Ceisteanna Eile - Other Questions

Credit Union Regulation

Willie Penrose

Question:

6. Deputy Willie Penrose asked the Minister for Finance to outline the work his Department has carried out in conjunction with the Department of Housing, Planning and Local Government with regard to the establishment of a special purpose vehicle for credit unions to invest funds in social housing projects; and if he will make a statement on the matter. [43969/18]

Will the Minister for Finance outline what work the Department is doing, and has carried out in conjunction with the Department of Housing, Planning and Local Government, with regard to the establishment of a special purpose vehicle for credit unions to invest funds in social housing projects? Will the Minister explain why nothing has yet been loaned by any credit union for housing? They have the funds and the desire to lend but they believe the Department of Finance is not helping.

A Programme for a Partnership Government recognises the potential role credit unions can play in dealing with our great housing difficulties. To that end, officials from my Department and the Department of Housing, Planning and Local Government have met with the credit union representative bodies on several occasions to examine how credit unions can assist in the area of social housing.

Following this engagement, the Central Bank undertook a review of the investment framework for credit unions in 2017. The outcome of the review led to the introduction of revised investment regulations, which allow credit unions to invest in tier 3 approved housing bodies through a regulated entity. As such, since 1 March of this year credit unions have been permitted to provide funding for social housing via a special purpose vehicle. This may facilitate a combined sector investment in tier 3 approved housing bodies of close to €700 million. Let us put this figure in context. As of the end of 2017 total lending from the Housing Finance Agency to approved housing bodies was about €356 million.

In supporting credit unions in the provision of funding for social housing my role and the role of the Central Bank has been to ensure there are no undue regulatory barriers. The Central Bank has now fulfilled its role and I have fulfilled my role in this regard. I look forward to seeing the credit union and social housing sectors progressing and developing any specific funding mechanisms for investing in tier 3 housing bodies. In particular, in line with the commitments in Rebuilding Ireland, the Department of Housing, Planning and Local Government has now established an innovation fund to support the development by AHBs of innovative financial models.

I thank the Minister for his response. Every side of the House is keen to see credit unions being able to make an appropriate level of investment in a structured regulated entity like a SPV to be in a position to provide funds for housing. From my contacts I understand that the Housing Finance Agency will be providing funding for approved housing bodies and that the SPV for credit unions is now on the back-burner. In practice, it may have been abandoned by the Government.

The Central Bank is often criticised for being slow-moving but it has moved to provide the regulatory framework. When we heard this some time ago we were all rather optimistic that the difficulty was on its way to being solved. However, the Department of Finance is sitting on its hands and is not really facilitating the process.

That is wrong. I am pleased to inform the Deputy that one of the credit union representative bodies has now completed all the preparatory work for establishing a SPV. There were several things that I needed to do and that the Central Bank needed to do. They are now done. Those responsible within the credit union movement have a level of commitment to being involved in this. It is now up to them to work with approved housing bodies to put in place a framework that works for them to meet this need.

It is most welcome that the preparatory work has now been done by one body. I understand that the particular body in question is now awaiting the build-up of a project pipeline to ensure it has the minimum level of projects that it would require to justify the cost of establishing a SPV.

Everything that I have been called on to do and everything my Department and the Central Bank have been called on to do has been done. All the various credit unions involved now need to go through the type of work that must be done to look at the level of risk and the project pipeline that would justify their investment. I know that work in now under way.

I am rather disappointed to hear the Minister's lacklustre response. The credit unions have on deposit somewhere between €13 billion and €14 billion at any time. Many of the members would be really happy if, as the Minister himself referenced, a relatively small proportion of funds, something like €700 million, could be invested for starter projects.

The Minister referenced that the Credit Union Development Association, CUDA, has advanced the work but does he not understand that in his reply, as with previous replies on housing, he and the Department of Finance are not prepared to assist the credit unions in getting the initiative under way? He said that he wants the credit unions to do all of the work when, in fact, much of the expertise in the structure of the project should be provided by the Department of Finance. The Minister is standing back from that; perhaps he is cold on the idea.

I struggle to see how meeting all of the requirements that I was called on to meet can justify being called lacklustre. The Central Bank and I were asked to put in place a framework under which credit unions and the credit union movement could then decide whether they wanted to be involved in funding social housing and that is what we have done. The work began in June 2016 when a review was carried out on section 35 of the Credit Union Act 1997, which deals with this area. In November 2016, an implementation group produced a paper examining amendments to lending regulations. I wrote to the Governor of the Central Bank outlining my support for this approach. In March, the Central Bank informed credit unions that a review of credit union limits had commenced, noting that this issue had been dealt with in different fora. That led to the publication of a consultation paper and, as I have said, this framework is in place. The Deputy is correct that it now requires the credit unions themselves to determine what projects they want to be involved in, what level of risk they are willing to bear and what level of return they want. That is work that they need to do themselves for the simple reason that, as the Deputy well knows, it is the money of their members at stake.

Income Inequality

Paul Murphy

Question:

7. Deputy Paul Murphy asked the Minister for Finance if he has carried out an analysis of #budget 2019's impact on inequality; his views on a study by an organisation (details supplied) that indicated that the recent budget will primarily benefit higher earners; and if he will make a statement on the matter. [44225/18]

Does the Minister agree with the analysis of Social Justice Ireland, SJI, that the budget fails to make a notable impact on Ireland's entrenched inequality and which rightly describes inequality as a disease of society where, for example, child poverty has worsened or where, compared to what little benefit low paid workers will receive, those on higher incomes received ten times that amount?

My Department routinely assesses the impact of budgetary measures on inequality. As part of this distributional analysis, the effect of tax and welfare changes by income band is examined. This is undertaken using the Economic and Social Research Institute's, ESRI’s, SWITCH micro-simulation model.

In the context of budget 2019, this analysis found that the combined tax and welfare measures delivered the largest gains for those in the lowest income group. They experienced a 0.5% increase in their disposable income. This analysis confirms the intent of budget 2019 to protect our most vulnerable in our society.

Of course I am aware of the analysis and critique study published by SJI, which conducted a partial review of budget measures. This analysis excluded the impact of indirect taxes and important non-tax and welfare measures such as raising the minimum wage and changes to prescription charges. The alternative findings in the SJI study underscore the importance of looking at the impact of the full range of budgetary measures in order to reach a comprehensive view of the distributional impact of the budget.

I have taken a number of important steps in the sphere of equality budgeting. I have piloted an equality budgeting initiative across six programmes in 2018, as part of which associated objectives and indicators were published in the 2018 revised estimates volume. The pilot programme predominantly looks at gender and is anchored in the existing performance budgeting framework. However, it is my intention to expand this programme to capture broader dimensions of equality, including poverty, socioeconomic inequality and disability.

Let us get real about what the budget represented. The Government likes to present itself as a non-ideological Government but is the truth not that the Minister's budget is highly ideological? It is a highly ideological, right wing, neo-liberal budget which is about shrinking the State, whereby Ireland now has the lowest public spending to GDP ratio in the entire EU at 25.76%. It is about tackling crises, not through direct State investment, but through funnelling money to private individuals, who are landlords in the case of the housing crisis. That ideological drive to the budget comes at a serious cost, including increasing inequality, deepening crises in our public services, the horrendous figures on child poverty outlined in the SJI report and maintaining a cohort of workers on low pay and, as such, a low-paid economy.

Let us look at the facts. Ireland has the second most progressive tax system in the OECD. The most recent survey on income and living standards conducted by the Central Statistics Office, CSO, found that deprivation in Ireland reduced from 25.5% to 21%. A significant change in levels of inequality and income inequality, in particular, in our country has happened and that is a journey that I want to see continued. Let us also look at the fact that the discretionary measures that were announced in budget 2019, particularly in terms of the delivery of services, will help those who have the least, particularly those who are on lower levels of income. I want to see the level of income change that is happening in our country be concentrated in such a way that will help those who need it the most. It is extraordinary to hear the Deputy talk about an agenda being in place which looks to shrink the State, given that this is a budget that looks to increase capital investment next year by €1.4 billion and invest in key public services to a level that is higher than at any point in our recent past. All of this is about ensuring that we have a State that can make a difference to those who are in great need. Those are the beliefs that underpin this budget.

It is ironic that in the Minister's first response he talked about the need to look at the impact of indirect taxes but he then cited a study that suggests that Ireland has a progressive tax model based purely on direct taxation because when indirect taxation is taken into account, the bottom decile of the population pays effectively the same percentage of their total income in tax as the top 10% does. We do not have a progressive tax system when indirect taxation is taken into account.

On the idea that the Government wants to solve the crises and so on, the Minister cannot answer on the issue of housing. We had a landlord's budget. It was delivered by a Government that acts in the interests of landlords and the main action in terms of the housing crisis was to choose to funnel more money towards landlords in HAP payments, which are a direct subsidy from the State to them, and additional tax allowances. The fact that the Government chose to do that as opposed to allocating any significant extra money to invest in building houses to resolve the crisis precisely proves the point that it is an ideological budget driven by the interests of the 1% in this country.

This is a budget that was driven by my determination and the determination of the Government to make a difference to the lives of citizens, particularly those who need and deserve support in times of difficulty. Let us look at the figures on this. Let us challenge each of the points that the Deputy has put forward and examine what the figures are. Next year, €1.25 billion will deliver 10,000 new social homes. As I did with Deputy Boyd Barrett yesterday, let us contrast that with the figure for HAP over the same period, which is €423 million. If I was not making this funding available to provide accommodation to citizens in times of need when social housing is being built, the Deputy would condemn the Government for not providing accommodation for people at a time homes were being built in the private sector.

In respect of housing output, I acknowledge that we need to build more and deliver more. However, in the second quarter of 2018 we saw an increase of 40% in new home completions. We need more new homes to be delivered but progress in that area is being made this year, with more new homes to be delivered next year than this year.

The homeless numbers are at a record high.

Housing Policy

Richard Boyd Barrett

Question:

8. Deputy Richard Boyd Barrett asked the Minister for Finance his views on the macroeconomic impact of the escalating housing crisis and the potential drain on the public finances of Rebuilding Ireland's heavy reliance on the private property sector to deliver social housing in view of the rapidly inflating cost of rents; and if he will make a statement on the matter. [44230/18]

The main path to emergency accommodation and homelessness, in which we see a shocking further increase today, is from the private rented sector. People are being made homeless by the private rented sector. From a macroeconomic point of view, never mind the humanitarian and social point of view, why is 80% of the housing plan dependent on the private rented sector? It is madness - social madness, economic madness and financial madness.

As I said to Deputy Paul Murphy on the question of funding, next year we will be spending more money to deliver new homes than on housing assistance payments to support people. My Department has published a paper, to which Deputy Boyd Barrett referred, looking at how money can be better used in this area. While new homes are being built and we are trying to get housing output back up to meet the level of social need of which the Deputy has spoken, does it not make sense to support citizens in accessing rental accommodation? The alternative is something neither of us would want to happen, where the level of homelessness increases. That is why the payment is in place.

As more and more homes are built directly by the State next year under the Rebuilding Ireland programme, the number of homes delivered through the housing assistance payment will fall from a peak of 17,000 new units to 10,000 new units in 2021. We are looking to change the mix of how housing needs are met through building new homes via the State and local authorities. While that is under way, however, it is incumbent on us to provide support to citizens who need it now.

We have no choice but to do everything we can to get people into accommodation other than hotels, hubs or the streets. Taken as a whole, 80% of Rebuilding Ireland is dependent on HAP, RAS and leasing and that is the problem. We do not know how much it will cost but some estimates are for between €20 billion and €30 billion in current expenditure over a 30-year period, for which we would get nothing. One estimate is for €1.7 billion per year which, over the period of a home mortgage of 30 years, would be some €30 billion. If we built homes, the upfront costs would be greater and we would need capital, which links to the argument about rainy day funds and strategic investment funds, but ultimately we would have an asset and revenue would be coming back in.

It is just plain wrong to say current expenditure going into housing assistance and RAS payments is getting nothing back. The payments are getting bigger year on year but they are used to provide accommodation and if we did not have those payments we would be faced with even higher levels of difficulty than we currently face, and which we want to reduce. We would be facing questions on what we were doing to help citizens to access rental accommodation at a more affordable level. As the level of new homes provided by the State increases, which it will, it will provide an alternative to the levels of investment in HAP and RAS, which will fall over time as we find other ways to meet housing needs.

The point I made is that the private rented sector is what is driving people into homelessness. The Minister says we are getting something back but we are getting back social housing that is not social housing. It is precarious and the landlord can pull out at any time. There is nothing in the HAP arrangement, which is the bulk of Rebuilding Ireland, that prevents landlords from pulling out, which they do. The people in hubs will be able to tell the Minister that they have been in and out of two or three RAS, HAP or private rented homes and are back in homelessness. To categorise this as social housing and call it part of a social housing plan is deceptive. One cannot hide the grim reality of what it means, which is record numbers of people in homelessness and huge numbers of people in a deeply precarious situation paying extortionate rents.

I am as aware as the Deputy of the grim reality for those who find themselves in precarious rental accommodation, not to mention the reality for homeless people or those facing the risk of homelessness. The plans for next year include meeting the housing needs of over 27,000 families, of which 10,000 will be met through local authority programmes to build new homes, either through direct build or by approved housing bodies. We are looking to a situation in which more homes are delivered directly by the State than in the past. More will be done next year than this year but we do so, we also must find ways to accommodate and support citizens who face the grim reality described by the Deputy.

Tax Code

Richard Boyd Barrett

Question:

9. Deputy Richard Boyd Barrett asked the Minister for Finance his views on whether it is acceptable in view of the dramatic inflation of the property market, particularly in relation to rapidly rising rents and property values, that corporate landlords and property investors should continue to avail of tax reliefs such as section 110 and that he is unable to ascertain the amount of tax revenue that is forgone through such reliefs; his further views on whether the imposition of a higher effective tax rate on the large profits being generated in this sector should be reconsidered; and if he will make a statement on the matter. [44226/18]

The Minister will see that I am on the theme of housing, and the Minister's connection to it, with all my questions of both yesterday and today. The other side of the coin in regard to this housing and homelessness crisis is the lesser known fact that vast amounts of money are being made by corporate landlords and property speculators who are also availing of tax reliefs. The Minister cannot give me an answer to a question I have asked repeatedly as to how much tax is being forgone in section 110 tax relief. Given the obvious profit bonanza being enjoyed by property speculators and landlords, we need to look at whether we need to find new ways to tax this sector to give us more money to build social housing and other things we need in our economy.

I do not need to be reminded of my role in respect of housing. I work as closely as possible with the Minister, Deputy Eoghan Murphy, to look at how to make new resources available and to ensure the appropriate policies are in place. Deputies will recall that amendments to the taxation of section 110 companies were made in the Finance Act 2016 specifically to address the issue of returns relating to Irish property. Section 110 companies can only hold certain qualifying assets and real property, such as land and buildings, that are not an asset that a qualifying company can hold. They can, however, hold loans and other financial assets that derive their value from Irish land and buildings.

The changes made in the Finance Act 2016 relate to the taxation of qualifying companies which held loans that derived their value from Irish land. The effect of these changes was to ensure that profits generated from Irish real estate remain within the charge to tax.

The Finance Act 2016 also provided for the introduction of a new Irish real estate fund regime which made changes to the way in which Irish funds which derive 25% or more of their value from Irish real estate are taxed. A new 20% withholding tax was introduced on distributions from these funds.

The Finance Act 2013 provided for the operation of real estate investment trusts, REITs, in Ireland. The function of the REIT framework, in common with other jurisdictions, is not to provide an overall tax exemption but rather to facilitate collective investment in rental property.

I have been aware of concerns about the level of activity of the institutional sector in the housing market. I refer the Deputy to data from the Residential Tenancies Board included in this year's tax strategy group, TSG, paper on corporation tax, which demonstrates that over 91% of landlords hold three or fewer tenancies. The 20 largest landlords in Ireland now account for 3% of total tenancies. It is unlikely that landlords accounting for such a small proportion of tenancies are significantly influencing rental prices in the overall market.

We are talking about the likes of Lone Star, Kennedy Wilson, Cerberus, all these people with whom the Minister's Department, under the management of Deputy Noonan, had 65 meetings in 2013. They swooped in and bought huge amounts of land and property. They will, if I understand this correctly, continue to benefit from section 110 tax relief, which means that if they maintain their investments for a certain period - seven years, I think - they will pay no tax on the rental income or capital gains. Considering that rents have gone up 60% to 70% in that period and property prices have gone up by about a similar percentage, they are walking away with an obscene fortune. Making a distinction between a property and the loans used to purchase property is just semantics because that is what they do: they borrow money to get into Irish property or land and they can then write that off if they are a foreign investor and get massive tax relief. What is shocking is that the Minister cannot quantify it. There is the answer.

I thank the Deputy. Others are waiting.

I will deal with each of the points the Deputy raises with me. To respond to the first point, the most recent information available to me - and I have checked this on the back of concerns he and other Deputies have raised - is that real estate firms in 2017 were net purchasers of 1% of transacted housing stock. They are the figures. That is the effect they are having on housing transactions in Ireland. Firms in this category currently purchase less residential stock than public authorities, so our public authorities, in the desire to deal with the difficulties the Deputy correctly raises, are purchasing more housing stock than these bodies are purchasing.

As for the Deputy's concern about my not being able to calculate the amount of tax that would be paid by these companies, the reason for this is that we have a regime in place, which many other countries have in place and which was put in place to try to increase housing output, and he is asking me to state what these companies would pay in tax if that regime were not in place. Of course, the challenge I have on this point is that it is not at all clear whether these companies would be active in providing new homes if we did not have such a regime in place. That is at the heart of the difficulty the Deputy has raised.

The 2017 figure is misleading because we are talking about the window between about 2012 and the point at which the change was made in 2016. It was in this period that NAMA flogged off most of its land and assets, about €40 billion worth. It was not the little accidental landlord buying the stuff from NAMA; it was Kennedy Wilson, Cerberus, Lone Star and all these big boys. They swooped in on Irish land and property assets. Did they solve the housing crisis, as Deputy Noonan predicted they would, and create a new professional landlord sector? That is what Deputy Noonan said at the time. Not at all. They sat on their assets and will get huge tax relief. In many cases they just sit on the land; in some cases they are sitting on empty property. I know of two such cases and have highlighted them twice in here. Cerberus and Apollo Global Management are trying to de-tenant property and are just sitting on perfectly good empty apartments because they are watching the value clock up and they know they will walk away without paying any tax.

Of course, much of what happened across that period, 2013, 2014 and 2015, happened because our country was at such a level of exceptional economic difficulty and because we did not have investors or investment funds in Ireland that were capable of making those kinds of acquisitions themselves. I have looked at the figures for the most recent period. They are as I have just shared with the Deputy. The reason I believe the taxation regime is appropriate is that I believe some of these companies are playing a role in bringing new housing stock into our economy for our citizens and, at a time of such housing need, that is an important role to be played.

Question No. 10, in the name of Deputy Alan Kelly, is to be taken by Deputy Joan Burton.

Economic Competitiveness

Alan Kelly

Question:

10. Deputy Alan Kelly asked the Minister for Finance his plans to ensure Ireland protects its competitiveness and mitigates the risk of overheating pressures in the economy; and if he will make a statement on the matter. [43972/18]

Bernard Durkan

Question:

17. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he remains satisfied about the competitiveness of the economy; the potential challenges in this regard; if he has identified specific areas of threatened inflation which might impact on the stability of the economy; and if he will make a statement on the matter. [44176/18]

Bernard Durkan

Question:

108. Deputy Bernard J. Durkan asked the Minister for Finance if issues have emerged which suggest overheating in the economy; and if he will make a statement on the matter. [44584/18]

I want to know what the Minister proposes to do to protect Ireland's competitiveness and to reduce the risk of overheating pressures in the economy, which we have heard about already this morning, particularly in respect of housing and land prices.

I propose to take Questions Nos. 10, 17 and 108 together.

As I outlined in budget 2019, the economy at a macro level is in good shape at present, with a much faster than expected recovery from the crisis. The recovery in part reflects improvements in Ireland's competitiveness in recent years, as measured by the Central Bank's real harmonised competitiveness indicator. Our competitiveness has improved by over 20% from the low point in 2008.

Despite the rapid rate of recovery, the main indicators of overheating do not yet suggest evidence of any widespread overheating pressures. While price pressures have been seen in the housing market, these are more a function of structural imbalances between supply and demand that we are actively seeking to alleviate, rather than being themselves evidence of overheating.

The strong growth in employment in recent years has seen the unemployment rate fall from a peak of around 16% to 5.4% in September. While this is an improvement, the unemployment rate is still above, albeit slightly, the level I would consider to represent full employment in Ireland.

As of now, the recovery in the economy has not yet given rise to broad inflationary pressure. In the first nine months of the year, inflation as measured by the harmonised index of consumer prices averaged 0.7% on an annual basis. This follows five consecutive years in which inflation has been below 1%.

Regarding credit growth, it should be noted that lending to Irish households, as the Deputy will be well aware, only turned positive during the second half of last year. Of course, this is a particularly important factor in evaluating whether we are seeing inflationary pressures within the economy.

I wish to raise a number of points which I believe are pressure points and which are leading to overheating and other risks in the economy. The first is that we are now, in a way, back to an old Fianna Fáil model, which the Government has embraced, of allowing land prices to soar without restriction. This is great for people who own land and are sitting on it, but the fact is that in large parts of Dublin West, for instance, there has been a tenfold to 15-fold increase in land values and costs on the position a number of years ago. We might have expected a 100% to 300% increase, but the level of increases now is positively dangerous.

Many of the people buying or selling this land will effectively pay no tax on it.

The second point relates to the building industry's role in the housing shortages we referenced earlier. Not enough apprentices are being trained. Progress has been made and I was heavily involved with that in my time as Tánaiste. We must now import construction workers from other countries. The rising cost of houses as a result of these two issues is leading to major pressure on wages.

I am trying to ascertain the Minister's opinion having regard to a comment made by a Government advisory service in recent times that overheating in the house building sector could undermine competitiveness and cause the bubble to burst. The reverse is the case in reality. The lack of affordable and local authority houses is an impediment to the competitiveness of the economy. Part of the original taxation system in this country related to the availability of affordable and local authority houses, and this in turn reduced the need for increased wage demands. Is the Government advisory body in question aware of this? To what extent has it studied the matter? One must always watch from where one's advice comes, particularly in this business.

I always take the advice of Deputy Durkan seriously on matters like this. The point he makes highlights the balance that the Government must strike. On one hand there is a level of housing need that must be met. Deputy Boyd Barrett focused on it earlier, and Deputies Burton and Durkan did so in the last set of questions to me. We must build more homes to meet the existing housing need. On the other hand, the Irish Fiscal Advisory Council has warned that if too many homes are built at a particular point, and specifically if a level of workers is not available to build them, it would mean that our efforts to meet the level of housing need could in itself end up being an inflationary pressure.

We are not at that point because we are still seeing the housing sector beginning to grow. The number of new homes being built is increasing. To deal with Deputy Burton's points, of course I track what is happening with the price of land, and this is the reason we made a change with the derelict site levy in place, and which is increasing. The Deputy also made a point on apprenticeships and I want to see the construction sector deliver more of these. We have an apprenticeship programme in place for it and although we have made great progress in dealing with youth unemployment - the Deputy was heavily involved with the most difficult phase of that - we still have young people who want to and can work. The change we have made in increasing the employers' PRSI levy for next year will lead to an additional 10,000 apprenticeships in our economy. The construction sector needs to play a role now in ensuring the framework will allow more young people to enter that industry.

I speak a lot to employers, particularly in the Dublin region, many of which are employing significant numbers of people. These include employers coming to Ireland with major investments. I would say the same is true in Cork, Limerick and Galway. Employers are now deeply concerned that the people they hope to recruit will not be able to afford to rent and, if they are Irish, they will in practice be unable to buy for a very long period. This is because we are now again in the grip of rampant speculation in land values. I can understand that, ideologically, it is unacceptable to Fine Gael to seek to control and tax rampant speculation in land prices. I am glad the Minister has said that by next year we will have more apprentices in construction. Currently and notwithstanding all the efforts I made, there are only approximately 2,000 construction apprentices.

Does the Minister agree that a lack of affordable housing in the economy is most likely to lead to overheating by way of house price inflation, which could land us in the position we occupied some years ago and where the State might have to intervene? Would he agree that as long as property prices continue to inflate in the way they do without adequate availability of affordable housing, there is only one way we can go? That will lead us to an anti-competitive position. I put all these questions down, as I am sure the Minister did, ten years ago when the similar signs were there. The problem is now exacerbated because of a major lack of affordable housing. Many people cannot get into the housing market without paying an inflated price they cannot afford, and ultimately they will find this a burden.

I have a related question on the threat of inflation. One of the major sources of inflation for householders is the cost of insurance. There have been a number of years with continuing increases in insurance premiums and the Minister of State, Deputy D'Arcy, has taken a number of actions to tackle that cost, particularly in the motor insurance sector. Transparency is a big factor. The Central Bank (National Claims Information Database) Bill 2018 was introduced to tackle it but it has not come to fruition. What will the Minister do about that?

The Central Bank (National Claims Information Database) Bill 2018 is moving through the Houses and I am prepared to work with anybody who is prepared to give it time in this House. We are awaiting Committee and Report Stages, and this will an impact on the insurance debate through two sections of the Civil Liability and Courts Act 2004. The cost of motor insurance is decreasing and costs of premiums are down 21% from the peak. There is movement in the right direction and if any Member from the Opposition or elsewhere wants to make time available for the Central Bank (National Claims Information Database) Bill 2018, I would be very grateful to accept the offer.

I will first deal with Deputy Durkan's question. I accept that the lack of affordable housing in our economy and our society not only has a very material effect on the living standards and aspirations of our citizens but it also affects our economy, the wages therein and its competitiveness. I accept the Deputy's point but this is the reason we have such a level of resources going into housing for next year. It is one of the reasons we expect to see well in excess of 20,000 new homes being delivered next year. The balance we are trying to get right is to deliver those new homes without that delivery occurring in such a way that other challenges would be created for the economy.

Banking Sector Reform

Joan Burton

Question:

11. Deputy Joan Burton asked the Minister for Finance the progress being made in the establishment of the promised stakeholder forum on foot of the conclusions of the public banking investigation; the organisations which are stakeholders; when a tender for the independent evaluation of the local public banking concept will issue; if the stakeholder forum will be involved in the selection of the external evaluator; and if he will make a statement on the matter. [43976/18]

This relates to the proposal to have a stakeholders' forum on local banking drawing in the credit unions and post offices and which might be inspired by the Sparkasse model in Germany, about which my colleague, Deputy Penrose, has addressed the House on a number of occasions. When will this take place? Will it be like the processes with credit unions or social housing in that it will be drawn out over years, meaning in practice that the issue will be left sitting there?

As the Deputy is aware, my Department and the Department of Rural and Community Development published a report on local public banking at the beginning of July. The report concluded there was not a compelling case for the State to use Exchequer funding, which I remind the Deputy was approximately €150 million, to establish a new local public banking system.

However, as set out in the report on local public banking, my Department will commission an independent, external evaluation to establish if there is a requirement for local and community banking in Ireland.

As part of our continued engagement with key public banking stakeholders, my Department has consulted with Irish Rural Link and others in the development of the terms of reference which will form the basis of the evaluation the consultants will conduct. I was involved in the tendering process for this yesterday, and believe that the tender process will be concluded by the end of this year, with a view for the evaluation process to begin in early 2019.

Written Answers are published on the Oireachtas website.