I welcome the Tánaiste and thank him for coming to Seanad Éireann. This is the first time he has been here since taking up his new portfolio. I wish him the very best of success in the Department

I move recommendation No. 1:

In page 8, between lines 10 and 11, to insert the following:

“Report on Universal Social Charge

3. The Minister shall, within 3 months of the passing of this Act, prepare and lay before Dáil Éireann a report on removing the Universal Social Charge from the first €40,000 a person earns.”.

This recommendation is about ensuring that the first €40,000 anyone earns will be exempt from the universal social charge, USC. This would be a targeted measure, although everybody who earns up to that amount would benefit. The cut-off is €40,000, which is appropriate. This amendment would benefit people by up to €746, which would make a real difference, particularly in the cost-of-living crisis. This is about providing real and substantial tax relief to workers across the State, something that the Government chose not to do in the budget. It is both surprising and amazing that with a budget of €9.4 billion, the Government managed to leave workers worse off. Once again, ordinary workers in the State are carrying the can for the excesses of the banks, while the banks continue to enjoy the protected status under this Finance Bill. That is why I proposed the recommendation.

I thank the Cathaoirleach for his good wishes. I very much look forward to working with Seanad Éireann in the time ahead.

I thank Senator Murphy for the recommendation, which, as he outlined, seeks a report on removing USC from the first €40,000 a person earns. We all know that USC was designed and incorporated into the Irish taxation system in 2011 to replace two other charges, namely the health levy and the income levy. The primary purpose of USC is to widen the tax base and provide a steady income to the Exchequer to provide funding for public services.

USC is a more sustainable charge than those it replaced, and it is applied at a lower rate on a wide base. It is important to acknowledge the significant contribution that USC makes in contributing to the many expenditure demands placed on the Exchequer. The USC yield last year was around €5.7 billion, with a yield of around €5.6 billion forecast for 2025. If USC were to be significantly altered, it would be necessary to consider how this yield could be generated from alternative sources.

In regard to the Senator's recommendation, Revenue advises that it would be estimated to cost around €1.44 billion in the first year and €1.65 billion on a full-year basis. Not only would this measure be costly, it would also have the effect of further hollowing out the USC base by removing an additional 1.17 million taxpayer units from the charge. It is estimated that 29% of all taxpayer units will not be liable for USC in 2026.

This proposal would significantly narrow the tax base, as it would mean that around 2.2 million or 63% of taxpayers would not be liable to pay the USC in 2026. Therefore, this would be a policy choice that would create a fiscal vulnerability and would weaken the original policy intention. We should say - indeed, we have published papers on this in recent days - that Ireland has one of the most progressive personal income tax systems. This plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI. Senators will recall that during the economic crisis, it reached a point where 45% of all income earners were exempt from any income tax and that was clearly, as we saw with the financial crash, unsustainable. It placed an unfair burden on those earners who were contributing to the income tax base and it exposed the vulnerability of the income tax system to economic shocks.

I hear the Senator's points on this budget and the decisions that were made in relation to it. We will no doubt debate and have different views on some of them. The Government decided, in its first budget of five, to prioritise a variety of measures on the tax side. The first measure was to extend the renters' tax credit that was due to expire. Sometimes that gets forgotten. It was due to expire. That is worth a bit to quite a few people. It makes a big difference. We have extended that for a number of years. We also made the decision to deliver on a commitment that I know the Senator agrees with, which is the reduction of the VAT rate to 9% for the hospitality sector. I think that is really important. Too many people take full employment, the domestic economy, the hospitality sector and rural Ireland for granted. We also made the decision to reduce VAT on the construction of apartments. I am pleased today, in the context of the Society of Chartered Surveyors of Ireland's report, to see that this is already having objectively a big difference in terms of apartment construction. They estimate that in respect of six categories of apartments, only around two out of the six were viable before the Government made viability changes. They now believe five out of the six categories are viable. As a new Minister for Finance, I want to say that we are determined to deliver on our tax commitments in the programme for Government over the lifetime of this Government.

One Senator voted from the wrong chair but the result remains the same.

Sinn Féin will of course oppose this section in its entirety. This section very clearly displays where the Government's priorities lie. The Bill does not aim to assist ordinary workers; rather it is those who are already comfortably off who get the big breaks. There are tax cuts in this budget which are not for the ordinary man or woman going out to work every day. The people who are getting them are those who can avail of the special assignee relief programme, SARP. The previous Minister for Finance, and I assume the current Minister stands over it, has guaranteed €60 million in taxpayers' money to help them. These workers, who have to be earning over €125,000 and up to €1 million will get a tax cut of up to €100,000. That really beggars' belief given the circumstances that many families across this State currently face. We oppose this section of the Bill and intend to vote against it.

I listened carefully to what the speaker from Sinn Féin had to say, but it is important to recognise the contribution that IDA Ireland-backed companies have made to the economy. The tens of thousands of people across the country who are employed by them recognise the fact that corporation tax funds the vital public services that everyone relies on across the country from teachers, nurses, doctors, hospitals and our gardaí. It is so important we recognise the contribution of these IDA investments. I support ensuring that we continue to do what we can to ensure that those companies remain in Ireland, providing vital employment and funding our tax base. These measures proposed in the Bill go a long way to ensuring that. On behalf of the Fine Gael group, and in the absence of my colleague, Senator O'Reilly, I confirm that we will support the section and opposing Senator Murphy's proposal.

Senator Byrne summed up Fine Gael's position very well.

It is always right that the issues are scrutinised, but we have an economy that is very reliant on people coming in and investing in our country, on the jobs that brings to our country, and indeed on the corporation tax and the revenues that creates in our country. One only has to look at last week's November Exchequer returns to realise how important a part it is. With respect to everybody in this House and the other House, every day there are more demands to spend more money on health and education, etc. That money does not fall from the sky; it comes from the very successful economic model we have built up. It is based on a combination of small and medium enterprises and indigenous Irish companies, and also an ability to attract foreign direct investment and highly skilled people into this country to do those jobs. That is why we have decided to refine the SARP. I know we have a policy difference in relation to this, but that is the policy rationale behind it.

I fully agree with the business of attracting foreign direct investment and skilled workers. I spent my previous post as Minister for the Economy North of the Border doing exactly that. However, what we also need in the system is fairness. We need to ensure that people who are from this country, who work here and who live on the bread line now with the cost-of-living crisis also experience a benefit from this. This is a clear opportunity for a fairer taxation approach which would benefit all people who work here, not just those who are in the high-earning category. People who earn up to €1 million are not in need of further tax breaks. We have a lot of people who are struggling to meet their everyday bills, have had energy credits removed from them, and have seen increases in price on fuel, groceries and rent. All of these challenges are affecting quite a lot of families. This particular section is blind to all of that, as is the Finance Bill as a proposition generally. I have no issue with people being attracted in who will generate wealth, but trickle-down economics is a theory that has been proved to be disastrously wrong. The Government has responsibility for ensuring there is fairness in the financial and taxation systems to give everybody a break.

That is why the Government delivered a budget that was by any objective standard, and in fact by objective measures, a progressive budget. Sometimes we try to differentiate in conversation between corporations, foreign direct investment and the people of Ireland. The people of Ireland are working in the companies that have set up here in all of our constituencies across Ireland. The people of Ireland, including the very people the Senator mentioned, are benefiting directly from the revenues those investments bring in. I refer to our ability to pay out a Christmas bonus, to deliver and expand social welfare, and to be able to invest more in childcare, children, disability, education and health, as this budget has done.

SARP is actually a very targeted scheme. This is often misrepresented, although not necessarily by Senator Murphy. It is targeted at employees who, prior to relocating to Ireland, acquired specialist knowledge and skills relevant to their company. In that capacity, upon relocation such workers are uniquely positioned and qualified to contribute to the expansion or the development of that business, thus creating further opportunities for the Irish economy. At such a perilous and turbulent time globally, with so many headwinds, it would be utterly irresponsible to start reducing the offering we provide to people who seek to invest in our economy and our country and who provide significant employment.

As I said about the previous section of the Bill to which we objected, we have no issue with people getting research and development support. The question is about the level of that support when there is an absence of support for others who badly need it. It is a matter of the priorities the Government has put forward in terms of tax breaks. This measure will mean that a developer who builds 50 apartments and makes a profit of €2.5 million will pay no tax whatsoever, whereas up until now they had to pay tax. That is set against an overall Bill that provides no support for people who are struggling, such as ordinary workers and their families. People have faced the cost-of-living crisis and all the other elements in terms of rent and the price of homeownership that they have been burdened with. I am objecting to this section simply to say that, consistent with other propositions the Government has brought forward, I believe this is the wrong course and the wrong prioritisation at a time when people are really struggling.

It is important to recognise that if, as a country, we are to get to grips with the housing crisis, we must ensure we have privately built houses that are available to first-time buyers, people who are downsizing and people who are moving into their forever homes. The reality at the moment is that the companies which are building those houses are saying to us that it is not viable to do that.

The reality is that the State cannot provide every housing unit that is needed. There is a very important role for the State in the construction of housing. That is why we have councils and the Land Development Agency building houses on public land. However, there must also be a recognition that the State cannot provide everything. We must ensure that private builders are able to build houses in a viable way to ensure that supply of houses reaches the targets that the Government recently set in the housing plan. It is important to recognise that a measure such as this ensures that the viability gap in the construction of those much-needed apartments is reduced. I would certainly like to see a scenario whereby every person who is starting out in life, is able to get a mortgage, is working and wants to get ahead, particularly in our large urban areas, such as Dublin, is able to purchase an apartment. Without this measure, it will simply not be possible to ensure the construction of those homes.

While I appreciate the point that Senator Conor Murphy is trying to make, it is important to recognise the reality of the market, which is that we must have private developers building much-needed apartments. Therefore, on behalf of the Fine Gael party, I support this measure.

Relying on tax breaks for developers has been tested previously. It did not lead to the delivery of more housing. There was a demonstration today which, I am sure, some Senators saw. The Irish Wheelchair Association and other interest groups related to the disability rights sector are talking about people living with disabilities having additional costs of up to €30,000 per year, simply for living with a disability. We then see these tax breaks for developers. With all due respect, there is no evidence that this measure is not going to line developers pockets. There is no evidence that it will lead to reduced costs for the individual buyer. While I respect the idea of first-time homes, there will be people living in tiny, single-aspect apartments who will not be able to move to the next-stage home because it will not be there. We need the State to build homes directly and not to rely on the private sector.

Everyone in the Chamber knows that a budget is a reflection of a society and of who we are. This suggests that we preference tax breaks for developers over supporting those who are in most need. People are choosing between heating and eating this Christmas and winter. That is shameful.

In a housing emergency, you prioritise building houses. The idea that the State can do everything is not true and is not a good use of public money. If the State were to do everything, we would not meet the type of housing that is needed by many people in this country. There is demand from many people for privately owned homes and apartments. It would not be a good use of our resources to constantly say that every single euro needed for housing will come from the Exchequer because that would mean we would not have the same amount of money to invest in education, health, disability, childcare and other areas.

I know it is not related to the Bill, but I acknowledge the point about disability made by the Senator. Only last week, there was a meeting at the Department of Social Protection with representative groups of people with disabilities. The cost of a disability payment is an important issue. It is one we are committed to developing in collaboration and co-operation with groups and organisations, and with people with disabilities. The Minister, Deputy Calleary, was involved in those meetings in the Department.

There is a degree of evidence in relation to this. I have never built an apartment. I am not sure if anyone present has done so. The Society of Chartered Surveyors Ireland came out with a report today. It stated that before we started taking the measures in the budget, which everybody on the Opposition side of this House and the Dáil has condemned, that only two of the six categories classified by the society were deemed viable. Five of the six categories are now deemed viable. These are real homes that people in our constituencies will be able to rent and buy.

We have a housing emergency. Everyone wants to build more houses but everyone opposes every single effort that we bring forward to address viability. It is utopian to suggest there is not a need to address the viability gap and to support the private sector. We call them developers and use other sorts of words because we like to think there is a certain tone attached. These are people who get up in the morning and build homes and apartments for our people to buy. I support them in their work and I think these measures in the budget, in the round, will help to increase housing supply. Housing is priority one, two and three for this Government.

I will just come back on one point. We are giving money to the unit, saying we cannot use it all in the Exchequer, that it needs to go to other social services. However, we are reducing our overall income take by these tax breaks. We would have more money in the Exchequer if we were not giving tax breaks. We have reduced by €1 billion the overall tax income with this budget than in previous budgets. I do not find that a credible point in this regard.

To answer, it would cost a hell of a lot more to build the apartments than €1 million.

I have heard what both the Minister and Senator Byrne have said. There are many people who get up early in the morning and work two and three jobs who cannot afford housing. Affordability is not simply about the benefits to the developer and people who already, in all likelihood, are fairly well off and wealthy. Affordability is about how people can reach and afford those homes. That is why we argue the tax breaks are wrongly directed to support those who are already doing quite well.

People here work very hard in whatever level of job they are at. It is not simply about people who are wealthy and are building apartments. We need to ensure people can afford apartments. Supply is critical but so is affordability.

I welcome the Minister of State, Deputy Feighan, to the House.

This is in a similar vein in that the approach of the Government to the supply of homes - that is, to put money in the pockets of developers - is one that has been tried, tested and failed repeatedly. The proposition is to cut VAT on the sale of apartments. It is not something that will support the hundreds of thousands of people across the State who cannot access housing. It is not a measure that will increase the supply of accommodation, although the Government will undoubtedly attempt to window dress it as such. This is a tax reduction for big developers. With this measure, the Government will hand developers a tax break of approximately €20,000 for each of the over 19,000 apartments currently under construction. The Government says this measure will last until 2030. That will mean a potential cost to the State of over €1.5 billion of taxpayers' money. As with other propositions under this Bill, it is simply the wrong prioritisation from the Government in trying to deal with the housing crisis and support for ordinary working families. We oppose this section.

Fine Gael will support this section. I reiterate some of the points made earlier in the debate around the fact that the State cannot provide all houses, housing developments or apartments that are needed by hard-working first-time buyers, people who are seeking to buy their first starter home, or those who are seeking to move on from their starter home to their forever home. I challenge Sinn Féin to explain how it would go about bridging the viability gap here because the reality is that the private sector has an important role to play in our housing market. Small, medium and large builders are required in order to deliver on the Government's housing targets. It is to recognise the fact there is a very important role for first-time buyers and people in the private sector to purchase those houses.

As I said, I fully support local authorities and the Land Development Agency building on publicly owned land. There is a very important role for them in that. Indeed, they should be moving faster on that, but I recognise the fact we have a private sector in our housing area. It is very important that supports are delivered to ensure viability for builders in order to build much-needed houses.

We need to get realistic about when the tax breaks will end. For building an apartment now in an urban area, including the town grants, VAT and everything added up, the breaks are about €230,000 to €260,000 per apartment. Is that enough? Will that be enough? Will we be coming next year and saying developers need more for the viability gap? At what stage is it enough to build? We can look at the profits of many of our developers - we can go into their accounts online and look at their annual profits, which is all publicly available information - and what they are drawing down and sharing with shareholders. Are we basically subsidising that as a State because they are making profit and these huge profits are then going to shareholders? That is what it comes down to. We are reducing our tax base that we could use to pay for disability services, education, healthcare - you name it - and the plethora of problems we all see on a daily basis in our own communities. That is what it comes down to. What and who are we prioritising?

We need houses built. We can chat separately about the different ideas we could bring forward on housing.

The Social Democrats have ideas, which we have spoken about at length. What it really comes down to is the question of what a budget represents and who we prioritise. In this case I strongly believe it is not going to those who need it most nor do I believe we are going to suddenly see a plethora of viable homes as a consequence. We have relied on the private sector to deliver up to this point and it has not. It is like doing the same thing over and over again and expecting a different outcome.

This is an important issue and the record of the House is very important on the subject of housing in particular. It is something that every Member has as their number one priority. Having access to a home that is adequate to a person's needs and is affordable and secure is a basic human right. Most of us agree on this. There is a lot of misinformation being shared today. To suggest the Bill is slanted entirely in favour of one section of society is a misrepresentation of the facts. Next year there will be more than €11 billion of taxpayers' money invested in housing alone. It has been suggested that this tax break will deliver €1.5 billion over five years but in one year alone €11 billion will be invested in housing.

The proof that it goes to delivering housing for people and addressing the housing need in our country can be seen from the past four years, when more than 137,000 homes were built and one in every three was social and affordable housing. This term a minimum of 300,000 homes will be built and one in every two will be social and affordable housing. To try to present the budget or the Finance Bill as being designed entirely to support one type of housing is factually a misrepresentation.

When development levies were being waived, which facilitated the commencement of tens of thousands of homes, the Opposition opposed it. When water connection charges were refunded the Opposition opposed it. The €30,000 tax refund that first-time buyers received to make it viable for them, not for big developers or fat cat speculators but for people like our children and our young adults who want to buy their own homes, was something the Opposition also opposed. The renter's tax credit is in place as is the first homes scheme. There is not one silver bullet to fix our housing crisis. If there was, we would have used it already. Everything that can be done is being done and this is one of the measures. For this reason we will support it.

This section provides for a temporary 9% VAT rate on the supply and construction of apartments and apartment blocks as part of our social policy. The temporary 9% rate of VAT on the supply of apartments came into effect on budget night. The extension to the construction of apartments and the supply and construction of apartment blocks, including student accommodation, came into effect on 26 November 2025, which was the date of Report Stage in the Dáil. The 9% rate will apply until 31 December 2030.

The Government's view is that everything that can be done to increase the supply of housing should be done. The reality is that Government funded or subsidised housing will not be enough to meet the housing requirements of our growing population. Measures are required to incentivise the private market to meet housing demand. This VAT measure is targeted specifically at apartment construction, one of the areas that we know has viability challenges when considerations are made by private operators as to whether they should begin construction.

This is a measure that will take place over five years and will, among many other measures, help to meet our housing needs. It is in line with the social policy to support higher density housing by reducing the viability gap for apartment construction. This measure will support the development of all qualifying apartments, including those sold as affordable housing.

As such, I cannot accept this recommendation.

I thank the contributors for the constructive discussion of this. Senator Byrne asked for our plans for this, but I do not think Senators will thank me for going through them in chapter and verse at this stage of the evening. Suffice it to say, there are sufficient plans, which we have put forward repeatedly. Despite what has been said, the difficulty for us is that this €1.5 billion does not go to home buyers. It goes to those who build homes and the repeated practice and policy of the Government has been to enrich those who are building houses. We accept there is a need to incentivise housing and for a range of housing provision. I am not sure for the young people that €35,000 is going to get them a house, particularly living in Dublin. Nonetheless, we wish them all well in attempting to. However, what we want to see is a proper spread of support.

It is more than Sinn Féin would give.

I know plenty of people who have kids in Dublin and even the thought of getting a house in Dublin is way beyond them.

We want to see proper supports going to those who are trying to buy houses and to look again at this policy which seems to say that unless we give developers more and more money over time, we will not get the houses we need. We have to have a range of approaches. Sinn Féin has presented costed and detailed proposals in relation to it.

For that reason and in a similar way consistent with some of the other approaches we have taken to other measures in this Bill, we oppose this provision.

I welcome a former colleague of Senator Noel O'Donovan to the Gallery, from New Ross, Garda Kevin Burke and his son Evan. You are most welcome to Seanad Éireann. Thank you for being here today. I hope you enjoy your visit.