Contribution to the Finance Bill 2013 – 20th February 2013.

February 21st, 2013 - Pat Breen

Deputy Pat Breen: I welcome the opportunity to contribute to this debate. While the Finance Bill itself is somewhat technical in nature, nevertheless it is an important step in giving legislative effect to the budgetary measures announced by the Minister for Finance, Deputy Noonan, last December.
Economic recovery is contingent on the implementation of a number of initiatives. Fixing our banks and restoring our finances is the key to creating the necessary economic activity which will drive job creation. Creating the environment for job creation is a key priority for this Government. Considerable work has already been done to restore our international credibility and the key to attracting foreign direct investment is maintaining our favourable corporation tax rate. As Chairman of the Oireachtas Committee on Foreign Affairs and Trade, I have been speaking to various potential investors and this is a very significant factor in determining whether companies locate here. In that context, I welcome the fact that the Minister for Finance has recognised this and that there will be no change in the level of corporation tax being applied here.
Foreign direct investment projects alone will not suffice in the battle to combat unemployment. A key sector in job creation in many of our communities is the small to medium enterprise sector, to which the Minister of State, Deputy Kelly, referred earlier. The economic crisis has taken its toll on this sector and quite a number of businesses have been forced to close down. I was talking to a hairdresser in Ennis recently who told me that were it not for her promotional days, when she cuts her prices by almost 50%, she would be gone out of business. The problem for many such businesses is that while their revenue streams have fallen significantly, their costs have not been reduced proportionately.
I welcome the work being undertaken across a number of Departments to ease the burden on SMEs by reducing red tape, improving their cash flow and helping them to access funding. I commend the Minister for Finance, Deputy Noonan, the Minister for Enterprise, Jobs and Innovation, Deputy Bruton and the Minister of State, Deputy John Perry, on their efforts in this regard. The additional measures being introduced in the Bill will provide even more support for these valuable businesses. It is important that small businesses in our communities are given the necessary assistance because they can create one, two or three jobs which helps to sustain communities, particularly in rural areas.
The changes to the tax relief for new start-up companies are also welcome. An exemption from corporation tax for those start-ups that begin a new trade will allow these companies to grow and is particularly welcome given that the most difficult time for any business is the beginning, when the company is trying to get off the ground. For those SMEs who have moved to a stage where they would like to expand, the changes in the research and development credit system will allow them to invest in research and development, which is critical to the success of these companies going forward.
The tourism and hospitality sector is a very important part of our economy. It is estimated that revenue generated from overseas visitors last year was in the region of €4 billion. Buoyed up by The Gathering for 2013, further growth is expected this year with an additional 325,000 visitors expected to come here to celebrate the various Gathering events which are taking place all over the country. The spin off will be particularly important for communities in my own County Clare, where tourism and tourist-related activities provide a livelihood for many people.
The extension of the excise duty rebate on diesel for licensed road hauliers to include licensed passenger transport from 1 July will provide a major boost to tourism in County Clare. I met quite a number of these operators in the run-up to this decision and can assure the House that they are operating with significant costs. This relief will make a real difference to them in supporting local employment. I wish to thank the Minister for Finance for taking their concerns on board.
The arrangements which have been put in place at Shannon Airport, The Gathering 2013 and the announcement that the national Famine commemoration will take place in Kilrush on 12 May next will all provide an important boost. Under the chairmanship of Ms Rose Hynes, the creation of the new Shannon Airport Authority has led to renewed optimism about the airport. While figures for January show a drop in the average monthly number of flight movements through the airport, the airline commitments already secured by the new authority for this summer give rise to optimism. The airport has secured a 25% increase in transatlantic capacity, with new services from Chicago and Philadelphia, as well as a return to St. Patrick’s Day services for Aer Lingus on the cards. UK and European traffic is also set to expand. There will be a new Faro service, Flybe has returned to serve Glasgow and there will be increased frequency on a number of holiday destinations such as Bodrum, Malaga and Palma. These are all positive signs and I expect that there will be further announcements in due course. I understand that developing a link with a hub airport in Germany is also a priority and work is progressing on this. I am also aware of a number of expressions of interest from airlines who wish to use Shannon Airport as a transit stop on route to the US, given the availability of pre-clearance facilities. I have been facilitating a number of meetings with the authority and I expect to see some more developments in the future. In the next week or two we will also see the introduction of military pre-clearance into Shannon, which will give the airport some leverage in terms of allowing other airlines to transit to Shannon Airport for this purpose. This will form a very important part of the pre-clearance facilities at Shannon Airport.
Shannon Airport is unique in that it has evolved over many years in response the various changes in the aviation industry, thanks to the capacity of the management and staff to adapt to those challenges. Going forward it is vitally important for Shannon Airport to concentrate on developing a mix of business and was delighted to hear that Ms Hynes say recently that she is hoping to expand services further at Shannon Airport, in keeping with the strategy for developing a new, strong mix of airlines. Generating what would be considered non-core business has always been important to the airport. Shannon has already built up a strong reputation as a location for aircraft maintenance and I welcome the changes to section 30 in this context. There are approximately 30 aviation-related business located in the airport already and the provision of an accelerated capital allowance scheme for the construction of hangars and tear down pads, which the Minister has introduced in the Bill and which would apply for a seven year period should greatly enhance the airport’s capacity to develop this side of its business. Plans are already afoot for the creation of 850 jobs in this area and I would hope we can attract further projects.
Since the collapse of the Celtic tiger and given the high levels of debt in the country, including personal debt and mortgage debt, I have campaigned for the past two years for people to have early access to AVCs or pension funds. I am dealing with a number of cases where families have found themselves in mortgage arrears. During the good times they had invested in AVCs and pension schemes. Now they need this money but cannot access it. I thank the Minister for Finance for taking on board these concerns and for introducing measures in the Bill which allow such people to have early access to 30% of their AVCs, which will be of enormous help to a number of families who are in mortgage distress.
There are a number of other issues which I would like to address tonight but given the time allocated, I am not in a position to do so. Suffice to say that I believe that a number of important measures being introduced in this Bill will foster increased economic activity across a number of sectors. I also recognise that there a number of difficult decisions which have to be taken by the Government and which may place a difficult burden on people. However, achieving our fiscal targets by managing our finances in a prudent and fair manner will improve our budgetary situation and will ultimately help to alleviate the burden on our people.