Deputy Pat Breen: I welcome the opportunity to contribute on the debate on the Finance Bill. This is the last Finance Bill before the general election and I pay tribute to the outgoing Minister for Finance for his stewardship of the Department. He has played a central role in driving our economic transformation. He pursued policies that restored sustainability to our public finances, improved our competitiveness and enhanced job creation. It is no accident that we are currently the fastest growing economy in Europe and I commend the Minister for his dedication and work in the finance portfolio.
We must continue to build on the progress that has already been achieved by adopting policies that will continue to support the prudent management of the public finances while at the same time ensuring the economic impact of the recovery is shared with the ordinary men and women who have made sacrifices to get this country back on its feet. The first step was to reduce the universal social charge rates which will make a significant difference for people, especially low and middle-income earners. For the first time in six years, the tax rate will fall below 50% and more than 700,000 of the lowest paid workers will be exempt from the universal social charge in January. Those on lower incomes and the squeezed middle, as they are often described, have suffered during the crisis and reducing their tax liabilities is the best way of putting money back in their pockets. This is probably just the beginning. If we are re-elected, the next Government will continue to make those reductions.
I speak to working families every week as they face the struggle in day to day life. I do not understand our colleagues in Sinn Féin. They do not want to see cuts to the universal social charge. Lower tax rates will strengthen job creation and consumer sentiment. When a tax change increases a worker’s take home pay, the worker has more disposable income which ultimately generates jobs in the economy.
Many of the additional jobs created are in small businesses. Small and medium enterprises are key to delivering jobs, in particular in rural areas. It is important to support these SMEs. I welcome the introduction of the earned income credit of €550 which will apply for self-employed persons and the Minister’s commitment to bridge the gap in tax treatment for the self-employed. There are more than 300,000 self-employed taxpayers who did not receive a PAYE tax credit for whom this new credit is extremely important. Some 99% of all active business enterprises in Ireland are small and medium sized according to the CSO figures for 2012. There are 185,000 people active in SMEs, employing 68% of the workforce and generating half the State’s annual turnover. Last year, 202 extra jobs were created in small businesses in County Clare through the support of the local enterprise office. The sector is valuable and important in County Clare.
We saw the retention of the 9% VAT rate and the abolition of the air travel tax. It is important to continue to highlight these measures as they are important year on year to the growth of the tourism industry. We have supported The Gathering and the Wild Atlantic Way, which resulted in significant growth in our tourism industry after years of stagnation. It is estimated that last year overseas tourism delivered €4.7 billion to the economy. One of the greatest success stories for the communities stretching along north Clare and the west Clare coastline has been the Wild Atlantic Way.
Tourists are being driven into areas which had previously been unnoticed. The opening of the lighthouse at Loop Head was a wonderful addition for tourism in the area. More than 30,000 people visited Loop Head last year. This has been a boost for the hotels, restaurants and providers of bed and breakfast accommodation. New businesses have sprung up in the area. The new heritage trail from Kilkee to Loop Head won a huge award yesterday in London and congratulations are very much due to everyone concerned. It is a 69 km heritage trail that takes in 14 local attractions along the route. Well done to all the local stakeholders because this will pay dividends in the future.
Another area which is making an enormous contribution is the agriculture industry.
Bord Bia estimates that our food and beverage exports for 2014 have reached over €10 billion. Exports have increased by 45% since 2009. This is very important because we export 70% to 80% of what we produce. Farming is extremely important in County Clare, as is the food and drink industry. Farming supports thousands of jobs, both directly and indirectly, so it is critical that we support farmers.
The agri-taxation measures included in the Bill are welcome. The new self-employed tax credit of €550 is welcome for farmers, but I am particularly happy with the introduction of a range of agri-taxation measures which will encourage young farmers back into the industry. The stock relief for young trained farmers and the stamp duty exemption for young trained farmers has been extended for a further three years. The family transfer partnership initiative is especially welcome. This will allow established farmers who wish to pass on their farm to the next generation to form a succession farm partnership. It will require that 80% of the land is passed on to the next generation within ten years and a tax credit of over €5,000 per annum will be available to split between both partners. The transfer of land to the next generation is a complex matter, as Members from rural areas are aware, but it is extremely important for sustaining the agricultural sector. We must encourage young farmers and I believe this initiative will help in that regard. It provides parents with a guaranteed tax relief within the agreed period of transferring and allows young farmers to share in the farm profits as well.
Sections 77 to 80, inclusive, relate to the disabled drivers’ fuel grant. My colleague, Deputy Kyne, referred to it earlier. Provision is being made for the payment of fuel grant to replace the excise repayment scheme, which was ruled incompatible with the EU energy tax initiatives. The Minister for Finance, following consultation with the Minister for Health, will outline the regulations, including the eligibility criteria.
Broadening the issue is important. The eligibility criteria in the regulations for the disabled drivers and disabled passengers tax concessions scheme should be reviewed. I have dealt with a number of cases in my office in Ennis involving people who have applied for the primary medical certificate and have been refused it on appeal because of the strict medical criteria laid down in the current regulations. In one case, for example, the person had suffered a stroke and had lost the use of one leg. He has sustained repeated falls and needs a specially adapted car and scooter to help him get around, but his application has been refused.
However, if he could not use both legs, he would qualify. The current regulations are very strict and do not facilitate people with such a disability who need to drive. Consideration should be given to that. I ask the Minister to re-examine the eligibility criteria for the scheme.
I could discuss several other aspects of the Bill, but time does not permit me to do so. The scheme for accelerated capital allowances to stimulate aviation-related activity came into effect on the night of the budget. That will encourage the construction of certain aviation-specific facilities, which is a welcome boost for Shannon Airport. There is significant interest from aviation-related investors in Shannon at present. A sum of €21 million is being invested in phase one of a major refurbishment of the Shannon Free Zone, which will enhance the region as an attractive location for aviation-related business. That is very important. There is a shortage of open office spaces. If those were in place, it would attract many foreign direct investors to the area. The Shannon Free Zone was built in the 1960s and was built for light engineering and manufacturing. However, the type of jobs being created in this country now is very different from the type of jobs that existed in the past. They are in the life sciences, research and development and aviation-related industries. We want those jobs and we must have the office space for them.
I could say a great deal more but my time is concluded. I commend the Bill and I thank the Minister for his ongoing work.