2. CONTENTS
02 President’s Introduction
03 Department of Agriculture, Food and the Marine
03 Department of Education and Skills
03 Department of Environment, Community and Local Government
04 Department of Finance
05 Department of Health
06 Department of Jobs, Enterprise and Innovation
08 Department of Public Expenditure and Reform
09 Department of Social Protection
YOUNG VOICES
IN A CHANGING IRELAND
3. YOUNG FINE GAEL PRE BUDGET
SUBMISSION 2012/2013
PRESIDENT’S INTRODUCTION
The budget for 2013 promises to be a difficult 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 reflect the de-
sire of people across Ireland for significant, 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
significantly 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 reflection of many issues
concerning young Irish people, as well as outlining many of
the things they feel offer solutions or alternative methods
while reflecting the long-term best interests of the country.
I would like to thank all the members of YFG and, in partic-
ular, the Policy Officers of the National Executive for their
efforts in compiling this document.
Patrick Molloy
2
4
4. 3
5
DEPARTMENT OF STUDENT UNIVERSAL SUPPORT IRELAND (SUSI)
AGRICULTURE, FOOD AND YFG wishes to express its dissatisfaction with the performance to date
of the new centralised body for processing student grant applications,
THE MARINE SUSI. It was recently admitted at the Joint Oireachtas Committee that
CAP the system had proven to be flawed for 2012/2013 grant applications, as
YFG asks the Government to lobby for provisions in only one in three applications were processed3. This centralised system
CAP to be made to young, trained and active farmers must be adequately resourced in terms of staffing to deal with the influx
as challenging re-negotiations get underway. of applications annually, if necessary by secondment of civil servants for
Many countries will lobby for a reduction in this the necessary period.
area in general; we commend the Government’s
commitment to CAP in what will be a tough and TECHNOLOGY COURSE INCENTIVES
challenging negotiations process. YFG proposes that the Government consider options for increasing
second level student uptake in Computer Science and Technology
YOUNG FARMERS INITIATIVE courses at third level. It is one of the few sectors in our economy where
Ireland has an excellent reputation abroad for the there is a shortage of qualified entrants and is an industry that the
quality of its food produce, ingredients and finished Government is targeting in terms of Foreign Direct Investment (FDI)
food products. As a result of this reputation, to Ireland. YFG also proposes that the Government introduce a pilot
more young people see agriculture as a viable project in one of the universities in Ireland with reduced fees for related
and rewarding career choice. However, only 7% technology, innovation and computer science courses, in order to
of farmers in Ireland are under 35 years of age establish if this is a proposal worth introducing nationwide.
and the Government should be more active in
encouraging young people to choose it1. Necessary
resources should be allocated to agricultural
DEPARTMENT OF ENVIRONMENT,
training colleges to increase take-up of courses. COMMUNITY AND LOCAL GOVERNMENT
The Government should ensure that farming is NEW HOME SUSTAINABLE ENERGY AUTHORITY OF IRELAND
properly marketed as a way of life as, not only are GRANTS
young farmers partaking in a growing industry, but
YFG proposes that persons building new homes be entitled to the same
farmers also live longer and have considerable
grant entitlements in relation to renewable energy and energy efficiency
input to climate change2.
implementation as those receiving grants who are in their homes for
more than 5 years. The excess burden to build in accordance with
DEPARTMENT OF environmental law should be assisted by the Government by providing
them with the same entitlements as those with pre-existing buildings.
EDUCATION AND SKILLS
EDUCATION AND SKILLS EXCISE DUTIES ON TRADING FUEL - ESSENTIAL USER FUEL
Irish universities must be proactive in creating REBATE
an education system that’s end goal is training The Government currently takes 59.62c out of every 159.9c charged
students to gain employment, as well as assisting per litre of petrol and 48.57c out of every 154.9 per litre of diesel4
those who are interested in setting up businesses. in fuel duty. For hauliers, half of their total costs comprise of fuel
In some cases, this may be as simple as the costs5. This has proven to be unsustainable for the industry, with
provision of open lectures or optional modules many haulage companies ceasing trading in recent months and
on how to maintain proper accounts or comply years. Those hauliers surviving this period frequently resort to getting
with employment law. These lectures or modules fuel abroad, which is a loss to the exchequer according to the Head of
should be available to all students to foster the Irish Road Haulage Association6. According to a Deloitte report in
entrepreneurship and prepare people to run a 2011, 95% of Irish freight is transported via road7. This demonstrates
business. 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
5. A tax rebate on fuel would create a more level THE FUTURE OF STAMP DUTY
playing within the EU. Five EU member states YFG believes that the future of stamp duty should be zero-rated for
have fuel rebates for the industry - Spain, France, Principle Private Residence purchases, but should be retained for
Belgium, Hungary and Slovenia. There is provision Non-Principle Private Residence purchases and for land zoned for
in an EU Directive under Energy Tax that allows for development.
vehicles that carry over 7.5 tonnes to have rebate
on fuel duty. WHO SHOULD BE EXEMPT?
The Joint Oireachtas Committee on fuel duty tax We propose that the following groups be exempted in full or in part from
rebate recommended that a fuel duty rebate would the Property Tax: low income families and families in social housing.
alleviate pressure in the haulage industry and Those with negative equity mortgages and in mortgage arrears should
would be fiscally prudent and YFG calls on the be considered for deferment of payment until disposal of asset10.
Minister to consider this proposal.
WHO SHOULD COLLECT THE TAX/OPTIONS ON PAYMENT?
PROPERTY TAX
For the initial introduction of the tax, we propose that the Revenue
YFG fully supports the Government’s proposal Commissioners should collect it, to ensure maximum compliance.
to re-introduce residential property taxes, as According to Minister Hogan, as of 12th October 2012, 59% of those
set out under the EC/ECB/IMF guidelines and liable for the Household Charge have paid it11. This yielded €90 million
supported by highly reputable organisations such out of the budgeted €160 million. The new tax proposal would yield
as the Organisation for Economic Co-Operation €500million12. The Revenue Commissioners have the necessary audit
Development (OECD)8. control in place to assure maximum planned yield for the Government.
While there exists a short-term challenge with the The OECD indicates, that for maximum compliance, the tax should
re-introduction of the tax in the midst of financial be deducted at source13. All yields should be repatriated to Local
adjustment, it is imperative that Ireland learns Government, as the vision set out in Fine Gael’s New Politics14.
from the past and ensures we are not at the mercy Payment of the tax should be at quarterly intervals unlike the Domestic
of a property bubble again in the future. In the long Rates abolished in the late 1970’s and this should be done via the ROS
term, the introduction of a property tax will provide system and/or the PAYE system via tax credit reductions.
a reliable and consistent stream of revenue to
safeguard valuable public services.
Budget 2012 saw the introduction of the DEPARTMENT OF FINANCE
‘Household Charge’, which proved quite unpopular BANKING
with the public, as it was not a progressive tax, with
There is still strong public anger towards the banking sector. Given that
everyone liable for the charge paid the same rate.
the State partially or largely owns the two pillar banks, YFG feels that
The Household Charge introduced in Budget 2012 the Public Interest Directors and the Minister should act and moreover,
gave the Government valuable information on should be seen to act more for the taxpayers interest, while preserving
property ownership for the long term proposal of a the need to restore the institutions to viability and stability.
fully-fledged property tax.
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
WHAT METHOD SHOULD BE USED?
providing a financial support facilitated by this Act or pursuant to any
YFG advocates the Site/Land Valuation Tax method other enactment, from imposing any terms and conditions which any
of Property Tax. This method considers the value other provider of financial support to the relevant institution concerned
of the land or site on the property, rather than would be entitled to impose or which the Minister considers desirable to
merely the value of the building on it. Hence, any impose in order to protect the public interest” 15.
commercial activity or an expensive holding on the
In relation to any institutions that have received state support through
land would be reflected fairly for tax liability due.
this act, we believe that the Minister or Public Interest Directors should
It is the most progressive and fair of the methods
request a full and comprehensive review justifying why an institution
outlined in the Commission of Taxation Report
plans to impose an increase on variable mortgage interest rates. This
20099. It can be tapered to reflect ownership by
review should be explicit in outlining how the long-term viability of the
OAPs, or in respect of income below a certain level
institution and the interests of the taxpayer are factored into the rationale.
so as not to impose an unfair and excessive burden.
If the Minister deems the rationale sufficient for the interests, both the
6
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.finegael2011.com/pdf/NewPolitics.pdf 15 http://www.irishstatutebook.ie/2010/en/act/pub/0036/
print.html
6. 7
viability of the institution and the taxpayer, then steps to eliminate the stigma attached to mental health in Ireland.
YFG requests that the review be released into the There is a need to examine the current provision of community based
public domain, in full or in part. We feel this move Child Adolescent Mental Health Service (CAMHS) teams to provide
would help to make the public more confident in support for schools. This issue remains a priority for young Irish people
once very trusted institutions in the state. and improvements to that system would have considerable impact on
In relation to bonuses and pensions, we welcome the health and happiness of young people for the rest of their lives.
the Government’s attempts to request former YFG believe the government need to maintain focus on young people
senior executives to return their excessive payments and to identify preventative measures such as mental health training
back to the exchequer. We acknowledge the legal and bullying prevention training for those who have dealings with young
constraints in relation to legacy bonuses and people and more education for young people about maintaining their
pensions, however, YFG calls on the Government to mental health.
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 TAX ON SATURATED FATS AND SUGARY DRINKS
address the compelling need to restore confidence An Oireachtas study found that 66% of all Irish adults, 22% of 5-12 year
in the banking sector; to protect the taxpayer.”’ The olds and 20% of teenagers (13-17 years) are overweight or obese18.
Government, via the Public Interest Directors or the Recently, a University College Cork study on behalf of SafeFood found
Minister, should take this into account, along with that obesity is costing the State over an estimated €1.1 billion in direct
the explicit statement in the Credit Stabilisation and indirect costs19. The main contributors to our obesity problem are
Act 2010 in relation to bonuses “that such bonuses a lack of exercise and unhealthy eating habits. Weight problems for
are unlikely to have been paid if the State had children create huge risk to their general health and well-being later in
not enabled the relevant institution to meet its life, as the chances of remaining overweight or obese into adulthood are
financial and regulatory obligations through the large. Cardiovascular disease and type 2 diabetes are among the other
provision of financial support” 16 . The Government health problems heavily linked to weight problems20.
should ensure that legacy bonuses are not paid out A study has been conducted on the potential income from these taxes
using State financial support. This provision sets and a yield of €79.91 million has been estimated from saturated tax,
out the governance of this issue, proving it is the while €95.1 million has been estimated from fat tax. At an individual
responsibility of the Public Interest Directors via level, the imposition of the tax could mean €0.05 on a tub of butter,
the Minister to ensure this is complied with. €0.03 on a bar of chocolate and €0.02 on a two litre bottle of sugary
YFG welcomes the Department of Finance’s drink21. Whatever revenues are generated from such a tax should be
initiative to hire Mercer as consultants to review pay reinvested in measures to increase awareness of the problems caused
in the banking sector in a benchmarking exercise. by obesity, the measures that can be taken to rectify it and to subsidise
Even though we would like the €500,000 pay healthy foods.
barrier for bank executives not to be broken, YFG
welcomes Minister Noonan’s efforts requesting
HOME HELP
the IBRC executives to consider pay cuts17.
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
DEPARTMENT OF HEALTH home help and this measure ensures, in many cases, that such persons
do not require hospital beds, already in excessive demand and have a
MENTAL HEALTH better quality of life in their own homes. Home help is an area of massive
YFG wishes to ensure that the Government does concern to the public and one that cannot afford to face further funding
not abandon proposals outlined in A Vision For cut.
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
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
7. DEPARTMENT OF (SMEs constitute less than 250 workers). Despite the relatively strong
performance of the services sector and multinationals based in Ireland,
JOBS, ENTERPRISE AND it does not account for with the performance of the Irish economy
INNOVATION as a whole. The gap between GDP and GNP expanded significantly
between 2009 and 2011. GDP takes into account multinationals profits
JOB CREATION AND ENTREPRENEURSHIP
whereas GNP does not. In 2011, nominal GDP was 20% higher than
Creation and retention of jobs is the highest priority GNP, compared to 2009 where it was 14%25. Further adjustments to
for the Coalition Government since coming into Government schemes below and introduction to new measures can
office and this must remain a focus throughout impact positively on the domestic economy.
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 EMPLOYMENT INVESTMENT INCENTIVES SCHEME (EIIS)
welcome development22. Unfortunately, emigration YFG believes that the EIIS, in its current format, does not support the
of Ireland’s youth is a factor in this stabilisation. outlined objectives to create jobs, source finance and produce profits by
Employment not only contributes positively to PRSI indigenous companies. As of 12/06/2012, only a measly 11 companies
and income tax, but it also reduces the cost of qualified for the scheme26. Factors contributing to this are the volatile
social welfare and. It also has a substantial positive investment climate, lack of awareness of the scheme and the barriers
effect on people’s confidence and dignity. Irish for qualification. This scheme must be fundamentally reviewed to ensure
people have a great sense of pride in their work it achieves the objectives of Government.
and strive for responsibility and opportunity. The According to members of Ireland’s accountancy bodies, potential
Government must continue to assist further job investors are not encouraged to invest when the scheme’s headline tax
creation and create an economy that competes as relief is heavily restricted by the High Income Earners’ Restriction27. In
best it can, given the limited monetary resources at light of the curtailment of pension tax reliefs, there will be an increase
our disposal. in demand for tax relief investment vehicles. To realise the scheme’s
This year we have seen the Government’s launch potential, it should loosen its ties with the High Income Earners’
of the Action Plan for Jobs 2012. This plan outlined Restriction. Since this is the group more likely to invest in a scheme like
measures to help found and develop indigenous this, it is not advisable that they are unable to claim the relief. A reformed
businesses and to attract and incentivise Foreign EIIS should be compelled to focus on the business that could benefit and
Direct Investment (FDI) into Ireland. In light of not the individual taxpayer. Also, it should take into consideration that
the volatile domestic and international operating the relief should be paid up front.
climates, we believe it vital to create and harness The UK has a scheme similar to the EIIS which allows this type of relief
the conditions to ensure that that Ireland “is and their scheme is perceived to be more valuable and more likely to
open for business” and that it remains “open for yield investment28. Called the Seed Enterprise Investment Scheme, it
business”. concentrates on smaller companies in their infancy. Stakeholders whose
The Government’s Action Plan for Jobs 2012 shares total less than 30% of the company’s overall shares can claim
introduced reliefs for start-up companies; the tax reliefs. Companies with 25 or fewer employees and assets of up to
Employment Investment Incentive Scheme (EIIS); £200,000 can apply for the relief under the scheme. The introduction of
Seed Capital Relief; R&D relief for employees; this scheme in the UK demonstrates their seriousness in supporting
and Foreign Earnings Deduction, amongst others. small enterprises.
We believe that these reliefs, together with the Similar schemes to the EIIS operating in Austria and the Netherlands
retention of Ireland’s corporation tax rate of 12.5%, have attracted favourable investors by mitigating risk and attracting
a highly educated workforce, and our prominence capital by guaranteeing proportionate losses. The introduction of such
as an English-speaking member of the European a scheme would attract non-traditional investors to our shores. YFG
Union with a potential market of over 500,000,000 believes that such a scheme should be rolled out between 2013 and
people23 all contributed to positive job creation 2015.
announcements by Paddy Power, Paypal, Twitter
and many more. In Q2 2012, service exports rose PROFESSIONAL SERVICE COMPANIES AND EIIS
9% compared with the previous year24.
At present, professional service companies are not eligible to apply for the
However, it is imperative to keep in mind that EIIS29. Many professional service companies are running on an overdraft
70% of Irish employment in the private sector or loan financial model and they feel they are discriminated against as
is in the Small and Medium Enterprises sector they can utilise outside investment for equally worthy investment as
8
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%20
signed.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/$file/IBEC+Budget+2013+Submission+-+low+res.pdf
8. 9
companies who qualify for the scheme. YFG calls To ensure that the focus of the scheme is to create jobs, mechanisms
upon the Minister to allow professional service should be in place to ensure the original reasons for acquiring the
companies to apply for the EIIS. loan are adhered to. The introduction of a preclearance vehicle should
be required for any refinancing of the loan. Relief clawback should be
SEED CAPITAL RELIEF AND EIIS available to the state in the event of refinancing the loan for personal use
Seed Capital Relief and EIIS are the only tax or paid back before the requisite period.
reliefs available to a manager/owner since the YFG believes the EIIS model does have potential to be a greater catalyst
abolishment of income tax relief for loans used in smaller and medium enterprises for job creation, development and
to invest in companies. Seed Capital Relief, evolution. The Action Plan for Jobs 2012 outlined that the EIIS should
along with the EIIS, are predicated upon the idea “assess if any amendments are required” and YFG believes that these
that the owner of the shares holds onto them amendments could ensure the scheme exploits its full potential31.
for a minimum of three-years. This is a sensible
minimum period for a third party investor, but not
STATE-BACKED INVESTMENT/ ENTERPRISE BANK
for an owner/manager.
Canada, the US and Germany have State Backed Investment/Enterprise
Minister Richard Bruton mentioned at the 2012
models in operation. Ireland needs lending facilities that provide a
Chartered Accountant’s Annual Conference
growth-orientated credit facility. It would give businesses with potential
that only 63 out of a possible 1200 new start-up
and positive growth more confidence and when seeking lending. A new
companies availed of the Seed Capital Relief30. On
investment bank entering the market would increase the equity and
those figures, it suggests that the scheme is not
debt sources available to enterprise. The bank would be funded by the
being utilised.
European Investment Bank and the National Pension Reserve Fund.
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 RESEARCH AND DEVELOPMENT TAX CREDIT AND RELIEF
sell their business in order to realise a return Ireland is operating in an open market at the edge of the Eurozone to
on their investment. This is not very attractive which we contribute approximately 1% of the Eurozone’s GDP. Given this
for potential investors who might have worked background, it is imperative that we are as competitive as we can be.
hard for 3 years in a venture that they will then be The R&D tax credit and relief is an important component in the decision-
forced to dispose of. making process of multinationals when choosing their location. It will
YFG believes that the Seed Capital Relief scheme also be supportive of indigenous companies engaged in R&D. The
should serve to qualify investment by a loan for effectiveness of the R&D relief is proven, as the number of companies
long-term development of the business, while claiming it doubled in the two year period 2008 and 201032.
keeping the entrepreneur involved in the venture.
The potential new structure could involve a new INCREASING ELIGIBILITY FOR R&D QUALIFIED EXPENDITURE:
definition of investment of 20% instead of the YFG believes that R&D tax relief, in its current form, does not reward
current 30% and address any concerns on the safe- standard business practice. Given the unpredictable nature of R&D and
guarding of genuine use on a loan/equity ratio to the current trend of streamlining in businesses, it is often necessary to
the holding period. See table below as an example: hire contract employees to carry out R&D work. Business managers do
not view contract employment as outsourced expenditure, therefore, the
YEAR LOAN % EQUITY % qualified expenditure should reflect this sentiment.
1 3 17
2 6 14 R&D TAX RELIEF FOR EMPLOYEES:
Presently, the R&D Tax Relief for employees is only available to high
3 9 11
earners and large companies. According to the CCAB-I Pre Budget
4 12 8 Submission 2013, an employee would have to earn at least €70,000 to
5 15 5 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
9. €45,000- €55,000. YFG believes this discriminates DEPARTMENT OF PUBLIC EXPENDITURE
against lower paid employees, compared to an
R&D Director who contributes valuable talent AND REFORM
and innovation to the long-term viability of the PUBLIC EXPENDITURE FUNDING
business. For this relief to be more of a progressive In the midst of continuing cutbacks and increasing taxation measures
nature, it should be amended to include those on necessary to restore fiscal rectitude to state finances, the public would
lower salaries of €70,000. be more supportive if more adjustments were made at the top. It is a
It is at the early stage of a company cycle that the notable aspect of leadership culture that people are happier to follow if
most crucial phase of the R&D takes place. This they are lead by example; in the past few years Irish people have been
is the time when it is most difficult for a company proven to be quite pragmatic and motivated in improving our economic
to accrue profitability. However, the current R&D outlook. We believe the Government’s job of implementing financial
tax relief only applies to companies that accrue adjustment would be easier for the electorate to accept if its own
profitability. If this impediment is removed, the capitation guidelines for special advisors were applied as far as possible
relief would be beneficial to smaller indigenous and a vouched expenses system apply across the board in politics.
companies.
CROKE PARK AND ALLOWANCES IN THE PUBLIC SECTOR
BASE YEAR RESTRICTION: There remains a continuing disparity between the need to find savings
YFG advocates a change to the base year 2003 upon and the protection of highly-paid civil servants. YFG believes that the
which R&D tax credit is calculated incrementally Article 1 Subsection 28 of the Croke Park Agreement can and should be
over the base year. If companies were given the enacted. YFG opposes the extension of the Croke Park Agreement and
autonomy to choose their base year, it would give calls for it to be substantially renegotiated.
them more incentive to conduct R&D activities In any future agreements, there must be a broader awareness of the
at a low cost33. The disadvantage of companies larger issues impacted by the agreements, and an acceptance that
with high level R&D long-term compared with further reductions in the overall level of expenditure of the state are both
companies established after 2003 with low level necessary and beneficial in the long term. The continuing payment of
would be removed. There is no real logical rationale excessive wages and the consequential impact on necessary services
for using the base year 2003 and a more favourable caused a clear detachment of the senior civil service from the realities
incentive should be put in place. facing many Irish people and families.
YOUTH ENTREPRENEURSHIP ANY FUTURE AGREEMENT MUST THEREFORE REFLECT:
There is a clear need to provide a better • The need to protect lower-paid public sector workers who have
environment for to foster entrepreneurship among been used to protect the excesses that exist within the public sector
young people. The introduction of a credit review pay bill by tying the higher paid civil servants’ wages to those of
board has provided a reasonable and cost effective secretaries general and other highly paid officers who earn more
measure of ensuring viable businesses will be that the Taoiseach and President.
able to gain access to funding. YFG also welcomes • A recognition that there needs to be a continuing scale that will
reduction of the duration of bankruptcy. reflect the real-time value of wages within the greater economy.
The specially introduced VAT rate for the Tourist • An explicitly stated premium that identifies the value of job security
and Hospitality sectors is of significant value for the at a time of widespread lack of job security. This is to be deducted
sector, in terms of job retention and investment in from overall pay.
new businesses, and we hope for the continuation • A re-alignment of wages to account for allowances that in effect
of this34. represent core pay but which previous governments have failed to
deal with.
• The removal of additional allowances that are
a) not related or reflected in the amendment proposed to core pay,
b) do not relate to generally accepted premiums based on work
hazard or exceptional circumstances.
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33
http://www.ibec.ie/IBEC/Press/PressPublicationsdoclib3.nsf/vPages/Newsroom~budget-2013-any-increase-in-labour-costs-will-hit-recovery-
27-09-2012/$file/IBEC+Budget+2013+Submission+-+low+res.pdf Page 10
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http://www.revenue.ie/en/tax/vat/rates/rate-changes-jobs-initiative.html
10. 11
• An acknowledgement of the inter- FIRST COMMUNION AND CONFIRMATION ALLOWANCE
generationally inappropriate premiums and First Communion and Confirmation Allowances are unnecessary
an according realignment so as to reflect a entitlements that serve no purpose. As Ireland moves towards become
comparatively fair reduction in overall wage a more diverse and secular society, it is unjust to provide members of
levels that does not penalise younger entrants a particular religious faith with allowances to celebrate such religious
in favour of longer-serving staff. Some new occasions, when there is no provision for similar occasions celebrated in
entrants may be more skilled or qualified than other religions. This should not be something that the average tax payer
their colleagues, making this situation even contributes to in society and YFG advocates removing these allowances
more unfair. in full.
• A complete overhaul of the structure of
promotions and the removal of increments in
place of independent overall assessment.
SOCIAL PROTECTION FOR SELF-EMPLOYED
Ireland now needs to flourish and this requires a greater level of
assurance that those who try to create jobs will not be crippled for
QUANGOS bringing about new Irish business and new employment. YFG strongly
YFG believes it is vital that the Government continue recommends that the Irish government examine the lack of access
to strive to reduce the number of quangos and to to social protection provisions for those who are self-employed. This
increase efficiency in quangos. Taxpayers want to safety net is afforded to a great many people and accordingly should
see a productive and efficient in return from all not exclude those are working to create jobs through entrepreneurship.
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 fiscally prudent policies and plans.
DEPARTMENT OF SOCIAL
PROTECTION
CHILD BENEFIT
YFG proposes that the Minister for Social Protection
introduce a gradual cut in Child Benefit over the
next year, with the end result being a tiered system
of allowance, based upon a family’s income. The
highest Child Benefit 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 benefit 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.
11. Fine Gael National Headquarters
51 Upper Mount Street, Dublin 2
Phone: 01 619 8444 Fax: 01 662 5046
Email: yfg@yfg.ie Web: www.yfg.ie
