My Pre Budget Submission to Minister Michael Noonan – sent August 2013

1. A) Increase grants for Housing for the Elderly and Disabled Persons Schemes

I believe that allowances should be made through a specific allocation from the Budget to direct monies towards small builders and tradesmen in order to reignite this failing industry.

With the Local Property Tax coming into force, it is essential that people see a reinvestment in their Local Authorities. For some time, funding towards housing grants for the elderly/ disabled has been extremely limited. An increase in Local Authority grants, which could be sourced through the above mentioned dedicated Budget allocation, towards home improvements will have a double edged effect of keeping people within their homes (and therefore out of nursing homes and hospitals, freeing up much needed beds) and generating trade within the local area for small tradesmen and builders who have suffered as a consequence of local of funding being curtailed.

B) Focus on small construction workers

With many families forced to remain in their homes rather than moving to bigger houses when their family grows, funds from the above mentioned Budget allocation could also be used by people to retrofit their homes through investment in extensions, conversions etc. This would also apply to people who just wish to refurbish/ redecorate their homes. With so many construction workers currently unemployed, this could be seen as an investment drive towards taking people off the live register, away from the black market and bringing the industry back to life. However, in order to access monies through this fund, it is imperative that tradesman/ builders are registered and regulated.

Figures pertaining to Point 1 A) & B)

A major decision will have to be made for Budget 2014 with regard to the savings made on the Promissory Note €“ do we use this to reduce the deficit or to stimulate the domestic economy. I believe the latter should take precedent as this will reduce unemployment by creating jobs and increase tax revenues. Therefore, I am proposing to invest some of the savings from Promissory Notes back into the economy by way of the above schemes, particularly when one considers that 94,000 persons on the Live Register are from a construction background.

Positive impact of funding on Local Authorities:

Currently Kildare County Council has 300 applications on hand for Housing Aid for the Elderly and Disabled Persons Grants. I have been informed that a sum total of €1.6 million from the Department of the Environment along with matching funds of 20% from the Council will clear these applications. However due to budgetary restrictions they are unable to open up for new applications. I therefore propose that the amount of matching funds invested into these schemes from the Local Authorities should remain the same but that these should be double weighted in terms of investment from the Department. For example Kildare County Council has a budget of €405,000 in 2012 available for Housing Adaptation/Mobility Aids/Housing Aid Grants which will leverage €2,350,000. Under the proposed scheme, the €405,000 would leverage €4,700,000 which will not only clear the existing applications but allow for new applications. This in turn will allow the Council to approve an increased number of applications, generating more jobs locally..

How effective €300 million could be for creating jobs:

Large scale projects such as the Luas Cross City will create 800 construction jobs from an investment of €368 million. However I have been informed by the Department of Enterprise, Trade and Innovation that small scale projects are much more effective for job creation €“ for every €1 million invested 20 jobs will be created. Therefore an investment of €300 million could create up to 6,000 jobs, the knock on effect of which would be an increase in VAT returns and savings on Unemployment Benefit.

2. Childcare Cost Allowance €“ Tax relief

Childcare costs continue to be unnecessarily prohibitive to parents in Ireland. Indeed in some cases a parent may decide to remain in the home as a full time parent as this option is more financially beneficial than returning to the workforce. In the current climate it is essential that as many people as possible are encouraged to enter the workforce. I am aware that the Minister is very aware of the ongoing problems associated with childcare costs but I am urging him to again look at this issue from a practical point of view. I do appreciate that from an economic point of view, now may not be the optimum time to introduce government backed childcare schemes but I firmly believe that working families need support in terms of childcare costs as they are the people being most hit by austerity measures.

I believe that tax relief on childcare costs is an option that should be explored. This relief could be available directly to one parent, as nominated by the household, whose child/ children attend a registered childcare facility. If this was to be introduced I would also propose the notion of fixed pricing childcare costs to ensure that prices do not rise as a result of childcare providers exploiting the tax relief being available to parents.

I also appreciate that the cost of childcare varies geographically throughout the country and therefore the tax relief cannot be a flat rate. Therefore I suggest that the amount to be claimed on the cost should be geographically defined similar to the thresholds used for Rent Supplement throughout the country whereby the amount received is dependent on where a person lives.

International Alternative:

There are two government-supported childcare options in Denmark, between the ages of 0 and three children can be placed in local nurseries and from the ages of three to six children can be placed in local kindergartens. The price of childcare is set by the local government, however according to state law parents must not pay more than 25-28% of the cost of childcare in the institution. All staff employed (both public and private) are trained as pre-school pedagogic (the science and art of education). In Denmark, for children of primary-school age there are before and after school programmes, this form of childcare is available through the school or through the local government. For children secondary school age youth clubs either ran privately or ran by the local government are available to teenagers.

3. Allow Mortgage Interest Relief for families who are forced to rent out their homes:

There are a growing number of families being forced to move out of their homes due to lack of space. Many of these were young couples who bought apartments or small houses during the boom, have since had a family and can no longer remain in cramped accommodation. Due to negative equity and difficulties in obtaining mortgages, these families are being forced to move out of their homes and rent larger accommodation elsewhere. In the meantime, the house which they are paying their one and only mortgage on is being rented but the property owners lose their Mortgage Interest Relief because the house is no longer considered their principal residence.

I would urge the Minister to seriously look at this situation. This is clearly a fall out from the property bubble and struggling families, who rely on the Mortgage Interest Relief, are being penalised for seeking more suitable accommodation for their growing families.

I appreciate that in order to be eligible for Mortgage Interest Relief the property must be the principal residence, however I feel that justifiable exceptions should be made in situations such as this, similar to extending the 30% Mortgage Interest Relief to those who bought between 2004-2008. Ultimately, despite the fact that the property owners may no longer be living in the house, they are still technically the mortgage holders, a large percentage of which are First Time Buyers, and they should not have to lose this status as consequence of overcrowding.

I understand that there is a threat that this could be abused by some people and therefore certain conditions must be imposed for example:

– The mortgage holders will have to rent accommodation which is registered with the PRTB and their own property should likewise be registered.

– They will have to consistently prove to the bank that they are both paying their mortgage and rental on other properties

4. Gaming

An area through which money can be generated is a licence fee on gaming machines. I would urge you to increase the gaming machine licence fee and the gaming premises licence by bringing them in line with Northern Ireland costs. For example if there was a fee of €1,000 per machine the excise duty could be as much as €12 million based on current figures.

5. Low Price alcohol selling

There has been much debate in recent time with regard to the banning of alcohol companies from sponsoring sporting clubs and events. Throughout this debate, an issue which has consistently been raised with me is that such a measure would have very little impact on alcohol consumption but rather tackling low cost alcohol sales would be more effective. In last year’s Budget, the cost of a bottle of wine was increased by €1; therefore a precedent has been set. I therefore support the concept of minimum pricing on alcohol as I believe that it would not only tackle alcohol misuse in this country but also contribute to the exchequer.

ENDS