Independents pile on pressure for concessions
Finance Minister Brian Lenihan made some last-minute changes to the bill which he said made it fairer. And he claimed it was of no political advantage for Fianna Fáil to push through the legislation, but the country needed it.
He warned his Dáil colleagues that until the bill passed through the Oireachtas the “eyes of the world will be looking at us”.
In order to appease those concerned that the budget hit the worst-off hardest, Mr Lenihan announced an amendment to lower the burden of the Universal Social Charge for medical card holders.
The reduction means medical card holders, now paying the top rate of USC, will have to give 4% rather than 7%. The move will cost €80m a year, but this will be recouped by charging an extra 3% to self-employed people who earn more than €100,000 a year.
Elsewhere, Mr Lenihan said a number of reliefs and exemptions were being either restricted or abolished. These included rent relief, patent royalty exemption, tax relief for trade union subscriptions and for employer-provided childcare facilities, capital expenditure on new machinery and plant for use in mining.
For homeowners, provisions on the property-related tax expenditures will not take effect in the next tax year after an economic impact assessment on the proposed changes.
However, the Finance Bill gives effect to the reforms to stamp duty on residential property, which is now payable at 1% on residential property transactions valued up to €1 million and 2% on the excess over €1m.
Income tax relief will be provided for expenditure incurred by individuals (not the landlord) on a range of works undertaken to improve the energy efficiency of residential premises situated in the state.
However, Government Chief Whip John Curran has still to confirm if it has the numbers to win the first vote at midday. Negotiations will continue this morning with independent deputies who need to be persuaded to vote with the Government.
Independent TD, and former Fianna Fáil deputy, Joe Behan, confirmed he will support the Bill.
If Michael Lowry and Jackie Healy Rae follow suit the Government would have a majority of 82 to 80.
However, Mr Lowry has objected to a number of measures on behalf of the pair, including the provision to change the self-assessment reporting date for income tax from October to September. He feels it puts farmers under pressure.
Mr Lowry and Mr Healy Rae met with the Taoiseach yesterday morning and will indicate this morning if they will back the bill.
Fine Gael’s finance spokesman Michael Noonan said his party would vote for some amendments, but it could not support sections it objected to.
He said there was very little new in the bill beyond the announcements made in the budget.
During the debate, Mr Noonan and Mr Lenihan got into an angry exchange over the Fine Gael spokesman’s suggestion that the department had taken its eye off the ball in the aftermath of negotiations on the country’s international bailout.
Mr Lenihan accused Mr Noonan of linking officials to “foolish political charges.”
However, Mr Noonan said the minister was either to blame himself, for failing to spot the opportunity to haggle for a lower interest rate, or he had been briefed incorrectly. This would be only resolved if Mr Lenihan published the report on the operation of his Department, Mr Noonan said.
Labour’s finance spokesperson Joan Burton said regardless of her party’s reservations about the provisions of the bill it was important for the country that the debate ended quickly and the General Election campaign began.
She said the melt down of the coalition had provoked commentary around the world which “bordered on racist.”
