Protected Disclosures Data

Questions (81)

Micheál Martin

Question:

81. Deputy Micheál Martin asked the Taoiseach the number of whistleblower complaints in his Department since the legislation was introduced in 2015. [25666/19]

View answer

Written answers (Question to Taoiseach)

The Protected Disclosures Act 2014 provides a robust statutory framework which aims to provide protections to whistleblowers who raise concerns regarding potential wrongdoing in their workplace.

In line with the Act, my Department has a policy on Protected Disclosures which sets out the procedure by which an employee can make a disclosure, what will happen when a disclosure is made, and what my Department will do to protect a discloser.

To date, no disclosures have been received from employees or former employees of my Department.

Departmental Offices

Questions (82)

Joan Burton

Question:

82. Deputy Joan Burton asked the Taoiseach the cost of renting, leasing and hiring office space for his Department, including public bodies, in each of the years 2015 to 2018 and to date in 2019, in tabular form. [25921/19]

View answer

Written answers (Question to Taoiseach)

My Department does not rent, lease or hire any office space. The properties occupied by my Department and the National Economic and Social Development Office are provided and managed by the Office of Public Works. The National Economic and Social Development Office pays a contribution to the OPW of €322,329 per annum for its office space, with €241,746 paid to date in 2019.

Defence Forces Recruitment

Questions (83)

Fiona O'Loughlin

Question:

83. Deputy Fiona O'Loughlin asked the Taoiseach and Minister for Defence further to Parliamentary Question No. 101 of 14 May 2019, the timeline of the review into the recommendations from the working group; and if he will make a statement on the matter. [25642/19]

View answer

Written answers (Question to Defence)

I have requested the information sought and will revert to the Deputy when the information is available.

Defence Forces Personnel Data

Questions (84)

Fiona O'Loughlin

Question:

84. Deputy Fiona O'Loughlin asked the Taoiseach and Minister for Defence further to Parliamentary Question Nos. 69, 70 and 71 of 29 May 2019, when a decision will be made on whether members of the Defence Forces will be participating in the 2019 CISM World Games in China; and if he will make a statement on the matter. [25643/19]

View answer

Written answers (Question to Defence)

Further to Parliamentary Questions, No's 69, 70 and 71, I can confirm that approval has now been given for the Defence Forces to participate in the 7th CISM World Games which will take place in Wuhan, China in October 2019.

Protected Disclosures Data

Questions (85)

Micheál Martin

Question:

85. Deputy Micheál Martin asked the Taoiseach and Minister for Defence the number of whistleblower complaints in his Department since the legislation was introduced in 2015; and if he will make a statement on the matter. [25656/19]

View answer

Written answers (Question to Defence)

There have been a total of 22 Protected Disclosures made between 2014 and 2018 with an additional 4 received to date in 2019. This figure relates to all Protected Disclosures which have made been made both in the Department and the Defence Forces.

In accordance with the terms of section 22 of the Protected Disclosures Act 2014 an annual report in relation to the total number of protected disclosures made in the preceding year is prepared and published on the departmental website:

https://www.defence.ie/what-we-do/protected-disclosures.

Reports are currently available for 2014 to 2017 with the 2018 report being finalised at present. The following table details the numbers received in the years 2014 to 2018. This number relates to the total number of disclosures made to the Defence Organisation and it is not broken down further into the location of the discloser in keeping with the confidentiality requirements specified in the 2014 Act.

Year

Number of Disclosures

2014

2

2015

3

2016

2

2017

11

2018

4

Defence Forces Recruitment

Questions (86)

Carol Nolan

Question:

86. Deputy Carol Nolan asked the Taoiseach and Minister for Defence the actions he plans to take to resolve the ongoing issues regarding retention and recruitment in the Defence Forces; and if he will make a statement on the matter. [25716/19]

View answer

Written answers (Question to Defence)

The Defence Forces' 2019 recruitment campaign continues and is targeting 800 new members. Additionally a range of alternative recruitment approaches are being developed, aimed at addressing vacancies in certain specialist areas.

There is also significant work being progressed, aimed at ensuring the Defence Forces remains an attractive career for those currently serving. There are ongoing promotion opportunities, opportunities to gain unique experiences and work is continuing to enhance work-life balance.

The independent Public Service Pay Commission has been tasked with examining recruitment and retention issues and I expect that the Minister for Finance and for Public Expenditure and Reform will bring its report to the Cabinet in the near future. The Government will consider any recommendations made therein.

Defence Forces Remuneration

Questions (87)

Carol Nolan

Question:

87. Deputy Carol Nolan asked the Taoiseach and Minister for Defence if the ongoing issue of low pay for Permanent Defence Force personnel will be addressed; and if he will make a statement on the matter. [25717/19]

View answer

Written answers (Question to Defence)

Similar to other sectors in the public service, the pay of Permanent Defence Force personnel was reduced as one of the measures to assist in stabilising national finances during the financial crisis. The recovery in the economy has provided the fiscal resources to restore pay scales to all public servants in an affordable and sustainable manner.

Pay is being restored to members of the Defence Forces and other public servants in accordance with public sector pay agreements. The focus of these increases is weighted in favour of those on lower pay.

Members of the Permanent Defence Force have received the pay increases due under the Lansdowne Road Agreement. In addition in 2017, following negotiations with PDFORRA, improved pay scales for general service recruits and privates, who joined the Permanent Defence Force post 1 January2013, were implemented.

The Public Service Stability Agreement 2018-2020, provides for increases in pay ranging from 6.2% to 7.4% over the lifetime of the Agreement. The increases due under the agreement to date have been paid to Permanent Defence Force personnel. Further increases in pay are scheduled in 2019 and 2020.

By the end of the current Public Service Pay agreement the pay scales of all public servants (including members of the Defence Forces), earning under €70,000 per annum, will be restored to pre FEMPI levels. The restoration of the 5% reduction to allowances cut under FEMPI is also scheduled as part of that agreement.

New entrants who joined the Defence Forces since 2011, may also benefit from the measures which will see interventions at points 4 and 8 of the pay scales for all such relevant new entrants to the public service.

In accordance with the provisions of the Public Service Stability Agreement 2018-2020, the Government has tasked the Public Service Pay Commission with conducting a more comprehensive examination of the specific recruitment and retention challenges in the Defence Sector. The Minister for Finance and Public Expenditure and Reform will bring the report to Government shortly.

The Government will give due consideration to the findings and recommendations that arise from the report.

Departmental Offices

Questions (88)

Joan Burton

Question:

88. Deputy Joan Burton asked the Taoiseach and Minister for Defence the cost of renting, leasing and hiring office space for his Department including public bodies in each of the years 2015 to 2018 and to date in 2019, in tabular form. [25916/19]

View answer

Written answers (Question to Defence)

The information is contained in the following table.

Year

Rent paid for office space in the Permanent Representation to the Council of the EU, Brussels

2015

€84,846

2016

€116,896

2017

€121,490

2018

€111,600

2019 to date

€27,207

Protected Disclosures Data

Questions (89)

Micheál Martin

Question:

89. Deputy Micheál Martin asked the Tánaiste and Minister for Foreign Affairs and Trade the number of whistleblower complaints in his Department since the legislation was introduced in 2015; and if he will make a statement on the matter. [25660/19]

View answer

Written answers (Question to Foreign)

The Protected Disclosures Act was introduced in 2014. The making of a Protected Disclosure refers to a situation where a worker discloses information in relation to wrongdoing. This is sometimes referred to as 'whistleblowing'.

No protected disclosures were received by my Department from 2014 to date.

Foreign Policy

Questions (90)

Niall Collins

Question:

90. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade the status of the position in Hong Kong; the EU position on same; and if he will make a statement on the matter. [25722/19]

View answer

Written answers (Question to Foreign)

In recent weeks, demonstrations have been taking place in Hong Kong to protest against plans to amend local legislation to allow for extradition to the Chinese Mainland, Macau and Taiwan. On 15 June, the Hong Kong Chief Executive Carrie Lam announced the indefinite suspension of the Extradition Bill. While the demonstrations have continued following that announcement, they have been largely peaceful.

Ireland supports the statement issued by the Spokesperson for High Representative Mogherini following the disturbances which took place on 12 June, which reiterates the fundamental right of citizens to assembly and expression, as contained in Hong Kong's Basic Law, while calling for restraint on both sides. The statement also noted that the EU has expressed its concerns regarding the Extradition Bill to the Hong Kong Government.

Our Consulate General in Hong Kong, and officials in my Department, will continue to monitor this situation closely.

Ebola Virus Outbreak

Questions (91)

Niall Collins

Question:

91. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade the efforts being made at EU and international level to prevent the spread of Ebola; and if he will make a statement on the matter. [25723/19]

View answer

Written answers (Question to Foreign)

The Ebola outbreak in the Democratic Republic of the Congo (DRC), and now Uganda, is a matter of grave concern. To date, 2,014 people have been infected, of whom 1,411 have died. The fact that the epicentre of the outbreak is in a conflict zone makes this an extremely difficult crisis to resolve.

So far, Ireland has provided over €2.6 million to UN and NGO partners both for outbreak control programmes in DRC and for preparedness efforts in Uganda. These include support for community mobilisation, sanitation, health & hygiene promotion and health worker training.

Ireland is also engaging through the EU. To date, the EU has provided €21.5 million to the UN, the Red Cross, and to NGOs for access to health care, prevention and control of infections, epidemiological surveillance, safe burials, contact tracing, logistics, and coordination. This includes new funding of €3.5 million announced on 13 June to enable rapid detection and reaction to Ebola cases in Uganda and South Sudan.

Officials from my Department are liaising with US State Department, given the leading US role in the international response.

Irish Embassies in Kampala and Dar es Salaam - which has responsibility for relations with DRC - are liaising closely with local partners and donors, as well as with Irish citizens in the affected regions. My Department, including the two Embassies, is working with partners in Ireland, including HSE and the Department of Health, implementing lessons learned from previous situations including the Ebola outbreak in West Africa.

Foreign Policy

Questions (92)

Niall Collins

Question:

92. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade the status of the situation in Moldova; the position of the EU on same; and if he will make a statement on the matter. [25724/19]

View answer

Written answers (Question to Foreign)

Ireland and its partners in the EU are closely monitoring developments in the Republic of Moldova.

I issued a statement on 11 June to express Ireland’s support for efforts to resolve the constitutional crisis by peaceful means and to call for calm and restraint.

I take note of the decisions taken by the democratically elected Parliament of Moldova, and welcome the formation of a new government.

The situation in Moldova is under continuing discussion at EU level and I echo the joint statement issued by HR/VP Mogherini and Commissioner Hahn underlining the readiness of the EU to work with the new government, on the basis of a commitment to reforms and to the core principles enshrined in our Association Agreement.

Israeli Settlements

Questions (93)

Niall Collins

Question:

93. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade if he has formally sought the publication of a database (details supplied); if not, if he plans to seek publication of same; if not, the reason therefore; and if he will make a statement on the matter. [25742/19]

View answer

Written answers (Question to Foreign)

In March 2016, the UN Human Rights Council adopted Resolution 31/36, calling upon the Office of the High Commissioner for Human Rights to produce a database of all business enterprises involved in activities relating to Israeli settlements in occupied Palestinian Territory.

The EU and its Member States, including Ireland, are wholly opposed to Israeli settlements in Palestine, which are contrary to international law, and are damaging to the prospects of peace. However, we believe that action against settlements must be both lawful and well-considered, since actions which are not fully thought-through risk ultimately being unwound, thereby undermining the cause they aim to support.

In this case, the terms of the Resolution as adopted by the UN Human Rights Council were so broad that a list draw on up pursuant to it might well include businesses with only tenuous or inadvertent connections with settlements. Any ambiguity about could potentially lead to unfair and counter-productive outcomes.

The EU members of the HRC therefore abstained in the vote on the Resolution. Despite these reservations, Ireland of course assured the Office of the High Commissioner for Human Rights (OHCHR) that we would cooperate with any request for assistance in the task they had been assigned.

In March 2019, the High Commissioner for Human Rights reaffirmed her commitment to discharging the mandate given her under Resolution 31/36 and explained that she needed more time to fully respond to the Council’s request as the mandate was novel and complex. Ireland notes the High Commissioner’s commitment to discharge the mandate of the HRC resolution 31/36 in a legally, factually and methodological sound manner.

Ireland has always sought to protect the independence of the Office of High Commissioner for Human Rights. We have not supported any efforts to delay or prevent publication of this database. Nor do we believe it would be appropriate to attempt to influence the High Commissioner’s decision on when she considers the database ready for publication.

The Government is committed to the implementation of the UN Guiding Principles on Business and Human Rights, and in November 2017 published its National Plan on Business and Human Rights 2017-2020. Implementation of this plan is a priority for the Government over the coming years, with the objective of promoting responsible business practice at home and abroad.

Budget Submissions

Questions (94)

Micheál Martin

Question:

94. Deputy Micheál Martin asked the Minister for Finance if the economic division in his Department has assessed the recent pre-budget submission of an organisation (details supplied) on creating a fairer Ireland. [25599/19]

View answer

Written answers (Question to Finance)

I can confirm that the pre-budget submission from the organisation in question is being considered by the relevant officials in the context of Budget and Finance Bill preparations. However, as the Deputy will be aware, it is not the practice of the Minister for Finance to discuss the details of measures which may be under consideration as part of the Budget and Finance Bill.

Oireachtas Select Committee Recommendations

Questions (95)

Thomas P. Broughan

Question:

95. Deputy Thomas P. Broughan asked the Minister for Finance when his Department will respond to the recent report of the Oireachtas Select Committee on Budgetary Oversight on tax expenditures; his views on the key recommendations of the report; and if he will make a statement on the matter. [17777/19]

View answer

Written answers (Question to Finance)

The Committee on Budgetary Oversight's report on Tax Expenditures was received in my office on 9 April this year. This report examines the current process by which the Department of Finance reviews and evaluates tax expenditures, and sets out the oversight role that the Committee can have in monitoring and scrutinising this process in future. It sets out four conclusions and makes eight recommendations covering information to be made available; the approach to reviewing tax expenditure measures; as well as ex-ante and ex-post scrutiny of tax expenditure measures.

I welcome the work of the Committee and concur with the conclusions set out in the report. The individual recommendations are currently being considered by my Department, and I hope to be in a position to write to the Committee, in the coming weeks.

VAT Rate Application

Questions (96)

Fiona O'Loughlin

Question:

96. Deputy Fiona O'Loughlin asked the Minister for Finance the rate of VAT payable by sports and leisure clubs seeking to purchase and install emergency defibrillator devices at their facilities; and if there is provision for such clubs to claim VAT back. [25644/19]

View answer

Written answers (Question to Finance)

The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the Directive, defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate, currently 23%. The installation of defibrillators is also liable to VAT at the standard rate.

I am advised by Revenue that generally, businesses that are registered for VAT, including businesses in the leisure sector, are entitled to reclaim the VAT borne on the input costs associated with their taxable business activities including the cost of purchasing and installing defibrillators. As sporting activities are exempt, sports clubs cannot normally reclaim the VAT they incur on their purchases.

The Deputy may be aware that the VAT Compensation Scheme for Charities was introduced in Budget 2018 to reduce the VAT burden on charities through the partial compensation of VAT they incur. However, one of the conditions for qualification under the scheme is registration as a charity under Section 207 of the Taxes Consolidation Act 1997. Bodies established for the promotion of athletic or amateur games or sports are normally granted tax exemption under Section 235 Taxes Consolidation Act 1997, and this being the case may not be eligible to claim under the Charities Compensation Scheme.

Home Renovation Incentive Scheme

Questions (97)

Fiona O'Loughlin

Question:

97. Deputy Fiona O'Loughlin asked the Minister for Finance his plans to reintroduce the home renovation incentive scheme; and if he will make a statement on the matter. [25645/19]

View answer

Written answers (Question to Finance)

The Home Renovation Incentive (HRI) was introduced by Section 477B of the Taxes Consolidation Act 1997 in 2014. I currently have no plans to re-open the scheme which terminated in accordance with its sunset clause on 31 December 2018.

Under my Department's Tax Expenditure Guidelines, the introduction of new tax incentive measures should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention.

The HRI was introduced at a time when there was considerable loss of employment within the construction sector, with the aim of addressing this market failure by stimulating increased activity in the sector. In the current context of a growing economy and construction sector, the initial objectives of the scheme have been fulfilled, and this support is no longer needed in the terms in which it was originally envisaged.

Furthermore, in light of the current housing supply shortage, and the need to deliver 25,000 additional housing units per annum over the period 2017-2021, there is a risk that a reintroduction of the HRI could lead to increased competition for scarce resources within the construction sector, leading to upward pressure on construction costs and house prices. The potential for displacement of labour from work on new builds to work on home renovations would create a high opportunity cost of labour associated with HRI which was not present at the inception of the scheme.

Revenue advise me that, as of 2 January 2019, the cost to the Exchequer of the HRI was c. €105 million, with a further €65 million worth of credits yet to be claimed in respect of the incentive. As the Deputy will appreciate, I must be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base.

Financial Services and Pensions Ombudsman Remit

Questions (98)

Michael McGrath

Question:

98. Deputy Michael McGrath asked the Minister for Finance if credit servicing firms with a transitional authorisation status fall under the Financial Services and Pensions Ombudsman in the same way as a fully regulated entity; and if he will make a statement on the matter. [25649/19]

View answer

Written answers (Question to Finance)

The Financial Services and Pensions Ombudsman may investigate complaints against "financial service providers”. This includes complaints against a regulated financial service provider within the meaning of section 2(1) of the Central Bank Act 1942.

Under the 1942 Act, "regulated financial service provider" includes "a financial service provider whose business is subject to regulation by the Bank under this Act or under a designated enactment or a designated statutory instrument". Persons who are taken to be authorised pursuant to the transitional provisions provided for in Section 34FA(1) of the Central Bank Act 1997 are considered to be ‘regulated financial service providers’ for the purposes of financial services legislation. Therefore, I can confirm that the Financial Services and Pensions Ombudsman may investigate complaints against the transitionally authorised firms to which the Deputy refers.

Protected Disclosures Data

Questions (99)

Micheál Martin

Question:

99. Deputy Micheál Martin asked the Minister for Finance the number of whistleblower complaints in his Department since the legislation was introduced in 2015; and if he will make a statement on the matter. [25659/19]

View answer

Written answers (Question to Finance)

The Department of Finance has put in place a policy with related procedures for the making of Protected Disclosures, which have been developed in line with the Protected Disclosures Act, 2014. The Department’s policy and related procedures supports my Department’s strong commitment to ensuring that the culture and working environment of the Department encourages, facilitates and supports any member of staff in ‘speaking-up’ on any issue that may impact adversely on the Department’s ability to properly and fully carry-out all its roles and responsibilities to the high performance standard required.

As provided for under Section 22 of the Protected Disclosures Act 2014, a report is required to be prepared and published on an annual basis setting out the number of disclosures made to the Department in the previous year, the actions taken in response to those disclosures and any other information as may be requested by the Minister for Public Expenditure and Reform under the Act.

I can advise the Deputy that since the introduction of the Act, two protected disclosures have been made to the Department. This is set out in the table below and also on the Department's website at the following link

https://www.gov.ie/en/organisation-information/32ddef-protected-disclosures.

I can assure the Deputy that any appropriate issue raised by a member of staff relating to a matter connected to the conduct of the business of the Department will be dealt with professionally and appropriately.

Year

Protected Disclosures Received

2014

Nil

2015

Nil

2016

Nil

2017

1

2018

1

Revenue Commissioners Investigations

Question No. 102 answered with Question No. 49.

Question No. 103 answered with Question No. 78.

Questions (100, 101)

Joan Burton

Question:

100. Deputy Joan Burton asked the Minister for Finance if he will provide statistical information (details supplied) in respect of each of the quarterly lists of defaulters issued by the Revenue Commissioners for list A in each of the years 2015 to 2018 and to date in 2019, in tabular form. [25676/19]

View answer

Joan Burton

Question:

101. Deputy Joan Burton asked the Minister for Finance if he will provide statistical information (details supplied) in respect of each of the quarterly lists of defaulters issued by the Revenue Commissioners for list B in each of the years 2015 to 2018 and to date in 2019, in tabular form. [25677/19]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 100 and 101 together.

Section 1086 Taxes Consolidation Act, 1997, requires Revenue to publish Lists of Tax Defaulters, within three months of the end of each quarter in which agreed settlements are reached with taxpayers, or where Penalty Determinations are made by the Courts. The List is published in two parts as follows

- Part 1: Persons, where the Court has determined a penalty relating to a settlement, or has imposed a fine, imprisonment or other penalty in respect of a tax or duty offence.

- Part 2: Persons, where Revenue has accepted a settlement offer instead of initiating court proceedings, or a settlement has been paid in full.

The following table sets out the ‘Part 2’ details requested by the Deputy for the years 2017, 2018 and 2019 (to date). Prior to 2017, details of unpaid amounts were excluded from the List of Tax Defaulters.

Period

Settlements Agreed

No. Unpaid

% No. Unpaid

Amounts Remaining Unpaid

% Value Unpaid

Q1 2017

86

29

33.7%

€3,865,936

26.8%

Q2 2017

58

19

32.8%

€5,574,183

50.3%

Q3 2017

81

27

33.3%

€10,470,992

60.0%

Q4 2017

64

26

40.6%

€4,309,244

42.2%

Q1 2018

61

20

32.8%

€4,226,805

44.7%

Q2 2018

66

17

25.8%

€2,614,579

29.4%

Q3 2018

65

18

27.7%

€3,402,907

26.3%

Q4 2018

73

24

32.9%

€5,360,772

42.1%

Q1 2019

62

17

27.4%

€14,374,017

68.0%

The following table sets out the ‘Part 1’ numbers of cases and values of fines imposed by the Courts in respect of revenue offences for the years 2015 to 2018 and to 31 March 2019, as published in the quarterly List of Tax Defaulters. Revenue has advised me that the collection of such fines is a matter for the Courts Service of Ireland.

Period

No. of Cases in which Fine Imposed

Total Amount of Fines Imposed

Q1 2015

324

€795,212.20

Q2 2015

247

€645,548.50

Q3 2015

310

€869,722.50

Q4 2015

294

€709,423.00

2015 Total

1,175

€3,019,906.20

Q1 2016

215

€592,498.00

Q2 2016

273

€733,637.50

Q3 2016

164

€471,317.50

Q4 2016

245

€612,705.50

2016 Total

897

€2,410,158.50

Q1 2017

228

€566,778.00

Q2 2017

215

€609,860.00

Q3 2017

176

€460,788.00

Q4 2017

209

€525,332.50

2017 Total

828

€2,162,758.50

Q1 2018

162

€411,340.00

Q2 2018

178

€445,587.50

Q3 2018

139

€380,703.00

Q4 2018

170

€429,090.00

2018 Total

649

€1,666,720.50

Q1 2019

159

€ 517,742

Question No. 102 answered with Question No. 49.
Question No. 103 answered with Question No. 78.

Economic Competitiveness

Questions (104)

Bernard Durkan

Question:

104. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to make progress in meeting the various economic indicators with particular reference to the need for a competitive economy; and if he will make a statement on the matter. [25835/19]

View answer

Written answers (Question to Finance)

Overall our economy is in good shape and is expected to grow this year and next. Modified domestic demand, an underlying measure of growth in the economy, grew by 4.5 per cent for 2018 as a whole.

One of the best barometers of the heath in the economy is the labour market. The strong growth in employment over the last number of years has continued into this year, with total employment increasing by 81,200 (+3.7 per cent) in the year to Q1 2019. As a result, there are now more people working in Ireland than ever before.

At the cornerstone of our recovery, has been the improvement in our competitiveness. Since 2008, the Central Bank’s real harmonised competitiveness indicator has improved by approximately 22 per cent. The improvement in our competitiveness reflects the hard-won productivity gains made over the last number of years, alongside wage and price moderation.

Importantly, the robust economic growth in recent years has not yet given rise to significant inflationary pressures. In the first four months of 2019, average annual inflation was just 1.1 per cent was recorded.

On wage developments, while average annual earnings grew by over 3 per cent in 2018, this came on the back of a near decade of low or negative growth in earnings. The rise in labour income is a welcome development, however it needs to be monitored closely, as a significant acceleration in wages could undermine Ireland’s relative competitiveness to other European countries.

Over the medium term, the domestic economy is expected to act as the primary driver of growth. In this context, we must remain conscious of the potential upward pressure this will place on both prices and wages, that could give rise to a loss of competitiveness.

Economic Competitiveness

Questions (105)

Bernard Durkan

Question:

105. Deputy Bernard J. Durkan asked the Minister for Finance if he has identified specific factors which might impede economic progress or reduce the competitiveness of the economy having particular regard to the extent to which the relative positions compare in each jurisdiction in the European Union; and if he will make a statement on the matter. [25836/19]

View answer

Written answers (Question to Finance)

Overall our economy is in good shape, modified domestic demand, an underlying measure of growth in the economy, increased by 4.5 per cent for 2018 as a whole. Although growth in our economy is expected to moderate over the coming years, it is still expected to compare very favourably to other EU countries. The 2019 IMD World Competitiveness Yearbook recently ranked Ireland as the 2nd most competitive country in the EU and the 7th most competitive country in the world, both of which are relative improvements on the 2017 rankings.

As a barometer of how well our economy is performing, there is no story more positive than the one emanating from our labour market. The positive growth in employment seen over the last number of years has continued into 2019, as a result the unemployment rate has fallen from a peak of 16 per cent in early 2012 to 4.4 per cent in May 2019. This compares favourably to an average unemployment rate of 6.4 per cent for the EU as a whole.

Importantly, the robust economic growth in recent years has not yet given rise to significant inflationary pressures. For 2018 as a whole, average annual inflation of just 0.7 per cent was recorded, this compares favourably to the 1.7 per cent recorded across the EU.

Over the medium term, the domestic economy is expected to act as the primary driver of growth. The baseline projections assume that some moderate overheating pressures will emerge, particularly in the context of the expected increase in housing output. However these pressures could be more significant than expected with the potential to generate imbalances over the coming years and impact on our competitiveness.

As I outlined in the Stability Programme Update in April, our economy also faces a number of external risks which could undermine our competitiveness. These risks primarily relate to a more adverse-than-expected outcome from Brexit, a rise in protectionism and a disruption to world trade. There is also increasing evidence of a slowdown in global growth.

As many of the risks we are facing are external and thus beyond our control, the best way we can mitigate against them is through prudent budgetary policy, careful management of the public finances and by focusing on competitiveness-oriented policies, particularly those that increase productivity.

Brexit Preparations

Questions (106, 108, 109)

Bernard Durkan

Question:

106. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which taxation matters under discussion at EU level are likely to impact on economic progress in the aftermath of Brexit; and if he will make a statement on the matter. [25837/19]

View answer

Bernard Durkan

Question:

108. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to monitor discussions on taxation at European level with particular reference to the need to ensure that Ireland does not find itself in a vulnerable position in the aftermath of Brexit in view of its geographical location in the European context; and if he will make a statement on the matter. [25839/19]

View answer

Bernard Durkan

Question:

109. Deputy Bernard J. Durkan asked the Minister for Finance if he will ensure that Ireland does not become marginalised by way of fiscal or taxation changes in the European context in the aftermath of Brexit; and if he will make a statement on the matter. [25840/19]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 106, 108 and 109 together.

As the Deputy will be aware, currently taxation matters at EU level, in particular tax directives, require the unanimous agreement of all Member States before they can be adopted. Taxation is one of the areas which remains subject to the subsidiarity principle and therefore within the gift of national parliaments. This means that Member States maintain powers in the area of taxation unless EU legislation has been agreed in a specific area. The principle of subsidiarity is guaranteed by Article 5 of the Treaty on European Union.

This current system of deciding taxation matters at EU level has been the basis of decisions for tax proposals since the beginning of the European Union. Since 2015, Member States have unanimously agreed in excess of 20 different tax initiatives.

While there has been discussions at EU level about changing the current voting system from unanimity to QMV (qualified majority voting), a considerable number of Member States have expressed support for retaining the current voting rules in taxation.

Ireland believes that the current unanimity-based voting procedure is the most appropriate voting system in the area of taxation. Several Member States have made clear that their Governments do not support any proposed change to how tax decisions are made at European level.

As EU partners, the United Kingdom and Ireland have traditionally shared similar views on the broader tax issue of harmonisation and on proposals such as the proposed directive for a Common Consolidated Corporate Tax Base. While Brexit will result in the loss of an important ally on these matters, Ireland will not be isolated as a number of other countries have similar views to us.

Brexit, in whatever form it takes, will have a significant impact on Ireland, and requires planning by Government, business and citizens, as well as at the EU level. Our planning at home and at the EU level for all possible outcomes will continue. The Department of Finance and other Government Departments and key Agencies have been preparing for Brexit for three years now – and we continue to do so, through extensive contingency planning and stakeholder engagement. Last week (on 12 June) the Commission issued its fifth Contingency Communication which updates and reinforces the necessary no deal Brexit preparedness measures at EU level.

Whatever the outcome of Brexit, Ireland will remain in the EU with all the stability and certainty that membership brings, including access to the Single Market of over 500 million people.

Economic Growth

Questions (107, 112)

Bernard Durkan

Question:

107. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which economic performance here compares with other countries within the European Union; and if he will make a statement on the matter. [25838/19]

View answer

Bernard Durkan

Question:

112. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he remains satisfied regarding the economic performance of Ireland when compared to other countries throughout and outside Europe; and if he will make a statement on the matter. [25847/19]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 107 and 112 together.

As published in the Stability Programme Update (SPU) 2019, my Department has forecast economic growth to moderate to a more sustainable rate of 3.9 per cent in 2019, and to continue at the broadly similar pace of 3.3 per cent for 2020. Although growth rates have moderated from 2018, they still compare very favourably to other EU, and significant non-EU, trading partners.

As a barometer of how well our economy is performing, there is no story more positive than the one emanating from our labour market, where we saw full time employment growth of almost 3 per cent in 2018. More people are working in Ireland than ever before and the unemployment rate, at 4.4 per cent, is significantly lower than that of other Euro Area countries.

Growth in the Irish economy is expected to come from both modified domestic demand, which is set to increase by 4.0 per cent in 2019, and an expansion in Irish exports – which are set to grow by 5.2 per cent this year. Modified domestic demand excludes the volatile components of investment spending – giving a more accurate picture of the health of domestic economic activity.

Ireland’s economic data compare favourably to those of our main trading partners – with growth, unemployment, and inflation performing better than the Euro Area and EU averages - as the data in Table 1 below illustrate. The European Commission Spring 2019 forecasts, published in May, show that the pace of expansion in the Euro Area, the EU and the US is expected to ease. For the Euro Area, the Commission is forecasting growth of 1.2 per cent this year, strengthening slightly to 1.5 per cent in 2020. Growth in the US economy will slow but remain relatively strong at 2.4 per cent for 2019, easing further to 1.9 per cent in 2020. In common with Ireland, unemployment continues to fall in the EU and US, with the US labour market set to tighten further as it approaches full employment. In the UK, unemployment will remain stable as employment growth slows in the context of subdued GDP figures.

The comparatively low level of inflation in Ireland should help to maintain our competitiveness and protect real wage growth. The 2019 IMD World Competitiveness Yearbook recently ranked Ireland as the second most competitive country in the EU and the seventh most competitive country in the world. This should help our economy to continue to perform well internationally – notwithstanding a number of key global risks.

Table 1

Real GDP

Inflation

Unemployment

2018

2019

2020

2018

2019

2020

2018

2019

2020

Ireland (SPU 2019 forecasts)

6.7

3.9

3.3

0.7

0.9

1.1

5.7

5.4

5.2

UK

1.4

1.3

1.3

2.5

2.0

2.1

4.0

4.1

4.2

Euro Area

1.9

1.2

1.5

1.8

1.4

1.4

8.2

7.7

7.3

EU28

2.0

1.4

1.6

1.9

1.6

1.7

6.8

6.5

6.2

US

2.9

2.4

1.9

2.4

2.0

2.0

3.9

3.8

3.7

Source: European Commission Spring 2019 forecasts and Department of Finance SPU 2019 forecasts for Ireland