I welcome the Minister and his officials. Apologies have been received from Deputy Matthews. I remind members of the notice on privilege. They are not to refer to any person by name or in such a way as to make him or her identifiable. I invite the Minister to make an opening statement.
Finance (Covid-19 and Miscellaneous Provisions) Bill 2022: Committee Stage
I do not propose to make an opening statement as this is Committee Stage of the Bill. I flagged on Second Stage in the Dáil all the amendments that have been tabled.
Section 1 agreed to.
SECTION 2
Question proposed: "That section 2 stand part of the Bill."
The section deals with the employment wage subsidy scheme, EWSS. As we acknowledged on Second Stage, much of the Bill relates to issues that have taken place, such as the extension of some of the supports during Covid. Some of those supports have now expired while others will expire in the coming weeks. A certain number of them will have a slightly longer tail. There will be very few issues in respect of things that have already taken effect.
The Minister will note that the quarterly bulletin published by the Central Bank today stated that 10% of the workforce is currently working and receiving supports through the EWSS. How confident is he that when this support is withdrawn - some of it runs to the end of April - those jobs will remain viable? Is he concerned that a large number of jobs in companies are being kept alive by the scheme? Has the Department carried out analysis in that regard?
It might be helpful to the committee to give the current state of play in respect of EWSS. That will frame the answers I give to the Deputy. As he stated, we are now in the final stage of the exit from the EWSS. Most businesses will exit the scheme at the end of April and some businesses, mainly hospitality businesses that were affected by the 8 p.m. closing time, are due to exit at the end of May. We currently have 22,000 employers and 260,000 employees supported by EWSS. Although it is not possible to be absolutely definitive, we expect that by the end of this month, 18,000 of those 22,000 employers will exit EWSS. That is equivalent to 160,000 employees. We expect a considerable majority of the employers and a majority of the employees to leave EWSS in a few weeks, with the balance then due to exit at the end of May.
As regards modelling or analysis we have done in respect of the number of businesses that could find themselves facing challenges due to this, we have not been able to form a view in respect of businesses that could be at risk. Indeed, we ran the EWSS for the duration we have to give businesses the best chance of being viable because they were viable before Covid hit. I hope, therefore, that the vast majority of businesses will be in a position to return to successful trading, but I expect it will be towards the end of the year that we will have a better sense of whether the viability of employers will be affected. My expectation is that the vast majority of businesses that are on EWSS will be able to exit from it and trade successfully.
Regarding the Minister's points, is there information on the number of jobs that are no longer available, that is, employees cannot go back to them because they have been filled, ceased to exist or whatever?
The main information we have is the employment figures for the fourth quarter of last year, which would not be relevant to the Deputy's question. The period for which figures will answer his question will be the first quarter of this year. We will not have those employment figures for a few more weeks.
From anecdotal evidence and my engagement with a wide variety of employers, I have little sense of jobs that were available before Covid not being available now. In fairness, it will take a little time - it will be towards the end of this year - before we are clearer on the interplay between leaving the EWSS and companies trading in a different economic environment. We will not have the employment figures for a few more weeks, but I do not have any feedback at the moment regarding pre-Covid jobs no longer being available.
I accept that and I thank the Minister for the information, but we see evidence virtually everywhere of employers advertising the fact that they are hiring. We also see vacancies in the services and manufacturing sectors. Has any information been made available to the Minister as to why there are so many people who cannot fill the posts that they are advertising?
I view it slightly differently to the Deputy's good self. What I believe is happening is that there are many jobs that were available before Covid and were not available over the 18 months of the dark days of the pandemic but that are now returning. They might not all be in exactly the same sectors, but there is no sign at all of job opportunity erosion happening within our economy.
As to why so many employers are struggling to attract new workers to their businesses, I do not believe it is due to a lack of people in most parts of our economy. It is simply the case that more workers are needed for some parts of our economy. The Deputy is aware of the pressures on the work permit scheme as we try to bring new people into our economy to fill vacancies. People who performed jobs in some parts of our economy before Covid hit are making the decision to change sectors and do other work. The restaurant and hospitality sector, which is before another Oireachtas committee at the moment, is on the front lines in that regard. As the Deputy knows, it is having considerable recruitment difficulties. It has indicated in some of its pre-committee statements that it views this as a major challenge to having a successful summer period. There are some parts of our economy where there is a lack of workers, and there is a great deal of demand for additional work permits for those parts of the economy.
I thank the Minister.
Question put and agreed to.
SECTION 3
Question proposed: "That section 3 stand part of the Bill."
This section provides an exemption from income tax, USC and PRSI for the recognition payment to front-line healthcare workers. We have discussed this matter previously. I believe it was first mooted by the Taoiseach when he was in America last June or July. Commitments were made that it would be enacted before the end of the year or, at one stage, even before the budget. The Minister is now providing for a legislative basis to exempt the payment from income tax, USC and PRSI, but when will the payment be made? I understand that it will now be made in June, but I cannot see why it is taking so long - nearly a year from when it was initially suggested by the Taoiseach - for the Government to make the payment to our front-line workers. There are still no criteria setting out who will get the payment, yet we are enshrining in legislation, and rightly so, its exemption from income tax, PRSI and USC. Has the Minister any pearls of wisdom from his meetings and discussions with the Minister for Health and from collective decisions taken by the Cabinet about who will be paid this recognition payment of €1,000 and when those front-line workers will receive it?
The Deputy raised two questions, the first of which has to do with who will receive the payment. I have a list with me regarding the forms of job that will be receiving the payment. It includes doctors, nurses, healthcare assistants, porters, cleaners, medical laboratory staff, health and social work professionals, swabbers, vaccinators, home carers who were carrying out duties contracted to them by the HSE, those who were seconded or assigned to the HSE, such as Defence Forces staff who worked at HSE testing centres, ambulance workers employed by the HSE, and administrative staff who meet the criteria set out by the Minister for Health, including those in our emergency departments. I have a significant list of who will be getting the payment. There is still work being done on whether it needs to be expanded further. I understand that the Department of Health and the HSE are finalising some work on this with trade unions, which will be completed soon.
As to when the payment will be made, the exact date is dependent on arrangements at local HR level, but I expect the payment to occur in the next few weeks.
Will it be this month or a little after that?
I expect that, for most, it will be paid this month.
Obviously, the criteria have to be agreed, announced and published before payments are made. The Minister has a list with him. Are nurses who were working in GP practices and were involved in vaccinations on it? Are those who worked through voluntary bodies like Cancer Care West on it?
Will the Minister provide us the details of the pro rata nature of the payment? How will it be calculated? I understand that it will be based on the amount of weeks that an individual worked during a period. To what reference period will the payment apply?
Regarding the two duties that the Deputy mentioned, my understanding is that they are not included in the list currently. However, engagement is under way with the healthcare unions on the full list. I expect that all of the details of who will be receiving the payment and, I assume, the pro rata issue will be published later this week.
Does the Minister have an estimate of this measure's cost?
I understand that it will cost between €130 million and €150 million.
Is the list available?
It will be made available. I understand that the full public list of who will be part of the payment will be made available this week.
Gabhaim buíochas leis an Aire as teacht os comhair an choiste. My colleague Deputy Doherty asked most of the questions that I had. On timing, I am sure the Minister is aware there were some reports yesterday in the media that it could be as far as June. I understand the Minister said here today that he hopes it will be within the coming weeks. Does the Minister have any concerns that it could take as long as June? As he is aware, people are asking those questions, and when they see that kind of information being put out in the media, they have concerns.
I expect most payments will be made available within the month. It is the case, however, as the Deputy knows, that there are many different payroll operations included in the different sets of workers to whom I have just referred. It may well be the case, because of when payrolls are run, for the workers I referred to, some of that may happen in early May and not all within April. However, out of the workers and kinds of work I mentioned a moment ago, I expect those payments to be made to those workers in the majority of cases this month.
To answer the Deputy’s other question regarding it going to June, the only circumstances where I can imagine something like that happening would be if there continued to be an issue regarding whether a particular worker was due to benefit from the payment. Perhaps that might result in a late payment. However, as I said, I expect the majority of them to happen in the coming weeks.
Question put and agreed to.
Section 4 agreed to.
SECTION 5
Amendments Nos. 1 to 6, inclusive, are related and may be discussed together.
I move amendment No. 1:
In page 11, to delete lines 19 and 20 and substitute the following:
“(iii) the scheme commonly known as the Live Performance Restart Grant Scheme;”.
These amendments make changes to sections 5 to 10, inclusive, to delete references to the scheme commonly known as the "live performance support scheme phase 4" and replace that with the new name of the scheme, which is the "live performance restart grant scheme". This is to reflect the change in the name of the scheme that happened since I published this Bill a few weeks ago.
Sections 5 to 10, inclusive, amend existing debt warehousing arrangements to give effect to the recent announcement by the Government that the tax debt warehousing scheme would be extended for an additional four months for businesses impacted by public health restrictions that came into effect on 20 December. This four-month extension is only available to those entitled to payment under a number of Covid-19 supports scheme. Sections 5 to 10, inclusive, list those schemes, including a number of them administered by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media. One such scheme is referred to in each of the six debt warehousing sections as the scheme commonly known as the “live performance support scheme phase 4”. Since the Bill was published, the name of that scheme has been amended in the way I described, and these amendments simply update the references accordingly. I commend them to the committee.
On amendments Nos. 1 to 6, inclusive, obviously, that is just a change of name. The criteria remain the same, so we have no issue on that. It is a technical amendment.
I would like to speak on the wider issues of section 5, if the Chair allows it.
Yes, the Deputy may.
Sections 5 to 10, inclusive, deal with the tax warehousing element of the Bill. Obviously, this was a very important provision that allowed for a bit of comfort and space for businesses. We see that, across the sector, about 10% of the eligible debt for warehousing has been warehoused, about €3 billion out of the €30 billion. Different companies responded in different ways in taking up the initiative. Some are paying back the warehouse debt that has been paid while others are warehousing a portion of it. About 5% of the businesses have warehoused all of the Covid-19 debt, which makes up about €300 million and 12,000 businesses.
The period now is coming to an end and we will start the period of a zero interest rate for a 12-month period until the end of April next year, after which the interest will start to kick in as normal, so there is still that window of comfort for individuals. However, we have seen, and this is probably understandable, a low level of insolvency during the pandemic because of these measures that have kept companies on life support in some cases and, in other cases, that were just a comfort they needed to be able to trade through. However, we saw an abnormally low level of insolvency. Has there been any modelling within the Department to show what will happen as this timeframe lapses, there is a requirement on the companies to start to pay back the debt and the interest starts to kick in? There have been suggestions in some quarters that a substantial amount of the €3 billion that is warehoused could have to be written off as bad debt as companies may fold. I just want to understand the Minister’s assessment. As always with any of these schemes, and we went in with eyes wide open with this scheme, there was always going to be a case where the Government was not going to get everything back, but without it, we would have had companies fold left, right and centre. Has there been any early assessment by done by Revenue or the Department on where they see the total amount of the €3 billion?
Adding to that question, given where we are at with the war in Ukraine and with it being one crisis after another - a pandemic followed by a war and economic sanctions that are having an impact not just on households and workers but also in some sectors and businesses, particularly those that have higher energy consumption or cannot access the type of materials they would have accessed heretofore - is there any consideration within the Department to looking at the debt warehousing timeframes for specific sectors that would be affected by the ongoing war in Ukraine and the economic consequences that flow from that?
I thank the Deputy for his questions. The key issue first is what the Government has done to try to offer support to companies that will be facing difficulty or viability challenges as we exit from the emergency supports that are in place. As the committee will be aware, we have put in place two significant legislative changes to try to provide support to smaller businesses, in particular, that find themselves in this difficult point. First, we amended the Companies Act 2014 through an Act that was brought in place recently to extend the examinership process and increase the threshold at which a company is deemed unable its debts up to €50,000. That was a change made by the Government to help companies manage this moment of transition. We have also brought in the small company administrative rescue process, SCARP, which is a kind of dedicated and specific process to help small and micro companies that may have to go through a period of restructuring. We have looked to amend the examinership model to help companies in that way. Critically, we have made changes in our procedures to help companies when they approach this point.
On the Deputy's question whether we anticipate how many companies will not be in a position to repay their debts, again, the answer is not at the moment. However, Revenue will begin the process of outreach to those minority of companies that have continued to avail of warehousing and have not paid back any of their debt at all. That is a small minority of companies.
Later in the year, when that outreach is complete, I think we will have a better idea as to what kind of liability issue we will face or whether a larger share of companies might be unviable than would normally be the case. Revenue will start making contact with those businesses imminently. It is worth noting, however, that 85% of companies have now either paid back their taxes in full in the month they were due or begun the process of doing so, showing, I hope, that we have got the balance right to date.
In response to Deputy Doherty's final question as to whether we are considering amending the provisions we have in place in respect of an interest rate of zero increasing to 1% and then all the way to 3%, we are not at the moment. I would not give consideration to any change at all before we do the budget. The engagement now under way between the Revenue Commissioners and these 12,000 businesses will, I think, give us a helpful steer as to what the payment capacity will be like.
Amendment agreed to.
Section 5, as amended, agreed to.
SECTION 6
I move amendment No. 2:
In page 13, to delete lines 26 and 27 and substitute the following:
“(iii) the scheme commonly known as the Live Performance Restart Grant Scheme;”.
Amendment agreed to.
Section 6, as amended, agreed to.
SECTION 7
I move amendment No. 3:
In page 16, to delete lines 1 and 2 and substitute the following:
“(iii) the scheme commonly known as the Live Performance Restart Grant Scheme;”.
Amendment agreed to.
Section 7, as amended, agreed to.
SECTION 8
I move amendment No. 4:
In page 18, to delete lines 11 and 12 and substitute the following:
“(iii) the scheme commonly known as the Live Performance Restart Grant Scheme;”.
Amendment agreed to.
Section 8, as amended, agreed to.
SECTION 9
I move amendment No. 5:
In page 20, to delete lines 16 and 17 and substitute the following:
“(iii) the scheme commonly known as the Live Performance Restart Grant Scheme;”.
Amendment agreed to.
Section 9, as amended, agreed to.
SECTION 10
I move amendment No. 6:
In page 22, to delete lines 19 and 20 and substitute the following:
“(iii) the scheme commonly known as the Live Performance Restart Grant Scheme;”.
Amendment agreed to.
Question proposed: "That section 10, as amended, stand part of the Bill."
Section 10 amends the warehousing provisions for refunds due to Revenue under the EWSS payments. Does the Government have an idea of the level of those refunds? Is there an awareness of the capacity for them to be repaid?
As of February, €57 million in temporary wage subsidy scheme overpayments have been moved into the debt warehouse, and so far we have not had any in respect of the EWSS.
Question put and agreed to.
NEW SECTION
Amendments Nos. 7 and 9 are related and will be discussed together.
I move amendment No. 7:
In page 24, between lines 7 and 8, to insert the following:
“Amendment of Schedule 2 to Finance Act 1999
11. The Finance Act 1999 is amended with effect as on and from 10 March 2022 by the substitution of the following Schedule for Schedule 2 (as amended by section 42 of the Finance Act 2021):
“SCHEDULE 2
RATES OF MINERAL OIL TAX
|
Light Oil: Rates per 1,000 litres |
Heavy Oil: Rates per 1,000 litres |
Liquefied Petroleum Gas: Rates per 1,000 litres |
|||||||||
|
With effect as on and from: |
Petrol |
Aviation gasoline |
Used as a propellant |
Used for air navigation |
Used for private pleasure navigation |
Kerosene used other than as a propellant |
Fuel oil |
Other heavy oil |
Used as a propellant |
Other liquefied petroleum gas |
Vehicle gas: Rate per megawatt hour at gross calorific value |
|
10 March 2022 |
€474.11 |
€474.11 |
€413.51 |
€413.51 |
€413.51 |
€84.84 |
€118.01 |
€120.55 |
€118.27 |
€54.68 |
€9.36 |
|
1 April 2022 |
€465.98 |
€465.98 |
€405.38 |
€405.38 |
€405.38 |
€84.84 |
€118.01 |
€120.55 |
€118.27 |
€54.68 |
€9.36 |
|
1 May 2022 |
€465.98 |
€465.98 |
€405.38 |
€405.38 |
€405.38 |
€103.83 |
€141.12 |
€138.17 |
€130.52 |
€66.93 |
€9.36 |
|
1 September 2022 |
€628.58 |
€628.58 |
€527.33 |
€527.33 |
€527.33 |
€103.83 |
€141.12 |
€158.50 |
€130.52 |
€66.93 |
€9.36 |
|
12 October 2022 |
€654.07 |
€654.07 |
€555.53 |
€555.53 |
€555.53 |
€103.83 |
€141.12 |
€158.50 |
€130.52 |
€66.93 |
€9.36 |
|
1 May 2023 |
€654.07 |
€654.07 |
€555.53 |
€555.53 |
€555.53 |
€122.83 |
€164.23 |
€178.83 |
€142.76 |
€79.17 |
€9.36 |
|
11 October 2023 |
€671.43 |
€671.43 |
€575.61 |
€575.61 |
€575.61 |
€122.83 |
€164.23 |
€178.83 |
€142.76 |
€79.17 |
€9.36 |
|
1 May 2024 |
€671.43 |
€671.43 |
€575.61 |
€575.61 |
€575.61 |
€141.82 |
€187.34 |
€199.17 |
€155.01 |
€91.42 |
€10.13 |
|
9 October 2024 |
€688.78 |
€688.78 |
€595.68 |
€595.68 |
€595.68 |
€141.82 |
€187.34 |
€199.17 |
€155.01 |
€91.42 |
€10.13 |
|
1 May 2025 |
€688.78 |
€688.78 |
€595.68 |
€595.68 |
€595.68 |
€160.81 |
€210.45 |
€219.50 |
€167.25 |
€103.66 |
€11.48 |
|
8 October 2025 |
€706.14 |
€706.14 |
€615.76 |
€615.76 |
€615.76 |
€160.81 |
€210.45 |
€219.50 |
€167.25 |
€103.66 |
€11.48 |
|
1 May 2026 |
€706.14 |
€706.14 |
€615.76 |
€615.76 |
€615.76 |
€179.81 |
€233.57 |
€239.83 |
€179.49 |
€115.90 |
€12.84 |
|
14 October 2026 |
€723.49 |
€723.49 |
€635.83 |
€635.83 |
€635.83 |
€179.81 |
€233.57 |
€239.83 |
€179.49 |
€115.90 |
€12.84 |
|
1 May 2027 |
€723.49 |
€723.49 |
€635.83 |
€635.83 |
€635.83 |
€198.80 |
€256.68 |
€260.16 |
€191.74 |
€128.15 |
€14.20 |
|
13 October 2027 |
€740.85 |
€740.85 |
€655.90 |
€655.90 |
€655.90 |
€198.80 |
€256.68 |
€260.16 |
€191.74 |
€128.15 |
€14.20 |
|
1 May 2028 |
€740.85 |
€740.85 |
€655.90 |
€655.90 |
€655.90 |
€217.80 |
€279.79 |
€280.49 |
€203.98 |
€140.39 |
€15.56 |
|
11 October 2028 |
€758.21 |
€758.21 |
€675.98 |
€675.98 |
€675.98 |
€217.80 |
€279.79 |
€280.49 |
€203.98 |
€140.39 |
€15.56 |
|
1 May 2029 |
€758.21 |
€758.21 |
€675.98 |
€675.98 |
€675.98 |
€236.79 |
€302.90 |
€300.83 |
€216.23 |
€152.64 |
€16.91 |
|
10 October 2029 |
€773.25 |
€773.25 |
€693.38 |
€693.38 |
€693.38 |
€236.79 |
€302.90 |
€300.83 |
€216.23 |
€152.64 |
€16.91 |
|
1 May 2030 |
€773.25 |
€773.25 |
€693.38 |
€693.38 |
€693.38 |
€253.25 |
€322.93 |
€318.45 |
€226.84 |
€163.25 |
€18.09 |
”.”.
Amendment No. 7 has been grouped with amendment No. 9.
Amendment No. 7 provides the necessary legislative basis for the changes approved by the Dáil under the financial resolution of 9 March. That financial resolution provided for a temporary reduction in the excise rates for auto fuels amounting to 20 cent for petrol and 15 cent for diesel motor fuels, with a proportionate 2 cent reduction in excise on marked gas oil. These reductions were provided for in recognition by the Government of the impacts of the current fuel price increases on households and businesses. The measures are VAT-inclusive and will last until 31 August. While these increases in energy costs are driven primarily by global factors, the decision was taken to alleviate some of these impacts through the domestic taxation of fuel. The measures implemented provide significant mitigation of recent fuel price increases. It is impossible, however, to offset all the recent increases just by using the taxation system. The excise reductions strike the balance between passing on a needed benefit to consumers, protecting our ability to collect tax in the future and respecting the minimum rates allowable under the EU energy tax directive. The excise reductions come in addition to a temporary and targeted emergency support measure for licensed hauliers announced by the Minister for Transport to address cost pressures arising from current high fuel prices.
Amendment No. 9 provides for amendment of the Long Title to include the excise duty reductions in the Bill.
I wish to ask the Minister a number of questions about amendment No. 7. As we know, it relates to the financial resolution that was passed and that is just now being put into statutory law to ensure that it does not lapse after the 90-day period, or whatever the number of days a financial resolution can last is. I am conscious that none of us can predict where petrol and diesel prices will be in the coming months. I saw that in my local garage yesterday diesel was up at 195 cent per litre. I know that that can vary from area to area and that, depending on further sanctions, we could see different price increases and pressures over the coming period. I am concerned that this measure will lapse on 1 September. It may be appropriate that it lapse on 1 September if prices stabilise, but they could go in completely the wrong direction. I am also conscious that the Dáil does not sit usually on 1 September. Therefore, if through the summer period petrol and diesel continue to rise as a result of international pressures, although it is to be hoped the war will be well over by then, there would be a challenge to deal with this. I understand that the only way we could do this would be to reconvene the Dáil and pass another financial resolution at that point in time. I ask the Minister to speak to the fact that he has chosen 1 September as the date on which this lapses. I am very conscious that there is normally no Dáil sitting at that time, and I suggest that that may be the reason the date was chosen as opposed to dealing with the matter six weeks later in the budget.
I have a second question for the Minister. He acknowledges that we could go further in respect of petrol and that another 10 cent could be cut off excise. Nearly 11 cent could be cut off the excise duty on petrol without breaching the European rules in this regard. Has any consideration been given, for example, to suspending temporarily the diesel rebate scheme and ensuring that all hauliers are able to avail of that 7.5 cent excise rebate, given it directly at the pump? The benefit of that would be that not only would the hauliers - or certain hauliers because not all of them get the rebate - benefit from it but all other users of diesel would benefit as well. That would be in compliance with the European rules, so there is a possibility there to reduce petrol by 10 cent more and diesel by 7.5 cent more by introducing a measure that would suspend the scheme where the rebate would have to be applied for. The hauliers would still get that benefit because they get the rebate directly at the pumps, but every other user of diesel would also get it.
Another question I wish to come on to is about home heating oil and the fact that excise duty was not reduced on home heating oil. In America there are advertisements that say "This ad was approved by the candidate". I am not sure if the Minister approved the fake news Fine Gael put out saying there was no excise duty on home heating oil. As we know, excise duty comes in the form of mineral oil tax, which has two components: a carbon component and a non-carbon component. The document before us is very clear. We can all read. That issue, in fairness, has been cleared up, but the carbon component of the excise duty on home heating oil could and should be reduced, given the huge increase that has happened. It should be reduced on a temporary basis to release the pressure on families.
Furthermore, in three weeks' time the Government plans to increase excise through further increases in carbon tax on gas and home heating oil and a number of other fuels. The Taoiseach has said that that will be offset. What is the financial measure the Government plans to bring forward in the next three weeks to offset this increase? For example, home heating oil will go up by €20 a fill. What is the financial measure or legislative instrument the Government will use? Will the Government use this legislation, with the Dáil in recess for two weeks so there will be one week left before the Government's carbon tax increase kicks in?
Will the Minister give the committee clarity on the schedule because the schedule deals with the increase that will happen on 1 May?
Regarding the different issues that have been brought forward, I first picked the date of the end of August-early September for the change that would be made in petrol and diesel excise in the hope that the energy price pressure that we are facing due to the war would begin to moderate and improve as the year goes on. It is certainly not my intention to go back to the Government and ask for the Dáil to be recalled. The thinking behind that date had nothing to do with whether the Dáil was sitting or not. I will certainly keep under review the pressures that continue in relation to petrol and diesel, and then decide what is the right step to take on the current excise reduction.
On the question regarding the diesel rebate scheme, the Deputy asked whether I gave any consideration to cancelling it and making the change he referred to. I did not. While I will always face calls to do more, as the Deputy is making of me, and I understand why, the measures we have brought in for both petrol and diesel are considerable and ensure that the increase all fuel users are facing is not as big as it otherwise would be. I know that is cold comfort with the challenge many are facing, but a 9 cent to 13 cent reduction per litre is still a significant response and is a measure that is costing the State many hundreds of millions of euro.
As to where we are with home heating oil, and the increase in carbon tax that is due to that, the Deputy asked whether I gave any consideration to reducing the carbon share of that excise tax. The Government is committed to going ahead with changes to carbon taxing. The Deputy made the point about the multiple crises we are facing. The additional crisis we are facing, as he well knows, is in regard to climate. This week alone, the United Nations warned all of us that we have so little time left to avoid a catastrophic decline in our climate. The revenue from carbon taxing continues to play a very valuable role in trying to mitigate the effect of that damage and to invest in the areas that might make some difference to us in the future.
On the off-sets that the Taoiseach and Tánaiste referred to yesterday and how they will be implemented, I am working with the Minister, Deputy Michael McGrath, on that. Of course I know the deadline is 1 May. When we have decided what we will do in conjunction with the rest of the Cabinet, we will then be able to say what the legislative means will be, if needed, for implementing it.
I asked for clarity in regard to that. Will the Minister clarify that the carbon tax is not hypothecated in law, that there is not a magic pool of money where carbon tax goes into one section, that it goes into the Central Fund and that there is a policy decision to spend that resource on mitigation measures, which not all happen? If the banking levy, which is reduced as a result of the Minister's decision in the Finance Act last year, was at the same level as last year, it could pay for the lost carbon tax of, for example, not increasing home heating oil costs on people who are really struggling. Home heating oil has gone up €1,600 per fill and the Minister will increase it by €20. If one were to look for a dictionary example of a government out of touch, this would be a good example. This would be an example of a society in crisis, trying to heat their homes, keep their family safe, and the Government's response is to push up the cost of home heating oil further in three weeks' time. The argument that if we do not do this, it will take away from retrofitting or other measures, is not actually the case because it is not hypothecated in law. Therefore, other resources from tax resources, such as the banking levy, which should be restored to the level it was at last year, could be used to fill that gap. That is the first issue.
In terms of the mitigation measures the Ministers, Deputies Donohoe and Michael McGrath, are talking about, the Taoiseach gave a commitment that no person would be worse off as a result of the carbon tax increases. Will the Minister give the committee that same commitment, that every person will be no worse off as a result of the increase he plans to make to home heating oil and gas in the next three weeks as a result of the increase in carbon tax?
If the Deputy wanted to open the dictionary and find an example of an opposition that has been dishonest, he would find Sinn Féin in the same dictionary. Sinn Féin comes forward and claims it is serious about trying to make a difference to the potentially catastrophic decay of our climate, but it will not advocate any measure that is challenging in order to make a difference to that existential risk. The Deputy knows that the majority of scientists and economists, who are trying to form a view as to what we can do to save our planet, are of the view that an increase in carbon taxation can play a role in doing that in conjunction with other measures. The Deputy knows that. He continues to make the case that such measures are not needed despite the level of challenge we are facing. He makes the case that he wants to be honest and play a role in avoiding and reducing the climate change crisis we are facing, but he will not advocate a single measure that is challenging or difficult to do it.
I am being honest in acknowledging that if we are going to reshape our economy and help protect our society as we do it, in the face of environmental disaster, all the ways of doing it are not easy. I do not take for one moment the Deputy's trite points regarding the Government being out of touch or not aware of the challenge people are facing. Of course we are aware. Of course I know. Of course we appreciate the huge challenges that so many are facing due to the rising costs of energy and daily living. Of course I appreciate that, but my appreciation of it cannot diminish the need for me to also be honest. The honesty about what we face is that, because so much of what is happening is outside of our control, we cannot protect or cover all the cost in relation to it. I am aware of the commitment the Taoiseach made in ensuring that nobody is worse off due to the changing carbon tax. I will certainly work to bring forward measures to the Government that aim to do that.
On the Deputy's point about hypothecation, he is right in that it is not legally in place at present. We have not set up such a fund, but it is also the case that every cent of the last three increases in carbon taxation have been set aside to go into measures to either help with the cost of fuel going up or to invest in things that could make a difference to our economy and society being able to manage climate change.
I think what the Deputy is suggesting in regard to his point on the bank levy is that if I had charged the bank levy for another year, I could have avoided some of the costs that are here. However, these banks are going. They are getting ready to leave. When they leave, the bank levy they were paying will go with them, whereas the expenditure commitments I am referring to here that we will have to incur, particularly when it comes to climate change, many of them will be permanent. With that in mind, using a bank levy revenue, even if I were to do what the Deputy has advocated, that might only be available for another year will not help with funding expenditures and needs that are likely to stretch way beyond that.
The Minister questioned my honesty numerous times and put himself on a pedestal in terms of the honest politician and me, the dishonest politician. There is nothing trite about me, a representative, having been elected by the people of Donegal with a substantial mandate, raising the issue of people in my constituency who are facing poverty and increased poverty as a result of the measure the Minister is advocating. He says that he understands how they are suffering, but he will push ahead with the measure and push up the cost of keeping their homes warm.
I do not know but maybe the Minister was outside the country in talking about the experts. His expert who was appointed to the advisory group was on national radio saying that this carbon tax increase in three weeks' time should not go ahead.
This was because there is a recognition that the price is going through the roof. Carbon taxes and behavioural taxes have a role to play in changing behaviours when there are other options available to people. We have seen an increase in the cost of filling a tank of oil, which two thirds of households in the west and the north west, and one third of households in the State, use as the primary source of heating their homes. The price increase of filling a tank of oil has nearly doubled since the start of the year. If there was going to be a behavioural change it would be that. The point is that the Minister lumping on another €20 every time one fills a tank is just creating more misery. It is not going to make people run out and move to an air-to-water system in the morning or move to underground heating. Most of these families do not have that type of resource.
I will make the point again that the Government's own expert on climate advice is saying that this is not the time to increase carbon tax on heating a home. The Minister's own backbenchers have a motion down before the parliamentary party tonight calling for the Minister to see sense. At least there is some hope in Fine Gael that not all of them are out of touch, but by God, if the Minister is not out of touch, he is telling me that he understands what is happening out there and he is deciding to go ahead with €20 increase in home heating oil in three weeks' time, despite the fact that Social Justice Ireland has stated that people are at breaking point. The Society of St. Vincent de Paul, one-parent family organisations and people on the front line are telling us this time and again. Comments are coming into my constituency office, and I am sure to the Minister's constituency office, that people are not putting on the heating because they simply cannot afford it. Where does the Minister believe that people are going to get the extra €20 in three weeks' time? It is easy for the Minister. It is easy for people who have been elected to the Oireachtas because we are well paid. It is easy for Ministers who are sitting round the table who are well paid and well looked after with all of their Garda drivers and all of the rest to say "Look this is important and they will get through it somehow". A lot of people will not get through it. For a lot of people, this is the breaking point. The Government's role here is to protect people from the worst edges. I am not suggesting that the Minister can do everything but he can do a lot more. The very least that the Minister should do is do no more harm. Yet, this is what he plans to do in three weeks' time by increasing the cost of home heating oil, by increasing the cost of gas, and by increasing the costs on these families and workers in trying to keep their homes safe and trying to keep their homes warm.
I want to call out-----
That is honesty.
I want to call out what Deputy Doherty is doing there. The Deputy is deliberately looking, again and again, to create the image of some kind of cosseted elite who are making decisions with the deliberate consequence of trying to add hardship and do harm to those we are privileged to serve. The tone, the words, and the way the Deputy describes those who are privileged to be in Cabinet and to be members of the Government, is all about trying to drive a wedge between those of us who are privileged to be in government and those we serve through being in government. That is what the Deputy is doing. It is a clearly defined and clearly thought-out tactic, which I am not having any of.
I am representing my-----
Can I just tell the Deputy that I can appreciate why he is doing this because as I call out of this kind of tactic, it is uncomfortable for him and it is uncomfortable for Sinn Féin? Let me tell the Deputy that there are no pedestals over here. I am trying to get the balance right between decisions that I know are needed to help our country in the years to come, to deal with trying to avoid the collapse of our environment and our biodiversity and to help in the here and now with the challenges and hardships that are here, which are created by the war and created by inflationary pressure. I accept that these will be added to by changes the Government is trying to make to help to deal with where we are with climate. This is what I am trying to do. I am trying to get that balance right.
Deputy Doherty referred to experts and to me being out of the country. Did the Deputy have his radio off yesterday when we heard the chairman of the Climate Change Advisory Council say this change is needed? Is the Deputy aware of that? The experts the Deputy refers to, including the person who chairs the panel that advises the Government, said that on balance, a change like this is needed and can play a role to fund the kinds of things we will need to do to help avoid the scale of climate challenge that we could yet face. This is what the experts said. I know that the Deputy is aware of the majority of expert advice that says these are part of the changes that are needed. The Taoiseach, the Tánaiste, and the Minister, Deputy Eamon Ryan, have made a commitment that will bring forward measures that would aim to mitigate the effect of this on many at a time of difficulty. The Minister for Public Expenditure and Reform, Deputy Michael McGrath, and I will do it. Deputy Doherty must not think that he will get away with trying to delegitimise or challenge the intentions of those of us who are in government and are trying to do our best to represent those who are in need at the time of great challenge. We understand that. We understand the challenge we are facing. Deputy Doherty does not have a monopoly on compassion and he certainly does not have a monopoly in understanding the kind of changes coming up that are needed in respect of climate. The Government will, in the next few weeks, bring forward measures that will do as the Taoiseach has outlined.
On a positive note, I am glad that the Minister for Finance has at least recognised that he said before that he was bringing no measures forward until budget day. I am glad that he has made a U-turn. Maybe the Minister's backbenchers are getting him to be a little bit more in touch with where ordinary people are at. The penny is dropping.
I thank the Chairman for allowing me to participate the committee for this section. I have a particular interest in the taxes on agri-diesel and how they impact on our farming families and others in the agriculture sector. As somebody who is probably not as au fait with these matters as everybody else, will the Minister confirm to me, in the context of this Schedule, that agri-diesel is incorporated under the other heavy oil section of the table?
That is correct.
Prior to the Government decision of 10 March, if I read this correctly, the rate of mineral oil tax that applied to agri-diesel then would have been €138.17 per 1,000 l.
That is correct.
As part of the package of measures on fuels, the Minister introduced a two cent reduction, which means that the current rate is, I believe, €120.55.
That is correct.
That has been described by a number of farm organisations including farm and forestry contractors as an insult. A number of other farming organisations described it as insufficient. Does the Minister believe this reduction has made a meaningful impact on farming families given the pressures they are under and given the increasing costs of agri-fuel diesel and its impact on their operations?
I know that those organisations, as is the case with many other representative bodies who represent those who are affected by this change and by changes in our economy, wanted me to do more. They believe that measures I have brought forward could be strengthened. I believe the change we are making here will offer help in respect of the additional costs that many are facing at the moment in the sector but I acknowledge it will not cover all of the costs.
The Minister says it would offer help. Would the Minister not describe it as meaningful?
I would describe it as meaningful help.
On 1 May, I understand that the carbon tax increase we have been discussing as it applies to home heating oil will also apply to agri-diesel under the section of other heavy oil.
That is correct.
So what will the charge be per 1,000 litres? What will be the rate of mineral oil tax on agri-fuel?
I will get that figure for the Deputy. It will be €138.17.
So, it is exactly as it was on 9 March, before the Minister brought in these measures.
That is correct.
The Minister has brought in measures that amounts to a two cent reduction in agri-diesel, which the Minister has just described as being "meaningful" and "helpful", and which offer help to farm families, and seven weeks later they will be paying the exact same rate as they were.
That is the case also with other fuels that I have referred to. As I have said all along, the measures I am bringing forward will not stop any increase happening, they will just reduce the level of increase that consumers will face.
The difference is that, unfortunately, the Minister made the decision that increases on petrol and diesel applied from last year, so the reductions the Minister applied on 10 March will apply to them until he lifts them, currently scheduled for 1 September. For agri-diesel, the increase is set to come in on 1 May. Essentially, the Minister has offered farm families, farm contractors and others required to use agri-diesel a 2 cent reduction per litre for a grand total of seven weeks.
I have stopped an increase going through that the Deputy would no doubt have criticised, had it happened.
No, the Minister reduced agri-diesel by 10 cent per litre on 10 March, from €138.17 per 1,000 l to €120.55. He will now increase it again, back to €138.17. As agri-diesel is generally purchased in tanks, most farmers and contractors will have had, at best, one fill in which they benefited from the reduction. The Minister has given the sector, which is under huge pressure and struggling, as referenced and acknowledged by the Government, seven weeks of respite. His intention, however, on 1 May is to restore the rate of mineral oil tax as it applies to agri-diesel to what it was on 9 March.
In the absence of the change I brought forward, that increase would have happened after 1 May. Does the Deputy accept that?
The Minister is asking for credit for-----
-----increasing the carbon tax and giving people a seven-week break from that increase.
I am not looking for credit for what I have done and have never suggested I am. I am saying that if I had not taken the measure I took, then after 1 May the increase would have been larger. Is that not the case?
Perhaps-----
That is the case. If I had not done what I did, the increase after 1 May would be larger and the Deputy would criticise me for that at that point. I have avoided something happening. If I had not taken the step I took, the increase would have happened and the Deputy would be critical of that.
I am sure somewhere in the Minister's mind there is logic in what he is saying. Can he outline the total mineral oil tax rate as it applies to agri-diesel on 1 September?
It is not that the logic is somewhere in my mind. There is logic. I will repeat it in case the Deputy is not clear on it.
In this instance, I-----
Let me conclude. I said if I had not taken the decision I took, there would have been an increase after 1 May. Because of what I did, there will not. That is not logic in my mind; it is just a statement of fact.
In relation to the Deputy's question, from 1 May it is €138.17 and on 1 September it is €158.50.
Here are the facts-----
If I had not done what I did, on 1 May users of this fuel would face an increase to €158.50. Because of what I have done, they do not.
Here are the facts, which are as logical as the Minister wants them to be. On 9 March 2022, the income derived by the Government from mineral oil tax on agricultural diesel amounted to €138.17. The Government made a measure on 10 March that reduced that to €120.55. On 1 May, the Government's take will increase to €138.17 again, back to where it was on 9 March, and on 1 September it will increase to €158.50. These figures are not affected by the war in Ukraine, international factors or global influences. This is the money the Government is charging on agricultural diesel.
Much of the discussion the Minister had with Deputy Doherty was on the benefits or otherwise of carbon tax. A core benefit of that tax, we were told, was to change people's behaviour. What alternative does the Government propose for farmers to the use of tractors and other vehicles using agricultural diesel?
Let me restate the facts. If I had not put in place the measures included in this finance Bill, the increase in excise would have been from €120 to €158.50.
That is happening on 1 September.
It would have been happening on 1 May, if I had not done what I have done. I wish to be really clear about that. In the absence of the action I have taken, the increase would have been considerably larger. That is all I claimed at the time and all I claim now. That is not logic in my mind. It is not my facts or the Deputy's facts, but the facts as laid out in this legislation.
Our farmers and farming community play an incredible role in looking after our economy and growing the food we need. They are entitled to a double deduction for the carbon tax element of farm diesel costs. I am sure the Deputy is aware of that.
I will come to that but I have asked a specific question on the alternatives.
I want to make sure the committee is aware a deduction is in place in relation to the carbon tax element of fuel costs. I accept that for many in our farming community at the moment, the alternative to diesel-fuelled tractors is not readily available. I know that is the case but that is why the Government has tried to help with other costs in relation to our farmers, for example, through the double income tax relief on carbon and the supports made available by the Minister, Deputy McConalogue, at other points, such as with regard to the tillage sector.
The Minister said "not readily available" Can I take it that is his term for "does not exist"? The only alternative to farmers using tractors, in terms of technology, is not to produce the food they are producing.
On the double taxation relief measures the Minister mentioned, I am sure he is aware, because Deputy Doherty and I have raised the issue, of farm contractors carrying out an increasing level of the work taking place on our farms. They do not avail of that measure, despite the fact they carry out agricultural work. The Minister's Department committed that a review into that matter would be completed by the end of 2019. We are approaching the middle of 2022. What is the Minister's latest excuse for not having that review done?
It is a rationale, not an excuse. I remind the Deputy, whose understanding of these matters may not be as clear as others, as he said to me earlier, that when it comes to carbon taxing, because of the tax relief in place for farmers, they have been able to claim back the tax increases that have happened in carbon since 2012. I am sure the Deputy is aware of that.
If they are making adequate profits, yes.
The Deputy is aware that due to the carbon tax we are referring to and the tax relief in place, they are able to claim that back.
Again, if they are making adequate profits, yes.
If they are making adequate profits, indeed. Despite the difficulty so many in our farming community face at the moment, the majority of members of that community are still able to claim the tax reliefs available in our Finance Acts. I reiterate the support that is there at the moment. I know it is needed. The review of contractors is under way and I expect it to be completed in advance of the budget.
So the Minister intends to bring forward a measure in the budget on that.
I said the review would be complete by the budget.
The problem is when farm contractors' costs increase, they have no option but to pass that on to the people for whom they are doing the work, so this charge applies directly to many farmers. It has been promoted at EU and domestic level that farmers pool resources and apply contractors and that, as opposed to having huge vehicles and machines lying idle on their lands for long periods, they contract somebody to carry out the work across a larger number of farms. They have been doing that. Does the Minister accept it is regrettable that a move in this area has not been made before now? Does he accept that the increases in carbon taxes that will apply on 1 May and, in a double whammy, on 1 September as a result of the reversal of the temporary measures, constitute, in effect, an additional charge on farmers, one which they have no alternative but to bear?
I reiterate that due to the relief that is in place, farmers are in a position to claim back the increased carbon taxing that has happened over recent years. It is through my recognition of the challenges that contractors are facing that this review is underway.
I might beg the indulgence of the Minister and Chairman for a few moments because my question does not relate directly to excise duty but to additional factors that inform the cost to the consumer of fuel and energy. Many of us, at least those of us on the Opposition benches, have been arguing for some months that the Government should seek a derogation from the VAT directive to allow the State to reduce VAT rates on fuel and energy for a period of time. This derogation could ensure that the VAT rate would not go up to 23% on the conclusion of that mitigating measure. We know the Central Bank has estimated that inflation may peak at 8% this year. This could be a conservative estimate. The Exchequer returns today are very impressive given the current context. Income and corporation tax and VAT receipts are up considerably on comparable months, namely, the first quarter of 2019 pre-pandemic. VAT receipts are up by 17%, which is significant in anyone's language. It is fair to say that a significant composition of the increase in VAT receipts comprises VAT charged on the increased costs of fuel and energy for householders and businesses. There is a strong case and policy rationale for some of that VAT windfall to returned to the pockets of those who need it most. Many of us on the Opposition benches have been arguing for the Government to seek a derogation from the VAT directive at European Commission level and it seems as if some headway has been made in that regard in recent weeks. Could the Minister update the committee on what headroom is available to him in respect of the potential reduction in VAT? My interpretation of the Taoiseach's remarks in recent days about mitigation measures leads me to believe that the Government may be considering a reduction in VAT on fuel and energy on a temporary basis. Will the Minister confirm that this is under consideration by him and his Government colleagues and let us know when he expects to make a decision on the mitigation measures the Taoiseach remarked upon in recent days?
Regarding Exchequer returns, I acknowledge that VAT receipts for the first quarter - in fairness to Deputy Nash, he used the base of 2019 as opposed to that of 2020 or 2021 - are strong. However, I would make the case that if we look at where we are with excise, we can see it is down. Excise is down for a number of reasons. The first is that we have cut the rate of excise, therefore, we would expect to see excise tax receipts fall. However, we have some concerns that this is the first tax head that is being affected by consumption within our economy beginning to change as the price of something goes up. While Deputy Nash is not suggesting that the outlook in our public finances for the rest of the year is rosy, I still want to make the point that if we accept, and I do, that living standards are under pressure and many are facing real struggles, that is not consistent with tax collection or tax receipts across this year getting better as the year goes on. I expect that as we move through the year, we will face challenges with regard to additional costs to which we must respond. Next week, we will publish the stability programme update that will outline our best thinking regarding where we are with tax collection and growth for 2022. There is no more flexibility available to me than when I announced the set of measures contained in the Finance Bill a few weeks ago. In the ECOFIN meeting yesterday, I raised the case for flexibility for clarification regarding what is possible both under this and future VAT directives and that is being considered by the Commission. I expect it will be some time before I get an answer and can understand whether that answer will be of help. I have no further VAT flexibility available to me now than when I announced the measures contained in this Bill.
I approach the issue not as a Government Minister, which the Opposition suggests is in elitist mode, but as a Member elected by and representing the public. To what extent do we respond when energy companies such as the electricity, petrol and diesel suppliers seek or propose an increase? How do we react to that? Do we test it or accept it as being normal? Do we accept the suppliers' word that it is part of the ongoing situation that automatically arises out of the war in Ukraine or do we test it? Are there means of testing it? If so, to what extent do we exercise those means? I have experience of seeing five, six and seven container ships anchored offshore in various heavy ports across Europe waiting. When I inquired about it, I was told they were waiting for the price of energy to rise, which is interesting. In order for us to know how best to deal with the situation, for example, a container ship going askew in the Suez Canal, to what extent do we attribute the fuel price increases to that? Has this been done?
It would be up to the Department of the Environment, Climate and Communications, the Minister and his regulators to form a view on the kind of pressures energy companies face at the moment. All I would say is the fact that every other economy is facing rising prices for energy coming through from a variety of energy suppliers points to the fact that the pressures relating to the cost and availability of fuel are real. If we were the only country facing exceptional increases, there would be some concern regarding how energy is being supplied to us and at what cost but that is not the case. Every other economy in Europe and across the world is facing these kind of challenges. I am sure the Minister for the Environment, Climate and Communications and his regulators will take time to see if there is any evidence of anything local having an impact on the prices about which we are concerned.
I thank the Minister for his answer. It leads me to my next point, which is that this strategy was adopted in the 1970s and 1980s. The response to the request for information as to why increases were happening was a suggestion that everybody was doing it as a precaution. I do not accept that. I believe we need to test everything, particularly at the moment, because there is a grave danger of energy companies off-loading their concerns leading to a real negative impact on consumers, be they householders or other users of diesel, including farmers, fishermen or fisherwomen etc. There is a grave danger that energy companies can succeed in off-loading the increased prices and it then becomes part of our way of life.
I do not accept that, at all. I strongly support the idea that we have to justify everything, especially in times of crisis such as the present. I compliment Deputy Doherty on his knowledge of the goings-on at the Fine Gael Parliamentary arty meeting. He should come along some time for the fun of it, just for the photos.
That would indeed be an appearance.
I cannot wait to take up that offer.
I assure Deputy Doherty that we would welcome him with open arms. However, we need to deal with this part because it is not sufficient to say there is a worldwide trend of increasing energy. That is fine, but the worldwide trend then becomes the driving force as opposed to the necessity. I am looking for the necessity.
There is another issue that needs to be dealt with by all parties in the House. The Minister, Deputy Ryan, is right in that we have been very lax in our delivery of alternative energy. Ten, 12, 14 or 15 years ago, politicians of all hues in the House made great capital out of supporting people who were in opposition to wind turbines and onshore and offshore wind farms and the opposition still goes on. At the present time, I am intoning that the level of investment, either in onshore, offshore or other alternative energy, is far short of what is required. We need to take that issue on board and enable the areas that are capable of providing the alternatives to do so without imposing negatively on the consumer. It should not impose on the consumer. What are the Minister's comments on that, apart from Deputy Doherty attending the Fine Gael meeting?
We have already commented on what an unusual event that would be. Maybe Deputy Doherty will invite Deputy Durkan along to a Sinn Féin Parliamentary Party meeting before this committee appearance is out.
That would be funny.
In answer to the Deputy's question and point, this is why the Minister of State, Deputy Burke, has brought forward the changes in foreshore licensing and marine planning, which is to lay the foundations for accelerating where we are with offshore wind and renewable energy. There is no doubt at all that if we want to increase our energy security, not to mention respond to the great challenge of climate change, all of those agendas point in the same direction of increasing our renewable energy capacity. That is why the legislation is being brought forward and has been passed by the Oireachtas. The Minister, Deputy Ryan, is now very energetic in trying to accelerate the delivery of those kinds of energy sources off our coasts.
I am glad to see that. However, I contend that the level of investment so far with regard to onshore or offshore energy alternatives is far short of what is required to meet the targets to which we have committed. I am surprised the Opposition has not raised this issue because, in many cases, it was very vocal in its opposition to the provision of the necessary investment and was repeatedly to the fore in its objections and alleged concern about some of these issues.
One of the reasons private sector investment has not yet materialised in the way we want is that there has been uncertainty regarding where these kinds of applications would stand from a planning point of view. That is why the legislation the Minister of State, Deputy Burke, has piloted through the Oireachtas is so important. It aims to bring clarity to the licensing regime off our shores. The Minister, Deputy Ryan, and the Government will do what we can to try to encourage private sector investment to locate in a greater amount off our coasts.
I agree entirely, but I emphasise the necessity to ensure that wherever the investment comes from, be it from Government, private investors or wherever, it is accelerated to the extent necessary to achieve the targets in 2030, 2031 or 2032 and that we do not fall far short of the targets at that time. It would also serve to meet the criticisms in some quarters that we have not done our job to the extent to which we should have.
It would also alert politicians to the fact that, when they oppose such proposals of investment in wind farms, solar farms or whatever, in terms of alternatives, onshore wind turbines are the cheapest to provide and the cheapest electricity to produce. Offshore, it gets a bit more vague and expensive. Some of it may not materialise at all. It may not be feasible. That is on the basis of countless attempts to do so all over the world. The point at issue at this stage is how far we can tell the consumer that everything is in order to provide the alternatives in early days without bringing the economy to a halt. That is not a criticism of any government, Minister or Department.
We are trying to avoid bringing the economy to a halt in any way as we try to find new ways in which energy can be generated. We will do that. The Deputy is right. We are not where we want to be in terms of having access to more renewable energy. We need to do better than we are doing at present. This is why I go back to the importance of the legislative change that has just been made.
As the Deputy knows, that change will end up with an agency the role of which will be to try to deliver what the Deputy calls for. More important than the agency has been that a great many issues needed clarification with regard to our marine foreshore and its licensing and planning. The legislation the Minister of State, Deputy Burke, brought forward had been years in the making, has been long called for, and has now happened. I hope that lays the foundation for making the kind of progress the Deputy wants to see happen.
Can I just clarify, arising from the exchange with Deputy Carthy, that Schedule 2 in section 11 sets out the rate of mineral tax per 1,000 l. The Deputy was referring to other heavy oil, which includes home heating and agri-diesel. Is that correct?
That is correct.
I will not repeat everything but I want clarification. In each of the months stated, that will be the tax take per 1,000 l from both kinds of oil.
That is correct.
It shows increases from €138.17 to €158.50 to €178.83 and so on into 2023 and onwards. For clarification, the Minister then mentioned offsets and that no one will be worse off. What offsets? Is that a targeted offset to help those on whom all of this impinges, be it the elderly, sick, marginalised or those on low incomes? Is that what the Minister means?
This is the kind of work that the Minister, Deputy McGrath, and I need to do.
That work is under way.
It is.
When will the outcome of that be? Will it be in time to deal with the increases that will occur along the line?
That is the intention.
Will it be targeted?
We have to work all of that out.
Amendment agreed to.
SECTION 11
Question proposed: "That section 11 stand part of the Bill."
On section 11-----
I thought you had exhausted everything.
No. Unlike some of the other members, I stay for all of the sections of the Finance Bill.
Not at all. We could be coming on stream-----
And my good cara, Bernard, who is always there.
He represents the Fine Gael backbenchers.
Correct. We will be coming on to that now.
Sometimes it is scary how much Bernard and I have in common on this committee.
I may have some interest in this as I am a director of a music festival who will be applying for a licence in due course. I make that point in case there are any accusations of interests not declared.
Can the Minister clarify the timing of this? The section allows for no duty of excise chargeable on the special exemption licences, basically, the late licences, for events in respect of dates falling within the period. This is based on orders granted under section 5 of the Intoxicating Liquor Act 1927 in respect of dates falling within the period beginning on 26 January 2022 and ending on 30 April 2022.
I assume - this is the clarification I am looking for - that the date of the event is what is referred to here or is it the date of the granting of the order because it makes the point about orders "granted under section ... in respect of dates falling ..."? Is it the event that has to fall within those dates or the order by the court?
The event.
I thank the Minister.
Of course, my curiosity is now piqued as to what music festival the Deputy is involved in.
The Minister is more than welcome to come to Gaoth Dobhair. Indeed, the Tánaiste and Minister for Enterprise, Trade and Employment, as an avid festival goer, is more than welcome as well. It is a not-for-profit music festival in Gaoth Dobhair. It has been running for the past couple of years but, obviously, Covid has impacted on it.
Is it the Rory Gallagher one?
No. It is a new one. It is in Gaoth Dobhair itself. We have big bands such as Gavin James, Aslan, Kíla, Hermitage Green, Sigala and King Kong Company and local acts, such as Megan Nic Ruarí, all playing over two days.
I do not know if the Deputy will be disappointed or relieved to know I have seen many of those acts, only not at the Deputy's festival.
Very good.
The Deputy has whetted my appetite so.
Will the Minister attend?
We will, if the Chairman will come along. That would make some outing. That would be good.
The committee is more than welcome to have its July meeting in Gaoth Dobhair.
Question put and agreed to.
Sections 12 agreed to.
SECTION 13
Amendment No. 8 is out of order. It involves a potential charge on the people.
Amendment No. 8 not moved.
Question proposed: "That section 13 stand part of the Bill."
There is an issue here in how we are dealing with our fishing sector. It is a live issue today because of what is happening and I take the opportunity to raise it with the Minister. I have also raised with the Taoiseach previously. What is happening in Killybegs is a disgrace. The Minister needs to take an interest in this sector. There are companies, that, in fairness, have been supported by Enterprise Ireland and other State agencies, and which are employing individuals, that are at risk if this practice that is happening in Killybegs continues with the Sea-Fisheries Protection Authority, SFPA. The companies are in dispute as to how fish should be weighed when it comes onto the pier.
We have a particular issue with whitefish. Whitefish has to remain in water. Otherwise it cannot be used for human consumption. We had a Danish vessel coming in on Friday. The SFPA stated that they had to weigh a particular way, which meant it would be brought out of the water. That meant it could not be used for human consumption and would only have to be used as fishmeal. The Danish vessel went away and decided not to land.
Yesterday, we had a Norwegian vessel with 950 tonnes of fish on board. The Norwegian vessel was told the same. Prevented from landing, it went away. It landed today at Derry port. Derry port operates under the same EU regulations as Killybegs port because of the protocol. The 950 tonnes have been offloaded at Derry port. At the minute, there is a convoy of 40 lorryloads of fish carrying 950 tonnes travelling down from Derry back to Killybegs to get that fish processed. We talked about the environment and the need to do more. That is the height of stupidity. Not only that, 56 workers were let go yesterday in the factory because they had no work for them because the fish did not land. The Danish vessel is gone. Another Norwegian vessel turned around and is away back to Norway because they heard about the craic that is going on in Killybegs. If this gets out, as it is getting out, there could be long-term reputational damage. This issue needs to be resolved. Thankfully, there is a solution. The industry itself has developed a weighing mechanism that the High Court has ruled can be used if it is externally approved. It really needs to be dealt with.
The issue in this section is interlinked with how the fishing industry is dealt with. It is about the tax treatment of the decommissioning scheme. An announcement was made on funding being provided by the Brexit Adjustment Reserve fund to tie up vessels and this funding was to cover quota cuts. There were quota cuts as a result of Brexit, vessels had to be tied up, and under the Brexit Adjustment Reserve, money was made available. Now we learn that, under this decommissioning scheme which is separate to this, the money that was provided to those who are in the decommissioning scheme, which is basically getting rid of their vessels for the tie up because of the loss of their quota, will be deducted. This is not the way to treat this industry. You cannot give with one hand and take with the other. It is not fair. There needs to be a proper approach to this industry. Deputy Mac Lochlainn, my party's spokesperson on fisheries, is passionate about this, as is the industry itself.
I would raise with the Minister the need for him and the Minister for Agriculture, Food and the Marine to sit down and look at how this scheme is operating from both a fisheries and a taxation point of view. There are seven or eight companies based in Killybegs that do not process fish at all; they service boats. The boats that they service are in the Irish fleet, but they also service Norwegian and Danish boats. If they are not coming in, they have no boats to service. There is an engineering capability. It is fantastic that they are at the cutting edge but they are losing out as a result of what is happening in Killybegs. That is three vessels in four days that turned around. That is a serious issue. It needs to be resolved quickly because the message is going out that Killybegs is not a welcome port for these foreign vessels and they are making a decision to not spend a day steaming in to Letterkenny and using up diesel - we know the cost of diesel at present - on the off-chance that they will not be able to land and that they will go back to Norway or go to Scotland or wherever they go.
The worst thing is I understand most of the blue whiting that was on Danish vessel was going to west Africa because it is a good fish, and it is a cheap fish for west Africa. It is now going for fishmeal because once the water is taken out of it, it does not last and it will only be used as fishmeal. Some of it was going to Ukraine as well. It is ridiculous what is happening and it needs to be sorted out quickly.
I am aware that this matter is being dealt with by the SFPA, which the Deputy referred to. This issue has been the subject of engagement through the consultation committee between the SFPA and the local industry that the Deputy mentioned.
I was not aware this matter would be raised. I appreciate it is an important matter. While the SFPA is an independent body of Government and, obviously, of me, I will certainly ask for a report on the matter because I am aware of the significant asset that is Killybegs and the scale of technology and expertise that is there. It is important not only to the local Donegal economy but also to our maritime sector. I will ask my officials and my Department will raise this matter and ask for an update on it. The SFPA is independent but, nonetheless, it is a matter that I will look to understand more.
On the point the Deputy made regarding the fact that any aid received by a vessel owner under the Brexit temporary fleet tie-up scheme is deducted from the owner's decommissioning payment, I understand that this is a requirement of the state aid approval process for this scheme.
It is a requirement that has been made by the Commission to ensure that the scheme is consistent with state aid policy.
I welcome the Minister's commitment to taking an interest in this issue. My final point on this is that it was the subject of a High Court ruling. We know that the Commission's rule is clear, in that it can be either the Sea-Fisheries Protection Authority, SFPA, that oversees the weighing of fish - currently, it performs spot checks on 5% of the total catch - or it can be done by a third party. The industry, which developed this machine at great cost to weigh this type of fish without destroying the fish - the fish are taken out of the water quickly, weighed and then put back into water - is willing to give the machine to the SFPA and the SFPA would run it. Given that the High Court has stated that the machine can be used as long as it is independently calibrated, there is a solution.
I welcome the Minister's statement that he will take an interest in this matter, given the importance of the sector, particularly to the region in question. On the week that the town becomes a university town, with Letterkenny IT becoming a part of the Atlantic Technological University, this story is taking away from that positivity and potentially from the engine that drives the area and its hinterland.
Killybegs is an important anchor for our maritime sector. The SFPA is independent of the Government, but it sounds like the Deputy has raised an important matter. I will ask for an update on it. My departmental officials have put a great deal of work into this section because the issue had been raised by the sector with the Department of Agriculture, Food and the Marine. We knew that we needed to make progress on the matter in the context of Brexit's impact on the sector. That is why we made the decision to deal with this maritime matter in this Bill. We would not normally do that and would instead wait until budget day. However, we appreciate that this issue is important to the sector. In that spirit, I will try to find out a little more about the issue that the Deputy has raised.
Question put and agreed to.
Sections 14 and 15 agreed to.
TITLE
I move amendment No. 9:
In page 3, lines 6 and 7, to delete “regulation of taxation and of stamp duties” and substitute “regulation of taxation, of stamp duties and of duties relating to excise”.
Amendment agreed to.
Title, as amended, agreed to.
Pursuant to Standing Order 187(3), I have to report specifically to Dáil Éireann that the committee has amended the Title to the Bill to read as follows:
An Act to provide for the imposition, repeal, remission, alteration and regulation of taxation, of stamp duties and of duties relating to excise; to otherwise make further provision in connection with finance; to make provision for the exemption from income tax of the payment generally referred to and commonly known as the Pandemic Special Recognition Payment and for that purpose to amend the Taxes Consolidation Act 1997; to make provision for supports to employers and certain businesses and for that purpose to amend Part 7 of the Emergency Measures in the Public Interest (Covid-19) Act 2020, the Taxes Consolidation Act 1997, the Social Welfare Consolidation Act 2005 and the Value-Added Tax Consolidation Act 2010; to provide for the repayment of stamp duty on cost rental dwellings and for that purpose to amend the Stamp Duties Consolidation Act 1999; to provide for the waiver of excise duty charged on certain special exemption orders granted under section 5 of the Intoxicating Liquor Act 1927; to provide for the tax treatment of certain payments to holders of sea-fishing boat licences arising under a scheme to be established by the Minister for Agriculture, Food and the Marine pursuant to Regulation (EU) 2021/1755 of the European Parliament and of the Council of 6 October 20211 and for that purpose to amend the Taxes Consolidation Act 1997; to provide for cost recovery mechanisms in relation to the Central Bank of Ireland, as operator of two beneficial ownership registers; and to provide for related matters.
Bill reported with amendments.
I have been asked by Deputy Nash to inform the committee that he intends to introduce an amendment on Report Stage relating to a report on the Minister's management and administration of the temporary wage subsidy scheme and the EWSS. This relates to section 4.
I wish to inform the committee that I will table amendments to section 11 on Report Stage.
I thank the Minister and all of his officials for attending and members for participating.