Young Voices In A Changing Ireland

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Young Voices In A Changing Ireland - Young Fine Gael's pre-budget submission for Budget 2013.

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Young Voices In A Changing Ireland

  1. 1. IN AC HAYo IR NGI EL NG AN D u vO IC ng Es
  2. 2. CONTENTS02 President’s Introduction03 Department of Agriculture, Food and the Marine03 Department of Education and Skills03 Department of Environment, Community and Local Government04 Department of Finance05 Department of Health06 Department of Jobs, Enterprise and Innovation08 Department of Public Expenditure and Reform09 Department of Social Protection YOUNG VOICES IN A CHANGING IRELAND
  3. 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 Molloy24
  4. 4. 3 5DEPARTMENT 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 thatCAP the system had proven to be flawed for 2012/2013 grant applications, asYFG asks the Government to lobby for provisions in only one in three applications were processed3. This centralised systemCAP to be made to young, trained and active farmers must be adequately resourced in terms of staffing to deal with the influxas challenging re-negotiations get underway. of applications annually, if necessary by secondment of civil servants forMany countries will lobby for a reduction in this the necessary period.area in general; we commend the Government’scommitment to CAP in what will be a tough and TECHNOLOGY COURSE INCENTIVESchallenging negotiations process. YFG proposes that the Government consider options for increasing second level student uptake in Computer Science and TechnologyYOUNG FARMERS INITIATIVE courses at third level. It is one of the few sectors in our economy whereIreland has an excellent reputation abroad for the there is a shortage of qualified entrants and is an industry that thequality 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 pilotmore young people see agriculture as a viable project in one of the universities in Ireland with reduced fees for relatedand rewarding career choice. However, only 7% technology, innovation and computer science courses, in order toof 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 inencouraging young people to choose it1. Necessaryresources should be allocated to agricultural DEPARTMENT OF ENVIRONMENT,training colleges to increase take-up of courses. COMMUNITY AND LOCAL GOVERNMENTThe Government should ensure that farming is NEW HOME SUSTAINABLE ENERGY AUTHORITY OF IRELANDproperly marketed as a way of life as, not only are GRANTSyoung farmers partaking in a growing industry, but YFG proposes that persons building new homes be entitled to the samefarmers also live longer and have considerable grant entitlements in relation to renewable energy and energy efficiencyinput 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 withDEPARTMENT OF environmental law should be assisted by the Government by providing them with the same entitlements as those with pre-existing buildings.EDUCATION AND SKILLSEDUCATION AND SKILLS EXCISE DUTIES ON TRADING FUEL - ESSENTIAL USER FUELIrish universities must be proactive in creating REBATEan education system that’s end goal is training The Government currently takes 59.62c out of every 159.9c chargedstudents to gain employment, as well as assisting per litre of petrol and 48.57c out of every 154.9 per litre of diesel4those who are interested in setting up businesses. in fuel duty. For hauliers, half of their total costs comprise of fuelIn some cases, this may be as simple as the costs5. This has proven to be unsustainable for the industry, withprovision of open lectures or optional modules many haulage companies ceasing trading in recent months andon how to maintain proper accounts or comply years. Those hauliers surviving this period frequently resort to gettingwith employment law. These lectures or modules fuel abroad, which is a loss to the exchequer according to the Head ofshould be available to all students to foster the Irish Road Haulage Association6. According to a Deloitte report inentrepreneurship and prepare people to run a 2011, 95% of Irish freight is transported via road7. This demonstratesbusiness. 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.php5 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. 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 the6 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. 6. 7viability 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 basedpublic domain, in full or in part. We feel this move Child Adolescent Mental Health Service (CAMHS) teams to providewould help to make the public more confident in support for schools. This issue remains a priority for young Irish peopleonce very trusted institutions in the state. and improvements to that system would have considerable impact onIn 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 peoplesenior executives to return their excessive payments and to identify preventative measures such as mental health trainingback to the exchequer. We acknowledge the legal and bullying prevention training for those who have dealings with youngconstraints in relation to legacy bonuses and people and more education for young people about maintaining theirpensions, however, YFG calls on the Government to mental health.utilise the Public Interest Directors more especiallyin future decisions where the taxpayer is. One of thepurposes of the Credit Stabilisation Act 2010 is “to TAX ON SATURATED FATS AND SUGARY DRINKSaddress the compelling need to restore confidence An Oireachtas study found that 66% of all Irish adults, 22% of 5-12 yearin 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 foundMinister, should take this into account, along with that obesity is costing the State over an estimated €1.1 billion in directthe explicit statement in the Credit Stabilisation and indirect costs19. The main contributors to our obesity problem areAct 2010 in relation to bonuses “that such bonuses a lack of exercise and unhealthy eating habits. Weight problems forare unlikely to have been paid if the State had children create huge risk to their general health and well-being later innot enabled the relevant institution to meet its life, as the chances of remaining overweight or obese into adulthood arefinancial and regulatory obligations through the large. Cardiovascular disease and type 2 diabetes are among the otherprovision 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 taxesusing 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 individualresponsibility 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 sugaryYFG welcomes the Department of Finance’s drink21. Whatever revenues are generated from such a tax should beinitiative to hire Mercer as consultants to review pay reinvested in measures to increase awareness of the problems causedin the banking sector in a benchmarking exercise. by obesity, the measures that can be taken to rectify it and to subsidiseEven though we would like the €500,000 pay healthy foods.barrier for bank executives not to be broken, YFGwelcomes Minister Noonan’s efforts requesting HOME HELPthe 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 ofDEPARTMENT 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 aMENTAL HEALTH better quality of life in their own homes. Home help is an area of massiveYFG wishes to ensure that the Government does concern to the public and one that cannot afford to face further fundingnot abandon proposals outlined in A Vision For cut.Change. The 8.4% spending on mental healthoutlined in the Vision for Change proposal shouldbe the minimum objective for the Government for2013 and the Government should take all necessary16 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. 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 as8 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. 8. 9companies who qualify for the scheme. YFG calls To ensure that the focus of the scheme is to create jobs, mechanismsupon the Minister to allow professional service should be in place to ensure the original reasons for acquiring thecompanies 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 beSEED CAPITAL RELIEF AND EIIS available to the state in the event of refinancing the loan for personal useSeed 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 catalystabolishment of income tax relief for loans used in smaller and medium enterprises for job creation, development andto invest in companies. Seed Capital Relief, evolution. The Action Plan for Jobs 2012 outlined that the EIIS shouldalong with the EIIS, are predicated upon the idea “assess if any amendments are required” and YFG believes that thesethat 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 sensibleminimum period for a third party investor, but not STATE-BACKED INVESTMENT/ ENTERPRISE BANKfor an owner/manager. Canada, the US and Germany have State Backed Investment/EnterpriseMinister Richard Bruton mentioned at the 2012 models in operation. Ireland needs lending facilities that provide aChartered Accountant’s Annual Conference growth-orientated credit facility. It would give businesses with potentialthat only 63 out of a possible 1200 new start-up and positive growth more confidence and when seeking lending. A newcompanies availed of the Seed Capital Relief30. On investment bank entering the market would increase the equity andthose figures, it suggests that the scheme is not debt sources available to enterprise. The bank would be funded by thebeing utilised. European Investment Bank and the National Pension Reserve Fund.Generally speaking, many owner/managers haveto invest in their company via a loan. In order toget a return on their investment, they have to RESEARCH AND DEVELOPMENT TAX CREDIT AND RELIEFsell their business in order to realise a return Ireland is operating in an open market at the edge of the Eurozone toon their investment. This is not very attractive which we contribute approximately 1% of the Eurozone’s GDP. Given thisfor 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 willYFG believes that the Seed Capital Relief scheme also be supportive of indigenous companies engaged in R&D. Theshould serve to qualify investment by a loan for effectiveness of the R&D relief is proven, as the number of companieslong-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 rewardcurrent 30% and address any concerns on the safe- standard business practice. Given the unpredictable nature of R&D andguarding of genuine use on a loan/equity ratio to the current trend of streamlining in businesses, it is often necessary tothe 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 between29 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.pdf31 http://www.djei.ie/publications/2012APJ.pdf Page 54 32 http://oireachtasdebates.oireachtas.ie/debates%20authoring/debateswebpack.nsf/takes/dail2012061200122?opendocument
  9. 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.10 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 34 http://www.revenue.ie/en/tax/vat/rates/rate-changes-jobs-initiative.html
  10. 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 forQUANGOS bringing about new Irish business and new employment. YFG stronglyYFG believes it is vital that the Government continue recommends that the Irish government examine the lack of accessto strive to reduce the number of quangos and to to social protection provisions for those who are self-employed. Thisincrease efficiency in quangos. Taxpayers want to safety net is afforded to a great many people and accordingly shouldsee a productive and efficient in return from all not exclude those are working to create jobs through entrepreneurship.public investment.TAX TRANSPARENCYYFG welcomes the recently proposed bill on taxtransparency. The introduction of an assessmentshowing how taxpayers how funds are usedwill provide a greater degree of understandingamongst taxpayers as to importance of developinglong-term fiscally prudent policies and plans.DEPARTMENT OF SOCIALPROTECTIONCHILD BENEFITYFG proposes that the Minister for Social Protectionintroduce a gradual cut in Child Benefit over thenext year, with the end result being a tiered systemof allowance, based upon a family’s income. Thehighest Child Benefit payment for low incomefamilies should not exceed €120 per month.Following the introduction of the tiered system, nofamily should receive less than half the maximumpayment per month, because if the benefit wereto be cut altogether for middle and high incomeearners, the impact on the middle class wouldprove unjust.The revenue saved through the implementationof a tiered system should be invested in children’sfuture through investment in the primary andsecondary education systems.
  11. 11. Fine Gael National Headquarters51 Upper Mount Street, Dublin 2Phone: 01 619 8444 Fax: 01 662 5046Email: yfg@yfg.ie Web: www.yfg.ie

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