Finance Bill 2012 will Kick-Start the Agri and Job Sectors

Below is a copy of my speech on the Finance Bill 2012

The Finance Bill and the budget are based on three objectives. First, they aim at accelerating job creation to reach the target of 100,000 jobs over five years. Second, they seek to achieve fairness for our people. Third, the property market is to be kick-started.
The budget has managed to reduce our deficit to 8.6% of GDP through adjustments of €3.8 billion, in keeping with the EU-IMF deal. The reason for the figures and the starkness of the task that lies ahead is the legacy this Government inherited from its predecessor. It is fantasy economics to suggest there is an alternative to dealing with the EU-IMF. The ongoing events in Greece bear testimony to that reality.

I congratulate the Minister for Finance and his Cabinet colleagues on maintaining headline social welfare rates and avoiding increases to income tax. The Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Perry, is doing extraordinary work in the area of small business. The agri-food sector, which is the critical vehicle for creating jobs and driving the economy, is being protected through the maintenance of the off-farm income regime. These are enormous achievements.
In the area of job creation, the special assignee relief programme permits 30% of salaries ranging between €75,000 and €500,000 to be excluded from taxation. This will allow us to attract heads of divisions and development personnel from abroad. Similar initiatives have been introduced in a number of countries.

Research and development is central to the growth of our economy. Individual employees can now benefit from tax allowances for research and development activities in which they have a special involvement. The first €100,000 of qualifying research and development expenditure will benefit from a tax credit of 25%. Research and development sub-contracted to other companies will also benefit from tax relief.

The Bill contains 21 measures to assist the financial services industry. That has to come at a premium.
In the area of agriculture, food and drink exports increased by 25% in 2011 and the sector employs 135,000. It is important that support is given here. There are stock-relief initiatives to encourage partnerships in agriculture, which will represent a new model for Irish farming and should be encouraged. The reduction in stamp duty for the transfer of non-residential properties to 2% will have a critical effect and will be of great benefit to the farming community. It will also spur on the agricultural sector.
The three-year tax relief for start-up companies has been expanded to cover 2012, 2013 and 2014. Certain measures have been taken to address the issue of diesel laundering and I would encourage further steps. The exemption threshold for the universal social charge has been increased from €4,004 to €10,036 bringing 330,000 people out of the net of the universal social charge. That is progressive and represents fairness. Equally, the legally binding maintenance agreements within civil partnerships will now have the same status for tax purposes as within traditional marriages. Those are important progressive and socially just initiatives.
The expansion of the definition of bread to include other foods and other ethnic foods will allow them to avail of the zero rate of VAT. In the property market, reducing the rate of stamp duty to 2% should have a positive effect on property sales. Mortgage income relief will be available at 25% to people who buy a first home this year and at 15% for non-first homes. This is paralleled by the special increase in the mortgage income relief for people who bought homes since 2004 during the boom.

The budget and Finance Bill set the scene in terms of job creation and achieve a considerable amount in the area of fairness and in attempting to kick-start the property market once more. No other criteria could be used to evaluate it.

Senator Joe O'Reilly representing Cavan & Monaghan 2010. | An ExSite website