Vote 10 - Tax Appeals Commission (Revised)

Members have all received their briefing notes. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

The format of the meeting will be the Minister of State will give an opening statement, and the meeting will last for just under two hours. We must finish on time. When members make their contributions I ask them to consider that other members might like to join in, and we can have a constructive and efficient meeting.

I invite the Minister of State to make his opening statement.

I thank the Chairman. I am pleased to have the opportunity to appear before the Oireachtas Select Committee on Finance, Public Expenditure and Reform, and Taoiseach, in connection with the 2020 Estimates for the Department of Finance, Vote 7, and for the other Votes within the finance group: the Office of the Comptroller and Auditor General, Vote 8, the Office of the Revenue Commissioners, Vote 9, and the Tax Appeals Commission, Vote 10.

I thank the committee and its officials for arranging this meeting at short notice last week, and I also thank the committee for its understanding with respect to the delay in sharing the briefing material, which I believe only went out yesterday evening.

I will focus on the Department of Finance first. The Department is structured around two directorates - the economic and fiscal directorate, programme A; and the finance and banking directorate, programme B. There are also a number of support divisions that ensure the smooth operation of the Department. In order to provide an accurate cost of the two programmes A and B from a management reporting and oversight basis, the costs of these support divisions are allocated on a 50:50 basis to each of the two programmes.

The net funding allocation sought for the finance group of Votes for 2020 totals €460.9 million, which compares to a 2019 group Vote of €440.2 million. This represents an increase of €20.6 million or 4.7%. The primary driver of this increase is the provision of a €21.3 million increase for the Office of the Revenue Commissioners relating to increasing staff numbers and other staff costs, which I will address later.

Under Vote 7, the gross allocation to the Department of Finance in 2020 is €39.8 million, of which €10.5 million is provided for a fuel grant scheme for disabled drivers and a further €768,000 is to fund the office of the Financial Services and Pensions Ombudsman. Leaving these aside, the Department’s allocation provides for the administrative and non-administrative costs of the Department. The vast majority of this, some €20.6 million or 72%, is provided to cover salaries and allowances, with a further €4.9 million, or 17.4%, to cover facilities and non-pay administrative costs. The remaining €3 million, or approximately 10%, is provided to cover the legal, advisory and committee costs necessary to support the Department in the proactive delivery of its remit.

Vote 8, which is the allocation to the Office of the Comptroller and Auditor General, is applied towards a single audit and reporting programme. The Comptroller and Auditor General is an independent constitutional officer whose mission is to provide independent assurance that public funds and resources are used in accordance with the law, managed to good effect and properly accounted for, and to contribute to improvement in public administration. The Comptroller and Auditor General is required by law to issue opinions on the accounts of Departments and public bodies that are audited by him, which was completed last week in respect of the 2019 financial year; publish reports on important matters at his discretion relating to value for money and the administration of public funds; and authorise under the comptroller function the release of public money from the Exchequer for purposes specified by law. The office assists the Comptroller and Auditor General in his statutory functions and is staffed by civil servants.

The Comptroller and Auditor General’s financial audit role covers approximately 290 sets of accounts produced by public bodies. Together, these bodies have financial transactions totalling more than €200 billion of public money each year. The allocation for this Vote in 2020 is €9.116 million. Given that it was €8.657 million last year, this represents an increase of approximately 5.3%.

Turning to Vote 9, the Office of the Revenue Commissioners, which is the Irish tax and customs administration, plays a vital role in our economy by collecting taxes and duties due to the State. For 2020, Revenue requested a net budget allocation of €403.975 million, which was an increase of €21.29 million, or 6%, on the 2019 Estimate. Nearly three quarters of the budget is related to payroll for an increased employment ceiling of 6,714 staff. In this regard, an additional €18 million was allocated to Revenue in the 2020 Estimates to cover Brexit funding requirements. That allocation related to the full-year cost of an additional 330 staff to manage the implications arising from Brexit and for additional Brexit-related infrastructural and operational requirements, for example, vehicles and detection equipment. This outlay is required to facilitate import and export traders and to implement the customs controls and checks that will be required following the UK’s withdrawal from the EU.

The 2020 allocation also provided for some €2 million in order to move dividend withholding tax to a real-time platform as part of Revenue’s ongoing programme of developing online business solutions for taxpayers. However, this funding was instead used to provide for the speedy development of the wage subsidy schemes that were rolled out by Revenue as part of the Government’s economic supports to Irish businesses and their employees during the Covid-19 emergency restrictions. Some of that funding also helped to develop the stay-and-spend scheme. Taking account of a reduction in capital and appropriations-in-aid, the balance of €5.9 million provided to Revenue in 2020 is in respect of the restoration of pay under the public service stability agreement.

It is worth noting that, along with most sectors of the economy, Covid-19 has significantly impacted on Revenue’s operations during 2020. Revenue has responded by quickly putting in place a range of measures in addition to the wage subsidy schemes. For example, it has implemented special measures to support businesses by deferring or warehousing VAT or PAYE debts resulting from the impact of Covid-19 on businesses. Revenue is also continuing to support the delivery of other essential public services to combat the pandemic, including contact tracing for the Department of Health and the HSE and processing applications for income support payments for people affected by Covid-19 for the Department of Employment Affairs and Social Protection. These economic support measures have been implemented by Revenue without incurring additional costs to the Exchequer.

As we approach 2021, Revenue will continue to prepare for, and manage, the impact of the UK’s withdrawal from the EU.

Revenue will implement customs controls in a manner that encourages legitimate trade, enhances competitiveness and supports business while managing compliance risks.

The 2020 budget allocation for Vote 10, the Tax Appeals Commission, TAC, is €3.233 million, a slight increase of €25,000, or 1%, on the 2019 Estimate. The 2020 Estimate is to provide for the TAC to further advance its programme of modernisation and reform and to address its caseload in an efficient and effective manner, while also meeting its obligations and accountability as an independent body, under the aegis of the Department of Finance. The Estimate for this year provided for the establishment of a new role of chairperson of the TAC in 2020. I am pleased to say that Ms Marie-Claire Maney has been appointed as the chairperson of the TAC with effect from 1 July 2020. The 2020 Estimate also provided for further appointments at various administrative grades to bring the staff complement to 33, as per the recommendations of the independent review of the operation and workload of the TAC. I am confident that the Estimate provides for the increased staffing and supports that the TAC needs to make progress on clearing the backlog of appeals. This year there has already been a significant increase in the number of determinations issued by the TAC.

I thank the Members for their attention and commend the 2020 Estimates for the finance group of Votes to the committee.

I thank the Minister. Deputies Richmond and Tóibín have indicated.

I welcome the Minister of State and thank him for both his detailed remarks and the comprehensive material provided.

I commend the Estimates. I have a couple of questions on Vote 9, which relates to the Office of the Revenue Commissioners. In 2020, €18 million in extra funding was allocated in respect of Brexit and the appointment of 330 staff to deal with the customs infrastructure. Have those positions been filled? If not, where are the gaps and can they be filled? Looking at the year ahead, has consideration been given to funding, indirectly or otherwise, for customs agents? Obviously agents are not employees of the State but it is going to be one of the huge issues facing the collection of revenue and the engagement of business with exports, particularly to the UK.

Finally, I commend the Revenue Commissioners on the excellent work they did last summer on the uptake of economic operator and registration identification, EORI, numbers by exporting companies. Up to 97% of companies have registered for these numbers. Can the Minister confirm whether the percentage has increased? Are his office and the Revenue Commissioners happy with the percentage?

On Brexit, the 330 staff have been employed. Most of the recruitment commenced in 2019 so we are seeing the completion of the process in 2020.

In terms of agents for the State in 2021, everybody will appreciate that because of the general election and the formation of the Government, we are very late in coming forward with the Estimates for the calendar year. In a week's time, we will have the Estimate for 2021 published on budget day. The issues mentioned concerning 2021 can only be dealt with when the Estimate is published on budget day. I am not in a position to answer for 2021 but we will have the Estimate for next year, and so the answer, on budget day.

Finally, I do not have the number concerning Revenue. However, I will have a note sent to the committee as promptly as possible. I do not have the answer today.

Go raibh maith agat, an tAire Stáit ag teacht isteach. First, on consultancy and other services, subhead A.4, the amount seems extraordinarily high compared with the 2019 Estimate. What exactly were those consultancy services? What is the justification for the expenditure?

Will the Deputy identify the page in order that we can both be on the same page?

It is subhead A.4. and it relates to consultancy and other services.

On page 13.

I am looking at it on Microsoft Teams and I cannot see the page number. It could be page 13.

That was my first question so will I ask all of my questions together?

The second issue is the Financial Services and Pensions Ombudsman. We have a fragmented and soft system for this in Ireland. This is not a question of the funds specifically but in general, do we understand the views of the ombudsman on the further powers he desires to be able to fulfil his role in that area?

I mention Vote 8 for the Comptroller and Auditor General. The Comptroller and Auditor General does an important job and there is a reasonable and stable figure in that Vote. The Comptroller and Auditor General writes reports and the implementation of those reports is a key element. Would it be possible to find out exactly what reports from the Comptroller and Auditor General have not been followed up on or progressed as they should have been?

Was the Supplementary Estimate the Deputy referred to the Supplementary Estimate for 2019?

That was a large Supplementary Estimate that was nearly as big as the entire Estimate for the Department. That supplementary allocation was required to cover the payment of €24 million in legal settlements in relation to the air travel tax litigation. It is the final settlement amount and is in accordance with the legal advice given by senior counsel and approved by the Office of the Attorney General. That was approved in the appropriation accounts for last year with a Supplementary Estimate but it is still in the documentation for this year. That happened about 12 months ago, not in 2020. That is the big issue and maybe the Deputy can follow it up separately.

On the powers of the financial services ombudsman, we have no indication that his office has any difficulty in that regard. The Deputy was talking about the Financial Services and Pensions Ombudsman.

His question was more on policy than on the operation of the office. Policy is a matter that this committee will deal with and it is not an Estimates issue. I suggest that this committee can consider the role, brief and remit of the financial services ombudsman but all we are doing today is seeking to grant a request from the ombudsman for a certain amount of money for this year. There is a wider debate to be had at this committee with the ombudsman rather than just discussing a specific allocation but this is the allocation the ombudsman is to be given. The 2021 Estimate, which will be published next week, is where that debate can move on to next.

As members will know, the Comptroller and Auditor General issues a report and audits at the end of September each year on each of the Government Departments. That report normally has about 20 chapters and it was published last week. During the course of the year, the Comptroller and Auditor General can issue a number of special reports. It could be two, three, four, five or six reports, depending on the Comptroller and Auditor General's priorities. Each of those reports is considered by the Committee of Public Accounts and to wear my hat as the last Chairman of that committee, we were assiduous in issuing quarterly reports to follow up on the recommendations of the Comptroller and Auditor General. The Committee of Public Accounts follows up on the recommendations in the reports of the Comptroller and Auditor General. Then when we issue that report it goes back to the Minister for Finance for a considered response, having taken in a response from the relevant Department. It then comes back to the Committee of Public Accounts and the committee accepts that there has been a good response, that progress is ongoing or that there is a good reason something is not happening. It can refuse to endorse the response from the Minister at that point. That completes the chain of accountability in the Oireachtas and those reports have been consistently operating. Those reports are published on the website of the Committee of Public Accounts and that issue can be followed up by the Committee of Public Accounts for the last year or so because it is over 12 months since the last time the committee issued a report.

Gabhaim buíochas leis an Aire Stáit fá choinne teacht isteach leis na Meastacháin a phlé. Tá cúpla ceist sciobtha agam ó thaobh na Breatimeachta de.

In terms of Brexit, it was mentioned that there are 330 staff, although the Minister of State is not sure whether they have all been recruited. There is a difference between the amount of resources the Revenue Commissioners looked for and how much they were granted. They were granted a couple of million euro less than what they sought. Can the Minister of State explain the rationale for that? They looked for an increase of just over €21 million and they were provided €18 million.

I ask the Deputy to give me a moment while I go through my notes on that matter.

This information is from the Minister of State's own statement. I do not think those figures are in the Estimates.

I always believed that, in dealing with the Estimates, what Revenue sought in additional staff was usually granted. I may be wrong but in the context of Brexit, I am surprised the Revenue Commissioners were not allocated what they required.

They were allocated €18 million. Some €11 million of that was to cover the 330 staff, which was the full complement of staff required. Those staff have already been assigned, mainly to work in the ports and at a small number to information technology facilities. The other €7 million was for non-pay items, including refurbishments at Dublin Port and Rosslare Europort. The OPW carried out that work and was reimbursed. It is included in the €18 million. Given that Brexit is scheduled to happen at the end of this year and that further costs will be encountered as we move into the new year, I will ask that that be fully taken into account for the 2021 Estimate, which is being finalised at this stage. This allocation is a request from budget day last year. What was allocated and approved last year has been fully committed in terms of staff and the works on the ports. I accept the Deputy's point that it may not be sufficient as we are now getting to the crunch time. The Estimate to be published next week will be the most important. As I said, we are essentially playing catch-up having this Estimate so late in the year because of the election and no Government being formed. Normally this debate would have happened in March or April. At this stage, what has been allocated has been utilised and I will ensure that in advance of next week, the Deputy's points are brought back-----

I take it from what the Minister of State is saying that €11 million was allocated for pay, which is what was requested. That was delivered in full so all the staff complement was agreed to. There was a further €7 million in non-pay costs, a portion of which was spent on Brexit preparations at the ports.

It was spent on Dublin Airport, Dublin Port and Rosslare Europort, and a major new scanner which cost over €1 million and which is half funded by the European Anti-Fraud Office.

What level of costs did those four component parts make up? Do we know how much those four things, namely, the two ports, the airport and the scanner, cost?

The scanner was €550,000, which is half of its overall cost, and the other costs were at the ports. I do not have a breakdown but if the Deputy wants-----

I would be particularly interested to know what Revenue sought and was not granted. What was the €3.29 million of additional support it needed that it was not able to get last year? I note as well that the dividend withholding tax has not been put on a real-time platform. Is it planned that that will take place in 2021?

Some of the work that was carried out on the ports by the OPW was funded on an agency basis through the Department of Agriculture, Food and the Marine and the HSE. It has not all come through this Vote. Some funding was provided through the Department of Agriculture, Food and the Marine and the HSE as well as the funding through this Department.

I ask the Minister of State to give the committee more information on that €21.29 million request, if possible.

What were the component parts of that and what part of it was granted or not in last year's Estimates?

Also the part that came through this Department - the Department of Finance - and how much came through the Department of Agriculture, Food and the Marine and through the HSE.

The Minister mentioned that Revenue staff continue to support the delivery of public services through contact tracing and income supports. Can he tell me how many staff in Revenue are deployed to each section of work? How many are involved in contact tracing and how many are involved in applications for income support payments?

In relation to the staffing, I do not have the exact figure here but I looked at the notes this morning. Essentially, those who were recruited to Revenue over recent months were all immediately put to work on the contact tracing. They would number approximately 30. Rather than taking up work immediately in Revenue, because of the priority that was there, they went straight into the contact tracing. That is essentially the group from the Revenue who went.

Then there is a second group of staff who are involved in processing payments for the Department of Employment Affairs and Social Protection. Are those 30 staff across both contact tracing and the applications?

No. The 30 staff are for the contact tracing. Essentially, this time last year when the Estimate was published there was a significant provision in it to work on a new dividend withholding tax scheme because many dividends, especially in light of the financial services sector here, are paid to persons outside the State and we wanted to have a more modern method of accounting for the withholding tax on dividends being paid to them. As a result of Covid, work on that project did not proceed as planned. The staff and the resources allocated for that project this time last year were used on developing the employment wage subsidy scheme, the stay and spend, and putting together the warehousing programme for the PAYE and VAT payments at no cost to the Department. This was because some of those, especially the employment ones, are closely related to the Department of Employment Affairs and Social Protection. Some staff in Revenue doubled-up because one cannot work one without the other. It is not possible to say how many staff were allocated. They all remained working in the Department but it was a cross-Department project.

I understand. It all related to the employment wage subsidy scheme, not the pandemic unemployment payment.

It was a cross-Department project.

When we are dealing with Estimates, we are supposed to be looking at the expenditure and the outcomes. The necessary diversion would have taken away these staff from other areas of activity. Are we able to identify the areas of activity within the Revenue that were not able to be followed up, outside of the dividend withholding tax expenditure of €2 million?

As the Deputy will be aware, debt enforcement has been suspended. Staff who would have been working on debt enforcement have moved to work on projects I mentioned, such as the temporary wage subsidy scheme and the employment wage subsidy scheme. The biggest single issue was that the dividend withholding tax project did not proceed. That was the big event to happen this year and it did not proceed. In addition, the debt enforcement work has been scaled back dramatically during Covid.

How much is Revenue expected to pay out in the first quarter of 2021 on the employment wage subsidy scheme?

I do not have the figure to hand. I will send that on. It is a published figure. It is quite substantial between now and the end of March.

In relation to the economic and policy division, there has been a significant reduction in the Estimate for this section. Last year there was €24 million spent on consultancy services - two and a half times the overall payroll within that section. Can the Minister of State explain what was the consultancy and why it is not deemed necessary in 2020?

As I said, there is the big court case involving the air travel tax which was settled last year and there was a massive Supplementary Estimate through this committee at the end of last year of €24 million, which covered the legal and consultancy fees in respect of that. Essentially, that was a once-off item in 2019 which went through by way of a late Supplementary Estimate. That is why that figure is particularly high last year.

I thank the Minister of State. One of the output targets for 2020 was the summer economic statement, which gives us an indication in regard to the budgetary parameters, but it was not published. At that time, there was no communication with Opposition spokespersons that a normal statement would not be published, which is bad form. Some of us have just come from a meeting of the Committee on Budgetary Oversight, where the Irish Fiscal Advisory Council stated it is not satisfied at all that such a statement was not provided. It makes the point that it provides outlooks over a five-year period and that the Department of Finance has the ability, capability and wherewithal to do the same. It believes policies need to be guided not just by what is happening this year or in the next 24 months, but over the next period.

There is an acceptance that things are in flux and that the July provision of €8 billion or €9 billion of expenditure would have been added to what was presented. However, there could and should have been a summer economic statement. Will the Minister of State provide a justification as to why it was not published, given that, over the summer, there was more calm within the economy than there would have been in March-April when the pandemic hit us?

I thank the Deputy for raising that point, which I accept would be 100% valid in a normal year. Because of Covid, when it came to the time of the summer economic statement, all resources in the Department went instead working on the July stimulus package. Essentially, we had to make a choice as to whether to do the usual or to work on the July stimulus package. Those working in the Department would have produced that every other year and will do so next year. I accept there is a gap in the information but the Government took a strategic decision to progress the July stimulus. That is why we did the July stimulus in place of the normal report that should have been issued in the summer. I think people understand that it was probably the right call.

The Irish Fiscal Advisory Council, which is the independent oversight body, does not believe it is the right call. Why did the Government not publish work on the summer economic statement after the July stimulus was announced? It was still July; it was still the summer.

The fact is we are going into a budget next week without any document, regardless of how much the budget diverges from that document, which we know it does every year. There are no projections in regard to where the Department of Finance foresees the economy going prior to the budget. Therefore, there is less scrutiny and less oversight, not only by the Oireachtas, but also by the independent body that was one of the major outcomes of the last financial crash, when it was decided we needed this type of independent oversight and advisory body. The Irish Fiscal Advisory Council is not able to benchmark against a document. Why was this not done after the July stimulus?

Most people understand the scale of work being undertaken by the public service during that period in getting the July stimulus together, which happened towards the very end of July. It was being implemented and staff were continuing to work on developing the “stay and spend” scheme, which was announced in the July stimulus but not implemented at the time, and dealing with commencement notices. While the July stimulus was published and enacted by the end of July, most of the commencement, the setting up and the statutory instruments came through during the period after that. The reason we did not have the forecast at that time was there was just so much uncertainty that it would have been a very risky business trying to say with any certainty what was going to happen in the next three to five years at that point, which was at the height of Covid.

Forecasts by their very nature do not provide certainty; they are forecasts. I think people are reasonable and understand there is more risk of those forecasts being significantly out this year than any other year. However, it is important for the Department to Finance to note where it sees the economy going.

The Minister of State should take us to the next stage. The summer economic statement has not been published. I acknowledge things were in flux and I also acknowledge the work going on within the Department. In regard to the budget that will be announced on Tuesday, the Department planned not to provide medium-term forecasts.

At the time of probably the highest level of expenditure we will see in the State, which is needed to stimulate the economy, support incomes and so on, the Department will not publish its forecasts of where it sees the economy in three, four or five years, as it normally would. If the Irish Fiscal Advisory Council and others are able to put on paper where they see things going, surely, as part of the budgetary process, the Department of Finance should give an indication, however right or wrong it might be, of where it sees economic recovery in the medium term as opposed to giving us what is planned, which is a very short-term view.

Without getting into the budget immediately, one fact which may help people in understanding the budget scheduled to be announced on Tuesday, 13 October, is that we normally get the September figures the Friday before the budget is announced. We get these at very short notice and the budget figures sometimes have to be changed over the weekend. We are fortunate that, because of the calendar, these figures came out last weekend so now, ten days in advance, there is more information available for everybody to see in advance of the budget than has been the case in recent years. It is fortunate and helpful that it worked out that way. Figures normally come out on the Friday night before a budget and these can send other figures askew. That will not happen this year. We have a little more information in the public arena as we enter the last week of budget preparations than we normally have and that information is more up to date. The only commitment I will make is that we will publish our forecasts, although it will be spring before we do so.

As an Opposition spokesperson who has responded to 11 or 12 budgets, I have to say that the Minister of State's statement is not accurate. The summer economic statement would have outlined the package of expenditure and tax increases planned for the budget-----

That is correct.

-----regardless of whether the Government delivered it on the day. It may have increased or decreased the package, but it would have been published. We are now learning about the budget through the media and doorstep statements by the Minister for Public Expenditure and Reform and the Minister for Finance. Will the Minister of State confirm what we have learnt through the media, which is that there will be a Covid-related package of €9 billion, €5 billion of which will relate to income supports?

The only point I will make with regard to the Deputy's remark is that, while the Government has always outlined its proposals, these have always been subject to the envelope available on budget day. This is always impacted by the results at the end of September, the last figures before the budget, because it is a very significant period of the year in terms of corporation tax. In every recent year I can recollect, the size of the envelope could not be fully decided on until the September Exchequer returns had been seen. On this occasion, we have seen these results ten days out. These are significant figures, which are in the public arena. With regard to speculation on the budget, the Deputy will know that I cannot go into what might be in next week's budget today. I just cannot go there.

I am not asking for the measures. One of the out-turns is the summer economic statement, which we do not have.

That is correct.

That is what is in the Government's estimates. In that summer economic statements, we would normally see the totality of the planned package. The Minister of State is correct that the revenue figures for September can influence the package, but we would still know what it is.

That is correct.

What we are hearing from the Ministers for Public Expenditure and Reform and Finance, through the media, is that the package will involve Covid-related expenditure of €9 billion, of which €5 billion will relate to the income supports while the majority of what remains will relate to health. This is Covid-related and just intended to keep the lights on over the coming period. There is to be a €1 billion increase in capital spending, which was already flagged in last year's budget, and €1.1 billion in carryover spending relating to a number of different measures. There is also to be a discretionary package of €900 million. That is what would have been in the summer economic statement if we had one but we do not have one. Will the Minister of State therefore confirm that is the package we are looking at before the Government decides on any additional policies it may want to introduce?

Everything the Government announces on budget day is subject to available resources. Everything the Deputy has just outlined is dependent on resources being available. It will not be announced until the day. I indicated earlier that, with regard to withholding tax, the Department of Finance had to prioritise the temporary wage subsidy scheme, the employee wage subsidy scheme and the July stimulus package. These matters took precedence over things we normally would have done. I have accepted that.

A valid question was to ask what was not done this year that we do every year and that we had to put to one side due to the Covid-19 and to do those other measures. I accept that there was no summer statement. I, and I think most people, preferred to have the July stimulus that dealt with the temporary wage subsidy scheme, TWSS, and then the employment wage subsidy scheme, EWSS, because it affected the sustainability of people's income. I accept the point-----

Most people would rather the TWSS was not cut, especially when so many businesses are now going to be hurt by level 3 restrictions.

I wish to move on to the last point, which concerns the funding for the office of the Financial Services and Pensions Ombudsman under banking and financial services policy. The allocation of funding to the office last year was €950 million, and this year it is €768 million.

Can I ask the Deputy to what he is referring?

I am working off the Estimates. It is Vote 7, subhead B5. I am working off page three of the document I have here, and page 16 in the bigger document.

I ask the Deputy to bear with me for a moment.

What page is it?

It is page 16 in the document I have here, which states that the Estimate for 2020 has been reduced to reflect the actual funding required by the office. In the other document, to which I refer, on page three it states that the funding has been reduced from €950 million to €768 million. I imagine that the tracker mortgage scandal and the increased caseload of the Financial Services and Pensions Ombudsman may have put additional pressure on the organisation, although some cases have not yet been closed. A significant number of cases relate to business interruption. Indeed, court proceedings have commenced today in respect of same, and the findings will emerge in due course. I do not like the fact that there is a significant reduction in the allocation of funding to this office, without which, we would not have known about the €1 billion theft by the banks in relation to mortgages and many other issues besides.

The answer to that is that as time goes on, there will be increased funding from the financial institutions. When the office of the Financial Services and Pensions Ombudsman was set up, the contribution from the State was around €960,000. The funding allocated is decreasing because the funding to that office from financial institutions is increasing commensurately. Like the regulation of the banks, we have moved from the situation years ago in which the taxpayer would carry the burden. Now the financial institutions bear the full cost of financial regulation. Similarly, in relation to the Financial Services and Pensions Ombudsman, financial institutions will pay an increased percentage of the cost of running the office, and the cost to the taxpayer, through the Vote from the Department, will continue to reduce. It is not a reduction in service, but a reduction in the funding method.

Perhaps the Minister of State will clarify what we have here. I do not know whether he has been able to locate the pages.

The Estimate we are considering is a total of €768 million currently. On page 16 of this document, which I have here, it is stated that the out-turn by the end of September 2020 has already reached that figure of €768 million. Will there be a Supplementary Estimate in respect of the funding for the Financial Services and Pensions Ombudsman, or is that a typographical error?

There may be Supplementary Estimates if necessary. I ask the Deputy to bear with me for a few minutes while I find the pages.

I am happy for the Minister of State to provide a note to the committee or to me.

Is that page 15?

Yes, it is page 15. It states that the out-turn at the end of September is €768 million, yet the Estimate for the whole year, is €768 million.

That is correct, however, an increasing level of funding for that office is now provided by the financial institutions. Therefore, the €768 million is our commitment for the year, and significant costs will be borne by the financial institutions. It is only a matter of timing whether we pay in early or late. I am not aware of any need for a Supplementary Estimate at this time. I expect a lower figure in the Estimate for next year.

I thank the Minister of State for coming before the committee and wish him all the best in his role in the years ahead. We are three months away from Brexit, which may be a no-deal Brexit. Will the extra 330 staff allocated to the Revenue Commissioners be sufficient to deal with the extraordinary consequences of a no-deal Brexit? Alternatively, if there is a deal on Brexit, will all those staff be necessary? If they will not, are there plans to reassign them elsewhere?

The Revenue Commissioners are satisfied with facilities and the number of staff they have in place. The biggest risk will be to small businesses that have not yet fully grasped that there will be issues with customs clearance. This morning, I met Enterprise Ireland, the main job of which through local enterprise offices is to ensure small businesses are aware of these risks. Large businesses will be able to cope with all of the customs clearance documentation that will be required, but I do not think the owners of garages or repair shops in Kilkenny or Letterkenny, for example, know the extent of the significant extra work in respect of customs clearance that will be required to get a part in overnight to repair a car. It is really microbusinesses that will experience difficulty. That is why, through the Department of Business, Enterprise and Innovation and local enterprise offices, we are making sure they are all Brexit ready. Revenue is satisfied that it is ready. The biggest issue will be backlogs and queues in places such as Dover which are outside the responsibilities of the Revenue Commissioners. The issues will be in respect of small business that do a little importing and exporting. The challenge over the next three months is to make those businesses Brexit-ready, not the Revenue Commissioners.

Will those small businesses still have significant extra work to complete even if a deal is agreed between the United Kingdom and the European Union?

They will. It depends on the products they are importing. The ability to use the land bridge means that businesses that get customs clearance leaving Ireland when travelling via Dover to mainland Europe will not require further customs clearance. That will also be the case in respect of goods being transported in the opposite direction. The issues will arise in respect of products coming into Ireland that originate in the UK, rather than coming via the land bridge, which is really a bridge between Ireland and France. There will be customs issues for businesses importing or exporting product, depending on the tariffs involved, which have yet to be established. The single biggest issue will be in respect of small businesses. That is why I referred to local enterprise offices. There has been a big uptake in the number of businesses getting ready and getting their Revenue customs clearance documentation. We will eventually get to a situation whereby truck drivers and van drivers will have their customs clearance on their mobile phone and be able to wave it to clear customs. The biggest issue is in respect of small businesses. The Revenue and the Department are ready, but we believe small businesses are not fully ready. I am afraid that some of them will just wait and see what happens on the day. They may experience delays receiving products that would normally be delivered overnight. That is where the issue lies, rather than on the State side.

Many of the questions I planned to ask have been covered. I will not rehash those issues. I refer to the section of the Estimate relating to law charges. The Estimate for 2019 was €11.3 million, but the final outturn for 2019 was significantly in excess of that figure. Will the Minister of State explain that overrun? Is the Estimate for this year too conservative in that regard in light of the higher amount in 2019?

I refer to the allocations relating to the Ombudsman. I would expect that in a year such as this, there would be more queries in that regard.

I attended the meeting last week of the Committee on Budgetary Oversight.

The Irish Fiscal Advisory Council, IFAC, stated clearly that the Government should provide medium-term projections. A period of five years should be examined, and the Government should set out what it expects the debt to be in that context. In May, for example, IFAC gave projections based on three scenarios, and the Government should be taking that on board. I ask the Minister of State to comment.

Is the Deputy is referring to the law charges?

Last year's outcome included some once-off items, which resulted in figures that were exceptionally higher than originally planned for at the beginning of 2019. The final outturn, therefore, for 2019 is not expected to be a benchmark for this year. We are basing this year's figure, therefore, more on the original Estimate for last year, and, if we do not have any unusual once-off items like we did last year, we think that will be a better basis on which to start. I stress, at this stage, that there is no basis for suggesting that this Estimate is not sufficient.

I take the point that we did not publish all the documents in July as we normally would have done. I tried to explain why that was the case, in that we were concentrating on the July stimulus, the temporary wage subsidy scheme, TWSS, and the employment wage subsidy scheme, EWSS, and the Department and the Revenue Commissioners have only so many officials to do all that work. What was requested today, however, will be published in the spring. The point is also well taken that we should have these economic forecasts coming out regularly on a guaranteed timetable. This year, however, some projects, in all Departments and agencies but in the Revenue in particular, had to be put to one side to allow some of the items concerning Covid-19 to be dealt with. That was for this year only.

I thank the Minister of State. Much of what I wanted to ask about has already been the subject of questions and there is no point in repeating it.

In the Estimate, there is a figure for disabled drivers and the refund in respect of the disabled drivers and disabled passengers scheme. All of us, from time to time, requested that the scheme be reformed or made more accessible. Are there discussions in the Department regarding reform in this area? Turning to the loss of a disabled driver permit, such a decision will mean that the relevant tax will be due for collection again. A disabled driver availing of tax relief for a car but who subsequently loses that status will, therefore, be obligated to pay back the tax concerned, or a portion of it.

Such a situation puts the holder of that status at a disadvantage in dealing with the Revenue, and that agency does not have an appeals system. It is necessary, instead, to go back to the HSE and the relevant section in that body. There are, therefore, anomalies in this scheme that should be addressed, and I am just using this opportunity to bring those anomalies to the attention of the Minister of State because this situation puts the taxpayer at a serious disadvantage. Will the Minister of State provide us with a note on this issue and in respect of the Department's intentions regarding the scheme?

I asked for a note on this issue. As was said, rightly, the medical board is run by the HSE, which is not within the remit of this Department. The Disabled Drivers Medical Board of Appeal, however, is within the remit of the Department of Finance, and that is where appeals come. We have a figure of €370,000 in the Department's Vote for running the medical board of appeal. It includes the costs for the medical consultant who is the chairman of the board and the administrative staff, which amounts to about €270,000. It is important to note that a judgment of the Supreme Court on 18 June 2020 found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them the primary medical certificate.

The appeals board lost on the basis of the judgment of the court that the medical criteria set out in the regulations did not align with the regulation-making mandate in primary legislation to further define criteria for a severely or permanently disabled person. My interpretation of this finding of the Supreme Court in the summer is that the statutory instrument and regulations that have been underpinning the implementation of the scheme are not in line with the primary legislation passed by the Oireachtas some time ago. The court's decision has raised major policy issues that will require careful consideration. The matter is being examined by the Attorney General's office and it will bring forward for consideration to the Minister any policy or legislative proposals necessary as soon as possible. The Supreme Court decided in the summer that the statutory instruments which people felt were unsatisfactory are not in line with the original legislation, which is a very serious issue.

I would point out that successive governments, over the past 20 years, were told there was a problem but they chose to ignore it until such time as the matter went to court.

Two families took it to court.

It is an awful reflection on the State that it allowed such a situation to arise and did not address it. I am asking that the matter be addressed in terms of policy and that we look at how the €370,000 provision is spent. I would like to know what the breakdown of that figure is and the policy direction the Department will take to ensure we get value for money for taxpayers. We must address the situation of those persons who were benefiting from the scheme but, for some reason, were later taken off it. They were examined by the medical board and told they were disabled for life and therefore eligible for the scheme. Subsequently, for some reason, they are told they should not have that benefit and it was taken from them. As a consequence, they had to pay back part of the tax incentive from which they benefited. The second issue is that if they want to appeal that decision, they cannot appeal to Revenue but must go back to the medical board. There is no flexibility from the board and it does not give any reason as to why a person was considered eligible in the first case but then, after a number of years, found to be not eligible. I do not know how a person can have a disability for life three years ago and subsequently be told that, actually, he or she does not have such a disability. Someone is wrong in such cases and the person central to it is deprived of any means of appeal. I ask the Minister of State to examine the unfairness in the system and give it the attention that is needed.

The second question I want to ask relates to the Office of the Comptroller and Auditor General, which is responsible for examining 291 different sets of accounts. In the context of this Estimate, can the Minister of State confirm that all of the requirements set out by the office are funded? In other words, does the Comptroller and Auditor General have the full complement of staff he has indicated he requires? Has he full access to the IT, consultancy and professional inputs he needs, or are we leaving him short-changed in terms of the work we are asking him and his office to do?

Any formal request from the Accounting Officer at the Office of the Comptroller and Auditor General would have been accepted by the Department. It is not for me to speak for an independent office, but I believe it would benefit from having, for example, a number of staff who could provide technical services internally. In addition, the office does not have any medical people even though one third of the public services it audits are under the remit of the HSE and the Department of Health. There are more than 100,000 people involved, between the section 38 and section 39 organisations and Government bodies. In my opinion, the office should have some people who are medically competent to examine those types of issues when they are conducting financial audits.

Does the Minister of State know whether the Comptroller and Auditor General has been left short of anything for which he has asked? Specifically, has he included in his requirement for this year any specific request that has not been granted by the Department?

I am not aware of any request that has been refused. I would make the point that there are public sector agreements which determine the number of cases the Office of the Comptroller and Auditor General can outsource for external audit.

There has often been a backlog even though it has improved significantly. There has been a regular question of why he does not outsource some of the auditing, because there are many auditors to outsource to. The public sector agreement specifies the percentage of business that the Office of the Comptroller and Auditor General can outsource. That in itself is a result of the public sector agreement.

Can we have a note on that? Regarding the work of the Comptroller and Auditor General, I would like to mention that the fact that local government, which is one of the biggest spending parts of Government, is not audited by the Comptroller and Auditor General. This has been spoken about for years but it seems that either the Department of Finance is afraid to take them on because of the strength of their operation or there is some other reason. In the context of policy, the local authorities and Irish Water should be audited by the Comptroller and Auditor General. It is as if there is a bucket with holes in it and the Comptroller and Auditor General is looking after it, but there is also another bucket with no bottom at all, and that is Irish Water and local government. They seem to be getting poor scrutiny regarding value for taxpayers' money. I would like to see that included in any discussion that the Department has about the control of finances, the Office of the Comptroller and Auditor General, and what is required. I bring it to the Minister of State as a policy issue.

I will address the matter of Revenue. For those who have found themselves employed from home, it has been proven that productivity has gone up. The outcome for those employees is quite satisfactory. Will they get the opportunity to continue to work from home now that Revenue has seen how well it operates? Will Revenue develop a working from home policy for certain categories of Revenue employees in order to take up the increase in productivity that is occurring because they are working from home?

The programme for Government has a section dealing with working from home. It is not just the Department of Finance. The Department of Public Expenditure and Reform will be the key player in working with public services. It is listed as an issue in the programme for Government. We have learned a lot about working from home in the past six months. That is a policy issue and there could be a discussion between the Department of Public Expenditure and Reform and this committee. It is not so much an issue for the Estimate for the current year but it is definitely an issue for future years and for the Department of Public Expenditure and Reform.

These questions may not be directly related to what is before us today but they are related in a way. If we do not start to get it right in the State, we will continue to get it half right and half wrong.

In the context of Brexit and our direct connectivity with Europe, does the State have any plans to purchase the services of container ships for transport directly to Europe rather than through the UK? Has that been discussed by the Department of Finance in the context of Brexit?

Not as something that the State is doing. Imports and exports are carried out largely by the private sector. The most significant issue that we have to address is to make sure that the land bridge through England operates successfully so that we can get all our products to and from the Continent without any hold-up.

We need a second, efficient level of service directly to Europe for roll-on, roll-off services-----

-----and container services. While it is an operation for the private sector, if they do not have the appropriate services, then we will not be able to get our products to market in as efficient a way as we should. Therefore the State would need to have a plan. Would the Department of Finance encourage that plan because of the nature of the business being transacted? It is for the State and requires oversight to make sure that policy is being followed.

Is there any planning within the Minister of State's Department for that?

I agree absolutely with the points made by the Chairman. Has there been any investigation or consideration of tax incentives for commercial operators who would operate direct links from Rosslare Europort to the Continent, including Netherlands and France? We see today reports of shipments of Irish evaporated milk and baby formula going straight from Wexford to Rosslare on a 15-day train journey to China. These are the sort of processes we should be looking to and the Department of Finance has a major role in this.

Deputies Matthews and Durkan are seeking to contribute so we will get their questions before hearing from the Minister of State again.

I apologise for missing the first meeting but it clashed with a housing committee meeting and I was unable to attend. I congratulate the Chairman on his appointment. I thank the Minister of State for his attendance today and his statement.

I take up the Chairman's point on the requirement for investment in better roll-on and roll-off facilities or a direct port connection to Europe. Rosslare Europort springs to mind in that regard. It is a port that has land and capability around it for expansion and improvement. It also has the advantage of being connected by rail to the Dublin-Belfast rail line. A small portion of the port is not connected to the western rail corridor, which is the section between Rosslare strand and Waterford central. There is a rail line there so has the Department considered the prominence that Rosslare Europort may take because of Brexit? Will it actively consider engaging with the Department of Transport to look at the section between Rosslare strand and Waterford central with a view to providing a commuter, tourist or sail and rail link from Europe and facilitating shipping and freight services along the line?

Page 34 of the Estimates document refers to receipts in respect of the environmental levy. This is a charge with respect to the "Department of Environment, Community and Local Government" and that may have been the name of the Department when the plastic bag levy was introduced. The cost or charge to the Department seems to remain steady and this is in line with previous years. Does this charge remain constant, regardless of the levy? I imagine the levy must be considerably lower than what it was when introduced. Why does the charge to the Department remain constant if the levy is much smaller?

There are two imponderables I can see that can affect budgetary issues. The first is Brexit and the other is the virus. Is the Minister of State satisfied, insofar as he can achieve satisfaction, that the Department has provided for all the unquantifiables? A former US Secretary of Defense mentioned "known unknowns" and "unknown unknowns". This is somewhat similar but there are unquantifiables and we will not know how to deal with them until we get there. Brexit has been raised by the Chairman and others with respect to market access. I strongly urge that whatever happens, there would be provision made for direct access to Europe from Cork, Rosslare or elsewhere so we can get as far into the centre of the market as is possible, with less dependency on the whims of our next-door neighbour. They will have other pressing matters that may well have an impact on us.

My apologies for being late but there were three other meetings.

We must all learn that this is the most important committee meeting. Get the priorities right.

Many of the comments centre on Brexit.

From the State's point of view, the role of the Department of Finance and the Revenue Commissioners is to make sure that the customs measures are fully in place so that things can move quickly with no undue delays. The issue of expanded facilities is a matter for the Department of Transport and is not within the remit of my Department. The remit of the Department of Finance and the Revenue Commissioners relates to customs matters, which are well up to speed. I am concerned that some small businesses in Ireland are still not fully aware of what could happen on 1 January but there will not be any problems on the Revenue Commissioners' side. Revenue has very good technology and is very quick to implement any changes required. We are satisfied that the Revenue side of things is okay.

On port facilities, the biggest issue in the context of roll-on, roll-off is that some products are perishable while others are not. In theory, it is quicker to go through the UK once there is not a five-hour tailback somewhere along the line on the land bridge. Some products are not time sensitive and can be transported over the longer period involved with the roll-on, roll-off system. Some businesses do not like to hold large amounts of stock and like to order items on an as-necessary basis. These are issues for the Departments responsible for business and transport rather than for the Department of Finance.

On the environmental levy, the Deputy asks a very fair question. The figure appears to be historical and was probably set a long number of years ago. I will ask the Department to look at it to make sure it is still a fair charge and not one that just continually repeats itself, which seems to be the case. I will make sure that is examined prior to the next Estimate.

I have a question on claims by members of the public, as per page 31 of the Estimates. There were 25 such cases. The legal costs paid by the Office of the Revenue Commissioners were €33,000, the legal costs awarded came to €166,000, compensation paid amounted to €86,000 and the total cost was €285,000. In contrast, there were only 11 claims by Revenue employees but the total cost was €418,000, with compensation paid out amounting to €233,000. I ask the Minister of State to comment on that and on the fact that miscellaneous expenses from work-related incidents amounted to €5,000.

The note I have says that personal injury claims arise when members of the public are attending a Revenue office and most have arisen as a result of a fall on the grounds of the office. Damage to property tends to relate to road traffic incidents involving a Revenue vehicle. On the matter of claims by members of the public, the figure for legal costs awarded is almost twice the figure for compensation which is dreadful. Wearing my hat as Minister of State with responsibility for insurance, this is an issue to which I will certainly revert to the Chairman on. It is a live matter for this committee. Business insurance is a live matter as the Central Bank is the regulator for the insurance market. Lots of claims are dealt with through the courts which are independent but some of these claims may have been dealt with by the State Claims Agency and this is a recoupment to that agency.

Yes but the first breakdown of claims from members of the public shows that there were 25 cases which would be matters of public liability. What types of accidents were involved in the claims by Revenue employees?

I will get a detailed note on that for the Chairman. I do not have a breakdown of the types of claims involved but will get a detailed note on that.

There is a provision for the cost of ministerial drivers under the Office of the Minister for Finance. I ask the Minister of State to explain that.

Ministers and Ministers of State are entitled to a driver. Normally two drivers are allocated and they are employed on a week on, week off basis because of the length of the working day.

The shifts are not usually split where one person would drive the Minister somewhere with someone else having to drive him or her home. There will be an underspend in that Department in the second half of the year as I have not taken on any special driver since I took office. As a result of Covid, I am not keen on sitting beside somebody-----

Is that paid by the Department of Finance or the line Department?

Which page is the Chairman looking at?

I came across the item under ministerial drivers. I do not think that it relates to Ministers of State.

Drivers would be on the payroll of the Department.

Of the line Department?

Therefore, it is in the Minister of State's Estimate here.

Yes, this is an Estimate produced 12 months ago on the basis that there would be drivers for the full 12 months. The Minister has not changed but the Minister of State------

What are the figures provided then?

This is the Estimate that was expected for this calendar year but because State drivers were not in place for a substantial part of the year, I expect the out-turn will be below the Estimate.

The Estimate for 2019 was €905,000.

What page is the Chairman looking at?

Pages 5 and 6. It says the Estimate is €905,000 and the 2020 Estimate is €900,000. I did not think that ministerial drivers referred to Ministers of State.

The second last paragraph says it is running way behind profile. It will come in dramatically below the original Estimate for the year, that is the point I am making, and much of that is due to reduced travel because of Covid.

The 2019 Estimate was for €905,000, is that correct?

The 2020 Estimate is for €900,000. It is not exactly running at-----

That is the Estimate but the out-turn, with nine months of the year gone, is only €246,000. It will come in way under budget this year.

Why is that?

It is primarily because of Covid. There is much less driving and there are very few international engagements.

Is it because of the international engagements then?

This heading relates to international engagements specifically.

It relates to ministerial drivers, involvement in EU activities, including ECOFIN meetings, the World Bank-----

So it is not to do with junior Ministers, to be clear.

No, that is only one small item.

It is European Union travel.

Yes, and also the World Bank and promoting Ireland as a destination for foreign direct investment. Sorry, my mistake, the heading is travel and subsistence, of which a small portion-----

It is has to do with European travel.

It also has to do with World Bank travel and IMF travel. Ministerial travel is only a small amount. It was so small for two reasons, first because there was no new Government in place from February and there were lots of negotiations to form a Government and because Ministers were not travelling as much because of Covid. That will continue. The provision of €900,000 will be dramatically underspent by the year end.

It is expected to be €246,000.

That is the figure to date. It will come in way less than half of the figure in the Estimate. The ministerial drivers to which I referred are a small portion of that.

Finally, is the Office of Government Procurement in the Department of Public Expenditure and Reform or Finance?

It is directly under the Department of Public Expenditure and Reform. A Minister of State is specifically responsible for Government procurement. I presume that comes before the committee.

Contracts such as the school bus contract, which is a disgrace, comes under the Department of Public Expenditure and Reform.

Does the Department of Finance have any concern about the costs of the school transport system and the fact that it does not produce what it is supposed to produce?

That is a matter for the Department of Public Expenditure and Reform, which is a separate Department.

The Minister of State should encourage his senior Minister to look at what the school transport system is doing, because it is squandering his money.

We are in the same building.

The Minister of State should have a chat with the Minister. The service being provided is outrageous, as is the cost. It is inefficient and poor value for money. When Deputy Fleming passes the Minister's door, perhaps he could knock on it and tell him that.

Are there any other questions?

I am convinced that the matter of school transport is impervious to the representations of public representatives.

Yes. One cannot get the officials on the phone and they do not work with Zoom or Microsoft Teams, which puts one at a real disadvantage.

That is absolutely true.