Barry Cowen
Question:194. Deputy Barry Cowen asked the Minister for Finance his priorities for the remainder of his term in office; and if he will make a statement on the matter. [32776/14]
View answerThursday, 17 July 2014
Questions (194)
Written answers
The Statement of Government Priorities was published by the Taoiseach and the Tánaiste on Friday, July 11th which covers the remaining 21 months in office. Building on the commitments of the Programme for Government and the Medium Term Economic Strategy, the following key priorities were set out:
- Strengthening the Domestic Economy and Prioritising New Jobs for the Unemployed
- Delivering Better Living and Working Standards
- Improving Housing Availability and Affordability
- Responsible and Sustainable Management of the Public Finances
- Rebuilding Trust in Politics and Public Institutions
- Protecting and Enhancing Peace in Northern Ireland
1. Strengthening the Domestic Economy and Prioritising New Jobs for the Unemployed
In relation to the first priority, some of the specific actions relevant to my Department include:
- Enacting legislation to establish the Strategic Banking Corporation. By 2018 this will make up to €4 billion in low-cost funding available to small and medium-sized businesses.
- Enacting legislation to establish the €6 billion Irish Strategic Investment Fund to make commercial investments in Irish enterprise and infrastructure.
- Using the same legislation to establish NewERA on a statutory footing to support higher investment levels and better returns from our commercial semi-states.
- Continuing to support the development of Dublin as an international city region that will have positive economic benefits for the entire country.
As well as these specific actions, my Department will continue to examine the use of its policy levers to assist sectoral economic growth as reflected in policies already introduced to support tourism, agriculture, SMEs etc. My Department will also play a leadership role in developing the Construction 2020 Strategy and actively engaging with the Retail Consultation Forum.
2. Delivering Better Living and Working Standards
Consistent with the measures to be taken to create more jobs and reduce unemployment, Government has committed to delivering a new deal on living standards to ensure that the economic recovery is felt by low- and middle-income working families. Through the budgetary process, I will work with my Ministerial colleague, Brendan Howlin TD to:
- Introduce measures to assist low-income families by improving the system of child income supports such that those moving from welfare to work will retain payments for children to ensure that people are better off in work.
- Increase access to subsidised childcare and afterschool places by extending eligibility and rebalancing parental contributions for families making their way into employment.
- Announce a tax reform plan to be delivered over a number of budgets to reduce the 52% tax rate on low- and middle-income earners in a manner that maintains the highly progressive nature of the Irish tax system.
- Increase the Household Benefits Package by €100, in part to compensate older people and other vulnerable groups for the introduction of water charges.
My Department will also assist in completing, by end-2014, a review of the implementation of the Central Bank's mortgage arrears targets set for the banks and the operation of the Insolvency Service to ensure that both bodies have the powers needed to support families willing to work their way through their debt problems.
3. Improving Housing Availability and Affordability
My Government colleagues and I recognise that adequate supply of housing for all sectors is fundamental to a healthy society and a vibrant economy. The Department of Finance is playing a leading role in implementing the Construction 2020 strategy. A key policy objective is to ensure that home ownership remains an attainable ambition for young families. My Department will be centrally involved in:
- Assessing the merits of a new 'Help to Build' funding schemes for the development of affordable housing in the private sector, and the merits of a new "New Buy" scheme to ensure availability of adequate, affordable mortgage finance for first-time buyers when new housing output comes on-stream in advance of Budget 2015.
- Working with national and European competition authorities to encourage and support new mortgage lenders into the market in order to put downward pressure on interest rates for variable rate mortgage customers, both new and existing.
- Liaising with NAMA to ensure the timely and coherent delivery of a successful Strategic Development Zone to maximise the delivery of residential housing units, as well as to deliver commercial space in Dublin's Central Business District.
- Sourcing significant new sources of finance from, e.g. the EIB, ISIF, pension funds and the private market to assist the Social Housing Strategy.
4. Responsible and Sustainable Management of the Public Finances
A central pillar of Government strategy since it took office is to return the public finances to a sustainable position and introduce safeguards that will ensure past mistakes are not repeated. In this respect:
- Our Medium Term Economic Strategy commits us in the first instance to cutting the deficit to 3% of GDP by 2015.
- The state's investment in Bank of Ireland shows that the careful management and disposal of our bank holdings can result in good returns for the taxpayer. The Government will continue to work through diplomatic channels to build international support for measures that will reduce Ireland's debt. The disposal of the remaining bank assets will reduce this sector's contribution to the State's excessive debt levels.
- NAMA was an agency born out of the banking crisis and the Government is determined to ensure it concludes its work as quickly as possible. The ongoing review of NAMA strategy will be published in the coming weeks and it will support an accelerated disposal strategy that will mean at least 80% of the assets will be disposed of by end 2016.
- As Europe emerges from the financial crisis, the Union must focus on issues that will make a real difference to the daily lives of its citizens. The Government remains committed to ensuring that the European Union prioritises the key themes which were central to Ireland's presidency Jobs, Stability and Growth. Both government parties will work through their membership of the largest European political families the EPP and PES to ensure that growth and job creation are at the heart of EU's agenda. I will further this agenda through Eurogroup and ECOFIN and its relevant agencies. My Department plays a very significant role in representing Ireland at European and International institutions and we intend to use all of our interactions to ensure these institutions are focused on increasing global economic growth.
5. Rebuilding Trust in Politics and Public Institutions
In relation to rebuilding trust in politics and public institutions, greater transparency in budgetary policy through the publication of the Medium Term Budgetary Framework along with the independent oversight of the Irish Fiscal Advisory Council reinforces the integrity of the budgetary process. Enhanced engagement with the Oireachtas at Ministerial and official level also illustrates my Department's commitment to rebuilding trust in public institutions. For example, I now engage with the Oireachtas Committee on a quarterly basis ahead of ECOFIN to assess Ireland's views on European policy.Over the remaining term of this Government, my Department will continue to further this agenda through:
- Legislating to give NewERA, which manages the State's shareholder function in relation to commercial semi-state companies, the responsibility to provide advice to the relevant Minister on appointments to the semi-state boards.
- Assisting in systemically publishing details of all appointments to State Boards by providing details of appointments to boards under the aegis of the Department of Finance.
- Facilitating the retention by local authorities of 80% of the proceeds of the local property tax from 2015, with the option to vary the rate by up to 15%. This will be done in a manner that ensures that no local authority will be worse off as a result of the funding reforms, and that some local authority areas where property values and property tax bills are higher than average will be better off. It will be up to the new councils to decide whether to use any surplus funds to cut the rate of property tax or to fund additional services.
To conclude, we have achieved a great deal over the past 3 years but we must not become complacent. We will continue to place job creation and economic growth at the heart of all our economic policies. As we return to more normal times the Statement of Priorities, that builds on the programme for Government and the Medium term Economic Strategy (as a blueprint to sustain a competitive economy that can pay its own way, serve society, and that can survive and thrive in a reformed Eurozone and an increasingly globalised international economy) offers a roadmap on how we intend to help working families and low and middle income workers. My Department remains fully committed to delivering on these priorities.