Dáil Éireann Debate, Tuesday - 4 July 2017
146. Deputy Thomas Byrne asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 369 of 20 June 2017, if the National Training Fund Act 2000 was amended appropriately, if it would be possible to use a portion of the accumulated surplus and-or annual surplus of the NTF for capital funding in the further or higher education sectors. [30874/17]
View answer147. Deputy Thomas Byrne asked the Minister for Public Expenditure and Reform his views on whether it is justified to ask employers to contribute more to the NTF via the employers' levy in view of the fact that the fund already has such a large surplus which is not being used. [30876/17]
View answer148. Deputy Thomas Byrne asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 369 of 20 June 2017, if he will answer the original question which requested information on whether he has sought approval from EUROSTAT on whether it would be permissible under the fiscal rules to use the surplus from the National Training Fund levy for capital expenditure, which was not answered in the original response. [30877/17]
View answerI propose to take Questions Nos. 146 to 148, inclusive, together.
The Fiscal Rules were not developed by Eurostat and they have no oversight on the assessment of compliance, therefore it is not necessary to consult with or seek approval from them. The assessment of compliance is undertaken by the European Commission (EC) in terms of the EU Fiscal Rules and by the Irish Fiscal Advisory Council (IFAC) in terms of the domestic Budgetary Rule.
The EC and IFAC use the Eurostat estimates of General Government Expenditure on the European system of accounts 2010 basis (ESA 2010) to assess the growth in expenditure year-on-year to determine whether Ireland complies with the spending growth limits set out by the Expenditure Benchmark. The operation of the Expenditure Benchmark is set out very clearly in the Vade Mecum of the Stability and Growth Pact, published by the European Commission.
As set out in the Vade Mecum, the only means by which to increase expenditure beyond the limits set out in the Expenditure Benchmark is through the introduction of a Discretionary Revenue Measure (DRM), which would cause revenues to permanently increase. The use of a fund surplus does not count as a DRM and cannot therefore be used to fund additional expenditure over and above the limits set out in the Expenditure Benchmark.
However, the introduction of an increased employer PRSI contribution to go directly towards the NTF would constitute a DRM, as this is a policy decision to permanently increase revenue flows into the fund. The additional revenues raised by such a measure could then be used to fund additional NTF expenditure and provision of services.
Regarding the Deputy's question on the justification to ask employers to contribute more to the NTF while the Fund carries a significant surplus. Firstly, I would stress that the Fund, including its surplus, as set out in the legislation, can only be specifically used to raise skills of those in employment, to provide training to those who are wishing to acquire skills to take up employment or to provide information on the existing and future skills need of the economy.
Regarding using the NTF for capital expenditure; as previously indicated the implications of using the fund for any other purpose, including capital expenditure, requires consideration of whether the utilisation of the surplus would be in conformity with the Expenditure Benchmark rule since as set out above, use of the surplus would consume fiscal space. To increase expenditure from the NTF, as the Deputy suggested, requires a policy decision to permanently increase revenue flows into the fund - in this instance a proposed increase in the NTF levy. It is the additional revenues of this policy change that can then be used for future funding needs. The current surplus in the Fund does not represent additional revenues.
