Wednesday, 1 December 1999
Dáil Éireann Debate
(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
The resolution provides for the abolition of the excise duty on tickets issued for travel overseas by air or sea with effect from 1 January 2000. This tax was first imposed with effect from 1 September 1982 and the annual yield has increased steadily over time to approximately £19 million this year. However, with the improvement in Government revenues and in recognition of the abolition duty free sales for intra-EU travel with effect from 1 July 1999, it is an opportune time to abolish this tax. This is a positive measure in support of the business and tourism sectors and will be of considerable benefit to regional airports and to air and sea transport operators.
Mr. J. Bruton: This foreign travel tax should be abolished immediately. People travelling this Christmas to meet members of their families who are abroad should not have to pay this tax. Many people will travel this Christmas and many will travel abroad to celebrate the millennium with members of their families who are abroad. They should not have to pay the tax.
This tax is wrong and it was wrong on the day it was introduced. We can now afford to abolish it and we will have to do so as a result of EU rules. The date by which it is removed should be 1 December. We should not wait until 1 January.
We cannot put down an amendment to change the date because the procedure does not allow us to put down any amendments. We have no choice, therefore, but to oppose it on the basis that we believe a new resolution should be introduced tomorrow with the words “with immediate effect” substituted for the words “or after 1 January, 2000.” Unless the Taoiseach is willing to accept an oral amendment to that effect we have no choice but to oppose it.
We are also opposing this tax symbolically because of our opposition to the philosophy of the budget. It seems that the Minister believes that people who are not paid for things do not count. If a mother or father decides to stay at home to look after their children the fact that  they are not being paid for it means they do not count.
Mr. J. Bruton: They do not count for anything. Women in the home do not count for anything in the eyes of the Government. That says all that needs to be said about its ethics. I am glad to have the opportunity to oppose this motion, symbolically for that purpose and in practical terms because this tax should be abolished with immediate effect and not from 1 January.
Mr. Quinn: We are opposed to the motion for two reasons. First, this is a very bad budget. It is far worse than we were led to expect or believe. I do not know who is in charge of the shop in Upper Merrion Street, but as on previous occasions, this resolution gives us our first opportunity to express our utter opposition to the thrust of the budget.
Mr. Quinn: The proposal before the House is that this tax be abolished with effect from January at a time when the Government has more money than any previous Administration ever had. It has so much money it is trying to hide it from itself let alone from the public at large. There is a contingency fund of approximately £500 million going into this budget as well as a projected surplus. The only reason contingency funds were projected in the past was to maintain some degree of budget equilibrium and overall income equilibrium between one year and another. There is absolutely no reason that this tax could not be abolished with effect from midnight tonight. There is certainly no financial reasons and I am sure, given the competitive market in the travel area, that the people with responsibility for collecting this tax would be quite happy to avail of that. Certainly those people who tonight will be collecting the extra 50p on packets of cigarettes, which were bought into the shops prior to this, would be quite happy to charge the extra 50p at midnight.
For that reason, the Labour Party is opposed  to this resolution. We will call a division in respect of it. If it must go, and it is being abolished because of an EU interpretation which the Minister for Finance has already indicated as being the reason for its abolition, then it should go tonight because there is no financial reason, from the point of view of available moneys, that it should stay for four more weeks. For both those reasons, one—
Mr. Allen: I just want to add my voice to that. The price of cigarettes is being increased immediately from midnight, but the Government is not introducing this for a good reason. The only reason is that it is being forced into withdrawing this tax because it is seen to be unfair and discriminatory. I appeal to the Taoiseach to immediately implement the cut to give a Christmas bonus to the thousands of travellers who will be travelling over the Christmas period. The public will appreciate it.
As my Leader said, my party will vote on this to show its opposition to one of the most anti-family budgets to have ever been introduced in this House. The appalling situation where the woman working in the home is being discriminated against—
Mr. Allen: I will reserve those comments, but I am putting on record the reason my party opposes this issue, is to show its position on a number of anti-family measures which the Government is introducing at a time when the coffers are overflowing.
Mr. Callely: —perhaps, increasing benefits to a number of people, in particular, older people where an extension of their current travel arrangements under the Department of Social, Community and Family Affairs regarding free travel could be explored, but—
Mr. Callely: —but there were two difficulties: the £5 travel tax and another charge. I am pleased that this is a step in the right direction, as the Minister stated in his speech today, if I recall correctly, as it would encourage and assist older people to travel. I support the abolition of this excise travel tax. This will be of tremendous benefit to all concerned as we approach the 21st century at a time when air travel is a means of transport used by everyone. I welcome this proposal to abolish such a tax.
Mr. D. Carey: The difficulty which Deputy Callely does not seem to understand is that his Government likes to apply discriminatory taxation. It can afford to increase the tax on cigarettes tonight but it cannot afford to abolish the travel tax until January.
Mr. D. Carey: I was about to say something about the Taoiseach's constituency. There are rumours circulating in the House that there are people in the Taoiseach's constituency who bought in stockpiles of cigarettes knowing that their price would increase by 50p. That is a fact and it occurred in the Taoiseach's constituency.
Mr. Shatter: I join my colleagues in opposing this for a couple of reasons. First, as other Deputies have said, it seems to me entirely illogical that this tax would be continued until 1 January. It is quite clear that it contravenes EU rules. It is clear that the Government is being forced to introduce this change because otherwise it would be penalised by the European Court. It seems to me that it is a very bad day when we recognise that we are imposing an unlawful tax but then say that we will continue to impose it for another month. This House has a duty to uphold legal rules by which the State is bound. I appeal to the Taoiseach to amend the resolution. When responding will the Taoiseach indicate the additional income from which the State will benefit over the next 31 days for which the tax will continue to apply?
I found Deputy Callely's intervention intriguing. He is a man who does not want to tax the people who want to leave the country but he is quite happy to make it difficult for people who want to enter the country.
Mr. Shatter: I was expecting when he rose to his feet that not only would he support the Taoiseach on abolishing this tax, as he would inevitably have to do because the Whip is imposed on him, but that he would appeal for an additional tax to be imposed on anyone who attempts to enter the State and wishes to stay for more than two weeks. It came as some relief that he did not do so.
Mr. Shatter: I must confess, Sir, that I did not hear what Deputy Callely said, but it is usual that the first vote on an issue on budget night not only deals with the issue on which the House is voting but is a symbolic indicator of the level of the House's support for the basic ethos and thrust of a budget. It is right because this resolution is foolishly drawn up. Under European law it is possibly illegal for us to continue with this tax. It is right for us to vote against it for that reason, but it is also right that at the first opportunity Opposition Members have to vote they should indicate their disapproval for the view now taken by the Government that any spouse – be it a man or woman – who decides to remain within the  home to bring up the family should be financially penalised for so doing.
Mr. Allen: On a point of order, a comment was made by Deputy Callely, which may be on the record and if it is I would like him to withdraw it. If it is not on the record, he should have the decency to withdraw it anyway.
Mr. Power: We are debating the proposal by the Minister for Finance to abolish a £5 travel tax. The tax was introduced in 1982 and since then it has remained at £5. All parties have had spells in Government since then, although some of them have been in power longer than they deserve. We all had our opportunities—
Mr. Power: When the Opposition is having difficulty finding fault with the budget, it is perhaps understandable that they should decide to focus on a £5 tax they were prepared to put up with for the last 17 years. All of a sudden, they now want the tax to be abolished on 1 December rather than 1 January. It is hypocrisy at its worst. The Opposition should cop themselves on.
Mr. Higgins: (Dublin West): I support the lifting of the £5 travel tax. I will not be voting against it because that is game playing. I am appalled at the attitude of the Government and some of the Opposition parties. I remember when the tax was introduced in the 1980s and at the time I was a member of the administrative council of the national executive of the Labour Party. It was an appalling measure, a knee-jerk reaction to the crisis in which the Irish capitalist economy then found itself. The travel tax was in the same category as many other measures introduced then, including water charges and various forms of double taxation which hit ordinary people. In the context of the 1980s, the travel tax was the ultimate insult for tens of thousands of our people, the youth in particular, who were forced into emigration and exile because of the dismal failure of the economy. Their parting gift for the Governments of the day – and a number presided over the measure – was to pay £5 tax as they were kicked out to make a living abroad.
I listened carefully to the Minister for Finance when he gave the rationale for getting rid of the tax and it certainly was not done in a generous spirit. It was done because the EU required the abolition of the tax on the basis of equality between people of different nationalities within the EU. Otherwise this State would have had to levy the tax on people travelling within the State as well as those travelling to destinations outside the EU. The distinct impression I got from the Minister's comments was that he would not have the neck to impose a £5 travel tax on people travelling within the country and, therefore, the easiest thing was to get rid of it. In fact, the tax should never have been imposed in the first place.
Mr. Farrelly: I support the proposal to have this tax abolished immediately. It would have been a warm gesture on the Minister's part to transfer it in total to the fuel allowance for the elderly, which has not been increased for 13 or 14 years. By abolishing the travel tax today instead of on 1 January, the Minister could have given the benefit to the elderly immediately. It is unfair that the Minister forgot about the elderly in today's budget. The Minister for Social, Community and Family Affairs told us such a measure would cost millions of pounds, but £20 million could have been made available by abolishing the travel tax a month early, and that could have been transferred to the elderly.
Mr. O'Kennedy: Before the House votes on this resolution, I am seeking a point of clarification arising from what Deputy Farrelly said. He  said he would like to support the proposal to oppose the elimination of this tax on travel. I am not aware that there is any such proposal that Deputy Farrelly can support. No such proposal is before the House and none has been made. Can the Deputy, or anyone else, explain how he is opposing a proposal from the Minister for Finance to abolish a tax on travel from this country – which everyone in the House has opposed for almost 20 years – while, in his own words, supporting a proposal which is not before the House? I do not understand that. The Acting Chairman has had some considerable experience in the House also. I have heard some specious arguments from the Opposition that they are not actually opposed to the proposal but they will use the vote to highlight some other matters, even those that have no relevance whatsoever to the motion in the name of the Minister. Whatever other reasons may be used to vote in a certain way, Deputy Joe Higgins put it very well when he said it was game playing. If the Opposition is going to vote against this motion, they should do so in the full knowledge that they are against the elimination of a travel tax.
Mr. Barrett: For Deputy O'Kennedy's benefit, may I correct the Fine Gael position in relation to this motion? The motion proposes that this foreign travel tax be abolished as and from 1 January. As an Opposition party we support the concept of abolishing the tax, but we are saying it should be done today instead of on 1 January. Other resolutions are making changes as and from today and we are quite within our rights to propose an amendment. If the Taoiseach does not accept it, then we have no alternative but to—
Mr. Barrett: We make no apologies for the fact that we wish this tax to be abolished as and from today and we will vote against the proposal that does not permit it to be abolished as and from today. I would remind the Deputy that on many occasions in the past, particularly in the early 1980s, when some people found it too difficult to support hard decisions, they walked out on the first vote, which was a Mickey Mouse vote, in order to oppose the budget. Other Deputies who feel very strongly about some of the proposals  contained in the budget, particularly the anti-family proposals—
Dr. McDaid: The debate which has occurred has nothing to do with this proposal. I must take issue with Deputies Barrett, Shatter and John Bruton who veered away from the substance of the motion when they know that all they have to do is make a speech connected with the issue.
Dr. McDaid: That tax has been there since 1982. Successive Administrations had the power to abolish it, yet the only argument the Opposition can make tonight – Deputy Higgins is quite correct in his deliberations – is to oppose this for the sake of political opportunism. I thought Deputy Quinn did not stand for that type of opportunism. That was the old way. It is true we are abolishing it because the EU found this tax would be illegal.
Dr. McDaid: We are here to remove taxes from people. Therefore, we are abolishing this tax. That is what we have done from the beginning. That is the relevance of this point. We are not imposing any further tax on people.
Mr. M. Higgins: Now that the Minister, Deputy McDaid, has decided to offer his view on this matter, it might be useful if he informed the Taoiseach how his logic is derived from European Union decisions. I understand the Minister was suggesting a tax on people arriving here. If European law is the basis—
Mr. M. Higgins: It is matter of being logical, not just today but five minutes ago. We have just heard from the Minister that there is a European basis for removing the £5 tax. I suppose the European Union was concentrating only on movement between Dublin and places such as the Aran Islands, and was not worried about European citizens moving around Europe, which is its usual concern. That is a little illogical, unless we hear a very clear statement in the final summary that the Taoiseach has told the Minister that the £5 on arrivals – and, God knows, we have heard enough about departures and arrivals over the past month or two – is now as dead as a dodo. What is being suggested here is perfectly—
Mr. M. Higgins: It is very clear. If the Minister wants to dance on the head of a pin, the resolution before the House can be changed only by the Government. The Taoiseach can stand up and say that everybody is playing games and that he is going to call their bluff. He can say he has listened very carefully and that he proposes to  amend the resolution, that it will be exactly the same as the increased tax on cigarettes and that he will do it from midnight tonight. The argument would then be over. However, he is not going to do that.
I also want to refer to some of the other comments that were made. This suggestion is made in the context of a very long statement by the Minister for Finance. Those of us who are taking the first opportunity to vote against a budget which gave a huge benefit to those with inherited wealth who want to transfer property, while giving £20 per week to the lower paid—
Mr. M. Higgins: We are reserving the right to call a vote. We are taking the first opportunity available to us to show what we think of a purely regressive budget that transfers benefit to wealth, not only to earned wealth but massively, when one does the figures, to inherited wealth. Those who want to transfer great fortunes, which were mostly made on the basis of speculation, are receiving a tax reduction from 40 per cent to 20 per cent. They will be laughing—
Mr. M. Higgins: I notice there has not been a great rush by the Progressive Democrats to speak in the House because they are too busy in the bar, crowing about the budget they managed to impose on Fianna Fáil.
Browne, John (Wexford).
de Valera, Síle.
Ó Cuív, Éamon.
Woods, Michael. Wright, G. V.
Browne, John (Carlow-Kilkenny).
De Rossa, Proinsias.
| Higgins, Michael.
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