3% rate set at present is too low to be a meaningful disincentive to property hoarding. It is an issue I raised on the Order of Business last week. I made the point that we need to look to the stick as well as the carrot. While I welcome the new grant schemes in respect of vacant homes the fact is that we have not applied pressure in the other way with regard to vacant homes. We have had very long delays. This is an issue that I and others have been raising since 2017. What significant difference could have been made to the housing crisis we have now if we had had real action in respect of vacant homes from 2017?

We are all aware that the annual price increase of a property in the current market vastly outstrips the rate of the tax. If anything, the tax in its current form is an incentive to retain a property. According to the CSO, property prices increased by 14% between June 2021 and 2022. Astronomic price increases continued for some time. The reality is that a 0.3% tax is not a meaningful incentive to bring a vacant property into use when the owner is gaining 10% or more of the value simply by hoarding the property, speculating on trading the property or having it as an asset on a portfolio that can be sold.

Recommendation No. 5 addresses a different gap in the policy on vacant homes. This is the fact that derelict properties are exempt from the tax. We know that in 2021 only €1.1 million out of the €4.5 million owed in derelict site levies was collected by city and county councils. This is a collection rate of 23%. This is an issue for the State and our finances. A total of 18 councils failed to collect any levy at all. Again there are questions on how we incentivise or press councils to do this. It is a matter for the Department of Finance to address.

If we have a derelict site levy that is not working, we need to ensure we have other measures that do work, as well as looking to see what pressure can be placed to ensure the levy is collected. Perhaps allowing the retention of the funds at local level or ring fencing could make a difference in this regard. In other countries such as France, where taxes on vacant and derelict homes have been successfully introduced, derelict buildings have been included in the same bracket as vacant homes. It is not clear why we have not taken this approach with regard to excluding them from any national revenue measures when clearly the site levies are not adequate and not being collected.

Recommendation No. 6 calls for a report on the options for applying a rate of vacant home tax that varies annually and may be linked to annual residential property price inflation data, with particular assessment of the revenue-raising potential of such a measure and the potential deterrent effects it may have in respect of property hoarding. Whenever vacant houses and homes are mentioned we hear the examples of homes that may be vacant because of the fair deal scheme. There are also homes that are vacant for various other reasons. We also know there are entire apartment buildings with many apartments owned by the same investors that are also empty. I live in the city centre of Dublin and I know there are properties and homes that are left vacant because they are part of a suite or portfolio of assets that are sold and traded on the basis of their potential future revenue. They are treated as devices to store money and as future potential asset returns rather than being used as places to live. This is another area where there may be scope to look to more nuanced measures such as a variable rate. Where we have multiple vacant homes or portfolios of vacant homes, we need to increase massively the pressure on them. More nuanced measures would be a more effective and fair way to deter property hoarding, ensuring that in a given year the level of the tax would be directly linked to property price inflation for that year. The CSO monitors property prices and collects such data already. These data could be used effectively in terms of exploring a variable rate of tax.

Paul Gavan (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Sinn Féin supports these recommendations. It is clear to anyone with common sense that the current rate of the vacant home tax, at 0.3%, is not adequate. Members of the Minister of State's own party have acknowledged as much to me off the record. In the middle of a housing crisis it is unforgivable. We fully support the recommendation on including derelict sites in an effective levy. This is something the Government should act on.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will take this opportunity to reflect on vacancy. I acknowledge the great difficulties faced by many people and families at this moment. The need to address vacancy and the housing crisis is a priority objective of the Government. Senators are aware that in Housing for All the Government has set out a suite of incentives to try to encourage the reuse of properties and increase the supply of housing.

Following a commitment made in Housing for All, a new vacant homes tax was announced in the budget and legislated for in the Finance Act 2022. Residential property is within the scope of the vacant homes tax if it has been occupied as a dwelling for fewer than 30 days in a chargeable period. The first chargeable period commenced on 1 November 2022. The first self-assessed returns are due on 7 November 2023 and the tax will be payable on 1 January 2024. The vacant homes tax will be charged, as Senators are aware, at a rate equal to three times the property's existing base local property tax liability and must be paid in addition to local property tax. A small number of narrow exemptions are available to ensure that homeowners are not excessively penalised for normal temporary vacancy, which is a normal part of any housing market.

Senators have made recommendations for reports on a number of aspects of the tax, including the rate at which it is charged and options to include derelict properties. As the Minister, Deputy Michael McGrath, has said on a number of occasions, this is a new tax and it is important to allow the tax to be implemented and to monitor and review the tax as to its effectiveness. There are a couple of principles involved in making it likely to work the best it can. In developing a new tax the most important consideration in many respects is the simplicity of being able to administer it so we can collect the revenue. The tax should be easy to understand, can be administered in a straightforward way and is capable of being collected. This is why the vacant home tax is based on the local property tax charge. It is set as a multiple of the property's base local property tax as this tax system is well understood at this point.

The purpose of the vacant home tax is to encourage behavioural change as much as possible to get the properties back into use. It should be set at a level that will influence the decision-making of property owners. It is meant to be a behavioural tax. A tax charge at three times the local property tax represents a considerable financial penalty to those who leave properties vacant and will incentivise property owners to bring such properties back into use. Senators have said this may pale into insignificance with the uplift value that may be incurred but, at the same time, people still have to pay out the tax as it accrues.The owner of a property valued a €500,000 would face an annual vacant homes tax charge of €1,485 in addition to their local property tax charge of €495. While a higher rate would mean a greater yield initially, the policy is to try to get as many homes back into use as possible, and to achieve that balance as quickly as may be. It is really important, in that context, to look at the vacancy data from the local property tax returns, on which this tax is based. We are clear, based on that analysis, that there are 57,000 properties reported as vacant by their owners. When we look at the reasons for that, 22% of them are holiday homes, 20% are undergoing refurbishment, 13% are for sale, 7% are under probate applications, 7% have owners in long-term care, and 4% are between lettings. Around 80% of them are accounted for in a reasonable way, having regard to the construction of the local property tax, LPT. We consider holiday homes as part of that. Looking around cities and towns, it is very frustrating to see any property vacant. However, it is important to be aware of the breakdown of that. Not all vacant homes are coming from the same basis.

It is also very clear that 61% of the properties were reported as vacant for less than 12 months, and in all but one of the local authority areas, at least 50% of vacant properties were reported as vacant for less than 12 months. Preliminary analysis indicates that levels of vacancy among LPT-liable properties are low across all counties and are considered, counterintuitively, at levels that are consistent with normal turn in a property market. In terms of the location of properties reported vacant, 2.6% of properties in the Dublin city local authority area were reported as vacant, which is very low, having regard to the normal turn in the market. Similar low rates existed in particularly high areas of demand, such as Cork city with 2.6%; Dún Laoghaire-Rathdown with 2%; Fingal with 1.7%; Galway city with 2.4%; and Limerick city and county with 2.5%. They are lower than what a market should be.

In respect of derelict properties, as the Senator said, that is dealt with differently. However, I wish to highlight the compulsory purchase activation programme that was recently launched, which sets clear targets for each local authority to bring properties back into use. That is a hugely significant project. The councils that have already used CPOs effectively, either by using the process itself or using the threat of the process to bring properties back into use, have found it to be a very effective tool. I do not think that councils should be afraid of CPOs. Of course, they need the appropriate legal support, but the very existence of it is effective. Louth County Council has done it very well, as has Dublin City Council, to an extent. They have used the tool well to try to identify vacant properties and encourage people to bring them back into use without having to go down a CPO route.

The CPO activation programme is a really important tool for the State to be able to use. It is very important that each local authority has very clear targets about identifying derelict properties and bringing them back into use as a matter of urgency.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the recommendation being pressed?

Paul Gavan (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I will withdraw it with the right to resubmit on Report Stage.

Paul Gavan (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I move recommendation No. 5:

In page 8, between lines 5 and 6, to insert the following:

“Report on including derelict properties within scope of the Vacant Homes Tax

7.The Minister shall, within three months of the passing of this Act, lay before both Houses of the Oireachtas a report on the Vacant Homes Tax, including an assessment of potential revenue raisedand potential positive impacts on housing supply of including derelict properties within its scope, and an assessment of the potential benefits of this in terms of the failure of local authorities to collect Derelict Sites Levies.”

Paul Gavan (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I move recommendation No. 6:

In page 8, between lines 5 and 6, to insert the following:

“Report on variable rate of Vacant Homes Tax linked to property price inflation

7.The Minister shall, within three months of the passing of this Act, lay before both Houses of the Oireachtas a report on options for applying a variable rate of Vacant Homes Tax, which varies annually and is linked to annual residential property price inflation data as recorded by the Residential Tenancies Board, with particular assessment of the revenue-raising potential of such a measure, and its potential deterrent effect to property hoarding.”.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Recommendations Nos. 7 and 8 are related and may be discussed together by agreement. Is that agreed? Agreed.

Paul Gavan (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I move recommendation No. 7:

In page 9, between lines 15 and 16, to insert the following:

“Report on data centres’ participation in the TBESS

8.The Minister shall, within three months of the passing of this Act, lay before both Houses of the Oireachtas a report on all companies registered for the Temporary Business Energy Support Scheme with either a trade description or economic activity relating to data processing, hosting or related activities, and the amounts they received under the Scheme.”.

Recommendation No. 7 calls for "a report on all companies registered for the temporary business energy support scheme", TBESS, "with either a trade description or economic activity relating to data processing, hosting or related activities, and the amounts they received under the Scheme." The purpose of this recommendation is to establish how many data centres availed of the scheme, as a response to a parliamentary question on the scheme submitted by Deputy Paul Murphy seemed to indicate that companies are not required to provide a trade description when applying for the scheme. Perhaps we could get clarity from the Minister of State on that issue, and assurances that precise information on the nature of companies availing of the scheme will be published in due course. I will not be moving recommendation No. 8.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Senator for raising the issue. It is the intention of Revenue to publish such information. It will publish details of recipients of the scheme in due course, but I can tell the Senator, in advance of that, that I am advised by Revenue that fewer than ten businesses with a connection to the economic activity defined as data processing, hosting and related activities applied for registration under the scheme. For reasons of taxpayer confidentiality, of course, Revenue does not provide a breakdown of details that involve fewer than ten business. I understand, from information from the electricity networks, that there are connection agreements for approximately 40 data centres where there could be data hauls behind different connection points. In answer to the Senator's question, Revenue will be publishing details of the scheme.

Paul Gavan (Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I move recommendation No. 10:

In page 9, between lines 15 and 16, to insert the following:

“Report on extension of TBESS eligibility to charitable organisations

8.The Minister shall, within three months of the passing of this Act, lay before both Houses of the Oireachtas a report on options for extending eligibility for the Temporary Business Energy Support Scheme to charitable or non-profit organisations which do not carry on a trade which is chargeable to tax, including through the use of refundable tax credits or other means.”.

Recommendation No.10 calls for a report on options for extending eligibility for the TBESS to charitable or non-profit organisations which do not carry on a trade which is chargeable to tax, including through the use of refundable tax credits or other means. We are urging the Minister of State to explore options for providing targeted energy supports to non-profit or charitable organisations which incur significant energy costs but do not qualify for support under the scheme. We know, for example, that essential services like local drug and alcohol task forces have never seen their funding restored to pre-austerity levels. Even before the energy crisis, these organisations were calling for urgent support and funding. In 2021, for example, the Tallaght task force called for €1 million in additional funding in order to be able to continue its work. Considering the fact that since then we have seen energy costs potentially double for organisations like this, on top of the funding shortfall that already existed, we urgently need to explore options for targeted energy supports for these organisations.

Jennifer Carroll MacNeill (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Senator for raising the issue. The TBESS is for businesses and it has an important state aid element to it. A charity that carries on a trade, the profits or gains of which would be chargeable to tax under case 1 of Schedule D but for the exemption provided for in section 208(2)(b)of the Taxes Consolidation Act, would be regarded as an eligible business under the TBESS as regards that trading activity. There a number of charities that would come under the terms of the scheme. Where a charity is engaged in number of activities only some of which would be regarded as trading activities, then only the electricity and gas costs relevant to that activity would be eligible for support under the TBESS. While the TBESS is targeted at businesses and is being funded by the Department of Enterprise, Trade and Employment, it is important to note that Government has funded many other schemes aimed at assisting the community and voluntary sector with energy costs, for example, the community and voluntary energy support scheme, which was administered by the Pobal on behalf of the Department of Rural and Community Development.

Organisations that were deemed ineligible for the TBESS could have applied to this scheme. More than €918,000 has been paid out to 680 charities across Ireland over the winter months from this scheme. Other Government supports for the community and voluntary sector included the sports energy support scheme, the arts and culture energy scheme, and the temporary inflation payment for health organisations. I cannot accept the specific recommendation because the TBESS is a different scheme, but I hope the Senator will acknowledge the very broad support that was provided to sport, arts, culture and health organisations, and other organisations through the Department of Rural and Community Development.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

When is it proposed to take the next Stage?

Maria Byrne (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Next Tuesday.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is that agreed? Agreed.

Mark Daly (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

When is it proposed to sit again?

Pat Casey (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Next Tuesday at 12 noon.