I move amendment No. 2: In page 8, between lines 13 and 14, to insert the following: "Report on taxation and cost of indexation 4.The Minister and the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation shall include in their Summer Economic Statement in each year a report setting out the estimated cost to the Exchequer of adjusting— (a) tax rate bands and tax credits and allowances in relation to income tax, and (b) benefits and allowances payable under the Social Welfare Acts, to reflect any changes in the All Items Consumer Price Index numbers published by the Central Statistics Office in the 12 months before the date of the Statement.". As discussed in reference to the previous amendment, middle-income workers, especially those who expect to receive modest pay increases of 3%, 4% or 5%, will, in effect, see tax rises next year because of the failure of the Government in the context of October's budget and the provisions in this Bill to index tax bands and credits to accommodate and take into account those pay increases. As outlined, commitments were made by the Tánaiste in the context of the general election campaign 12 months ago. Indeed, there are references in the programme for Government to the ambition to introduce indexation for working people over the next few years. The reality is that because there is no form of indexation in the Finance Bill, there will, in effect, be tax increases for a whole swathe of middle-income workers next year. In the context of the cost-of-living crisis we are experiencing, it will be a particularly challenging year for those workers. The reality is that if the Government, during the next four years, is to meet the commitments it made previously, it will require a very significant amount of heavy lifting in budget 2027 and beyond. That is if it does what it committed to do, which is to move to index tax bands and credits incrementally over the next few years. Of course, budgets and Finance Bills, and politics more generally, are about choices. With the limited resources available to the Government this year in the taxation space, it decided, in its wisdom, to introduce an untargeted VAT rate cut for the hospitality sector. That particular cut will disproportionately benefit larger organisations operating in this country. The Government further decided, in its wisdom, to introduce VAT cuts that would have a substantial cost to the Exchequer and would involve a very large wealth transfer from working people to the developer sector. Those cuts, the Government hopes and says without necessarily any evidence to back it up, are designed to boost apartment supply and the viability of the sector. We all know they are about boosting the bottom line of development companies. In recent years, I have, for good reason, made the proposal set out in my amendment No. 2. It is a responsible proposition. Some of the countries against which we like to compare ourselves have automatic systems of indexation built into their systems of governance and financial planning. Indexation is done routinely and annually. What is also done routinely is indexation of social welfare payments. If we commit to indexation in the context of the tax system, the corollary must be that we do the same when it comes to core weekly social welfare rates to ensure nobody is left behind. I have listed the countries that do this routinely on Committee Stage and in other forums. They do so on the basis that it gives certainty to governments, workers and employers. The budget in October was marketed by the Government as a pro-business budget. What will happen next year, as a result of the Government's failure to implement indexation this year, is we will see increased wage demands on the very same employers it says it wants to support. That will be the reality. I have requested this measure time and again. I did it again this year on Committee Stage and am doing so now on Report Stage. My proposal is that the best mechanism for setting out a commitment to indexation is the summer economic statement. If there is another mechanism to do it, I am all ears. I am open to persuasion on that. Indexation would give certainty to workers and the economic planning systems in this country. It also would ensure that, every year, when we engage in the process in the run-up to the budget and then get to debate the budget, we would be doing two things, namely, indexing tax bands and rates and indexing social welfare rates. Then, we would have a genuine discussion and open public debate in this House about how we raise revenue to provide the resources we need to expand our public services. We would also then have a genuine discourse about other priorities in terms of taxation, tax and spending, accepting that indexation would be done as a matter of course in the context of the personal tax system for PAYE workers and social welfare, which is an area I accept the Minister is not responsible for. It is a point worth making that when we index tax, we should also, from the point of view of social and economic equity, index core social welfare weekly rates.

Sentiment score: 0.18

I move amendment No. 3: In page 8, between lines 13 and 14, to insert the following: “Report on employee share ownership trusts 4. The Minister shall, within 12 months of the passing of this Act, lay a report before Dáil Éireann on any proposals to amend Chapter 2 of Part 17 and Schedule 12 of the Principal Act, relating to employee share ownership trusts, so as to facilitate the establishment of a greater number of such trusts and their smooth and efficient functioning.”. My colleague, Deputy Lawlor, will be contributing to this debate as well. He has done significant work in this whole area of employee share ownership trusts, ESOTs. In my view, this is an underdeveloped area of the Irish economy. We have looked very closely at this area and I know the officials in the Department have as well, based on the discussions we had on Committee Stage with the Minister’s predecessor. Officials have looked at this in the Department. I know the Department of enterprise is looking at this whole space of employee share ownership trusts as well. Deputy Lawlor will speak much more eloquently than I on this particular issue, given the experience he has on the matter. We know that our indigenous enterprise sector could do better. There are challenges when indigenous enterprises and high-potential start-ups seek to scale up. In the engagements I have had over many years with business owners in my constituency, and from the period I spent in the Department of enterprise, I am familiar with the challenge to raise revenue and expand. The options are limited for people when they want to sell their business on. There is often an ambition to keep the business and ownership in Ireland, but those prospects can be very limited and limiting. In my experience, entrepreneurs who run and develop these companies, especially in the tech sector and so on, are often quite socially conscious and understand that their staff are a key component of the development and evolution of their business. Therefore, when they scale up, they want to see their staff succeed as well. One of the barriers to ensuring that staff can have a function in owning part of the company is the taxation treatment of members of employee share ownership trusts. Significant work has been undertaken in the UK in this regard and improvements have been seen in the landscape there in recent years. This is an area ripe for further focus from the Department of Finance and the Department of enterprise. It is an area that the Labour Party is interested in. We see this, in many ways, as the next frontier in the development of, dare I say it, stakeholder capitalism and evolving that idea of workplace democracy to meet the needs of the 21st century. This meets the needs of companies and staff and it helps to retain good, skilled staff in very competitive environments. This is an area we wish to see further explored by the Department and the Minister during his term.

Sentiment score: 0.33

Paschal’s new pastures.

Sentiment score: 0.00

Far be it from me to answer a question for the Tánaiste but it would be technically difficult to make that change mid-year. That aside, the case is well made for removing Russia from the scheme. As Deputy O'Callaghan and others have said, we are concerned that it has managed to remain as a state covered by the scheme despite the illegal invasion of Ukraine and the illegal activities and war crimes being perpetrated against the Ukrainian people by the Russian state. The Tánaiste said that in the year for which we have the most recent data, no claims were made in connection with Russia. That in itself is interesting. Deputy Doherty made the relevant point that we must remain vigilant about this particular scheme. It covers an extensive number of countries and should be open to regular review. The Deputy's point about companies not involved in exports being capable of benefiting from the scheme is interesting in that the scheme is principally designed to support businesses that are operating or seeking to operate in new and emerging markets. Its purpose is to encourage market diversification. That is why we must be vigilant and must continue to review schemes like this. To build on a comment made by Deputy O'Callaghan, I am intrigued as to why Russia has remained in the scheme for so long, given what we know, what the people of Ukraine are experiencing and that the international community has turned its back on Russia and is treating it as the pariah state it is. We have the sanctions regime and various other measures being taken against the Russian state because of what it is doing to Ukraine. Will the Tánaiste elaborate on how this scheme managed to escape the net? One would imagine that when the scheme of sanctions and other measures were introduced, a very extensive audit would have been undertaken by the Government of all measures applying to Russia and where any benefits might accrue to Russia, that would be a red flag. It is curious this provision has remained in place for so long. The Tánaiste might be able to elaborate on why that is the case. It may just be a sin of omission. I accept and completely understand that errors are sometimes made. For the most recent year for which we have figures, no recipient with any links to Russia was captured by the scheme, and this may well have been also the case in 2022 and before then. That may be why Russia has remained as a country included in the scheme. Perhaps the Tánaiste is in a position to address those points.

Sentiment score: 0.11