I, too, welcome this Finance Bill. I have been speaking on Finance Bills in one way or another since I was first elected to the council in 1998. In those days I was dealing with the finances of the local authority. Here we deal with the finances of the nation. This budget is the first in eight years that is a little more expansionary than has been and that expansionary focus is welcome, in particular on the capital side. We need to increase spending on the capital side to build for the future. Whether it is housing, road infrastructure or broadband, these things will ensure we have a growing economy far into the future.
I welcome the maintenance of the home renovation incentive scheme. This is an excellent scheme which benefitted the small guy and not big property developers associated with Fianna Fáil down through the years. It is a scheme for the small fellow with a small van on the side of the road. The scheme allowed people who could not afford to move from a three bedroom house to a four bedroom house to extend their properties. I would have liked to have seen something done for retired people who are not getting a mainstream income and not paying income tax so that they could benefit from the scheme also. Perhaps the Minister will look at the possibility of writing off the DIRT being paid on small amounts of savings as part of the scheme.
I would have liked to have seen more done on capital gains tax for innovative companies which wish to use their knowledge boxes. The rate currently stands at 20% but our competitors, in particular the UK and Northern Ireland, have a 10% rate. I hope the Minister will signal that his objective is to reduce the 20% rate to 10%.
The innovation in respect of the motor tax for lorries is extremely welcome. A number of large companies operate in my constituency. They provide a service to various industries in the area, including the agriculture and business sectors, by moving material. It is hoped this change in the road tax will have a knock-on effect to the benefit of the ordinary consumer on the street and there will be a reduction in the cost of some of the products being shipped.
I wish to mention one thing that the Minister may not be able to deal with directly but perhaps he will get involved in it at EU level. The Minister said he would like to see every schoolchild have an iPad. In my area, a number of schools, in particular those just starting off, have introduced iPads. That kids are not carrying heavy books into school is a welcome innovation. There is an issue, however, with the VAT rate. The EU regard electronic books as a service. No VAT applies to hard copy books. If all the books in schools are in hard copy, no VAT is paid. If the school is using iPads and downloads the book in electronic form, VAT applies at 23%. The French and Luxemburgish Governments received a knock back in the European courts in respect of reducing the VAT rate to a lower level for electronic books. The European Commission is now reviewing VAT laws. I would like us to put in a strong submission on having a VAT rate of 0% on electronic books, in particular educational electronic books. I hope the next time we have a Finance Bill, and the Minister for Finance, Deputy Noonan, is delivering it, that we will be reducing the VAT rate for electronic books to 0%.
The budget is a welcome and slightly expansionary budget, in particular on the capital side. The capital programmes will deliver in the future. If we want to keep the economy growing, we need to invest in infrastructure for the future.