young voices in a changing ireland
DESCRIPTION
"Young Voices In A Changing Ireland" - Young Fine Gael's pre budget submission in advance of Budget 2013TRANSCRIPT
vOICEs
Young
IN A CHANGIN
G
IRELAND
CONTENTSPresident’s Introduction
Department of Agriculture, Food and the Marine
Department of Education and Skills
Department of Environment, Community and Local Government
Department of Finance
Department of Health
Department of Jobs, Enterprise and Innovation
Department of Public Expenditure and Reform
Department of Social Protection
02
03
03
03
04
05
06
08
09
YOUNG VOICES IN A CHANGING IRELAND
42
YOUNG FINE GAEL PRE BUDGET SUBMISSION 2012/2013PRESIDENT’S INTRODUCTION
The budget for 2013 promises to be a diffi cult challenge,
made necessary by our continuing economic distress.
At times like these it is often easy to shy away from the
most necessary and most uncomfortable decisions. In this
Pre-Budget Submission, Young Fine Gael (YFG) asks that
the government take to the task of reforming Ireland with
renewed vigour and focus.
In crafting this submission, members of YFG refl ect the de-
sire of people across Ireland for signifi cant, meaningful and
long lasting change. This Budget can be a substantial part
of positively changing how the state conducts its business.
YFG has a long record of campaigning vigorously for just
causes and has always maintained a conscience focused
on the general best interests of the nation. This submission
continues that tradition but with a focus on the new issues
facing younger members of our society. The recent Chil-
dren’s Referendum has moved forward the youth agenda
signifi cantly and while this is an ongoing body of work,
many of today’s issues surround youth unemployment
training and the creation of a sustainable economic future.
The submission that follows is a refl ection of many issues
concerning young Irish people, as well as outlining many of
the things they feel offer solutions or alternative methods
while refl ecting the long-term best interests of the country.
I would like to thank all the members of YFG and, in partic-
ular, the Policy Offi cers of the National Executive for their
efforts in compiling this document.
Patrick Molloy
53
DEPARTMENT OF AGRICULTURE, FOOD AND THE MARINECAP
YFG asks the Government to lobby for provisions in
CAP to be made to young, trained and active farmers
as challenging re-negotiations get underway.
Many countries will lobby for a reduction in this
area in general; we commend the Government’s
commitment to CAP in what will be a tough and
challenging negotiations process.
YOUNG FARMERS INITIATIVE
Ireland has an excellent reputation abroad for the
quality of its food produce, ingredients and fi nished
food products. As a result of this reputation,
more young people see agriculture as a viable
and rewarding career choice. However, only 7%
of farmers in Ireland are under 35 years of age
and the Government should be more active in
encouraging young people to choose it1. Necessary
resources should be allocated to agricultural
training colleges to increase take-up of courses.
The Government should ensure that farming is
properly marketed as a way of life as, not only are
young farmers partaking in a growing industry, but
farmers also live longer and have considerable
input to climate change2.
DEPARTMENT OF EDUCATION AND SKILLSEDUCATION AND SKILLS
Irish universities must be proactive in creating
an education system that’s end goal is training
students to gain employment, as well as assisting
those who are interested in setting up businesses.
In some cases, this may be as simple as the
provision of open lectures or optional modules
on how to maintain proper accounts or comply
with employment law. These lectures or modules
should be available to all students to foster
entrepreneurship and prepare people to run a
business.
STUDENT UNIVERSAL SUPPORT IRELAND (SUSI)
YFG wishes to express its dissatisfaction with the performance to date
of the new centralised body for processing student grant applications,
SUSI. It was recently admitted at the Joint Oireachtas Committee that
the system had proven to be fl awed for 2012/2013 grant applications, as
only one in three applications were processed3. This centralised system
must be adequately resourced in terms of staffi ng to deal with the infl ux
of applications annually, if necessary by secondment of civil servants for
the necessary period.
TECHNOLOGY COURSE INCENTIVES
YFG proposes that the Government consider options for increasing
second level student uptake in Computer Science and Technology
courses at third level. It is one of the few sectors in our economy where
there is a shortage of qualifi ed entrants and is an industry that the
Government is targeting in terms of Foreign Direct Investment (FDI)
to Ireland. YFG also proposes that the Government introduce a pilot
project in one of the universities in Ireland with reduced fees for related
technology, innovation and computer science courses, in order to
establish if this is a proposal worth introducing nationwide.
DEPARTMENT OF ENVIRONMENT, COMMUNITY AND LOCAL GOVERNMENTNEW HOME SUSTAINABLE ENERGY AUTHORITY OF IRELAND
GRANTS
YFG proposes that persons building new homes be entitled to the same
grant entitlements in relation to renewable energy and energy effi ciency
implementation as those receiving grants who are in their homes for
more than 5 years. The excess burden to build in accordance with
environmental law should be assisted by the Government by providing
them with the same entitlements as those with pre-existing buildings.
EXCISE DUTIES ON TRADING FUEL - ESSENTIAL USER FUEL
REBATE
The Government currently takes 59.62c out of every 159.9c charged
per litre of petrol and 48.57c out of every 154.9 per litre of diesel4
in fuel duty. For hauliers, half of their total costs comprise of fuel
costs5. This has proven to be unsustainable for the industry, with
many haulage companies ceasing trading in recent months and
years. Those hauliers surviving this period frequently resort to getting
fuel abroad, which is a loss to the exchequer according to the Head of
the Irish Road Haulage Association6. According to a Deloitte report in
2011, 95% of Irish freight is transported via road7. This demonstrates
the importance of the haulage sector to the greater economy.
1 http://irishfarming.ie/2012/11/04/ireland-grapples-with-farming-age-crisis/ 2 http://irishfarming.ie/2012/11/04/ireland-grapples-with-farming-age-crisis/ 3 http://www.irishtimes.com/newspaper/breaking/2012/1113/breaking14.html 4 http://www.pumps.ie/FAQPricesExplained.php 5 http://www.irishexaminer.com/business/fuel-tax-take-driving-hauliers-to-wall-191497.html 6 http://www.irishexaminer.com/business/fuel-tax-take-driving-hauliers-to-wall-191497.html 7 http://www.oireachtas.ie/parliament/media/committees/transportandcommunications/JCTC-Report-on-the-Road-Haulage-Industry-in-Ireland-(Published-25.10.12).pdf
6
A tax rebate on fuel would create a more level
playing within the EU. Five EU member states
have fuel rebates for the industry - Spain, France,
Belgium, Hungary and Slovenia. There is provision
in an EU Directive under Energy Tax that allows for
vehicles that carry over 7.5 tonnes to have rebate
on fuel duty.
The Joint Oireachtas Committee on fuel duty tax
rebate recommended that a fuel duty rebate would
alleviate pressure in the haulage industry and
would be fi scally prudent and YFG calls on the
Minister to consider this proposal.
PROPERTY TAX
YFG fully supports the Government’s proposal
to re-introduce residential property taxes, as
set out under the EC/ECB/IMF guidelines and
supported by highly reputable organisations such
as the Organisation for Economic Co-Operation
Development (OECD)8.
While there exists a short-term challenge with the
re-introduction of the tax in the midst of fi nancial
adjustment, it is imperative that Ireland learns
from the past and ensures we are not at the mercy
of a property bubble again in the future. In the long
term, the introduction of a property tax will provide
a reliable and consistent stream of revenue to
safeguard valuable public services.
Budget 2012 saw the introduction of the
‘Household Charge’, which proved quite unpopular
with the public, as it was not a progressive tax, with
everyone liable for the charge paid the same rate.
The Household Charge introduced in Budget 2012
gave the Government valuable information on
property ownership for the long term proposal of a
fully-fl edged property tax.
WHAT METHOD SHOULD BE USED?
YFG advocates the Site/Land Valuation Tax method
of Property Tax. This method considers the value
of the land or site on the property, rather than
merely the value of the building on it. Hence, any
commercial activity or an expensive holding on the
land would be refl ected fairly for tax liability due.
It is the most progressive and fair of the methods
outlined in the Commission of Taxation Report
20099. It can be tapered to refl ect ownership by
OAPs, or in respect of income below a certain level
so as not to impose an unfair and excessive burden.
THE FUTURE OF STAMP DUTY
YFG believes that the future of stamp duty should be zero-rated for
Principle Private Residence purchases, but should be retained for
Non-Principle Private Residence purchases and for land zoned for
development.
WHO SHOULD BE EXEMPT?
We propose that the following groups be exempted in full or in part from
the Property Tax: low income families and families in social housing.
Those with negative equity mortgages and in mortgage arrears should
be considered for deferment of payment until disposal of asset10.
WHO SHOULD COLLECT THE TAX/OPTIONS ON PAYMENT?
For the initial introduction of the tax, we propose that the Revenue
Commissioners should collect it, to ensure maximum compliance.
According to Minister Hogan, as of 12th October 2012, 59% of those
liable for the Household Charge have paid it11. This yielded €90 million
out of the budgeted €160 million. The new tax proposal would yield
€500million12. The Revenue Commissioners have the necessary audit
control in place to assure maximum planned yield for the Government.
The OECD indicates, that for maximum compliance, the tax should
be deducted at source13. All yields should be repatriated to Local
Government, as the vision set out in Fine Gael’s New Politics14.
Payment of the tax should be at quarterly intervals unlike the Domestic
Rates abolished in the late 1970’s and this should be done via the ROS
system and/or the PAYE system via tax credit reductions.
DEPARTMENT OF FINANCEBANKING
There is still strong public anger towards the banking sector. Given that
the State partially or largely owns the two pillar banks, YFG feels that
the Public Interest Directors and the Minister should act and moreover,
should be seen to act more for the taxpayers interest, while preserving
the need to restore the institutions to viability and stability.
Under the Credit Institutions Act 2010 Section 51, “nothing in this Act or
in any other enactment, and no rule of law, prevents the Minister, when
providing a fi nancial support facilitated by this Act or pursuant to any
other enactment, from imposing any terms and conditions which any
other provider of fi nancial support to the relevant institution concerned
would be entitled to impose or which the Minister considers desirable to
impose in order to protect the public interest” 15.
In relation to any institutions that have received state support through
this act, we believe that the Minister or Public Interest Directors should
request a full and comprehensive review justifying why an institution
plans to impose an increase on variable mortgage interest rates. This
review should be explicit in outlining how the long-term viability of the
institution and the interests of the taxpayer are factored into the rationale.
If the Minister deems the rationale suffi cient for the interests, both the
8 http://www.oecd.org/eco/surveys/irelandcomingoutofthecrisisbutchallengesremain.htm 9 http://www.publicpolicy.ie/wp-content/uploads/commission-on-taxation.pdf 10 http://taxpolicy.gov.ie/wp-content/uploads/2011/06/10.09-Property-Tax.pdf 11 http://www.moneyguideireland.com/category/property-tax 12 http://www.irishtimes.com/newspaper/ireland/2012/1105/1224326140614.html 13 http://www.oecd.org/tax/taxadministration/48449751.pdf 14 http://www.fi negael2011.com/pdf/NewPolitics.pdf 15 http://www.irishstatutebook.ie/2010/en/act/pub/0036/print.html
7
viability of the institution and the taxpayer, then
YFG requests that the review be released into the
public domain, in full or in part. We feel this move
would help to make the public more confi dent in
once very trusted institutions in the state.
In relation to bonuses and pensions, we welcome
the Government’s attempts to request former
senior executives to return their excessive payments
back to the exchequer. We acknowledge the legal
constraints in relation to legacy bonuses and
pensions, however, YFG calls on the Government to
utilise the Public Interest Directors more especially
in future decisions where the taxpayer is. One of the
purposes of the Credit Stabilisation Act 2010 is “to
address the compelling need to restore confi dence
in the banking sector; to protect the taxpayer.”’ The
Government, via the Public Interest Directors or the
Minister, should take this into account, along with
the explicit statement in the Credit Stabilisation
Act 2010 in relation to bonuses “that such bonuses
are unlikely to have been paid if the State had
not enabled the relevant institution to meet its
fi nancial and regulatory obligations through the
provision of fi nancial support” 16 . The Government
should ensure that legacy bonuses are not paid out
using State fi nancial support. This provision sets
out the governance of this issue, proving it is the
responsibility of the Public Interest Directors via
the Minister to ensure this is complied with.
YFG welcomes the Department of Finance’s
initiative to hire Mercer as consultants to review pay
in the banking sector in a benchmarking exercise.
Even though we would like the €500,000 pay
barrier for bank executives not to be broken, YFG
welcomes Minister Noonan’s efforts requesting
the IBRC executives to consider pay cuts17.
DEPARTMENT OF HEALTHMENTAL HEALTH
YFG wishes to ensure that the Government does
not abandon proposals outlined in A Vision For
Change. The 8.4% spending on mental health
outlined in the Vision for Change proposal should
be the minimum objective for the Government for
2013 and the Government should take all necessary
steps to eliminate the stigma attached to mental health in Ireland.
There is a need to examine the current provision of community based
Child Adolescent Mental Health Service (CAMHS) teams to provide
support for schools. This issue remains a priority for young Irish people
and improvements to that system would have considerable impact on
the health and happiness of young people for the rest of their lives.
YFG believe the government need to maintain focus on young people
and to identify preventative measures such as mental health training
and bullying prevention training for those who have dealings with young
people and more education for young people about maintaining their
mental health.
TAX ON SATURATED FATS AND SUGARY DRINKS
An Oireachtas study found that 66% of all Irish adults, 22% of 5-12 year
olds and 20% of teenagers (13-17 years) are overweight or obese18.
Recently, a University College Cork study on behalf of SafeFood found
that obesity is costing the State over an estimated €1.1 billion in direct
and indirect costs19. The main contributors to our obesity problem are
a lack of exercise and unhealthy eating habits. Weight problems for
children create huge risk to their general health and well-being later in
life, as the chances of remaining overweight or obese into adulthood are
large. Cardiovascular disease and type 2 diabetes are among the other
health problems heavily linked to weight problems20.
A study has been conducted on the potential income from these taxes
and a yield of €79.91 million has been estimated from saturated tax,
while €95.1 million has been estimated from fat tax. At an individual
level, the imposition of the tax could mean €0.05 on a tub of butter,
€0.03 on a bar of chocolate and €0.02 on a two litre bottle of sugary
drink21. Whatever revenues are generated from such a tax should be
reinvested in measures to increase awareness of the problems caused
by obesity, the measures that can be taken to rectify it and to subsidise
healthy foods.
HOME HELP
YFG opposes any further cuts to home help in the upcoming budget.
Older people or people with a disability are most often those in receipt of
home help and this measure ensures, in many cases, that such persons
do not require hospital beds, already in excessive demand and have a
better quality of life in their own homes. Home help is an area of massive
concern to the public and one that cannot afford to face further funding
cut.
16 http://www.irishstatutebook.ie/2010/en/act/pub/0036/print.html Part 7 Miscellaneous 17 http://www.irishtimes.com/newspaper/ireland/2012/1110/1224326409015.html 18 http://www.oireachtas.ie/parliament/media/housesoftheoireachtas/libraryresearch/spotlights/spotObesity071111_150658.pdf 19 http://www.safefood.eu/News/2012/New-study-reveals-the-annual-cost-of-overweight-an.aspx 20 http://www.who.int/dietphysicalactivity/childhood_consequences/en/index.html 21 http://www.irishtimes.com/newspaper/frontpage/2012/1015/1224325260414.html
8
DEPARTMENT OF JOBS, ENTERPRISE AND INNOVATIONJOB CREATION AND ENTREPRENEURSHIP
Creation and retention of jobs is the highest priority
for the Coalition Government since coming into
offi ce and this must remain a focus throughout
Ireland’s period of the EU Presidency. Ireland’s
unemployment rate of 14.8% is still stubbornly
high though the stabilisation of this rate is a
welcome development22. Unfortunately, emigration
of Ireland’s youth is a factor in this stabilisation.
Employment not only contributes positively to PRSI
and income tax, but it also reduces the cost of
social welfare and. It also has a substantial positive
effect on people’s confi dence and dignity. Irish
people have a great sense of pride in their work
and strive for responsibility and opportunity. The
Government must continue to assist further job
creation and create an economy that competes as
best it can, given the limited monetary resources at
our disposal.
This year we have seen the Government’s launch
of the Action Plan for Jobs 2012. This plan outlined
measures to help found and develop indigenous
businesses and to attract and incentivise Foreign
Direct Investment (FDI) into Ireland. In light of
the volatile domestic and international operating
climates, we believe it vital to create and harness
the conditions to ensure that that Ireland “is
open for business” and that it remains “open for
business”.
The Government’s Action Plan for Jobs 2012
introduced reliefs for start-up companies; the
Employment Investment Incentive Scheme (EIIS);
Seed Capital Relief; R&D relief for employees;
and Foreign Earnings Deduction, amongst others.
We believe that these reliefs, together with the
retention of Ireland’s corporation tax rate of 12.5%,
a highly educated workforce, and our prominence
as an English-speaking member of the European
Union with a potential market of over 500,000,000
people23 all contributed to positive job creation
announcements by Paddy Power, Paypal, Twitter
and many more. In Q2 2012, service exports rose
9% compared with the previous year24.
However, it is imperative to keep in mind that
70% of Irish employment in the private sector
is in the Small and Medium Enterprises sector
(SMEs constitute less than 250 workers). Despite the relatively strong
performance of the services sector and multinationals based in Ireland,
it does not account for with the performance of the Irish economy
as a whole. The gap between GDP and GNP expanded signifi cantly
between 2009 and 2011. GDP takes into account multinationals profi ts
whereas GNP does not. In 2011, nominal GDP was 20% higher than
GNP, compared to 2009 where it was 14%25. Further adjustments to
Government schemes below and introduction to new measures can
impact positively on the domestic economy.
EMPLOYMENT INVESTMENT INCENTIVES SCHEME (EIIS)
YFG believes that the EIIS, in its current format, does not support the
outlined objectives to create jobs, source fi nance and produce profi ts by
indigenous companies. As of 12/06/2012, only a measly 11 companies
qualifi ed for the scheme26. Factors contributing to this are the volatile
investment climate, lack of awareness of the scheme and the barriers
for qualifi cation. This scheme must be fundamentally reviewed to ensure
it achieves the objectives of Government.
According to members of Ireland’s accountancy bodies, potential
investors are not encouraged to invest when the scheme’s headline tax
relief is heavily restricted by the High Income Earners’ Restriction27. In
light of the curtailment of pension tax reliefs, there will be an increase
in demand for tax relief investment vehicles. To realise the scheme’s
potential, it should loosen its ties with the High Income Earners’
Restriction. Since this is the group more likely to invest in a scheme like
this, it is not advisable that they are unable to claim the relief. A reformed
EIIS should be compelled to focus on the business that could benefi t and
not the individual taxpayer. Also, it should take into consideration that
the relief should be paid up front.
The UK has a scheme similar to the EIIS which allows this type of relief
and their scheme is perceived to be more valuable and more likely to
yield investment28. Called the Seed Enterprise Investment Scheme, it
concentrates on smaller companies in their infancy. Stakeholders whose
shares total less than 30% of the company’s overall shares can claim
tax reliefs. Companies with 25 or fewer employees and assets of up to
£200,000 can apply for the relief under the scheme. The introduction of
this scheme in the UK demonstrates their seriousness in supporting
small enterprises.
Similar schemes to the EIIS operating in Austria and the Netherlands
have attracted favourable investors by mitigating risk and attracting
capital by guaranteeing proportionate losses. The introduction of such
a scheme would attract non-traditional investors to our shores. YFG
believes that such a scheme should be rolled out between 2013 and
2015.
PROFESSIONAL SERVICE COMPANIES AND EIIS
At present, professional service companies are not eligible to apply for the
EIIS29. Many professional service companies are running on an overdraft
or loan fi nancial model and they feel they are discriminated against as
they can utilise outside investment for equally worthy investment as
22 http://cso.ie/indicators/Maintable.aspx 23 http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=tps00001&tableSelection=1&footnotes=yes&labeling=labels&plugin=1 24 http://www.davy.ie/content/pubarticles/econ20121025.pdf 25 http://www.davy.ie/content/pubarticles/econ20121025.pdf 26 http://oireachtasdebates.oireachtas.ie/debates%20authoring/debateswebpack.nsf/takes/dail2012061200120?opendocument 27 http://www.charteredaccountants.ie/Global/TAX/CCAB-I%20Pre%20Budget%20Submission%202013%20signed.pdf 28 http://www.ibec.ie/IBEC/Press/PressPublicationsdoclib3.nsf/vPages/Newsroom~budget-2013-any-increase-in-labour-costs-will-hit-recovery-27-09-2012/$fi le/IBEC+Budget+2013+Submission+-+low+res.pdf
9
companies who qualify for the scheme. YFG calls
upon the Minister to allow professional service
companies to apply for the EIIS.
SEED CAPITAL RELIEF AND EIIS
Seed Capital Relief and EIIS are the only tax
reliefs available to a manager/owner since the
abolishment of income tax relief for loans used
to invest in companies. Seed Capital Relief,
along with the EIIS, are predicated upon the idea
that the owner of the shares holds onto them
for a minimum of three-years. This is a sensible
minimum period for a third party investor, but not
for an owner/manager.
Minister Richard Bruton mentioned at the 2012
Chartered Accountant’s Annual Conference
that only 63 out of a possible 1200 new start-up
companies availed of the Seed Capital Relief30. On
those fi gures, it suggests that the scheme is not
being utilised.
Generally speaking, many owner/managers have
to invest in their company via a loan. In order to
get a return on their investment, they have to
sell their business in order to realise a return
on their investment. This is not very attractive
for potential investors who might have worked
hard for 3 years in a venture that they will then be
forced to dispose of.
YFG believes that the Seed Capital Relief scheme
should serve to qualify investment by a loan for
long-term development of the business, while
keeping the entrepreneur involved in the venture.
The potential new structure could involve a new
defi nition of investment of 20% instead of the
current 30% and address any concerns on the safe-
guarding of genuine use on a loan/equity ratio to
the holding period. See table below as an example:
To ensure that the focus of the scheme is to create jobs, mechanisms
should be in place to ensure the original reasons for acquiring the
loan are adhered to. The introduction of a preclearance vehicle should
be required for any refi nancing of the loan. Relief clawback should be
available to the state in the event of refi nancing the loan for personal use
or paid back before the requisite period.
YFG believes the EIIS model does have potential to be a greater catalyst
in smaller and medium enterprises for job creation, development and
evolution. The Action Plan for Jobs 2012 outlined that the EIIS should
“assess if any amendments are required” and YFG believes that these
amendments could ensure the scheme exploits its full potential31.
STATE-BACKED INVESTMENT/ ENTERPRISE BANK
Canada, the US and Germany have State Backed Investment/Enterprise
models in operation. Ireland needs lending facilities that provide a
growth-orientated credit facility. It would give businesses with potential
and positive growth more confi dence and when seeking lending. A new
investment bank entering the market would increase the equity and
debt sources available to enterprise. The bank would be funded by the
European Investment Bank and the National Pension Reserve Fund.
RESEARCH AND DEVELOPMENT TAX CREDIT AND RELIEF
Ireland is operating in an open market at the edge of the Eurozone to
which we contribute approximately 1% of the Eurozone’s GDP. Given this
background, it is imperative that we are as competitive as we can be.
The R&D tax credit and relief is an important component in the decision-
making process of multinationals when choosing their location. It will
also be supportive of indigenous companies engaged in R&D. The
effectiveness of the R&D relief is proven, as the number of companies
claiming it doubled in the two year period 2008 and 201032.
INCREASING ELIGIBILITY FOR R&D QUALIFIED EXPENDITURE:
YFG believes that R&D tax relief, in its current form, does not reward
standard business practice. Given the unpredictable nature of R&D and
the current trend of streamlining in businesses, it is often necessary to
hire contract employees to carry out R&D work. Business managers do
not view contract employment as outsourced expenditure, therefore, the
qualifi ed expenditure should refl ect this sentiment.
R&D TAX RELIEF FOR EMPLOYEES:
Presently, the R&D Tax Relief for employees is only available to high
earners and large companies. According to the CCAB-I Pre Budget
Submission 2013, an employee would have to earn at least €70,000 to
qualify for the relief. Average salary for a process chemist is between
29 https://www.enterprise-ireland.com/en/Invest-in-Emerging-Companies/Source-of-Private-Capital/Revenue-Employment-Incentive-and-Investment-Scheme.pdf 30 http://www.charteredaccountants.ie/Global/TAX/CCAB-I%20Pre%20Budget%20Submission%202013%20signed.pdf 31 http://www.djei.ie/publications/2012APJ.pdf Page 54 32 http://oireachtasdebates.oireachtas.ie/debates%20authoring/debateswebpack.nsf/takes/dail2012061200122?opendocument
YEAR LOAN % EQUITY %
1 3 17
2 6 14
3 9 11
4 12 8
5 15 5
10
€45,000- €55,000. YFG believes this discriminates
against lower paid employees, compared to an
R&D Director who contributes valuable talent
and innovation to the long-term viability of the
business. For this relief to be more of a progressive
nature, it should be amended to include those on
lower salaries of €70,000.
It is at the early stage of a company cycle that the
most crucial phase of the R&D takes place. This
is the time when it is most diffi cult for a company
to accrue profi tability. However, the current R&D
tax relief only applies to companies that accrue
profi tability. If this impediment is removed, the
relief would be benefi cial to smaller indigenous
companies.
BASE YEAR RESTRICTION:
YFG advocates a change to the base year 2003 upon
which R&D tax credit is calculated incrementally
over the base year. If companies were given the
autonomy to choose their base year, it would give
them more incentive to conduct R&D activities
at a low cost33. The disadvantage of companies
with high level R&D long-term compared with
companies established after 2003 with low level
would be removed. There is no real logical rationale
for using the base year 2003 and a more favourable
incentive should be put in place.
YOUTH ENTREPRENEURSHIP
There is a clear need to provide a better
environment for to foster entrepreneurship among
young people. The introduction of a credit review
board has provided a reasonable and cost effective
measure of ensuring viable businesses will be
able to gain access to funding. YFG also welcomes
reduction of the duration of bankruptcy.
The specially introduced VAT rate for the Tourist
and Hospitality sectors is of signifi cant value for the
sector, in terms of job retention and investment in
new businesses, and we hope for the continuation
of this34.
DEPARTMENT OF PUBLIC EXPENDITURE AND REFORMPUBLIC EXPENDITURE FUNDING
In the midst of continuing cutbacks and increasing taxation measures
necessary to restore fi scal rectitude to state fi nances, the public would
be more supportive if more adjustments were made at the top. It is a
notable aspect of leadership culture that people are happier to follow if
they are lead by example; in the past few years Irish people have been
proven to be quite pragmatic and motivated in improving our economic
outlook. We believe the Government’s job of implementing fi nancial
adjustment would be easier for the electorate to accept if its own
capitation guidelines for special advisors were applied as far as possible
and a vouched expenses system apply across the board in politics.
CROKE PARK AND ALLOWANCES IN THE PUBLIC SECTOR
There remains a continuing disparity between the need to fi nd savings
and the protection of highly-paid civil servants. YFG believes that the
Article 1 Subsection 28 of the Croke Park Agreement can and should be
enacted. YFG opposes the extension of the Croke Park Agreement and
calls for it to be substantially renegotiated.
In any future agreements, there must be a broader awareness of the
larger issues impacted by the agreements, and an acceptance that
further reductions in the overall level of expenditure of the state are both
necessary and benefi cial in the long term. The continuing payment of
excessive wages and the consequential impact on necessary services
caused a clear detachment of the senior civil service from the realities
facing many Irish people and families.
ANY FUTURE AGREEMENT MUST THEREFORE REFLECT:
• The need to protect lower-paid public sector workers who have
been used to protect the excesses that exist within the public sector
pay bill by tying the higher paid civil servants’ wages to those of
secretaries general and other highly paid offi cers who earn more
that the Taoiseach and President.
• A recognition that there needs to be a continuing scale that will
refl ect the real-time value of wages within the greater economy.
• An explicitly stated premium that identifi es the value of job security
at a time of widespread lack of job security. This is to be deducted
from overall pay.
• A re-alignment of wages to account for allowances that in effect
represent core pay but which previous governments have failed to
deal with.
• The removal of additional allowances that are
a) not related or refl ected in the amendment proposed to core pay,
b) do not relate to generally accepted premiums based on work
hazard or exceptional circumstances.
33 http://www.ibec.ie/IBEC/Press/PressPublicationsdoclib3.nsf/vPages/Newsroom~budget-2013-any-increase-in-labour-costs-will-hit-recovery-27-09-2012/$fi le/IBEC+Budget+2013+Submission+-+low+res.pdf Page 1034 http://www.revenue.ie/en/tax/vat/rates/rate-changes-jobs-initiative.html
11
• An acknowledgement of the inter-
generationally inappropriate premiums and
an according realignment so as to refl ect a
comparatively fair reduction in overall wage
levels that does not penalise younger entrants
in favour of longer-serving staff. Some new
entrants may be more skilled or qualifi ed than
their colleagues, making this situation even
more unfair.
• A complete overhaul of the structure of
promotions and the removal of increments in
place of independent overall assessment.
QUANGOS
YFG believes it is vital that the Government continue
to strive to reduce the number of quangos and to
increase effi ciency in quangos. Taxpayers want to
see a productive and effi cient in return from all
public investment.
TAX TRANSPARENCY
YFG welcomes the recently proposed bill on tax
transparency. The introduction of an assessment
showing how taxpayers how funds are used
will provide a greater degree of understanding
amongst taxpayers as to importance of developing
long-term fi scally prudent policies and plans.
DEPARTMENT OF SOCIAL PROTECTIONCHILD BENEFIT
YFG proposes that the Minister for Social Protection
introduce a gradual cut in Child Benefi t over the
next year, with the end result being a tiered system
of allowance, based upon a family’s income. The
highest Child Benefi t payment for low income
families should not exceed €120 per month.
Following the introduction of the tiered system, no
family should receive less than half the maximum
payment per month, because if the benefi t were
to be cut altogether for middle and high income
earners, the impact on the middle class would
prove unjust.
The revenue saved through the implementation
of a tiered system should be invested in children’s
future through investment in the primary and
secondary education systems.
FIRST COMMUNION AND CONFIRMATION ALLOWANCE
First Communion and Confi rmation Allowances are unnecessary
entitlements that serve no purpose. As Ireland moves towards become
a more diverse and secular society, it is unjust to provide members of
a particular religious faith with allowances to celebrate such religious
occasions, when there is no provision for similar occasions celebrated in
other religions. This should not be something that the average tax payer
contributes to in society and YFG advocates removing these allowances
in full.
SOCIAL PROTECTION FOR SELF-EMPLOYED
Ireland now needs to fl ourish and this requires a greater level of
assurance that those who try to create jobs will not be crippled for
bringing about new Irish business and new employment. YFG strongly
recommends that the Irish government examine the lack of access
to social protection provisions for those who are self-employed. This
safety net is afforded to a great many people and accordingly should
not exclude those are working to create jobs through entrepreneurship.
Fine Gael National Headquarters51 Upper Mount Street, Dublin 2
Phone: 01 619 8444 Fax: 01 662 5046 Email: [email protected] Web: www.yfg.ie