Since June 2020, my Department published Budget 2021 in October 2020, the Stability Programme Update forecasts in April 2021 as well as various economic, research and analysis papers to support policy-making, including the launch of the quarterly Economic Insights series. My Department also continues to provide technical input around the economic impact of COVID-19 and the related policy response.
Ireland’s National Recovery and Resilience Plan was submitted to the European Commission on 28 May 2021. The draft Plan, worth almost €1bn, will enable Ireland to access funding under the Recovery and Resilience Facility. This Facility is the centrepiece of the Next Generation EU (NGEU), the EU’s €750bn pandemic recovery package. Ireland is expected to receive approximately €915m in grants under the Facility for the period 2021-2022, with further grants in 2023.
On 30 March 2021, Ireland received €2.492bn under the EU’s SURE scheme (Support to mitigate Unemployment Risks in an Emergency). SURE is a temporary instrument, providing up to €100bn in loans from the EU to Member States affected by increases in public expenditure aimed at preserving employment during the pandemic. The amount of the Irish application was based on costs already expended under the COVID-19 Temporary Wage Subsidy Scheme (TWSS).
In July 2020, I brought forward the Financial Provisions (COVID-19) Bill to enable the State to participate in the EU crisis recovery instruments, the SURE scheme and the €25bn Pan-European Guarantee Fund. My Department has undertaken significant work on the EU regulatory package which forms part of the EU Action Plan on Financing Sustainable Growth. Sustainable finance is a priority, accounting for 10 of the 46 action measures under the Ireland for Finance 2021 Action Plan. Ireland for Finance is the strategy for the development of the IFS sector in Ireland to 2025.
The Taxonomy Regulation entered into force in July 2020 and the Sustainable Finance Disclosures Regulation took effect from March 2021. My Department recently concluded negotiations of the Regulation establishing the Public Sector Loan Facility, the third pillar of the Just Transition Mechanism expected to mobilise €25bn to 30bn in public investment over the 2021-2027 period.
Since 27 June 2020, my Department has transposed the Bank Recovery and Resolution Directive (EU) 2019/879, the Capital Requirements Directive (EU) 2019/878 and elements of the Capital Requirements Regulation (EU) 2019/876. In November 2020, Statutory Instrument 525 of 2020 was signed to amend the Interchange Fee Regulations to fully align with EU regulations. Negotiations on Regulation (EU) 2020/1503 on European crowdfunding service providers for business, amending Regulation (EU) 2017/1129 and Directive (EU) 2019/1937 concluded and the Directive was transposed in April 2021.
My Department completed the drawdown of €1.5bn from the National Surplus (Exceptional Contingencies) Reserve Fund to the Exchequer’s Central Fund at the end of October 2020.
The Finance (Miscellaneous Provisions) Act 2020 was signed into law in December 2020 to allow credit unions to hold General Meetings remotely and to provide more flexibility in voting methods.
In line with its strategic goal of promoting environmentally sustainable economic progress, my Department has increased its capacity for managing the climate action agenda at a cross-departmental, EU and international level, including the Senior Officials Group on Climate, ECOFIN and the Coalition of Finance Minsters for Climate Action. My Department is actively participating in the interdepartmental structures established to develop the updated Climate Action Plan 2021.
In the period to March 2021, my Department supported the migration of Ireland’s securities settlement system from the UK to Belgium. This project saw over €100bn worth of securities migrated. My Department introduced dedicated legislation and coordinated with national and EU authorities. The securities settlement migration means that Ireland remains well connected to the EU’s capital markets with the stable investment and legislative environment that comes with it.
The Investment Limited Partnerships (Amendment) Act 2020 was signed into law on 23 December 2020. This will enhance the development of Ireland’s international financial services (IFS) sector. My colleague, Minister of State Seán Fleming TD, officially launched the Ireland for Finance Action Plan for 2021 ahead of the sixth annual European Financial Forum in February 2021.
In November 2020, I published the Interdepartmental Pensions Reform and Taxation Group’s (IDPRTG) Report on supplementary pensions. The work will inform pension debates and future policymaking which will in turn have wider, longer-term socio-economic and fiscal benefits. The Report contains forty-two recommendations and conclusions. The IDPRTG is working on a number of those recommendations for implementation later this year.
A requirement at EU level was introduced that the forthcoming EU package of Anti-Money Laundering (AML) reforms must be compatible with common law and a registration and supervision regime was introduced for virtual assets service providers for Anti-Money Laundering and Countering the Financing of Terrorism purposes, the scope of which is more advanced and robust than the 5th EU Anti-Money Laundering Directive requirements and places Ireland ahead of EU obligations in this area.
The Office to Promote Competition in the Insurance Market has been created and is chaired by Minister of State Fleming.
Development and operation of the COVID-19 Restrictions Support Scheme, in particular the wage subsidy schemes, the TWSS and the Employment Wage Subsidy Scheme (EWSS) have been central pillars of the Government’s response to the pandemic. When the TWSS ended last August, nearly 70,000 employers and over 600,000 employees had been supported. Additionally, the tax debt warehousing scheme has been placed on a statutory footing and expanded; an enhanced Help-to-Buy incentive scheme was introduced in the Financial Provisions (Covid-19) (No. 2) Act 2020 and subsequently extended until end 2021; the valuation date for Local Property Tax (LPT) has been deferred until 1 November 2021; and a revised method for calculating taxpayers’ LPT liabilities was developed. The General Scheme of Finance (Local Property Tax) (Amendment) Bill was approved by Government.
Finance Act 2020 was enacted giving legislative form to the taxation proposals in the Budget 2021 Statement. Measures included a trajectory of annual increases in the rate of carbon tax leading to a rate of €100 per tonne of carbon dioxide by 2030; increase of the Earned Income Credit from €1,500 to €1,650 - delivering on the commitment to equalise this with the employee tax credit; the introduction of an accelerated capital allowances scheme for farm safety and disability adaptation equipment and legislative defensive measures to apply to the EU list of non-cooperative jurisdictions.
In January 2021, an update to the Corporation Tax Roadmap was published. Progress continued on the transposition of the Anti-Tax Avoidance Directives, with the publication in December 2020 of a Feedback Statement on the Article 4 Interest Limitation Rule, in advance of legislation in Finance Bill 2021.
On 19 May 2021, in response to a need to provide a significant disincentive to the multiple purchase by institutional investors of large parts of or whole housing estates before they reach the market, I introduced, by way of a Financial Resolution, a new measure which applies, subject to certain conditions and reliefs, a 10% stamp duty charge on bulk purchases (i.e. 10 or more in any 12-month period) of houses. This took effect from midnight that day.
Finally, I have established the Commission on Taxation and Welfare which has begun its work.