Vote 10 - Tax Appeals Commission (Revised)

I remind members of the notice relating to privilege. 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. Members are reminded of the constitutional requirements that they must be physically present within the confines of the place which Parliament has chosen to sit. Today it is Leinster House. Those who are not within the confines of Leinster House will not have the same privileges. Members who are attending the meeting should be present within the campus of Leinster House. I remind members that the meeting must conclude within two hours according to the Covid regulations for the House.

Today we are dealing with the Revised Estimates for Public Services 2021. We have before us the Minister and his officials. The Minister is welcome, as are his officials. We are dealing with Votes 7, 8, 9, and 10.

I am pleased to have the opportunity to appear before the committee today in connection with the 2021 Revised Estimates for the Department of Finance for 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 look forward to an exchange with the committee this afternoon.

I propose to focus on my Department first and to give a brief overview of its structure. The Department is structured around two directorates, the economic and fiscal directorate for programme A and the finance and banking directorate for programme B. This structure remains unchanged in 2021. 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 programme.

The funding allocation sought for the finance group of Votes for 2021 totals €494 million, which compares to a 2020 Vote group total of €462.7 million. This represents an increase of €31.3 million or 6.7%. The primary driver of this increase is the provision of a €30 million increase for Vote 9, the Office of the Revenue Commissioners, relating to costs associated with Brexit, on which I will comment later.

The net allocation sought for the Department of Finance Vote in 2021 is €39.5 million, of which some €11 million is provided for a fuel grant scheme for disabled drivers and a further €200,000 to fund the Commission on Taxation and Welfare. Leaving these aside the Department’s allocation provides for the administrative and non-administrative costs of the Department. The vast majority of this, €21 million or 53%, is provided to cover salaries and allowances, with a further €4.8 million to cover facilities and non-pay costs. There is an allocation of €370,000 to cover the Disabled Drivers Medical Board of Appeal and €570,000 for the Financial Services and Pensions Ombudsman. The remaining €2.6 million is provided to cover the legal, advisory and committee costs necessary to support the Department in the proactive delivery of its remit.

Vote 8 is the allocation for the Office of the Comptroller and Auditor General. 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 Government Departments and public bodies which are audited by him; 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 role covers around 290 sets of accounts produced by public bodies. Together, those bodies have financial transactions which total more than €200 billion of public money each year. The net allocation for this Vote in 2021 is €9.6 million, an increase of approximately 5.6% from 2020.

Moving on to Vote 9, the Office of the Revenue Commissioners, as the Irish tax and customs administration, plays a vital role in our economy by collecting taxes and duties due to the State. For 2021, Revenue has requested a net budget allocation of €441 million, an increase of €29.93 million or 7.2% on the 2020 Estimate. Over three quarters of the total budget allocation relates to payroll for an increased employment ceiling of 7,024 staff. In 2020 Revenue collected more than €82 billion gross and €72 billion net in taxes, duties and other charges. The cost of administration is 0.6% of net collection. The increased portion of the allocation is to fund requirements directly related to Revenue’s customs service, and primarily to the UK withdrawal from the European Union. The amount will provide for the full year cost for an additional 310 staff. The additional staff and related resources such as vehicles and equipment are being deployed to deliver on the objective of supporting and facilitating trade to address and manage the challenge of trading with the UK, now a third country, and to deliver on the objective of disincentivising and combating illegal activity and prohibited importations. In summary, this allocation will enable Revenue to implement customs controls in a manner that encourages legitimate trade, enhances competitiveness and supports business while managing compliance risks.

Revenue is also continuing to support the delivery of considerable Government supports to manage the impact that the Covid-19 pandemic has had on personal and business life. This includes the employment wage subsidy scheme, EWSS, the Covid restrictions support scheme, CRSS, and the debt warehousing scheme. These economic support measures have been implemented by Revenue in an efficient and effective manner without incurring additional costs. As 2021 progresses, Revenue will continue to manage the impact of the UK’s withdrawal from the European Union and to respond to the continuing challenge of the Covid-19 pandemic, while collecting the taxes, duties and other charges on behalf of the Exchequer.

Finally, Vote 10, the Tax Appeals Commission, TAC, has a net budget allocation of €3.2 million for 2021, a slight decrease on the 2020 estimate of €3.233 million. The 2021 Estimate is to provide for the TAC to advance its programme of modernisation and reform and to address its caseload, while also meeting its obligations. In July 2020, I appointed the inaugural chairperson of the TAC to take overall responsibility for delivery of its mandate. I am pleased and encouraged to say the TAC is now making progress in reducing the backlog of appeals and there has been an increase in the number of determinations issued, notwithstanding the challenges of the pandemic.

I expect we will continue to see further progress into 2021.

I thank members for their attention and I commend the 2021 Revised Estimates for the Finance group of Votes to the committee.

I will now call on members in the order to which they have presented to the clerk. I ask that they be conscious that there is quite a list of members who wish to contribute and we must finish at 5.30 p.m.

I call Deputy Doherty.

Gabhaim buíochas leis an Aire as an chur i láthair sin ar na Meastacháin. My first question relates to the revenue side. The Minister is familiar with President Biden's tax plan, particularly his support for pillar 2 of the OECD plan, which contains a minimum effective tax rate for OECD countries. While President Biden is advocating that be at 21%, it may fall somewhere below that during the negotiations. Given President Biden's support for pillar 2 and a minimum effective tax rate does the Minister believe that in future, Ireland's 12.5% tax rate will be increasing?

The Deputy is right to say that President Biden's proposals have had a very considerable impact on the process under way in the OECD. Ireland's 12.5% tax rate is a very stable, competitive and transparent rate and one I stand behind. Regarding a global minimum effective tax rate, the principles of what that figure is and how it will be implemented have yet to be discussed within the OECD. Therefore, while President Biden has laid out his proposals on these matters, they have not yet been advanced within the OECD and during that process I will be standing right behind our 12.5% tax rate, making the case for it and for legitimate tax competition.

The Minister stands behind the 12.5% tax rate and we have had resolutions passed in the Dáil across the political divide in support of that rate. The Minister acknowledges that obviously there is a process under way whereby they are looking at a minimum effective corporation tax rate and while President Biden in America is suggesting 21% others may be suggesting something lower or indeed higher. Is it the Minister's view that there is a risk of an increased corporation tax rate in this jurisdiction as a result of that or does he believe we can stand outside that process if, for example, a minimum effective corporation tax rate in excess of 12.5% is agreed at OECD level?

First, we are participating in a negotiation. This is not a debate, it is not an academic process. This is a negotiation which will be unfolding across more than 120 countries within the OECD and clearly the very largest countries within the debate, namely those in the G7 and G20, have made the case for a global minimum effective tax rate. However, while the US Government has said what the figure should be in its view, we have not seen other figures come from other large countries and we have not even seen the principle being debated, let alone negotiated within the OECD. Consequently, I do not see the issues the Deputy is referring to developing at the moment. As I said, in this process, I will be making the case for the 12.5% and standing behind the principle of tax competition. However, it is the case that this is a process we are going to have to engage in. Ireland's tax policy has been influenced by the OECD and given we see ourselves as reputable and important stakeholders in the global tax code it is important we stay inside the OECD framework and inside that framework I will be making the case as I have just outlined.

Okay. My next question relates to the stability programme update, SPU, published last week. Do the revenue forecasts in it include the projected increase from revenue as is scheduled in carbon tax increases, provided for in last year's Finance Bill? Is that captured?

Yes, I believe it is.

That is okay. Do the expenditure forecasts also provide for the cost of maintaining the State pension at 66 years of age out to the year 2025?

We would not have got into that level of detail yet because the only expenditure ceiling I published in the SPU was a total Government figure for current spending of 3.5%. I am not aware that it has been broken out at departmental level up to 2025.

Yes, but when the ceiling was set did it include a pension age at 66 years or 67? I ask because that would have changed the figures presented in the SPU.

I do not have the information to hand to be able to answer that question.

That is fair enough.

The Cepartmental element of it is a matter for the Minister, Deputy Michael McGrath, and I am responsible for the total ceiling. To the best of my knowledge, the Departmental element of that does not now go out all the way up to 2025.

Maybe we can get clarity on that in written correspondence.

The SPU provides for annual expenditure increases of approximately 3.5%. We see in the medium term fiscal strategy that 3.25% growth projected but since then we have had the programme for Government and the Climate Action Bill. On that basis, can the Minister credibly say the commitments entered into in the programme can be delivered with these expenditure ceilings? I point to the words of the Irish Fiscal Advisory Council on 15 April in response to the SPU. IFAC said "...the fiscal projections ... do not reflect the Government's priorities. Projected spending increases are very close to what is needed just to cover rising prices, wages and demographics".

I was very clear when I published the SPU that it was being prepared on a no policy change basis. It will be the case that if the Government makes further decisions that influence the level of expenditure we have for next year and beyond then that will change the expenditure ceilings. As the Deputy knows, the SPU is prepared strictly on the basis of decisions that have already been taken and it is very possible, as the Government makes decisions in advance of budget 2022, that the expenditure ceilings he referred to would go up to accommodate additional policy choices.

We may come back to that later on.

On banking remuneration, a review was to be done, it was one of the outputs listed in the 2019 Estimates. The Minister appointed the advisor Korn Ferry to undertake a review. How much was Mr. Ferry paid for that review? If the Minister does not have the figure to hand, will he give it to the committee? Lastly, has the review been published?

I do not have the cost of the consultation. I will by all means share it with the Deputy. The report has not been published. I was considering it during the last Government and have not published it to date.

Okay. The review was carried out in 2019 and it is now 2021. When is the Minister going to get around to actually putting the document on the Department website?

I will consider when I publish it. It was made available to inform me and help me in policy choices I might make about the banking sector and I did not make a set of choices that merited the publication of the report.

Is the Minister therefore saying he is not going to publish the report?

I am willing to publish it. I will consider what is the right point to do that, to inform the debate we are having on the banking sector.

The Minister, in fairness to him, is someone who has always been open to sharing information. I encourage him to publish the report.

I raise the acquisition of Goodbody Stockbrokers by AIB, or "Project Gold" as it was renamed, from "Project Oibre". The CEO of AIB wrote to the Minister on 8 January with a consent request. He said:

Under the terms of the State agreements, on completion of the transaction, Gold would be deemed a group company [Gold being Goodbody Stockbrokers] of AIB to which the remuneration provisions would apply. I am therefore seeking your consent that on acquisition Gold would be excluded from the definition of group company, solely for the purpose of remuneration provisions, and that none of the remuneration provisions will apply to Gold.

The Minister provided that consent on 2 March. On what grounds was he permitted to allow Project Gold or Goodbody Stockbrokers not to be considered a group company, as required under the 2010 placing agreement, which would have seen the excessive remuneration charge apply to Goodbody Stockbrokers?

I spoke to the Attorney General in respect of that matter. The advice from the Attorney General was that Goodbody would not be subject to that charge. From a policy point of view, that particular charge was brought in with a view to it applying to our retail banks. Goodbody is a stockbroker, it is not a retail bank. I emphasise that following the decision I made, anybody who is working for Goodbody will continue to be paid in the way they were before the transaction happened. Anybody working for AIB will continue to be paid in the way they were before the transaction happened. I have been very transparent regarding the provision and procedures relating to the movement between both companies. The reason I decided to give my support to this purchase happening in the first place was because I believed that it was good for three Irish companies. I made this decision in respect of banking remuneration to facilitate a transaction that was good for those three businesses.

To be clear, in layman's terms, the Minister had to change the rules because, under the rules, Goodbody would be deemed to be a group company. Is that correct? Did the Minister have to change the rules so that it would be deemed to be a group company and that therefore the remuneration provisions would not apply?

I did not have to change the rules. I had to make a policy decision and I made it. Events that have happened since proved the value of a company like Goodbody, which is an Irish company, being in stable ownership.

What was the policy decision?

It was about jobs. The policy decision I made was that remuneration policy not intended to apply to Goodbody in the first place would continue to not apply to it. If I had not made that decision, it is my view that this purchase would not have gone ahead. There is value to Irish jobs and our economy in having at least one of our stockbroking firms in the stable ownership of an Irish company. That decision is one that also had really considerable benefits for FEXCO. If I had not made that decision, the purchase would not have happened.


Deputy Doherty is out of time. I call Deputy Richmond.

With the consent of the Chair, can I ask one final question on the Dolphin Trust issue?

Yes. What is the question?

I tried to table an oral question in respect of this issue. It concerns a Ponzi scheme and a scam that caught out 1,800 pensioners. It was administered by Dolphin Trust GmbH, renamed the German Property Group. I am sure the Minister is familiar with the issue. The company's director, Mr. Charles Smethurst, promised people who invested their pensions with the company high interest payments and their capital back within a number of years. The whole plan was that the money would be used to build flat complexes on derelict sites in Germany and that the flats would be sold to German buyers. Many of the investments that were made and the properties to which it was suggested that the investments related do not exist. The reason this issue involves Ireland is because the centre of the operations was located here, in the State.

The administrative and marketing centre of this Ponzi scheme was Dolphin International Group Limited, which was based in Little Island, County Cork. In 2017, an agreement was concluded between Dolphin International and another company, Wealth Options Limited, which is based in Naas, County Kildare. In my view, they basically ensnared 1,800 individuals who in some cases put their life savings into the scheme and have lost everything. Between them, they have lost €107 million. While brokers facilitated the scheme and it was through them that investments were made, and brokers are regulated, the problem is that the companies I named as being at the centre of the Ponzi scheme and the loan notes they sold were unregulated. There are hundreds of millions-----

We have to move on.

My question is as follows. There are hundreds of millions of euros of people's pensions invested in similar unregulated products. Is the Minister aware of this? Does he intend to bring regulation to this shadow industry? Has the Government taken any action in respect of this scam, which had two unregulated Irish companies at the heart of its operation?

I am aware of the issue. It is a very serious matter. However, I came to answer questions about the Estimates for the Department of Finance. I do not have the kind of detailed briefing I would need in order to speak on the matter to which the Deputy refers. Given the seriousness of the issue, I do not want to speak on it until I have such a briefing. If the oral question to which the Deputy referred was not accepted, that is beyond my control and is a matter for the Ceann Comhairle. I will respond to the Deputy directly in writing during the week regarding the issues he has raised.

Perhaps the Minister can respond to the committee.

I call Deputy Richmond.

I want to ask two sets of questions if the time allows. The first set relates to programme B under Vote 7, specifically the area of financial services and banking sustainability. What work, if any, or to the extent the Minister can elaborate on, is his Department doing in contributing to the effort to recruit and attract financial services institutions and, crucially, jobs to this jurisdiction, particularly in light of the Brexit decision? What efforts are being made from a Government perspective to truly examine the Irish banking sector at this point in time, in light of the very worrying news in recent months in respect of the withdrawal of KBC, the winding down of Ulster Bank the change of operations for Bank of Ireland?

On the first question, a huge amount of focus goes into how we can support and further grow the financial services sector here in Ireland. In the post-Brexit environment we have had a number of important successes with regard to that, with companies either moving their headquarters to Ireland or a number of existing companies significantly expanding the number of people they employ here. In the different measurements that have been taken in respect of how different financial centres have performed in the aftermath of Brexit, many of them indicate that Dublin and Ireland have performed well in respect of the assets, business and jobs that we have moved to our country.

Second, on the question about the future of retail banking in Ireland, as opposed to the financial services, which was the theme of the Deputy's first question, clearly the exit of KBC is another significant and very negative development for the Irish banking sector. I know that there is a commercial process under way with regard to that now and a memorandum of understanding between Bank of Ireland and KBC has been agreed, from which both parties have said they want to deliver an outcome. However, given that development, which happened with some speed, the Department of Finance and I are going to have to take a step back and consider our policy framework for the Irish banking sector and what we believe to be the appropriate steps that need to be taken in the coming period.

I would say to the Deputy that, as he will be aware, many of our citizens are now accessing financial services in a way that does not involve them going into branches but instead involves them using technology in a way that allows them to access a full array of financial services. That is a big dimension of what is now happening in the Irish banking landscape.

When developing that policy framework, I think all members of the committee would appreciate the opportunity to engage and contribute on that.

I would like to move to a different area, namely, Vote 9, which relates to the Office of the Revenue Commissioners, and, in particular, the recruitment of 310 additional staff in the wake of Brexit to provide for customs inspections and allow for those practices that are now required in the post-Brexit landscape.

In the Minister's opinion, is that recruitment of staff enough? Does he estimate that we may need to recruit more staff or change the way they are allocated? Does he have any idea at this stage what the estimated receipts may be in terms of modelling for future needs based on the level of trade from Great Britain to Ireland?

Finally, concerning the amount of staff and the operations that are being put in place by the Revenue Commissioners, what correspondence or discussion has the Minister had with his continental European colleagues, who are probably similarly exposed, if not more so, than Ireland in this area? I think in particular of his counterparts in the Netherlands, Belgium and France.

I thank Deputy Richmond. The total amount of staff that the Revenue Commissioners will now have, upon the implementation of the proposed Estimate, is 7,024, which is an increase on the number at the end of last year when the total was just under 6,680. I believe the total number of staff the Revenue Commissioners will now have will be sufficient to allow them to respond to the many challenges of Brexit. They have done an excellent job on our behalf. If I look at what that work is now primarily focused on, it involves custom-related roles deployed across many different sites, but ports, airports and mail centres are particularly important at the moment. It is certainly the case that the Chairman of the Revenue Commissioners and his team can make decisions to reallocate staff, if they so wish, from some parts of the organisation to deal with Brexit-related policy matters. They have already done that, and that influenced decisions they made in 2020, where they needed slightly fewer staff than we would have anticipated because of reallocation decisions that were made.

In terms of the impact that this is having on the revenue of the Revenue Commissioners, we are seeing some very early signs of trade flows being affected. At this point, we have an appropriations-in-aid estimate of €59.5 million for the Revenue Commissioners, which would be a decrease on last year. We are seeing it having an impact on the revenue of the Revenue Commissioners, as the kind of work staff are performing, and the quantity of trade are also beginning to change.

I read somewhere recently that the Minister is working his way again through listening again to all the Beatles' songs. The song I have in the back of my head is one George Harrison wrote in the mid-1960s, "Taxman". I want to ask the Minister about a Covid solidarity tax. It is an issue that has been discussed and debated more or less since the beginning of the pandemic but one which has come to the fore again in recent weeks. First, we had a senior official in the International Monetary Fund, IMF, raising the idea of a Covid solidarity tax and pointing out that there had been winners in the pandemic, not least of which would include the likes of online shopping platforms, video calling companies, pharmaceutical companies and others, but that there were also losers, not least of which would be the poor, people in lower-income jobs and perhaps in particular, young people.

A Covid solidarity tax could raise significant sums of money and it could be used for a variety of purposes, not least of which could be job creation. That will be a significant issue as we hopefully emerge from the pandemic, in particular investment in jobs for young people. However, I note the issue came home a little bit more. Incidentally, the IMF is very much an establishment organisation. What one probably sees there is defenders of the establishment understanding the threat to the status quo posed by unprecedented inequality and feeling the need to clip the wings of the super-rich in order to protect the system of the super-rich. I am a supporter of a Covid solidarity tax for rather different reasons, including the point I just made about investment in jobs for young people. The issue came a little bit closer to home when a junior Minister in the Government outlined his support for the concept of a Covid solidarity tax being levied here in this jurisdiction. I understand that the Minister of State, Deputy Joe O'Brien, of the Green Party has written to the Minister for Finance, Deputy Donohoe. He outlined the case and put it in writing, in particular for reaching poverty reduction targets to which the Government committed. He feels that a measure such as this will be necessary in order to make progress in that regard and to avoid an increase in poverty in the course of the pandemic.

I noted the comments of the Taoiseach in the Business Post at the weekend and of the Tánaiste, Deputy Varadkar, on this issue. They were not very in-depth comments. It was more of a summary dismissal of the proposal made by the junior Minister. I also noted some comments from the Minister for Finance, but I am not sure if they fully addressed the proposal that had been raised. I invite the Minister to take this opportunity to outline his own views and opinions on a Covid solidarity tax. I also ask whether he has replied in writing to the correspondence he received from the Minister of State, and if so, whether he will publish it?

I thank Deputy Barry. When he started with his Beatles analogy I thought initially he was going to refer to "The Long and Winding Road" or something of that nature to demonstrate the journey that we are on with the pandemic, but the song he picked is probably a more appropriate one given the question he put to me. I did receive a letter from the Minister of State, Deputy Joe O'Brien, on his case for a pandemic levy. I did not write back to him; I exchanged messages with him and I plan to talk to him. I find conversation is a better way of teasing out such matters than continually writing to each other. I look forward to having that conversation with him in the coming weeks. What I did say to him over the weekend when he sent his correspondence to me and then it emerged into the public domain is that we potentially have a very significant amount of change pending on how large companies are going to be taxed through the OECD process that was raised with me by Deputy Pearse Doherty. That process has a number of different causes, but one of them is the growing view that we need to ensure that large companies pay more tax and that it needs to be collected in a different way to how it is done currently. I want to deal with that matter first. I believe it will change how, where and the level of tax that is paid by large companies. It is for that very reason that I am not supportive of levying an additional tax at this point.

That is fine. I have asked my question and I got my answer. I will leave it at that.

Gabhaim buíochas leis an Aire as an chur i láthair inniu. Bhí sé an-suimiúil. Maidir leis an chéad cheist atá agam, my first question, concerns the SPU. I noted in that regard that the Minister speaks about striving for a balanced budget in the medium term, but at the same time we very clearly have an economy that is unbalanced and facing huge amounts of uncertainty.

It seems to me that we could be balancing the budget before balancing the economy. If we do that, we will end up not balancing either. We have an emerging crisis in terms of credit provision. We face the prospect of an estimated €2.2 billion of our corporate tax revenue drying up. The stability programme update, SPU, states the Government will have no role in propping up firms whose business model is no longer viable. Unemployment is forecast to be higher than when we went into the crisis until 2025. That is not to mention the crises that existed before Covid-19, including the housing crisis and the low pay crisis.

I was glad to see the increase in capital investment but it seems that could come at the price of squeezing public services and social protection. As we can see from the SPU, our debt and deficits are projected to fall over the next five years. Given the major changes and challenges that this State is facing, what is the Minister's view on the proposal that we should be trying to balance the economy in the medium term rather than running the risk of trying to balance the budget and risk the prospect of doing neither?

Our national debt will have increased by €38 billion across a two-year period precisely because of my support for putting in place large programmes of Government spending that are funded by borrowing. The SPU anticipates a deficit of just under 5% this year, a similar figure to last year. The policy position for next year predicts a deficit of just under 3% before we make choices about how we can support our economy. What the SPU outlines is that in a scenario where employment is falling, our deficit should also fall. That is important because a falling deficit, as Ireland demonstrated before the pandemic hit, is one of the ways the country is able to give confidence to those from whom we are borrowing about our ability to repay debt in the future, particularly when the support the ECB is providing at the moment begins to change. My actions and the data in the SPU do not prioritise a balanced budget above everything else. In fact, in the two budgetary years we have been dealing with this pandemic, we will see an increase in our national debt of €38 billion and our supports are among the largest and most effective in Europe.

I do not need to point out, because we are all aware of it, that we have a deficit in housing. I am concerned for those people who have been in long-term unemployment. We are seeing from the SPU that some businesses will clearly end up closing and there will be a mismatch between the kinds of jobs that will be available and the people who are unemployed. I note from the SPU that the Minister has mentioned upskilling, reskilling and that kind of thing. What practical steps will be taken to give those who will be in long-term unemployment as a result of the decision to no longer support businesses which, as is stated in the SPU, will no longer be viable? It will need a massive and specific upskilling and reskilling programme, something we have never seen in this State before, in order for people to be taken out of long-term unemployment. We saw previously the impact that had on youth unemployment, with large swathes of our youth having to go abroad, including many of my generation. That will obviously not be an option as a result of Covid. I am also concerned about people who are aged 50 and over. They will find it difficult to move into other employment. The reskilling plan will have to be extremely ambitious.

The SPU indicates that we have the ability to get over 70,000 people back to work in the second half of this year and 224,000 people back to work next year. The document to which the Deputy is referring, which is a forecasting document only, indicates that on the basis of decisions taken already, the country has the ability to get 300,000 people back working. That is what we want to do.

The Minister must be concerned that there will be a skills misfit.

In terms of the decisions that have been made by the Government to look at how we can accelerate that, as recently as yesterday, the Minister for Higher and Further Education, Research, Innovation and Science, Deputy Harris, outlined the kind of apprenticeship programme that will be a vital element in how we retrain those who were working in some sectors of the economy and might not have many jobs available to them in the near future. They are the kinds of training programmes that will facilitate our citizens getting back to work and securing the jobs they need. The economy and the Government have shown our ability to get our country back to work. We will do so again and get the country back working.

The Minister must be concerned about the skills situation, especially for those over the age of 50. I will move on as I do now want to eat into other Members' time.

I want to ask about the proposals in President Joe Biden's tax plan. The Minister replied to Deputy Doherty's queries on the matter. We have had a long period during which Ireland's corporation tax has been described as the cornerstone of our industrial strategy. My colleague outlined President Biden's proposals and there is a concern that they will have an effect on our headline 12.5% rate of corporation tax, which has often been referred to as our tax competitiveness. In light of President Biden's proposals, it would seem that the EU's efforts to achieve a common consolidated tax base and digital tax could be back on the agenda. The OECD's base erosion and profit sharing, BEPS, initiative, which targets hybrid mismatches, double-dip tax depreciation and so on, will have an impact. BEPS also targets interest tax deductibility, which is key to the section 110 tax concession. The SPU forecasts a potential shortfall of €2 billion in corporate tax revenues as a result of changes to the international tax regime. The current corporate tax regime has been the cornerstone of Irish industrial strategy since the late 1950s. The Minister has said the proposed changes may not happen or may not have an impact. Does he agree that the prudent thing to do would be to look at industrial strategy and see what we can do in case these changes happen and have an impact? Does he believe Ireland will need a new industrial strategy? Should we be preparing one? If so, what should it look like, particularly with respect to our SME sector?

President Biden is bringing forward these proposals and they have elements within them which, as I have said before, are of concern to me because of the effects they could have for small and medium-sized economies. We will engage with President Biden's team and in the OECD process. That is the best option for Ireland as it looks to put forward its case and protect policy choices that really matter to us.

Our industrial strategy has been exceptionally successful in encouraging domestic and international investment in our country. I point to what has happened with Intel, Stripe and Workday in the past few weeks alone. These are investments that show that our strategy has worked. However, it is always the case that in order for a strategy to be successful, we have to keep it under continual review and that is what we do.

There must be concerns that President Biden's plans will have a massive impact. We have long neglected investment in infrastructure, housing and research and development, which should be a key pillar of a successful economic model. Our research and development expenditure as a percentage of GDP is consistently below the EU average.

We have had several years of underinvestment in infrastructure and the housing crisis will also have an impact. I understand that the Minister is engaging with the Biden Administration and I would expect nothing less. We need to seriously consider what we can do to support our SMEs when the rate is consistently below the EU average.

We are giving €12 billion worth of investment to support our SMEs and other employers at a time of a pandemic. While I notice the Deputy's criticism of the environment in Ireland from a research and development point of view, employer after employer has located here because they believe they can get the graduates and workforce who have the skills they need. They also believe they are working, living and trading in a country that values education, and they are right.

Gabhaim míle buíochas leis an Aire as an gcur i láthair.

In terms of the last discussion, a heavily dependent foreign direct investment, FDI, strategy is known as a transition strategy for Third World countries to migrate to first world status. This country has, unfortunately, never really moved out of that heavily dependent FDI strategy. It has done so on a basis of a bargain basement corporation tax when we should have been building competitive advantages in education, infrastructure, ICT and all of the other elements of society, which make it attractive for both foreign direct investment and indigenous businesses. This Government has not done that. It has heavily depended on a low corporation tax rate and has left the country exposed to radical changes in other countries' corporation tax, which is going to be a major problem for this country in the future. While FDI is good, we need to develop the indigenous sector. We need to build a section of the indigenous economy, the mittelstand sector, of large indigenous enterprises that are able to compete internationally. That has not been done, unfortunately.

I want to ask the Minister about the salary of the Secretary General of the Department of Health. Many people still cannot get their head around what a 45% increase in the salary to €292,000. That is at a time when half a million people have been made unemployed, and when hundreds of thousands of people have been pushed into poverty. Also, as the Minister mentioned, deficits are being run year after year and this country has been taking on massive national debt. That is a warning light for many people. A second warning light for people was the Government statement that the salary was created for a global recruitment process. What do we know at the end of that global recruitment process? In all of the Departments in all of the world, where was the candidate found? In the Department where the individual already works. The third warning light is the process. I mean that the Secretary General was in a particular Department for ten years. A decision was made within that Department, which I understand - please correct me if I am wrong - was reviewed by that Secretary General. That same Secretary General was then moved on an interim basis into the Department of Health and then won the recruitment process that came with a new salary. Can the Minister stand over that process? Can he stand over the largesse of that salary when the Irish economy is being stuffed by the Covid crisis?

To answer the first point, I am not sure what defunct Marxist economist the Deputy has derived the view of, that the form of economic development that we have is akin to a Third World country transitioning to some other form. Maybe the Deputy could elaborate his point a little bit more. An investment model that has, as one of its major pillars, a service exporting sector containing within it many different forms of businesses and different sectors is a form of economic development which, I can tell the Deputy, is one that many other countries at the moment are eager to be able to match by moving out of Ireland the kind of investment in jobs that we have. This has not been done at the expense of developing our SME sector. We have a very strong and diverse SME sector. We have an SME sector that is scaling up and scaled up in the aftermath of the great financial crisis to be more international-looking and to be more export-orientated.

To go back to the point I made to Deputy Mairéad Farrell, the very reason we have put in place such a range of supports here in Ireland in our economy is to support the SME sector. Those within the sector with whom I engage regularly acknowledge publicly that the level of support they have received has made a huge difference to them getting through the pandemic and is an articulation by our country of the value placed upon those kinds of employers.

As for the question about the new Secretary General for the Department of Health, I stand by the process that was in place in regard to his appointment. That appointment was made today by the Government. I understand that Mr. Watt has issued a statement saying that he will not be accessing that salary, given the current circumstances of the country.

I studied economics in UCD and I am a postgraduate of the Michael Smurfit School of Business. It was understood in our analysis at the time of enterprise development in countries, that countries aim to develop a much larger and scaled-up indigenous sector. The SME sector in this country is not scaled up to size comparatively with other European economies and it is a great weakness. It is a weakness that has never been tended to by the Government, unfortunately.

I wish to briefly touch on the banking market in this country. Again, there is a serious lack of economic analysis from a Government perspective on this matter. I have raised this issue with the Minister a number of times. Mario Draghi, when he was the President of the European Central Bank, stated the Irish banking system is a "quasi-monopoly". The Minister's predecessor, Michael Noonan, created a two-pillar banking system. He created an oligopoly or a very concentrated power in the hands of just two banks. There are smaller banks but the two banks have 85% of the market between them.

Under the position of the current Minister for Finance, we have seen two banks state that they are going to exit the banking system. I have heard nothing from the Minister or the Government to stem the flow of exits from the Irish banking sector. I have heard analysis on issues such as capital requirements, interest rates and the increased risk in the Irish market but no solutions as to how that flow of exits will be stemmed. One of the partners in government, the Green Party, has indicated previously that it would support a public banking system yet Fine Gael, and probably the only political party in the Dáil to do so, remains completely against the idea of simply replicating what is successful in other European countries such as Germany. We are in a crisis situation with a lack of competition in the banking market in Ireland and it seems to me that the Minister for Finance stands idly by.

Thank you very much, Deputy, for your questions. I am not sure what a comparison of economic credentials does for either of us so I do not propose to do that myself.

In relation to his point regarding stopping banks exiting, he might just help me with this. What policy tool would he propose I use if a large employer and a large investor in our country decides they want to go? If those policy tools are there, which they are not, but if he could come up with them and wants me to implement them, how does he think keeping an employer against their will in our economy would help our argument to get more companies in?

That is not what I am looking to do, Minister.

How does the Deputy think that would help the argument? He knows what the answer to that is. He knows that the tools are not there. He also knows that if they were to be there in some way, one cannot, on one hand, try to stop an international employer or bank leaving one's economy yet, on the other hand, encourage other employers to come into our country on the basis that we are open, flexible and competitive.

I am not asking the Minister to tell any company what to do. I am asking him, as a Government Minister, to create an economic environment where companies can flourish. In this country, we have had this occurrence within the banking sector.

One of the ways in which the market structure can be improved in any environment is to increase the number of suppliers. Right now, because there is a limited number of suppliers, those suppliers have massive power. The two main banks can control the market. In a situation where they control the market, they edge out smaller competitors. How is competition to be increased? More players must be added. One option is to establish a public banking system. The credit union sector could also be helped to gain the level of management ability required to function in the sector and An Post could be given help to take on a role in that area. There are three potential additions that could be made to the market. Finally, we must look at the reasons the banks are leaving and the elements within the sector with regard to capital requirements, risk and interest rates. We must work with the European Central Bank, ECB, to resolve those issues so that the market can function here. All I am seeing at the moment is the Government shrugging and saying that it cannot do anything about it.

The only thing that would be worse than a government shrugging, something which this Government is not doing, is a politician putting forward ideas he or she knows cannot be implemented. One does not work with the ECB with regard to capital charges or risk weightings. These decisions are made independently by regulators, which is as it should be. Given the Deputy's references to market structure and economic theory, I would have thought he would appreciate the principle of independent regulation.

With regard to the practical solutions which the Deputy has, in fairness, put on the table regarding the work of An Post and our credit union movement, we are supporting that movement and An Post. Over the period of the pandemic, An Post has put in place new services and has tried to move towards offering services it has not offered in the past. All that is happening. As I said at the start, however, I acknowledge that the exit of a second bank from Ireland so soon after Ulster Bank making the same decision is a really serious development for our banking sector. We have competition within the sector but it is also the case that we clearly have fewer banks left. That is a matter of concern to me, as is the question of how to sustain a competitive dynamic for banking services within our economy.

I thank the Minister for coming before us. I am slightly concerned about the narrative developing in the public domain and in some elements of politics with regard to foreign direct investment and our corporation tax policy. We recognise that President Biden is going to be a very consequential president in the United States. The reason this issue is being discussed now is that he has put forward a $2 trillion infrastructure project and scheme, for which he needs to pay. In order to improve the quality of life of American citizens, he is proposing to increase the corporation tax rate in the United States to 28%. In the same way, the Irish Government is entitled to make policy decisions in respect of taxation which it believes are in the best interests of the Irish public. That is why it is important that the Minister, the Government and others in Irish political and public life emphasise the very strong advantage and benefits the country has received as a result of foreign direct investment and our corporation tax policy. We have high taxes in other areas in Ireland. We made a conscious decision to have a low corporation tax rate of 12.5% because we wanted to attract foreign direct investment. That is why we have 1,600 foreign firms working in Ireland today. We wanted it to provide employment. That is why 250,000 people are employed as a result of foreign direct investment today. We wanted to get money from corporation tax. That is why we received €11.8 billion in Exchequer returns last year.

I am interested in hearing the Ministers comments in this regard. Obviously, President Biden will try to get the legislature in America to change the law there, but he cannot impose an international consensus. I hear what the Minister is saying in respect of the OECD. Does he agree with me that it is important that Irish politicians and people in Irish public life who are concerned about the economy emphasise the benefits of foreign direct investment and that part of the reason these firms have come here is our consistent low corporation tax rate?

I agree with the Deputy very much. There is a very strong and positive case for the impact of international investment in small open economies. There is also a very strong case to be made for legitimate tax competition. It is not only big economies that aspire to be competitive. Small and medium-sized economies also aspire to be competitive. Taxation policy is an important element in the competitive offering of smaller economies. It is not, however, the only part of our offering. Many other factors have played vital roles in allowing us to build up the degree of international investment here.

There is one matter to which I would like to draw the Deputy's attention. He is completely correct in saying that the United States of America cannot impose a settlement on the OECD, but through its global intangible low-taxed income, GILTI, provision, which the Deputy will be aware is a particular tax rate which applies to American companies that trade globally, the US has made policy decisions which affect the level of tax such companies pay on their global income. As the Deputy has said, it is in this regard that President Biden has brought forward his proposal. In and of itself, that is something which could have consequences for Ireland but, again, it has yet to go through the American political process. President Biden and his team will make their own domestic choices in that regard.

I thank the Minister. Has he had an opportunity to look at the proposal by the three banks in which the State has an interest, AIB, Bank of Ireland and Permanent TSB, in respect of Synch Payments, a service these banks suggest will provide for instant payments? Some people believe it is an anti-competitive measure. Has the Minister had an opportunity to look at that? Does he have any comments to make in that regard?

I have had an initial look at it and my Department is looking at it at the moment. My understanding is that the initiative is about facilitating payments between different banks in a more efficient way. I will get a further briefing on the proposal and revert to the Deputy and the committee.

I will conclude by saying that we already have instant payments and asking the Minister to have a close look at the proposal because I have a slight concern that it could be interpreted as an anti-competitive measure, and could be effective as such a measure, which would have the consequence of preventing other financial institutions entering the Irish market. Nobody wants to see that happen. We want to see more competition in the Irish banking market. I thank the Minister.

In programme B, which relates to banking, there is an allocation of €300,000 for general banking research. Over the years, what has that fund generated in terms of banking research? To put the question in context, two weeks ago the chief executive of Bank of Ireland was before the committee. She was asked about the challenges facing banks and the banking system in light of Bank of Ireland reducing the number of its retail outlets and the decision of Ulster Bank, which KBC followed this week. It is, therefore, quite obvious that there is a difficulty with banking and that there are great challenges for banks in Ireland. The chief executive outlined a number of areas which presented challenges in the Irish context and, in some cases, in the European context. Muted credit formation was one such challenge, as were the very low interest rates which mean that money on deposit no longer earns money but, rather, is an expense for the bank. Another challenge is the requirement to invest in the modernisation and digitisation of the banking system. In the Irish context, economies of scale are an issue. Ireland is a small country with a small customer base. Two and half large banks operate here. In that meeting, the relatively high risk for Irish lending was also outlined. More capital must be retained against loans here. This information came up as a result of a question on high mortgage rates.

Mortgage rates here may be higher than elsewhere in Europe but that does not necessarily mean the business is profitable or that the higher rates make it much more profitable. Does the Minister share the view that these are the challenges for banking in Ireland? In that context, has the banking research fund ever considered seriously a public bank offering? What are the Minister's views on a public banking system for Ireland at this time?

I thank the Deputy. On his first question, the part of the departmental budget in question has been used to publish papers, for example. One such paper, published in the past 12 months and available on the Department's website, is on the impact of risk-weighted capital levels on mortgage rates within Ireland. The fund is used to develop and publish research papers. They are available on the website of the Department of Finance.

On the practice that has led to the Ulster Bank exit and some of the comments made by Ulster Bank and NatWest, there is a combination of many factors, some of which the Deputy touched on. They relate to the scale of the Irish market and challenges banks are now facing in making a return in an environment in which interest rates are lower for longer. There are also factors that are specific to Ireland. We have made policy decisions that have been the right ones but they have consequences. For example, we require our banks to hold a higher level of capital in Ireland than is required in other markets. Having that higher level of capital has proved really valuable as our country has confronted the pandemic. It is a higher level of capital than other markets are asked to hold and it therefore influences how some of the banks have perceived maintaining a presence in Ireland. I emphasise, however, that we can see the value of the capital levels when we are dealing with an economic shock such as Covid-19.

On whether we have used the fund to research further the issue of having a public banking entity in Ireland, I do not believe we did so in 2020 but I definitely recall that, perhaps in the previous year, the Department of Rural and Community Development and I produced a joint paper on this that reached several conclusions, one of which expressed a view that I share, which is that if there is an interest in this particular matter among people who are not present in Ireland, the Department and I would be very happy to meet and engage with them. There appears to be a sense that we would be providing the capital for the initiative and that we would get it up and running. If there are investors who believe a public banking entity is a good idea, I would expect them to invest in setting it up. We have An Post and our credit unions. They provide a valuable service in this space already. A decade ago, we experienced the consequence of an overly tight relationship between the affairs of our State, the health of our country's balance sheet and our banking sector. We should debate whether that is a link we want to recreate given that we currently have a majority shareholding in two banks and a minority shareholding in the other that is still present in Ireland.

I have just been reminded that the paper to which I referred was published in 2019. It is entitled Evaluation of Concept of Community Banking in Ireland.

I thank the Minister.

At a previous meeting, when we were dealing with matters in private session, the committee noted the Taoiseach and Tánaiste had not responded to a request from this committee to make a written submission on the process that was engaged in regarding the Secretary General of the Department of Health, how it started and so on. The Minister might say he stands over the process of selection but the committee is anxious to examine that in a much more detailed way. The submissions would have helped. That the Tánaiste and Taoiseach did not respond shows great disrespect not only to this committee but also to the whole process of parliament. There is a lesson to be learned from this. The Secretary General of the Department of Public Expenditure and Reform, who was also acting Secretary General of the Department of Health at the time, was also asked for a submission. He gave a very curt one-liner as a response that I would suggest the committee is not satisfied with at all. I could not stand over the process of selection. I have grave reservations about the political input into the whole idea that the salary should be increased by more than €80,000. The committee is undertaking this investigation with the Committee of Public Accounts and we intend to have our hearings very shortly. The actions of the Taoiseach and Tánaiste, however, give certain licence to senior civil servants who then turn around and treat the committees in the same way as their political masters do. It seems as if the roles are now reversed and that the civil servants are now the masters and the political participants at that level are simply punching in.

I do not mind clocking in every day but I wonder how many times Secretaries General clock in or account for their time. That is a legitimate question to ask. It is a fair question. If Secretaries General can devise methods to have the Members of Parliament clock in, surely the Members of Parliament should expect the type of leadership that will ensure Secretaries General account for themselves. The whole process to date smacks of an old boys' club. They decided on the outcome and then they decided how they were going to get to it. That is my strong belief and I believe it is the general belief of the public, who are now far more involved in this type of politics than they were previously. It does not bode well for the future, for the role of committees in the Parliament or, indeed, for the Parliament itself. I suggest that those who hold leadership positions take off their gloves, get down and dirty and show the quality of their leadership by not being walked all over by a group of civil servants who, in my opinion, have had it their way for far too long. That is just a comment I am making in response to what the Minister said.

To go back to the remarks the Minister made about the small business sector, it is fair to say that there was €12 billion for SME supports. The Minister mentioned that figure. Much of what the Government has said recently is about big economic matters and big figures. We should consider what we learn if we drill down into the figures and listen to high-street traders, for example. I have spoken to high-street traders in Kilkenny city and to members of County Carlow Chamber. It is in my constituency, and that is what informs me. My background is business. Although the money exists for SMEs, I have been told by high-street traders, particularly those in the retail, clothing and footwear sector, that they are carrying stock worth from €250,000 to €500,000, depending on the size of the shop. To carry that much stock, a shop does not need to be huge. The retailers have had to warehouse all their winter stock and pay for the warehousing where they would not normally have had to do so. They have also had to accept the summer stock because they are contracted to do so. The suppliers will not back off from that contract and the payment is made up front.

The Government has reacted to the pandemic and it has had its positive outcomes, no doubt, but the retail sector will find it extremely difficult to get back up on its feet. I have appealed to the Tánaiste to examine this matter.

Similarly, small to large builders, from the Construction Industry Federation, CIF, to the small builder in a local parish, have been locked down. They will find it difficult, I have been told by them, to reopen. The same is true of suppliers to the trade, such as those who might supply much of the electrical equipment. I spoke to one such supplier earlier and he told me that the anger within his trade has gone beyond being able to be registered. The public is beginning to lose faith in the reopening process.

In the context of the reopening of the retail and hospitality sector, including bog-standard pubs, will the Government provide substantial supports at this stage when businesses are preparing for the reopening, having been closed for an extended period? I apologise for going on with my commentary, because I am interested in the Minister's reply. In the banking division, €300,000 was allocated for various consultancy projects, although I understand that the Department is getting some of that back from the banks. From talking to people at the coalface, there is not a politician in the country who could not talk about the bad experience that high street traders are experiencing, including our pub and hospitality sector. Will the Government extend the benefits that exist? Will it examine the new types of benefits and supports that will be needed in the context of financing and refinancing? Will it assist those who have had to carry stock, as I outlined? I am obliged to bring these cases to the Minister because they exist in every part of the country.

I am similarly obliged to the make the case to the Chairman and the committee for the efforts of the Government and the effect they are having. I ask the country to have faith in our reopening strategy and to look at how many vaccinations have been administered in the country, a total of 1.1 million doses. Some 140,000 vaccinations happened last week and at least 170,000 will happen this week. Despite all the ups and downs last week, Thursday and Friday were the busiest days of vaccination that our country has yet experienced. As for the supports the Chairman described, I should, in the interest of transparency, say that the €12 billion includes the cost of the pandemic unemployment payment, which has gone to support our citizens at a time of need.

Let us take the example of an individual retailer who is required to close due to public health guidance. I acknowledge the additional costs he or she is facing and the help needed to reopen, a point I will come to. Nevertheless, if the retailer is required by public health guidance to close, the State is paying back up to 10% of that retailer's turnover through the Covid restrictions support scheme. If the retailer is still employing somebody, the State is paying a large share of that person's wages. If the retailer pays rates, those rates have been waived, and if he or she has taxes that cannot be paid, the taxes are being warehoused. If costs were incurred when the retailer tried to reopen during 2020, those costs were co-funded by the restart grant. We have, through the wage subsidy schemes alone, invested more than €5 billion of taxpayers' money to protect the people the Chairman described.

Turning to the final point the Chairman put to me, I accept that as businesses look at reopening, that is costly. There is additional cost involved in reopening a business, whether it is a restaurant or a retailer. The Government has said, and I reaffirm it now, that we will look at policy measures to put in place beyond the end of June to help the businesses to which the Chairman referred. They are employers throughout the country and they closed because the Government asked them to close to keep themselves safe. We will, in the coming weeks, lay out our plans to help those businesses further.

In my remarks, I acknowledged that the €12 billion was there. I am pointing out the shortfall for retailers who cannot carry the cost of having purchased stock and then having to warehouse that stock, and of having to deal with the banks, which are relentless and unaccommodating in their pursuit of retailers. That is the point I am making. I acknowledge what has been done but I am pointing out where the shortfalls are and where they are serious. I have a special interest in the over-66s in business who did not get support. I give the example of limousine drivers and executive drivers who provide that type of service. They would plead with us in this House to give them some support, even if it was the difference between their pension and the €350 payment.

I am not arguing about what the Government has done. I am acknowledging it and then identifying gaps for the Minister to consider. I have given him two examples and the third is the standard pub, which is an opportunity for social engagement in rural Ireland. My fear is it will be a difficult job to get rural Ireland back to where it was, and it was not in a great space. It will need substantial investment from the Government and that is what I am pointing out to the Minister. I do not think we differ on anything.

Yes, indeed. I am very much aware of the analysis the Chairman outlined regarding the additional costs that businesses will face in reopening. It is why we have had supports in place that have been successful. As I said, in the coming weeks the Government will lay out our plans for how we can strengthen and change the supports as our economy reopens. By "strengthen", I mean we will look at the design of our schemes to ensure they are targeting and helping those companies that really need help.

I have two further questions but Deputy Tóibín wants to come in.

I join in the comments on the response the committee got from the Secretary General. It is clear he is not getting paid by the number of words he writes because it was an incredibly curt response to a committee and it added no light. It did not reflect the level of stress and concern that people understand the recruitment process to have caused.

I want to ask about the extraordinary debts that Ireland is building up. I am amazed by the lack of discussion that is happening in Leinster House about it. Ireland has had the longest and most severe lockdown of any country in the European Union. That has happened for a number of reasons, such as the weakness in the health service, the lack of protection in nursing homes and airports, the lack of cross-Border co-operation and so on. The Minister mentioned vaccines, and we welcome the fact that about 140,000 vaccination doses are being rolled out weekly, but the Government's promise was to reach 250,000 vaccination doses at this stage. Because of the extended lockdowns in this country, our debt is multiples of that of other countries. It is not just 10% or 20% higher; it is 200 or 300 times that of other countries such as Germany, yet there has been no evident difference in mortality and morbidity. It is estimated that by 2025, our debt will peak at about €270 billion. We entered the crisis with extraordinarily high debt and it looks as if, at the end of it, we are going to be an outlier in debt terms.

That debt works out at something like €100,000 for every worker in the country. It is the third-highest level of public debt in the world. This leaves us phenomenally exposed because after this crisis recedes, which it is to be hoped will happen soon, we will start to re-enter a normal debt market and Ireland will be radically exposed to that. Through the years, Governments have typically dealt with debt in the same manner, that is, by cutting public service investment and increasing taxes. There are other ways, such as growing the economy in order that the State has an increased level of income. Inflation has been used as an economic tool to deal with debt. What are the plans of the Government to start to reduce the deficit that exists and to tackle debt levels in the coming years?

I thank the Deputy. The process that led to the appointment today of the new Secretary General of the Department of Health was conducted by the Top-Level Appointments Committee, TLAC. It reached a recommendation that the Government accepted today. The Chairman raised the issue with me a little while ago of the response from various Departments to the committee. My Department did not play a role in the selection process. It was implemented by TLAC. If I did not write back to the committee to lay out our lack of a role in this matter, I will certainly do so.

On the point raised by Deputy Tóibín, he is correct that there has been a significant increase in public debt as a result of the decisions the Government has taken. It is my very strong view that we will need to reduce our deficit as the economy grows and employment rises. We will need to do that in recognition of the fact that the levels of public debt are very high. When the time is right, we will need to commence the process of changing the levels of emergency support that we have in place if and when the health emergency passes, which I believe it will. I believe we will get to that point in the coming weeks and months. The level of public debt that we have is one of the reasons for it. What we have been able to do during this period is to finance that higher level of public debt at interest rates that are affordable for the country and over a period that will give enough time to Ireland to recover from this pandemic before we get to the point of refinancing again. These are the kinds of things that have been enabled by the ECB and that, combined with the creditworthiness of the country and the strong condition of our national finances before the crisis hit, are really mattering now.

With all due respect to the Minister, he did not deal with the issue of the tools with which the Government will tackle the debt. It would be normal to expect that currently it is planning specific policy actions that will have an effect on that deficit. I am not just talking about the rolling back of the PUP, etc. The rolling back of that type of expenditure will not close the deficit gap or deal with the national debt. My worry is that the cost of this will be less expenditure in hospitals, healthcare, housing, ICT and road and transport infrastructure. There is an opportunity cost to the debt that is being built up now and the tardiness, to a certain extent, of the Government in making even small decisions, such as to reopen click and collect services, steals from the next generation. It steals from our children's ability to build an infrastructure and a society that they need. I ask the Minister to give specifics on his plans to reduce the deficit and debt into the future.

I do not agree with the Deputy using the language of stealing from future generations. Our approach is to try to keep current and future generations safe and healthy and protect their well-being. This has been an incredibly demanding year in which the pandemic has caused such harm to the country. The Deputy made the case that the harm caused to the country is created by weakness within the health services. What I have seen in the past year is the health services, combined with the very large amount of additional money that was made available to them because they needed it, playing an incredible role in trying to minimise the loss of life and to care for and support those who were most harmed by this disease.

As regards particular measures that I will indicate regarding how we close the gap between taxation and expenditure, today is 20 April. The budget will not be unveiled until October. I have told the committee that the single biggest set of decisions that will lead to the narrowing and even near closure of the gap between what we spend and what we are collecting in tax is that it is to be hoped that when the health emergency lifts, schemes such as the employment wage subsidy scheme, the pandemic unemployment payment and the Covid restrictions support scheme, which are multi-billion euro schemes, will not be needed. That will be the largest piece in the jigsaw for closing the gap between what we are spending and what we are collecting. There will be other decisions that need to be made, budget by budget, regarding carbon pricing and all the other issues that I deal with in every budget and which will close that gap further. The key priority of the next budget will be to get at least 220,000 people back to work. That is the key priority because it is getting the country back to work that will accelerate growth in the economy, increase well-being and improve the national finances.

I hope the Minister is right that when the tide of this illness recedes, most of Ireland will be as it was. However, my worry is that when the tide of this illness recedes, there will be serious collateral damage within small and medium-sized businesses. Many such businesses will not reopen as a result of the economic damage that has been done in the past year.

On the issue of the capacity of the health service, ten years ago we were meant to have 500 ICU beds. We entered this crisis with approximately 270 ICU beds. At most, that was increased to approximately 350 beds. The number of ICU beds per capita is far lower than that in other European countries, which had, therefore, a bigger health service cushion to deal with the outcome of the illness and, as such, did not have to rely on severe lockdown as much as Ireland did. I appreciate that we will not get more detail from the Minister on future fiscal policy.

At each point in this crisis, with the exception of some very difficult days, the existing ICU capacity we had, combined with decisions the Government made to scale up that ICU capacity, was able to provide intensive care support to citizens when they needed it.

The health service was not able to run cancer services as well.

As regards the Central Bank and the legislation that governs its activities, is it time to review that legislation and to ensure that in some way it can play a part in attracting another bank? For example, Spanish banks were interested in coming in as the majority shareholders in two banks. Rather than allowing them to buy the books of KBC or Ulster Bank, we could have insisted that those two banks stand back and encouraged others to come in. It appears from KBC and Ulster Bank and the manner in which they have approached their exit from the market that this was long in the making and that through the process of consultation, if one wishes to call it that, and the understanding between Bank of Ireland and AIB in respect of Ulster Bank and KBC, the opportunity was lost to attract another player.

Separate to that the Central Bank conducted the inquiry into Davy stockbrokers. There was no role for an Oireachtas committee, not to make findings but to look at it generally, so we now have to rely on the independent company that is coming in to do the analysis of the daily transactions and so on. Again, future legislation might include a provision that the Central Bank would be allowed to name the banks and the individuals concerned in order that we get more transparency into the system. I believe it is only by opening up that route to transparency through the Central Bank that we will get real accountability because it is clear from people who deal with banks now, whether one has a bad debt or is trying to take out a loan, that the banks are becoming far more difficult to deal with, even down to resolving some of the issues raised here in this committee. The EBS tied agents issue is one that has gone on for many years. It has been in court and so on and no effort has been made by AIB or the EBS to sort out the tied agents issue. People's livelihoods were at stake and now the same people are paying for the fact that the bank itself will not come forward and at least talk and find a resolution.

Out of the pandemic, our banking experience and the entire history of our financial institutions, is it time to look at the Central Bank in terms of how it operates and give it more powers and the ability to name names in the context of its reports and so on? Will the Minister enact legislation regarding individual responsibility in the context of those found to have been associated with some form of wrongdoing? No person is accountable anywhere in this country, bar someone who robs a pair of socks from a shop when he or she would be up in court the following week. That is the law for the ordinary person. There is no law for the ones who are well up the food chain.

To deal with the Chairman's case with regard to changing the legislation in respect of the Central Bank, I will not be bringing forward proposals to change the legislation on the Central Bank such that it would have some kind of role in attracting investment or banks into our country. It is a regulator. It is its job to regulate, not to look at how it can attract banks into our country.

On the idea that an opportunity to attract banks into our country was lost, we are seeing banks leave. It is not the case that there is a large number of retail banks knocking on our door to come to Ireland to set up business. They are leaving. What we now have to do is consider what is the right environment and the right policy framework, anchored in an independent Central Bank, to try to ensure we have a banking sector that is financially stable, competitive, delivers investment and credit and continues to be an employer in Ireland. As for the idea that I am going to change the legislation to give the Central Bank a role in attracting investment, I am not going to do that because I do not believe that would be conducive to its role as an independent regulator. The Central Bank has the ability to make decisions on individual prosecutions. It has done that in the past. It has happened. It has an array of legislation that has been made available to it, which it needs and uses. I have also said that I am developing proposals on personal responsibility. I hope to publish the heads of that Bill before the summer.

I would make two comments on that. Ulster Bank had staff and a network. KBC Bank had staff and a network. If that was put on the international markets, and I am not suggesting that the Minister would go seeking one, but a bank would be interested because it is not starting from scratch. I know banks are exiting the country but why should we allow the duopoly to take up the slack of Ulster Bank and KBC Bank? That is the point I am making. It is easy to buy into banking if one has a network and people already in place. From that perspective I believe we have lost an opportunity. That is all I would say to the Minister.

If the Chairman is aware of a bank that is considering buying Ulster Bank and KBC Bank beyond what happened and if he is aware of further international investment and someone wanting to set up a retail presence here in Ireland he could share that with me outside of this committee.

I will share it with the Minister in the committee. That is a glib answer. I am suggesting that rather than let an opportunity slip we would have done more to market the banks or insist that the banks would market themselves abroad. It is as simple as that. Rather than talk down our market, and I am not suggesting the Minister is doing that, we should talk it up and see if there is an interest out there. That is all I am asking. The last election was all about reform, the change that is necessary and so on. I have seen no change at all since the Government was formed on issues like this one. That is why I am raising the Central Bank, not its role to attract players but its role to make the players currently in the market more accountable and responsible in terms of their individual actions within the bank. Outside of that I am suggesting that we will not know who might be interested in an existing bank if those existing banks that are going out of the market are simply going to sell to the two pillar banks, namely, Bank of Ireland and AIB. I am just putting forward the view.

It is a view. I did not give the Chairman a glib answer. I gave him a serious answer that reflects the challenge we have currently in attracting and maintaining large international banks to Ireland. It is not a glib answer; it is a realistic answer. I would certainly welcome the collaboration and help of this committee in, as the Chairman said a moment ago, talking up Irish banking. It would be very beneficial if, the next time banks were before this committee, the Chairman would acknowledge their role as employers. I am not sure when Ulster Bank or KBC Bank were before this committee. Did he ever ask them if they were planning to leave Ireland? Did he ever say to them that he valued the investment, employment and the work they do in Ireland? If he did, I may well have missed it. It is not the case that I am offering a glib answer as I am trying to answer a serious point from the Chairman. What I am describing to him is an environment in which large international banks do not want to be present in Ireland in the way they were previously. If there were other banks, apart from the Irish banks that are registered here, that were interested in these acquisitions the Chairman can be sure we would be aware of it.

Deputy Durkan wants to come in but I have to answer. I am impressed by the numbers of people employed by the bank. They are making an investment in the country for themselves. They come first. What would I say to all the banks that came before us that literally robbed their customers in the course of the tracker mortgage issue? What would I say to the banks that came before us and which literally closed businesses and dealt with them in an appalling way?

What would I say to banks, some of whose customers committed suicide because of the way they were treated by them? I praise them where praise is necessary, but where it is fitting to point out their faults and failings and the disgraceful way they treat their customers, I will do so. The unions representing the bank's employees appeared before the committee. They told us they knew nothing of what was going on in the bank; they were not even involved in it. The Minister is a majority shareholder in two banks and a minority shareholder in another. I am not afraid to praise banks. I am not afraid to deal with banks. I have dealt with them all my life. However, their culture leaves much to be desired. If that were not the case and if I were absolutely wrong in this, there would have been no need to appoint the culture board which is also a useless operation because it is all funded by the banks.

I have a job to do here and I will hold banks to account for the sake of their employees and their customers. The Government could do a hell of a lot more in holding banks to account. The Minister could do a hell of a lot more with his majority shareholding in the banks on behalf of the people. I share that view with the Minister now.

I am glad the Chairman did so. It is good to hear that view from him. I have views of my own and I have duties of my own, just as he does as Chairman of this committee. I do not recall in our exchange asking him to praise banks. I did not do so. I think he was the one who said that there could be a role in talking up and acknowledging the benefits of banking in our country at the moment, and there are benefits. What I am challenging him on is the contention he has made that there are waves of international investors that want to come here to set up retail banks or purchase the banks that have decided to exit the market and that I have missed or not pursued. I am challenging him on that contention, and I am telling him that he is wrong.

The Minister----

I am sorry, just let me finish.

Go ahead.

I was very happy to hear the Chairman's views because I respect them. I think he would allow me the opportunity to give my views back. The inference in his suggestion that there were opportunities for other potential buyers of Ulster Bank and KBC beyond what has happened with Bank of Ireland and AIB and that I did not pursue those opportunities is plain wrong. The challenge we now have is to get the balance between calling out the issues that are of shared concern to us - I am also concerned about them - and having an environment in which we can have a banking system which continues to be a big employer in Ireland and which continues to meet the needs of our economy. Both of us have an interest in getting that balance right.

I have an interest in attempting to attract another player into the market. It is in the interest of the country. I am sure that if KBC or Ulster Bank were to be packaged and put out there, we would then see whether there is any interest in picking up an existing bank and its staff and network. I am simply saying we never asked. The two banks never asked. They were prepared to do a deal behind closed doors with existing banks. The Minister, his Government colleagues and all of us should be concerned that that is the case. Business people and individuals throughout the country are now forced to deal with the existing duopoly. We have made no real attempt to introduce a Sparkasse model or community banking in Ireland, whether that be through the post offices, the credit unions or whatever. I call Deputy Durkan.

I want to respond to that.

That is fine.

Let us just take a step back and consider what the Chairman has said I did not do. In respect of two banks, in which the State has no share and which are internationally owned, the Chairman is suggesting that I should have been involved in the sale process and played a role in attracting other buyers. I am telling the Chairman that there is not a wave of other buyers who want to come into Ireland. It is perfectly credible to say that we need to do all we can to try to encourage more investment and more banks to come to Ireland. I spend a lot of time doing that. I do not accept that I was complicit or that I could have been more active in decisions that were made by KBC and NatWest.

From listening to me, the Minister knows well that was not what I was doing. He is a shareholder in the two banks. They could have been asked to stand back while the other two banks, KBC and Ulster Bank, were encouraged to see if anyone was interested. Are we that bad here that no one is interested in it? That is all that I am saying.

I apologise for being late. Unfortunately, I was also moonlighting at another committee, trying to be in both places at the same time, which is a difficult job as we all know.

I have been listening to the discourse and I can sympathise with both opinions, different as they may appear to be. As the Minister knows, I have repeatedly engaged with numerous lending institutions over the past ten or 12 years regarding the way their customers were treated and so on. To be fair, some treated customers reasonably well in the circumstances; others did not. Some were smug and arrogant and went about their business with a single-mindedness which annoyed me and which was certainly not in accordance with best practice.

I can also understand what the Chairman is saying. It would appear that Ireland is not a nice place to be as far as banking is concerned. While a number of financial and lending institutions rushed into this country in the heat of the Celtic tiger era, many of them, either with or in the wake of the Celtic tiger, escaped again. Some did so have done an amount of damage to the economy by undercutting and undermining the existing banks or by encouraging them to go down the road of unsafe lending. The theory was there was no such thing as unsafe lending or unsafe borrowing. However, there is no absolute guarantee in respect of any lending and there is a duty and responsibility on our lending institutions to keep that in mind.

We are just out of time.

I am running out of time.

No, we need to conclude at 5.30 p.m.

I will it be as quick as I can.

The clock is ticking.

The clock is ticking, and it is not a 5 30 p.m. yet.

I want to allow the Minister time to answer.

The point at issue is this. The same rules for banking apply in this country as throughout the rest of the European Union. The same opportunities must be available to borrowers and banking customers in this country as are available in other European countries, without exception. The rules of the Single Market apply right across the European Union and apply to this country no less than anywhere else. Can we invoke our membership of the European Union to try to ensure that we have sufficient interest in competition in banking here to enable our customers to have what is available to customers in other countries throughout the European Union? Sorry about all that, Chairman.

With the Chairman's consent, I will give a quick answer to that question. Our membership of the Single Market means that we now have an array of financial services providers here in Ireland. While they do not have branches here, they are providing cards, current accounts and debit payment facilities to many consumers in Ireland. Our membership of the Single Market is allowing that to happen. However, our membership of the Single Market cannot compel companies to come here.

Can some other activity-----

I would like to conclude proceedings. I am obliged to do so-----

Our Estimates-----

-----by 5.30 p.m. I ask the Minister to take away with him the idea of reform of the Office of the Comptroller and Auditor General to allow that office to complete the audit for local government. Earlier, there was an incident with Kilkenny County Council. There is very little open debate about what goes on in local government.

It would be a good idea to have the Comptroller and Auditor General oversee local government and to merge the two offices. Irish Water could also be included in terms of having the Comptroller and Auditor General look over the amount of money it receives from the taxpayer. We have had a good exchange and have now completed our consideration of the Revised Estimate for the finance group, and other matters. The clerk will send a message to that effect to the Clerk of the Dáil in accordance with Standing Order 101. Some members have requested that further information be sent to the committee but I propose we agree that consideration of the Estimates has concluded and the committee has agreed to same. Is that agreed? Agreed.

I thank the Minister and his officials for appearing before us. There is always a good debate when the Minister appears before the committee.

Deputy Durkan referred to our "discourse", so we must have been doing something right.

Our next meeting, on Tuesday, 27 April, will deal with the Estimates for the Department of the Taoiseach. That, too, should be interesting.