Dáil Éireann Debate, Tuesday - 22 October 2019
153. Deputy Mattie McGrath asked the Minister for Finance the details on the rural proofing analysis conducted by his Department prior to the publication of measures contained in budget 2020; and if he will make a statement on the matter. [43343/19]
View answerPrior to the publication of Budget 2020, the Departments of Finance and Public Expenditure and Reform prepared an analysis on the distributional impacts of the direct tax, indirect tax and welfare measures contained in the budget using the ESRI's SWITCH micro-simulation model. The model cannot take account of the rural/urban split but found that on average the first three deciles gained from the tax and welfare measures and the rest of the deciles were left broadly unchanged.
Importantly, this analyis shows that the negative impact on incomes from the increase in the carbon tax, a key concern of rural citizens, is offset by other tax and welfare changes. Income gains were largest for the first decile, followed by the second and third which indicates that the tax and welfare measures in Budget 2020 were broadly progressive.
As with any model, the SWITCH analysis has limitations, and cannot take into account other targetted expenditure measures such as increased expenditure that will benefit rural communities. As I outlined on Budget Day, the Government is investing nearly €2 billion in rural Ireland in 2020. This includes an additional €51 million for the Department of Agriculture, Food and the Marine and €17 million for the Department of Rural and Community Development. This reflects the fact that agriculture and rural development are cornerstones of our economy, supporting thousands of jobs across the country.
In addition, a number of targeted provisions for rural communities were introduced in Budget 2020 to provide supports for rural households to transition to a low carbon economy. These include funding for the Just Transition Fund targeted at the Midlands to aide in the retraining of Bord na Móna workers in adjusting to the low carbon transition. The Just Transition Fund also provides for the restoration of the bogs to their original state as natural absorbers of carbon, creating 70 jobs in its first year, rising to 100 as the programme progresses. A group housing retrofitting programme geared towards social housing in the Midlands will commence in 2020, supporting 400 jobs directly and indirectly. The aforementioned measures will be spearheaded by the Just Transition Commissioner who will engage with all relevant stakeholders to ensure timely and efficient implementation of these measures.
I have also made provision for the biggest ever allocation of funds to the Warmer Homes Scheme which is targeted towards the most vulnerable in our society. €52.8 million is being made available for the retrofitting of homes of those living in energy poverty or those at risk of entering energy poverty. I believe that this measure combined with the increase in the fuel allowance of €2 per week will be of particular assistance to those low-income rural households who currently rely on fossil fuels to heat their homes.
Ring-fencing of funds for investment in sustainable transport is a crucial aspect of the transition to a low carbon economy and is of particular importance to rural communities who might have limited access to public transport. €14 million of additional funding for electric vehicle grants has been granted as part of Budget 2020 of which €8 million will be sourced from ring-fenced carbon tax revenue.
Finally, as part of the National Broadband Plan, which is committed to bringing high-speed broadband to the – largely rural –1.1 million people who currently do not have access to broadband, the Government has provided for €119 million in Budget 2020. High-speed broadband opens up new opportunities for rural Ireland including the increased opportunity for workers to work from home, impacting positively on rural commuters, making life in rural communities more environmentally sustainable.
