With the permission of members, I shall substitute for the Chairman, Deputy John McGuinness, until he comes back. We are considering the Revised Estimates for 2017 for the Finance group of Votes, namely, Votes 7 to 10, inclusive. On 15 December 2016, the Dáil ordered that the following Revised Estimates be referred to this committee for consideration: Vote 7, Office of the Minister for Finance; Vote 8, Office of the Comptroller and Auditor General; Vote 9, Office of the Revenue Commissioners; and Vote 10, Tax Appeals Commission. I welcome the Minister for Finance, Deputy Michael Noonan, to our meeting to consider the Revised Estimates and I invite him to make his opening statement.
Vote 10 - Tax Appeals Commission (Revised)
Deputy Michael McGrath took the Chair.
I am pleased to have the opportunity to appear before the finance committee today in connection with the 2017 Estimates for my Department and for the other Votes within the finance group: the Comptroller and Auditor General, the Revenue Commissioners and the Tax Appeals Commission.
If I may, I will focus on my Department first. As members know, the Department was restructured in 2016 around two directorates – the economic and fiscal directorate and the finance and banking directorate. This structure remains largely unchanged in 2017. There are a number of divisions in each directorate and I will briefly set out the key outputs from each of those divisions.
The EU and international division deals with the cross-departmental co-ordination of EU policy and with the development and implementation of strategies at European Union, euro area and international levels in regard to economic, fiscal and financial policy formulation. It manages the EU budgetary process and EU economic governance. It also builds relationships through Ireland's diplomatic network and ensures that the Minister and Department are fully apprised of EU and international developments.
The UK decision to leave the EU will result in major challenges for Ireland, as a small open economy with very strong economic ties to the UK. It is one of our most important domestic and EU-level issues. In addition to the priority of addressing the economic impacts, Ireland's key priorities are our economy, Northern Ireland, the common travel area and the future of the EU itself. Government work has been ongoing since well before the referendum vote in the UK. Since then, preparations have been intensified across all areas of Government to best safeguard Ireland's interests and to minimise any adverse impacts on our economy and on the free movement of people, goods and services on these islands.
A Brexit unit has been established within my Department and it is responsible for the co-ordination of the Department's contribution to the overall Government response on Brexit, preparation for the upcoming negotiations on the UK's withdrawal from the EU, and the future relationship; ongoing cross-departmental and interdepartmental consultation contributing to a whole-of-government response; and liaison with the Central Bank of Ireland, the National Treasury Management Agency, NTMA, and other agencies, as appropriate.
We know that, as result of our close economic ties, there are challenges to be met, as was highlighted by further macroeconomic analysis undertaken in November 2016 as part of the joint Department of Finance-Economic and Social Research Institute, ESRI, research agreement. The best and most immediate policy within the Government's control to counter the likely negative economic impacts of Brexit is to prudently manage the public finances to ensure that Ireland's economy continues to remain competitive in the face of future economic headwinds. In that regard, budget 2017 contained a number of prudential budgetary policy measures that will help our economy prepare for Brexit. Additionally, the last budget, budget 2017, laid out an extensive range of policies targeted at the most exposed sectors, including measures to support small and medium enterprises, SMEs, entrepreneurship, agrifood and Irish exporters. These measures are an important step in mitigating the impacts on the Irish economy from the economic implications of Brexit. Furthermore, where Brexit presents potential opportunities, we will seek to maximise these. For example, I refer to the area of financial services, where the Minister of State, Deputy Eoghan Murphy, has responsibility for the IFS 2020 strategy that will build on and compete for mobile international investment in the international financial services, IFS, sector. There are undoubtedly opportunities for financial services firms to locate here as Ireland remains a committed member of the European Union and the Single Market.
The EU financial services division of the Department continues to represent national interests in a European and international context. During 2016 the division made an extensive contribution towards Council agreement on a range of financial services dossiers, including the anti-money laundering directive and the European venture capital funds regulation.
The Department's review of policy in the insurance sector was also initiated in 2016 in consultation with the Central Bank of Ireland, other Departments and agencies and external stakeholders. In July 2016, a joint report on the review of the framework for motor insurance compensation in Ireland was published and work on the implementation of that report is already under way.
The international financial institutions division provides the primary interface with, and management of, Ireland’s shareholder interests and obligations in a number of international financial institutions, including the International Monetary Fund, the World Bank Group, and the European Investment Bank. The opening of the European Investment Bank’s new office in Dublin in December 2016 was an important milestone for that bank and will serve to underpin and build upon the strong relationship that already exists between the bank and its counterparts in Ireland.
Small and medium enterprises, SMEs, make up the vast majority of businesses in Ireland and account for approximately seven in every ten jobs. The latest Department of Finance credit demand survey for the period April to September 2016 indicates that while demand for credit remains subdued, trading conditions for SMEs remain broadly favourable despite the significant economic uncertainties. Profitability also remains high with 87% of the SMEs reporting they had made a profit or had broken even in the last six months.
The Strategic Banking Corporation of Ireland, SBCI, continues to make low-cost, flexible finance available to SMEs across all sectors of the economy and all regions of the country. To the end of September 2016, over 10,600 SMEs, operating across all business and economic sectors of the Irish economy, have benefitted from €458 million of SBCI loans.
The financial stability group, FSG, established in January 2017, replaced the principals group as a forum for senior officials in the Department of Finance, the Central Bank and the NTMA to monitor and discuss financial stability risks facing the Irish economy. The FSG will have a more forward-looking mandate, which is appropriate as the financial system moves from crisis management and the resolution phase into a growth phase.
My Department also constantly monitors and reviews the consumer protection frameworks that are in place in the area of financial services including, in 2016, the implementation of the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015. Under this Act, relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes issued by the Central Bank of Ireland.
Another very important issue is the Central Bank tracker mortgage examination. The Government is fully aware of the seriousness of this matter. It is essential that affected customers receive acknowledgement for the harm they have suffered from lenders, and appropriate redress and compensation packages are put in place. Therefore, the Government is committed to supporting the Central Bank in its independent examination of this matter in order to ensure a prompt and transparent conclusion.
Central Bank figures contained in its residential mortgage arrears and repossessions statistics to the end of the third quarter of 2016 show that progress continues to be made on mortgage arrears. The number of mortgage accounts in arrears for principal dwelling houses, PDH, has declined for the last 13 quarters. A total of 121,140 PDH accounts were also classified as restructured, of which 88% were reported to be meeting the terms of their arrangement.
Throughout 2016, officials in my Department continued work on our strategy to monetise the State’s remaining investments in the banks. Given its size, our immediate strategy prioritises the return on our AIB investment as the next milestone with disposal strategies for Bank of Ireland and Permanent TSB kept under review. We have received strong advice that a stock market initial public offering, IPO, is best way to optimise the return from AIB, with the earliest possible IPO window being the second quarter of 2017. We intend to be ready to avail of this window and recently appointed three firms from our panel of advisers to form the core of our selling syndicate. The appointment of these firms as advisers does not signal any intention or obligation for us to proceed with a transaction, which will be subject to a number of factors, including favourable market conditions.
In the budget 2017 income tax package I provided, for the third year in succession, for reductions in marginal tax rates for low and middle income earners. The Government’s policy of phasing out the universal social charge, USC, over time, as resources allow, will increase take-home pay for taxpayers, increasing their spending power and allowing for consumer confidence to generate positive knock-on effects for businesses and jobs in the domestic economy.
The well-established economic recovery is maintaining momentum. Gross domestic product, GDP, grew by 6.9% in the third quarter on an annual basis. As a result, the annual average GDP growth rate was 4.7% in the first three quarters of 2016. Encouragingly, the exporting sector appears to be holding up reasonably well despite the weakness in sterling. Recovery is perhaps most clearly evident in the labour market with annual employment having increased in each of the last 16 quarters, representing an increase of over 194,000 jobs since the low point in 2012. The number of people in employment has exceeded the 2 million mark since the second quarter of 2016 and is now at its highest level since the fourth quarter of 2008 - though with a more sustainable composition. While the indicators for domestic activity are encouraging, the international outlook underlines the need for caution supported by prudent economic and fiscal policies. Notwithstanding this, my Department is forecasting real GDP growth of 3.5% this year and 3.4% in 2018.
Public finances also continue to move in the right direction, with significant progress being made on the general government deficit. As members are aware, Ireland exited the excessive deficit procedure during 2016. Underpinned by a growing economy, the hard-won improvements in our public finances provide a sustainable budgetary platform upon which funding for the provision of public services can be provided in the years ahead. The most recent bond sale, in which €1.25 billion was raised through auction at yields of 0.088% and 1.026%, demonstrates that international investors have confidence in the Irish economy and its continued growth.
The market reaction to our management of the public finances has been positive but it is vital we sustain our progress. We must guard against complacency, maintain our prudent management of the public finances and continue with competitiveness oriented policies.
The funding allocation sought for the finance group of Votes for 2017 totals €389 million which compares to a 2016 Vote group total of €379 million. This represents an increase of €10.3 million or 3%. The primary driver of this increase is the provision of a €10 million increase for the Office of the Revenue Commissioners relating to increasing staff numbers and other staff costs, which I will address later.
The allocation sought for the Department of Finance Vote in 2017 is €39.47 million, of which some €10 million is provided for a fuel grant scheme for disabled drivers. Leaving this scheme aside, my Department's allocation provides for the administrative and non-administrative costs of the Department. The majority of this, some 61%, is provided to cover salaries and allowances, with a further €6 million, 20%, to cover facilities and non-pay administrative costs. The remaining €5 million is provided to cover the legal, advisory and committee costs necessary to support my Department in the proactive delivery of its remit.
The allocation for Vote 8 is for the Office of the Comptroller and Auditor General. This is an independent, constitutional office which has several responsibilities including controlling the release of funds for public services as approved by Dáil Éireann, auditing public accounts, undertaking independent examinations on the management and use of public resources, and reporting the results of the work to Dáil Éireann. The Comptroller and Auditor General's public audit role covers 290 sets of financial statements and accounts produced by public bodies. Together, those bodies have financial transactions which total over €200 billion of public money each year. The allocation for this office in 2017 is €6.915 million, which is broadly unchanged from 2016.
Vote 9 is for the Office of the Revenue Commissioners. They have requested a budget allocation of €331 million, an increase of €10 million or 3% on the 2016 net Estimate. Nearly three quarters of the budget is related to payroll for an employment ceiling of just over 6,000 officers. The Office of the Revenue Commissioners plays a vital role in our economy by collecting taxes and duties due to the State. In 2016, Revenue collected a record €47.9 billion for the Exchequer. In its recently published Statement of Strategy 2017-2019, Revenue is committed to two key strategic pillars, which are to provide a service to support compliance and to confront non-compliance.
In 2016, Revenue continued to support taxpayers in meeting their tax and duty obligations. Almost 2.1 million payments were made through the Revenue online service, ROS, an increase of 8% on 2015. The use of electronic business and PAYE self-service channels continued to increase in 2016. Almost 1.4 million customs declarations were processed by the automated entry processing system, an increase of 7% on 2015. During 2016, Revenue extended their electronic service channels through the introduction of RevPay which facilitates online payments for non-ROS customers, as well as jobs and pensions with a new online facility which allows first-time employees to register for tax online. In the annual report published by the World Bank last November, Ireland was once again ranked first among EU countries, and fifth worldwide, for ease of paying taxes. Looking forward, a key priority for Revenue will be the fundamental redesign and modernisation of the PAYE system, which I announced on budget day. Non-compliance with tax and duty obligations is an ever present challenge and those who engage in evasion can expect a robust response from Revenue. Through targeted and risk focused compliance interventions, Revenue continued to pursue those who do not meet their tax and duty obligations, as well as detecting those involved in tax evasion, shadow economy and smuggling activities.
In 2016, the yield from Revenue's audit and compliance interventions was €555 million and there were 17 criminal convictions for serious tax and duty offences. There were also 1,672 summary convictions with a total of €5.1 million imposed in fines, as well as the publication of 372 settlements on the list of tax defaulters. Revenue has also introduced a new data analysis system to its debt management operation which facilitates sophisticated case base segmentation and compliance tracking. This allows for quicker intervention in non-compliant cases.
Tackling tax evasion is an important element of Revenue's non-compliance focus. In my Budget Statement, I announced significant changes to the disclosure regime for Revenue audit. From 1 May 2017, tax defaulters who use offshore facilities to hide income, accounts or other assets will no longer have the facility to make a voluntary disclosure. This means that those who do not come forward before the end of April will face penalties of up to 100% of the tax evaded, publication in the list of tax defaulters and potentially criminal prosecution.
In strengthening our commitment in tackling non-compliance, the 2017 Estimates provides for an additional €5 million to the Revenue Commissioners for increasing staff resources by 50 full-time equivalents on audit and investigation activities, as well as enhancing ICT systems capacity for data matching and data analytics. This will lead to a direct increase in tax and duties yield from compliance interventions.
In other areas, Revenue continues to assist and support the Department of Finance in the formulation and implementation of tax policy. Revenue also has a key role and is actively involved in cross-departmental discussions on the implications of Brexit. Additional funding has also been allocated to the Revenue Commissioners to deal with challenges associated with Brexit. The Government's position is clear in that we want the closest possible trading relationship with the UK. In that regard, a key priority is to ensure the continued free flow of trade on the island and the need to avoid a hard Border. The Revenue Commissioners are actively engaged examining a range of scenarios to support Ireland's stated objectives. In this regard, the Estimate makes provision to increase Revenue staff by 40 full-time equivalents.
On Vote 10, the new Tax Appeals Commission, formerly the Office of the Appeal Commissioners, the Commission requested a budget allocation of €1.605 million, a net increase of €165,000, or 11% on the 2016 net Estimate. The increase in the 2017 Estimate is to provide for the Commission to continue to advance its programme of modernisation and reform, as well as to address its caseload in an efficient and effective manner. Specifically, the increase is largely accounted for by the need to provide for a significant number of additional personnel, including temporary commissioners and support staff, to deal with a large number of open appeal cases transferred from Revenue to the Tax Appeals Commission in 2016, as well as completing an ICT development programme for the commission necessitated by it becoming an independent statutory body. With regard to the latter, an amount of spending originally anticipated for 2016 in respect of the provision of an electronic case management system is now expected to fall into 2017.
I thank members for their attention and I commend the Estimates for the finance group of Votes to the committee. An unexpected meeting has come up for me some time after 4 p.m. Accordingly, at some stage, and with the permission of the committee, I may be replaced by the Minister of State at the Department of Finance, Deputy Eoghan Murphy.
Thank you for your opening statement, Minister. Four Deputies are signalling. We will start with Deputy Doherty. Can we try to keep the round to ten minutes, please?
My first question relates to the initial public offering for AIB. Can the Minister inform the committee prior to executing it? Will the Minister seek Oireachtas approval?
I do not think Oireachtas approval is necessary because it is in line with Government policy and it is in the programme for Government. The Houses are aware of it. However, I will go back to Government with a memorandum and I envisage a Dáil debate before a decision that takes us beyond the point of no return.
I agree that the Minister is correct to say Dáil approval is not required in this case. The real question is whether the Minister will proceed to sell AIB without the consent of the Dáil. Is the Minister confident that he would have the consent or support of the Dáil? If so, then why not have a motion? That would be the appropriate thing to do.
I will not commit now to bringing a motion before the Dáil, but I will certainly take the views of the Dáil. It would be difficult for me to proceed if I thought a majority of Dáil Éireann was against it.
My next question relates to the Minister's statement to the effect that he wishes to ensure free movement of people, goods and services on these islands continue. A report appeared in the media today – I imagine the Minister is aware of it – suggesting the Revenue Commissioners have identified several locations along the Border, including in my county of Donegal, that would be areas of examination and identification for checkpoints for what are called red and green channels. It is also stated that the M1 motorway between Dublin and Belfast is to be an area of considerable focus for customs officials should a hard border be needed. Can the Minister confirm whether the Revenue officials are engaged in such activity and scoping work?
The Chairman of the Revenue Commissioners, among his other responsibilities, has responsibility for the Customs services. If Deputy Doherty is talking about the free movement of goods, it is an issue for Customs; whereas the free movement of people is more of an issue for the immigration authorities, with the chain of responsibility going back to the Department of Justice and Equality.
I had a discussion with the Chairman of the Revenue Commissioners about how the Customs Service operates. With your permission, Acting Chairman, I will take a few minutes to give the committee an insight. The best insight arises from the procedure for goods from Third World countries coming in to Ireland rather than from European Union countries. This is the worst case scenario if there is no deal with the UK. Arrangements will have the status of Third World countries under the World Trade Organization. At present, Revenue operates a colour coded channel system if goods are coming in from a Third World country. The colours are green, orange and red. Let us suppose something is coming from the Americas. Everything has to be transferred electronically to the Customs in advance. The procedure is that 92% of the goods are cleared in advance electronically. They simply go through when the containers come in, without a check. Goods in the orange zone may be subject to an electronic request for a manifest of what might be in individual containers, but there would not be a physical check of them. The actual physical checking is less than 2%.
Let us suppose the UK ended up with a status operating under World Trade Organization rules. That would be the template under which the Customs would operate. However, given the large amount of trade we undertake with the UK and the large amount of imports received from the UK, volumes would change.
The Revenue is undertaking contingency planning, but it has not been directed from a policy point of view in any respect. It would be prudent for the Revenue to consider the options, but that is all Revenue is doing at the moment.
The Taoiseach is speaking in the Dáil this afternoon on Europe and Brexit. The Taoiseach has enunciated the Government position on several occasions, saying that we want no hard border and no inhibition to the flow of goods and services across the Border. From a Government policy point of view, we do not envisage Customs activity on the Border. However, it will depend on where the negotiations go. The British have a similar view. They want free movement of goods and people as well. However, the negotiators will be the negotiation team of the European Union. Even though this is the intent of the two jurisdictions involved, we still have to get it across the line in Europe. That might be five or six years down the line.
I will answer Deputy Doherty's question directly. The Customs is looking at contingency in the event of where the negotiations may land, but the decision of Government and the policy position is not to have the kind of border that would require Customs officials to be in place.
I appreciate that is the stated position of the Government. I have a further question in respect of the contingency plans the Revenue is drawing up. Some years back a campaign resulted in several Border roads being reopened. This is relevant for my county of Donegal. There are numerous roads, including main roads and national roads as well as secondary and local roads, that transcend the Border. Does the contingency plan include numerous locations being identified in the relevant counties? Is it the case that only the key arterial routes, like the Lifford to Strabane road, the Bridgend to Derry road or the Beleek to Pettigo road, are being targeted? I appreciate that this is contingency planning, but is that the type of contingency planning the Revenue is considering in spots?
I do not know whether the reports Deputy Doherty has referred to are accurate. The information I am giving is drawn from a lengthy conversation and discussion I had with the Chairman of the Revenue Commissioners two weeks ago. I have no wish to say anything to give the committee a wrong steer. I would invite the Deputy to put down a written parliamentary question to me and I will find out the exact up-to-date position with regard to contingency planning. In that way we will provide the relevant information to the Deputy.
Okay.
I have a question and I will add it to Deputy Doherty's time. The Minister referred to Customs controls. Did he indicate that it may be possible, even in the event that the UK leaves the EU Customs Union, not to have any physical Customs controls or Customs-related activities at the Border?
This is being discussed far and wide now. I have had various discussions, but they have been informal and without any policy status. Let us suppose goods come in to Dublin Port, they follow the colour coding I have described and there is a physical check on 2% at Dublin Port. Then let us suppose the lorry drives north and crosses the Border. Effectively, the technical people have said to me - again, this is not a policy position – that all we have to do is put in place a camera to get the licence plate on the Border to verify that pre-clearance took place in Dublin Port. In other words, there would be no necessity for a Border check.
I understand that with regard to the movement of people, the UK authorities are not doing checks at the point of entry. They are doing checks internally, including by matching PRSI numbers and revenue numbers and so on. That is how they are doing follow-up work.
The process has moved on. It would be wrong to think of fixed borders as we knew them. Anyway, it will all depend on where the negotiations land. The UK negotiating position is for a reciprocal free trade agreement between the UK and Europe. If there is a reciprocal free trade agreement, there will be no tariffs of any kind. We would only have the normal checks for illicit materials.
What about a car boot full of high-value goods, for example, electronics, jewellery and so on going over the Border and back every day?
There are issues around the Border but I do not think that is the most practical issue, though it might be. That would be a criminal activity and it would be a matter for the gardaí. Where the issue arises along the Border domestically would be, for example, the man from the bakery with the bread van delivering to shops on both sides of the Border, so that he would be up and down and over and back. I am told arrangements can be made for these things.
There is no doubt this is going to be a difficult negotiation. I ask members of the committee not to take anything I am saying as a definitive policy position. I am trying to scope out current practice in respect of third country goods to give the committee the flavour of how British goods might be handled in the worst case scenario. I would hope it would not be the worst case scenario because, as I said, Prime Minister May's position is to negotiate a reciprocal free trade with the EU. If she does not get that, I would assume that she would get some way down that road.
The Minister spoke about criminal activity in response to Deputy McGrath's question. At this point in time there is a free flow of people crossing the Border in both directions and carrying out their shopping activities because we are in a customs union. We are speculating here but is it a possible outcome, in the event that Britain takes itself out of the customs union and that there is not a free trade agreement between both jurisdictions, the EU and Britain, it would be a criminal activity for an individual from my county to go across the Border to shop in the ASDA in Strabane and to come back with their boot full of shopping without going home and filling in a VAT or customs return? How do we deal with that?
The Chairman spoke about-----
I know what he spoke about.
-----a boot-load of valuables.
I do not know anyone who goes around with a boot-load of valuables unless they are involved in criminal activity. That is not where we are at. If the Deputy is talking about someone going in to Lifford or Strabane for the messages and bringing them home in the boot of the car-----
Or a flat screen tv. I think that is what Deputy McGrath was getting at.
The question is what will the position be for someone who is over the relevant thresholds, and who is over and back across the Border. The Deputy's question-----
These are issues that have to be worked out.
Can I ask the Minister to move on from that? The Secretary General of the Department told us that there were four permanent dedicated staff within the Department who deal with Brexit. Do the 2017 Estimates allow for any additional resources to support his Department's preparations for Brexit, specifically in terms of recruiting and bolstering the personnel required within the Department?
There is whole of Department involvement as necessary in Brexit. The four people the Deputy is speaking about should be seen as co-ordinating the efforts of everybody else and being the point of contact in the Department. There is a whole of Government approach to Brexit, there is a cross-departmental approach to Brexit and then there are some designated officers who are the point of contact.
We have heard that from the Secretary General of the Department. The question is whether the 2017 Estimates allow for an increase from four to five, six, seven or eight?
There are 25 in total, from the information I have here. That is, six assistant principal officers, 12 administrative officers, two higher executive officers, two executive officers and three clerical officers, which brings us to a total of 25. I saw some publicity which suggested there were only four people in the Department of Finance involved in this very important issue, Brexit. I am stressing in my answer that is a misinterpretation of the position. There is a whole of Department approach, but there are dedicated people fronting this.
It has been reported that the report being drawn up by the Committee of Public Accounts will be highly critical of the Department of Finance, and indeed the Minister's own position, in respect of the engagement with Cerberus before the closing bid. It has been reported that it will describe it as flawed and unable to demonstrate that it was good value for the State. There has been an agreement to set up a commission of investigation. The question I have for the Minister is how prepared is the Department of Finance, and indeed is the Minister of Finance himself, to engage with that commission of investigation, the terms of reference of which will obviously require them to do so? What pressure or strain, if any, will dealing with that commission put on his Department alongside the other challenges that it has? Can the Minister speak to us in the context of the resources that the committee is allocating to his Department at this point in time?
The matter is still being discussed by the Committee of Public Accounts. I volunteered at the PAC's request to appear before it. I gave five hours of evidence and my officials and I were there for three days with innumerable hours of evidence. The matter which the newspapers are now saying will be the basis of an adverse finding against me was never raised with me in five hours of evidence. The minutes of the particular meeting were put up on the website back in 2015 by my Department. Subsequently there was a written request from the PAC for documents around that meeting and everything was supplied to it. No question was raised with me about that meeting on receipt of that set of documents.
As I understand due process, an adverse finding cannot be listed for anybody without giving them the right to reply. The meeting I had with Cerberus was not inappropriate in any way whatsoever. The PAC has legal advice saying that the functions of NAMA, the Minister and the Department were entirely different and that I had no legal right or authority to interfere with the commercial decisions of NAMA, and I did not. The minutes of the meeting are on the Internet. If what is in the newspapers is accurate, I strongly rebut this. If the PAC is now going to draw adverse conclusions about matters it never raised, after I gave five hours of evidence on a voluntary basis and was in correspondence with it subsequently, I would be very surprised it would do business in that way.
Will the Minister and his Department be in a position to engage with the commission of inquiry when it is established and how will that interfere with the other workload the Department has?
The commission of inquiry will be under the authority of the Department of the Taoiseach. When the terms of reference are developed I presume they will include the Department of Finance and the Minster for Finance. As always, we will co-operate fully and provide everything we have that is relevant. We have already done so with the PAC anyway so all the relevant documents are already posted on the Internet.
Deputy John McGuinness resumed the Chair.
I would like to move the conversation onto macroeconomic policy, specifically the Stability and Growth Pact. We are looking at the eurozone growth figures for the fourth quarter of this year and they are being revised downwards to something like 0.4% from 0.5%. I understand that letters have been issued to something like seven countries, although not to Ireland thankfully. Increasingly what we are seeing in respect of the Stability and Growth Pact is that there is a lot of focus on the stability but very little on the growth. I would like to get a perspective from the Minister as to where Ireland stands on, for instance, recent comments by the German finance Minister that there may need to be a review of the Stability and Growth Pact and where the politics of that rest at present within the EU.
If we are looking at growth in our own economy and capital spending, obviously there is going to be a turf war on the capital spend. The Minister and I both inhabit the great province of Munster. We would be looking at regional economic development between Cork, Limerick and Galway and that Atlantic corridor. People representing the eastern side of the country would be looking at metro north, the M50 and other such projects. If we are to be realistic about proper investment in projects of this nature, there needs to be some degree of flexibility built in to, or a revision of, the Stability and Growth Pact because I think it is actually impeding the potential for growth. There cannot be growth without proper regional infrastructure.
I would welcome the Minister's perspective on that and on whether that conversation is being had by ECOFIN Ministers.
At the budget time the forecast for growth in the Irish economy was 3.5%. We are maintaining that as the forecast even though there are some signs of variations on it. In January, the Central Bank marked the forecast down to 3.3% while Davy's Stockbrokers marked it up to 5% on the basis of recent data showing that domestic demand continues to be strong. I think there would be agreement that the adverse affects of Brexit that were anticipated, if they existed at all, have worked themselves through at this stage. We mark down growth rates by 0.5%. The weakness of sterling is coming into the equation but it looks now as if our position is pretty strong. We will monitor the forecast as the year passes and we will revisit it in the context of the summer economic forecast.
Growth rates in Europe have risen. The current forecast is 1.7% to 1.8% across the Community but there are regional variations on that. All European countries across the 28 member states are showing positive growth now.
It is modest growth.
Yes, but it is better than negative growth. On investment, like Ireland, Europe experienced a crisis but its impact was uneven across the Continent. It impacted more strongly on one set of countries than others. As a general observation, Europe is underinvested in infrastructure. Ireland is underinvested, in my view, in both social and economic infrastructure. In terms of economic infrastructure we need to work on completion of the roads programme, investment in the ports, airports and broadband and investment in social infrastructure in terms of refurbishment of schools, including prefab replacement, health centres and so on.
The capital programme announced in 2015, which relates to spend up to 2022, is €42 billion, but that includes the public capital programme from the Exchequer and the investment intentions and policies of the commercial State bodies. We know from experiences over the past year that more resources will be required for the public capital programme. The Minister for Public Expenditure and Reform has announced that he will revise upward the public capital programme and I understand he will do that in the first half of this year, although I am not sure of the date. Although I do not think he will be nominating projects, he has notified Departments that additional resources will be made available and projects will be prioritised. The Minister proposes to make the announcement in this regard some time in the course of this year. As I said, I do not know the timeline.
In regard to Europe, the rules continue to be the rules but we argue for flexibility on all occasions. As the Deputy will be aware, Mr. Andrew McDowell is now vice president of the European Investment Bank. I am an ex officio governor of the European Investment Bank. I am working with Mr. McDowell to see if we can get additional resources for a public capital programme. Mr. McDowell is also working with EUROSTAT on whether we can finance off-balance sheet. The Deputy will be aware from public private partnerships that the key test will be around transfer of the risk. Transferring the risk means transfer of the financial liability to the entity that is building the road, school and so on. We have just started this initiative but we have already discovered that we can expect the EIB to look favourably on projects that generate an income stream. For example, if we proposed to undertake a project in the public transport arena which resulted in the fares accruing from that being sufficient to service the loan, we could get it off-balance sheet. There are other projects of a similar nature.
Is the Minister speaking about specific projects?
Yes. I am speaking about the large projects from which we could expect a revenue flow.
Does that include projects in Galway such as the Atlantic corridor connectivity?
In terms of the motorway approaching it, there are two contracts under way, one starting in Tuam and the other in Gort, which is hoped will meet half way. If they do not, we will have two motorways. People will driving on that motorway at the back end of this year. There are other large projects in the pipeline. I agree with the general principle behind Deputy Sherlock's question, namely, that we need more investment in infrastructure and to find the resources for that. While the capital programme is under way and it is stronger than it was, it will be revised because extra resources are available now. That will be done in the course of this year. The additional bit I would like to put in place would be off-balance sheet financing through the European Investment Bank at low interest rates in respect of big infrastructural projects that would have an income flow. We will see how that works out. I am not promising anything. All I am saying is that it is worth exploring.
On the privatisation of Allied Irish Banks, is the Minister and the Government at all concerned that in advance of such privatisation AIB may try to offload loans which may end up with vulture funds and the threat that poses to the people who are living in the homes underlying those loans? I refer the Minister to the recent parallel in Limerick whereby the Strand apartments were sold by NAMA to Oaktree, leaving the tenants faced with eviction. Is this an issue the Minister is taking into account in terms of the process of privatisation?
Impaired banks all over Europe have been disposing of impaired loan books. The sale of 25% of AIB and what it might do with its impaired loan books is not connected. I am aware that AIB is examining the possibility of selling a loan book but my understanding is that loan book is in the main buy-to-rent rather than private mortgages. The big problem with vulture funds is their names. The Deputy will have seen articles in the newspapers to the effect that some of the vulture funds have more discretion to do deals with people than the banks have. I cannot vouch for that. If a bank writes off bad debt, it is crystallising bad debts on its books, bringing it forward and crystallising upfront whereas if somebody buys a loan book for 50 cent on the euro, then that person has a 50 cent head run to negotiate a settlement with the borrower. There are mixed views about this, which I admit, but there is publicity in both directions in the newspapers.
The credit servicing legislation is in place. Under law, the same obligations apply to the purchaser of loan books as applies to the original loaner of the loan books. The Central Bank is a vigilant regulator and it keeps a close on what is happening. In regard to the proposed privatisation of AIB, my intention is to sell around 25% of it. I would not be in a hurry to put the remainder of it on the market. I was talking recently to my former Swedish colleague about the Swedish banking crisis in the early 1990s. Sweden only sold off the last tranche of shares in the banks in 2015. By holding on to them for a time, they recovered, in nominal terms, about three times what they had invested.
It is a long game and my successors will deal with the matter. I am not certain we are going ahead with 25% this year. We have started a process but there is no compulsion on us from a debt management point of view or anything like that to sell. It is not like it was four years ago when Europe said we had to sell assets to get debt down. It is not like that. This is totally discretionary. We will only sell if we think we will get full value for the shares. If we do not sell then someone else will in the future.
And why not.
Deputy Pearse Doherty made some points, to which the Minister responded, about the report on Project Eagle to be published tomorrow by the Committee of Public Accounts. Previously the Minister has said that he had full confidence in both NAMA and the Comptroller and Auditor General. The reports are that the Committee of Public Accounts report will strongly back the Comptroller and Auditor General against NAMA. In respect of the two entities saying two different things, only one can be accurate. What position does that put the Minister in? Does he wish to revise his estimate of having full confidence in both if it is the case that the Comptroller and Auditor General has been very critical of NAMA, a view now backed by the Committee of Public Accounts?
I understand that the Committee of Public Accounts has generated a document that is now the subject for discussion among its members, starting later this afternoon. As that is two steps away from a report, we will see where it lands. I have no knowledge of where it might land at the end of the discussion.
In respect of the leaked document reported in the newspapers that suggests an adverse finding will be found against me, I would say that I rebut that in the strongest possible terms. I have never seen an inquiry or tribunal where an adverse finding was found against anybody on which that person was not allowed to comment. I spent five hours in there and was not compelled. I went in as a volunteer because the committee asked me. I answered everything and then I find there is an adverse finding about something, supposedly, that was never raised with me. There was a second shot at it when they looked for documentary evidence, which I provided, relevant to the meeting. When they received that they raised no question with me about it. I just do not understand what kind of legal advice was applied when this document was generated. I have written to the Chairman of the committee and pointed these things out to him. I do not think that I should get involved in a discussion on it because of that. I must wait until there is a final report.
Can the Minister see how it would be perceived as inappropriate to meet Cerberus in advance of the date for Project Eagle?
I meet people every week. I meet investors every week. It is my job. On this occasion the chairman of Cerberus came in from America. He requested to meet me. He was John Snow. He was a former Secretary of the Treasury in one of the Bush Administrations.
But not the guy in "Game of Thrones"?
No. The Chairman should not watch "Game of Thrones" as it clouds his judgment.
I meet people all of the time and I bring a note taker with me. Usually it ends up as a public document because we put most stuff up on the Internet and everything else is looked for under freedom of information, as this was. If the Deputy wants to check, the minute of that meeting has been up on the Internet since 2015 and it was supplied to the Committee of Public Accounts. There is nothing in the content of it that suggests there was an inappropriate meeting. If the argument that it was inappropriate to meet at all-----
In that situation.
-----because they were negotiating with NAMA, people look for meetings with me and I meet them. I protect myself and I protect the Administration by making sure there is an accurate note taken and a minute generated. That is all I can do. My diary is the subject of freedom of information so that one can go back in it and say why one met one person or another. I meet them because it is my job. I cannot have a third party or a committee of the House deciding who I should or should not meet.
On what was leaked to the newspaper, there was an adverse finding found against NAMA as well to the effect that it was inappropriate for it to meet Cerberus. How in the name of God could NAMA have sold the stuff if it did not meet the people who were buying it? What kind of a finding is that?
It is for people to debate, and that is what I think.
I am relying on newspaper leaks. Among the confidences I have, I have confidence in Deputy Sean Fleming who is the Chairman of the Committee of Public Accounts. I hope he will straighten these things out.
We will see.
There is a lot of pressure on the Chairman now, in terms of the confidence in supplying the leak.
The Minister is caught for time and has received an indication from his secretary.
I have a question on the report.
Yes, just one second. The committee has written to the Minister about the vulture funds and meetings that the Minister or his Department officials have had with them. I am coming at this matter from a different perspective. If representatives of these funds have met the Minister and his officials, they have refused to come here before us. As a committee, we want to look in their eyes to ascertain their agenda although we know that in a single line it is profit. We want to get an idea of how they operate. I ask the Minister that in his discussions with them to encourage them to come here. They have refused point blank. Due to the fact that they will end up with a considerable size of the market and there are individuals caught up in those loans and debts, it would be relevant if they would come before the committee. It is a pity that they do not. They have refused so far.
If they come into me I shall mention it.
Yes.
The amount of meetings now with people who buy loanbooks is limited. It started very strongly around 2014 and has pretty well worked its way through the system. NAMA has redeemed something like €30 billion worth of the loan notes that it had. In terms of assets the notes are down to about €1.5 billion so its work is nearly complete. I do not know how far up the road the IBRC is but I think it is fairly up the road as well.
The banks have reached the lower level of debt and are beginning to deal with individual debt, small business debt etc. Given where the banks are now, is there room within Government policy for a friendly vulture fund like the one I have suggested? A vulture fund could be funded by the State and could take in these loans from the banks at the same rate that a vulture fund might get them. Then it would be in a position to either continue at a lower mortgage repayment or create a situation where people become tenants and remain in their own homes. That is the level we are at.
No, it is not.
I thought the Chairman's suggestion was very interesting and we have had a look at it. The Department of Housing, Planning, Community and Local Government is progressing it in terms of circumstances in which a fund could be put together to purchase houses whose owners had impaired mortgages and in effect to rent them back to them. I think it is a very good suggestion. It is being actively explored. I have another piece of information on the matter.
The measure would relieve banks of their debt obligations.
My note says that the Housing Agency will work with a number of financial entities that have come forward with an interest in working the mortgage-to-rent scheme to progress a number of pilot alternative leasing arrangements. The objective is to explore what is available within the current market and to determine if this alternative model will benefit a greater number of households.
At the minute the local authority is empowered to purchase a house that has an impaired mortgage and rent it back to the owners so that they become local authority tenants. What if the same model could be applied to private funds? One must do the sum obviously. The issue would be whether the income flow generated from rental income was sufficient to service the loan. It is a good idea that is being explored actively but not in the Department of Finance. My officials have had a conversation with the officials of the Minister for Housing, Planning, Community and Local Government and the matter is being explored.
Is it being addressed by the Department of Housing, Planning, Community and Local Government?
Yes, it is being explored.
The Minister of State at the Department of Finance, Deputy Eoghan Murphy, has arrived and will act as super-sub for the Minister.
The Minister of State, Deputy Eoghan Murphy, will substitute for the Minister.
I thank the committee.
I welcome the Minister of State, Deputy Murphy.
I have one question relating to his brief in the context of financial services. What opportunities have arisen in light of Brexit? He has been active in promoting Ireland in the City of London as a destination for financial services. What does he expect to achieve in terms of employment, the nature of that employment and our capacity to receive that investment?
I thank the Deputy. An extensive operation is under way out of the Department working with the IDA, Enterprise Ireland and the Departments of the Taoiseach and Foreign Affairs and Trade to make sure financial services entities that currently reside in the UK continue to have access to the Single Market from other locations should they find at the conclusion of the Brexit negotiations that they are unable to retain such access from the UK. The work I am involved is to ensure Dublin and Cork, in particular, are seen as destinations for these firms to continue to access the Single Market. Having been appointed to this role, I visited London prior to the Brexit vote to talk to the London Irish Business Society and the diplomatic community. I also met a few other Irish people who are involved in business there to get their sense of where everything was going. I met bank representatives to talk about their contingency planning. Once the decision was known, engagement on our side ramped up quickly because we had one our contingency planning as a Government but companies had also done their contingency planning. They were coming back into the country to kick the tyres around again.
IFS 2020 is the five-year strategy for expanding our international financial services sector. We immediately went about retooling some of the key elements of the action plan for 2016 to adapt it to Brexit. We wanted to launch the new promotional banner brand, IFS Ireland, which represents the IDA and the Departments of Foreign Affairs and Finance, in Asia and North America in order that when people saw IFS Ireland, they knew what it meant - a young, educated workforce in a niche, developing, innovative financial services centre. Brexit gave us the opportunity to talk about how much of a better offering we have. We, therefore, talk about the three Ls - language, location and law. We are a common law jurisdiction, an English speaking workforce is important to Asian countries as is our location in terms of accessibility not just to London but to other parts of Europe.
At the same time, I began to engage with industry domestically and elsewhere, particularly in London, to put together further contingency planning around risks and opportunities. I am a member of the Cabinet sub-committee on Brexit and I have a feed into that work there as well. Ongoing work was done in parallel with continued engagements in Singapore, Shanghai, Tokyo, New York and Washington last year and Hong Kong, Beijing and a number of trips to London so far this year.
Prime Minister May has sought to put potentially a carve-out for financial services in a free trade agreement. That might come in the future. I have met representatives of the corporation, City of London, a few times and they have lobbied hard for such an agreement. However, they have since changed their position and they are seeking more of a bespoke arrangement where there might be passporting or its equivalent for certain entities. That means we continue to live in an environment of uncertainty. If the authorisation process for a financial services entity takes more than two years, it will be unable to wait until we have sight of what will happen. From last September onwards, we began to learn that companies would make decisions in the first two quarters of this year. I have made sure I am available to meet those entities where they have questions around the operating environment here. Sometimes they will go through the IDA or directly to my office or I organise meetings in London with 60 or 70 people in the room to discuss all the benefits of coming to Ireland and continuing to access the Single Market in terms of financial services offerings.
The IFS 2020 action plan for this year was launched at the European Financial Forum. This was attended by approximately 700 delegates from more than 400 companies based in 20 countries. Meetings were held on the side and there was a great deal of positive engagement and positive press. The action plan has two components. The first relates to the context of the Brexit, the Central Bank, international education and communications and the second outlines the 40 key actions under four pillars. Some have a specific Brexit dimension but others are more about maintaining a commitment to the regions and a focus on particular subsectors which all have a Brexit element underneath that.
To come back to the core question, what we think will happen is companies will continue to have a presence in the UK, including US companies, but they will move portions of their business abroad or start new hires abroad. They will go to different jurisdictions but we will in the mix and we will get more than our fair share from what I am hearing. I am worried about what other jurisdictions are saying to firms at a regulatory level when they meet them in terms of commitments they might be making that they may be unable to fulfil. That is doing a little reputational damage to our offering and, therefore, we are robustly countering that at every opportunity.
Is there an element of unfair competition? Are some of the larger cities we are competing with making offerings they may not be able to stand over? What is the Minister of State suggesting in this regard? He mentioned the word "regulatory", in particular.
I would describe it as "dangerous competition". I have been stressing to people I have met at a political level the importance of a transitional arrangement to protect the security of our financial system in this entire process because the financial architecture we have across Europe underpins day-to-day business, including exporting, businesses getting loans and trade. It is important to have a transitional arrangement in place and the Taoiseach spoke about this at another forum earlier. In that way, we can have the negotiations in a calm and safe environment. I am bothered when I hear that other jurisdictions are potentially making commitments on the level of regulation and supervision they might put in place when we work to a common framework under the ECB and various European laws and standards. We are in a competitive environment. We are not being predatory regarding London, as the Minister has said, but we want to facilitate companies where we can and, therefore, we are competing with other jurisdictions. What we have heard from some companies makes me question whether they are being prudent. If a significant company was to choose another jurisdiction as its location and what it had been led to believe did not transpire to be true and created difficulties for it, that would be worrying. We have been in communication with our European partners on this. I am visiting Brussels next week to meet members of the Commission and I will make that point to them.
Should this issue be raised with the ECB? If promises are being made on regulation and how companies will be treated when we are meant to be under a common supervisory and regulatory system------
I have raised this with the Central Bank. My understanding is its officials are aware of it and they have raised it with the ECB but I cannot speak for them and I do not want to put words in their mouths. I am speaking from memory but a meeting might be coming up to discuss some of the elements that have been reported but not confirmed------
How many jobs could be attracted from the UK in the context of Brexit? Could the Minister of State also comment on the quality of the jobs?
It is difficult to put a number on the quantity because we are in a changing environment. Some companies have decided to create more jobs in Ireland as a result of Brexit but they will not attribute them to Brexit immediately because they have relationships in other jurisdictions to which they are sensitive. Companies have chosen Ireland as a contingency but they have time to wait until they trigger it. They may not have to depending on what agreement is put in place. Other companies are waiting to make decisions and because they do not know what it will mean for them, they cannot put a number on this. Therefore, if they cannot, we cannot. IFS 2020 is about expanding the sector by 30% or between 35,000 and 45,000 by the end of 2019 and I anticipate that we will surpass that.
The Deputy asked about the quality of jobs. We have had inquiries from entities in every part of the financial services industry and in every part of the value chain in terms of jobs. We will see high-end jobs coming into this country if we can manage to get a couple of big wins in particular areas where we currently do a bit of the infrastructure - a bit of the plumbing - but we do not do the front office. If we can become a location for the front office, we will see a big gain with high-end jobs coming in, and not just to Dublin. Certain companies that have offices in Kilkenny and Cork are increasingly moving high-end jobs outside Dublin into the regions because of the cost competitive advantage and because the workforce is there. The Deputy knows all the reasons. He knows the strong offering Cork has in IFS. We will see high-quality jobs coming through.
That was the final point I wanted to make. The Minister of State has emphasised the regional dimension. As he is well aware, there are many pressures in Dublin. With Brexit, it is hoped that many jobs will come to Dublin in the financial services area. The regions have a lot to offer. The Chairman will make the case for Kilkenny. I and others will make the case for Cork with the university we have, the tier 1 data connection, the airport, being very competitive in office accommodation costs and so on. The Minister of State will be aware that Cork Chamber has done considerable work in its support for IFS 2020 and promoting Cork. I wish to reinforce that. I know the Minister of State has been there. He should keep the regions centre stage in his assessment of where incoming investment and FS can go. The regions have a huge amount to offer. This is an opportunity that only comes once and we have to make the most of it.
I thank the Deputy for saying that. As he will be aware, currently one third of Ireland's IFS jobs are outside Dublin, so there is already a strong offering. IFS 2020 was developed with industry. I am working with those in the industry on a weekly basis to ensure we are across everything we need to be across. They have been incredibly helpful in terms of intelligence. I have been unambiguous on this. I think Cork should be the second city for international financial services. When I was there recently on my second visit I said it was not for me to say that because those in Cork have done it themselves. Organisations such as Cork Chamber, Connecting Cork and UCC are doing a fantastic amount of work to position Cork, which is a very exciting place. As the Deputy said, this is potentially a once in a lifetime opportunity and we need to ensure we are completely across it.
Having said that, I have also been to Kilkenny.
One time only. If the Minister of State keeps going like that, we will lose out.
I was very impressed by the companies I visited in Kilkenny. The great offering Kilkenny has is its proximity to Dublin Airport.
I want the same amount of airtime the Minister of State gave to Deputy Michael McGrath. Keep going.
It was used up in his praise of Cork. I am not hearing the same about Kilkenny.
I have been prioritising the regions since I got the job. I have been to Drogheda twice, I have been to Kilkenny, I have been to Cork twice and I have been to Kerry. I will be in Galway in two weeks and I will be in Limerick the week after that. It is very important to me because I believe there is a real opportunity to correct some of the things we have got wrong in the past such as our strategic development in certain industries.
Certain very exciting things are happening. I hope the Chairman does not mind me mentioning State Street which has a very strong presence in Kilkenny. It is involved in the joint action committee I have with IFS 2020. It is also doing great work down in Cork. Such companies are making a very strong contribution to the country and what the Government can achieve, and a very strong contribution to places like Kilkenny. It has a great workforce there. Its workers are getting the benefit of living in a location like Kilkenny and not suffering some of the problems we have in Dublin.
The next time the Minister of State is in Kilkenny, he should give me a call and not keep it to the one party.
I genuinely tried. Maybe it is the signal.
The Minister of State had better find the signal. I asked earlier about the engagement of friendly vulture funds with the banks. Could the Department not be proactive about that? I know the Minister of State has got some information from his officials on the setting up of that fund and perhaps on the use of Government bonds to progress the notion of taking these bad debts from the bank and allowing them work out, similar to the business one.
While I did not catch all of the contribution by the Minister, Deputy Noonan, on this, my understanding is that we have been proactive in this. We have been dealing with the Department of Housing, Planning, Community and Local Government to ensure we can see what has worked in the past for local authority residents and whether it might work in the future for other mortgage holders.
I ask the Minister of State to provide the committee with a note on the status of the Department's consideration of that.
Absolutely. That is no problem at all.
I ask the Minister of State to impress on the Central Bank the urgency of bringing an end to the tracker issue regarding Ulster Bank and the global fund. The same applies to Ulster Bank on the commercial decisions it made around the global fund. We will engage with the Central Bank again, but it is an ongoing process that is affecting people's lives. I would like to see greater efficiency in how it is dealing with it. I ask the Minister of State to bear it in mind when talking to the Central Bank.
That is absolutely understood and the Chairman is right to raise it. Based on conversations I have had with individuals who have been across this for quite a while, as much information as can be provided will be provided. We can provide the committee with a note as well. The Chairman's comments are well put.
We need to get it to understand that it has a role in consumer protection, both in insurance, which we will debate with the Minister of State tomorrow, and also regarding the banks, consumers and so on. The Central Bank does not place enough emphasis on that area. I would like to see the Central Bank highlight its role in protection.
Vote 8 relates to the Office of the Comptroller and Auditor General. As the Department of Finance is responsible for the policy relating to the Comptroller and Auditor General and the Committee of Public Accounts, it should extend the remit of the Comptroller and Auditor General to ensure he can track the money, where necessary, down to the point where it is spent. As the Minister of State is a former member of the Committee of Public Accounts, he will know there are roadblocks on the way to achieving real transparency and accountability. I would like to see a policy shift to provide powers to the Comptroller and Auditor General to give greater accountability. That would apply to Irish Water if it continues to exist.
In the previous Dáil we discussed this extensively and we would have had the same view about extending the mandate of the Comptroller and Auditor General to give that office the resources to ensure it could follow the money. We experienced frustration with issues such as the Poolbeg incinerator where we could not get past how the local authority spent that money. Unfortunately, a former Member from the Chairman's constituency and a member of my party was not of the view that that was the correct approach. I remember debating the Bill in the Dáil. I think we had the same position even though legislation was going through at the time. I am not sure about the current position. I have not discussed it with the Minister, Deputy Coveney.
Things have changed and Deputy Eoghan Murphy is the Minister of State. I impress on him the need to modernise that legislation governing how the Office of the Comptroller and Auditor General works in order that everyone who spends money is made accountable to the Comptroller and Auditor General. I would be relying on the Minister of State to do that.
Can the Chairman remember if the Comptroller and Auditor General was in favour of extending that mandate? I know the local authorities had a problem regarding their mandate to audit their own spending.
That applies to the local authorities. However, generally speaking, the remit of the Office of the Comptroller and Auditor General should allow it to chase public moneys coming from the central Exchequer if something has gone wrong at the other end. That is all I am requesting.
I will certainly engage with the Office of the Comptroller and Auditor General to ascertain its thoughts on that previous legislation and how it might have been changed.
I thank the Minister of State and his officials for attending.