Young Voices In A Changing Ireland

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CONTENTS 02

President’s Introduction

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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

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 desire 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 Children’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 particular, the Policy Officers of the National Executive for their efforts in compiling this document.

Patrick Molloy

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DEPARTMENT OF AGRICULTURE, FOOD AND THE MARINE CAP 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 finished 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 SKILLS EDUCATION 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 flawed for 2012/2013 grant applications, as only one in three applications were processed3. This centralised system must be adequately resourced in terms of staffing to deal with the influx 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 qualified 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 GOVERNMENT NEW 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 efficiency 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-farmingage-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-taxtake-driving-hauliers-to-wall-191497.html 7 http://www.oireachtas.ie/parliament/media/committees/transportandcommunications/JCTC-Reporton-the-Road-Haulage-Industry-in-Ireland-(Published-25.10.12).pdf

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 FUTURE OF STAMP 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 fiscally prudent and YFG calls on the Minister to consider this proposal.

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.

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 financial 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-fledged 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 reflected 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 reflect ownership by OAPs, or in respect of income below a certain level so as not to impose an unfair and excessive burden.

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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?

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 FINANCE BANKING 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 financial support facilitated by this Act or pursuant to any other enactment, from imposing any terms and conditions which any other provider of financial 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 sufficient 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.finegael2011.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 confident 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 confidence 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 financial and regulatory obligations through the provision of financial support” 16 . The Government should ensure that legacy bonuses are not paid out using State financial 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 HEALTH MENTAL 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-overweightan.aspx 20 http://www.who.int/dietphysicalactivity/childhood_consequences/en/index.html 21 http://www.irishtimes.com/newspaper/ frontpage/2012/1015/1224325260414.html

DEPARTMENT OF JOBS, ENTERPRISE AND INNOVATION JOB CREATION AND ENTREPRENEURSHIP Creation and retention of jobs is the highest priority for the Coalition Government since coming into office 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 confidence 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

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(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 significantly between 2009 and 2011. GDP takes into account multinationals profits 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 finance and produce profits by indigenous companies. As of 12/06/2012, only a measly 11 companies qualified for the scheme26. Factors contributing to this are the volatile investment climate, lack of awareness of the scheme and the barriers for qualification. 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 benefit 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 financial model and they feel they are discriminated against as they can utilise outside investment for equally worthy investment as

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-willhit-recovery-27-09-2012/$file/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 figures, 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 definition of investment of 20% instead of the current 30% and address any concerns on the safeguarding of genuine use on a loan/equity ratio to the holding period. See table below as an example:

YEAR

LOAN %

EQUITY %

1

3

17

2

6

14

3

9

11

4

12

8

5

15

5

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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 refinancing of the loan. Relief clawback should be available to the state in the event of refinancing 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 confidence 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 decisionmaking 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 qualified expenditure should reflect 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

https://www.enterprise-ireland.com/en/Invest-in-Emerging-Companies/Source-of-Private-Capital/Revenue-Employment-Incentive-andInvestment-Scheme.pdf 30 http://www.charteredaccountants.ie/Global/TAX/CCAB-I%20Pre%20Budget%20Submission%202013%20signed.pdf http://www.djei.ie/publications/2012APJ.pdf Page 54 32 http://oireachtasdebates.oireachtas.ie/debates%20authoring/debateswebpack.nsf/takes/ dail2012061200122?opendocument

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€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 difficult for a company to accrue profitability. However, the current R&D tax relief only applies to companies that accrue profitability. If this impediment is removed, the relief would be beneficial to smaller indigenous companies.

DEPARTMENT OF PUBLIC EXPENDITURE AND REFORM PUBLIC EXPENDITURE FUNDING In the midst of continuing cutbacks and increasing taxation measures necessary to restore fiscal rectitude to state finances, 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 financial 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 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.

There remains a continuing disparity between the need to find 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 beneficial 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.

YOUTH ENTREPRENEURSHIP

ANY FUTURE AGREEMENT MUST THEREFORE REFLECT:

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 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 officers who earn more that the Taoiseach and President.

The specially introduced VAT rate for the Tourist and Hospitality sectors is of significant value for the sector, in terms of job retention and investment in new businesses, and we hope for the continuation of this34.

• An explicitly stated premium that identifies the value of job security at a time of widespread lack of job security. This is to be deducted from overall pay.

• A recognition that there needs to be a continuing scale that will reflect the real-time value of wages within the greater economy.

• 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 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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http://www.ibec.ie/IBEC/Press/PressPublicationsdoclib3.nsf/vPages/Newsroom~budget-2013-any-increase-in-labour-costs-will-hit-recovery27-09-2012/$file/IBEC+Budget+2013+Submission+-+low+res.pdf Page 10 34 http://www.revenue.ie/en/tax/vat/rates/rate-changes-jobs-initiative.html

11 • An acknowledgement of the intergenerationally inappropriate premiums and an according realignment so as to reflect 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 qualified 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 efficiency in quangos. Taxpayers want to see a productive and efficient 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 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.

FIRST COMMUNION AND CONFIRMATION ALLOWANCE First Communion and Confirmation 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 flourish 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 Headquarters 51 Upper Mount Street, Dublin 2 Phone: 01 619 8444 Fax: 01 662 5046 Email: yfg@yfg.ie Web: www.yfg.ie