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Tuesday, 14 Dec 2021

Written Answers Nos. 228-244

Question No. 228 answered with Question No. 220.

Tax Reliefs

Question No. 230 answered with Question No. 229.

Question No. 231 answered with Question No. 229.

Questions (229, 230, 231)

Pádraig MacLochlainn

Question:

229. Deputy Pádraig Mac Lochlainn asked the Minister for Finance when Dáil Éireann will be updated with full details of the extension following his recent announcement that the temporary Covid-19 waiver on transborder workers' relief will be extended. [61890/21]

View answer

Pádraig MacLochlainn

Question:

230. Deputy Pádraig Mac Lochlainn asked the Minister for Finance when the Revenue Commissioners will issue updated guidance to transborder workers' relief following his announcement that the temporary Covid-19 waiver would be extended. [61891/21]

View answer

Pádraig MacLochlainn

Question:

231. Deputy Pádraig Mac Lochlainn asked the Minister for Finance when Dáil Éireann will be updated on his recently announced extension to the temporary Covid-19 waiver on transborder workers' relief and if he will make a statement on the matter. [61892/21]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 229 to 231, inclusive, together.

Transborder Workers’ Relief may apply in the case of an individual resident in the State but who commutes to his or her place of work outside the State. This relief is set out in section 825A of the Taxes Consolidation Act (TCA) 1997.

The relief effectively removes the foreign employment income from a liability to Irish tax where foreign tax has been paid on that employment income. In simple terms, the effect of the measure is that Irish tax will only arise where the individual has income other than income from a foreign employment.

The relief applies subject to certain conditions, which include the requirement that the duties of a qualifying employment are performed wholly outside the State in a country with which Ireland has a Double Taxation Agreement. There is an exception in respect of merely incidental duties which may be performed in the State.

As the Deputy may be aware, the operation of this relieving measure is a matter for the Revenue Commissioners. Revenue understands that due to COVID-19, certain individuals whose duties of employment are normally performed outside the State, may be required to work from home in the State, which would result in them being ineligible for relief under Section 825A TCA 1997. In recognition of this, on 23 March 2020, Revenue issued updated guidance on the COVID-19 hub of its website and notified by eBrief No. 046/20, to provide for a concession in respect of this relief as follows - “where employees are required to work from home in the State due to COVID-19, such days spent working at home in the State will not preclude an individual from being entitled to claim this relief, provided all other conditions of the relief are met. For example, the employment income must be fully subject to non-refundable foreign tax.” This concession initially applied in respect of the 2020 tax year and was later extended (on 21 December 2020) to the 2021 tax year.

Revenue continues to regularly review all COVID-19 related matters and, provided all other conditions of the relief are met, Revenue’s temporary concession will be further extended into 2022, for the period that public health measures require employees to work from home.

The COVID-19 concessional treatment is only relevant to those individuals whose employment enables them to perform their duties from home. Certain service type employments requiring in-person attendance at the workplace would not fall into this category and as such, these individuals would presumably not seek to claim the concession, as they would already qualify for the relief.

Further guidance on the relief and the extension of the concession in 2022 may be found in Tax and Duty Manual www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-34/index.aspx - Transborder Workers’ Relief.

I am aware that there have been calls to place this concessional treatment on a statutory footing so that individuals who are resident in the State but work outside the State for a non-resident employer can continue to avail of the relief if they exercise their duties of employment in the State.

During the debates on Finance Bill 2020, I undertook that this matter would be examined as part of the work of the Tax Strategy Group (TSG) for 2021. The resultant paper was discussed by the TSG as part of its deliberations on 8 September last. The examination encompassed very detailed consideration of all relevant matters including the equity of treatment between Irish residents who pay tax in the State, the competitive position of Irish employers and the established principles of international tax. The review identified a number of significant concerns from a policy perspective when having regard to the interest of the wider body of taxpayers encompassing Irish resident employees and employers. The full TSG paper (TSG Paper 21/04) can be located here - www.gov.ie/en/collection/d6bc7-budget-2022-tax-strategy-group-papers/.

This matter was discussed at both the Committee and Report Stages of Finance Bill 2021 in Dáil Éireann and, in fact, it was during the Report Stage debate that I informed the House of Revenue's proposed extension of the temporary concessionary treatment into next year as already mentioned. I and my Department continue to monitor the issue having regard to the comprehensive review carried out under the auspices of the TSG and the fundamental points which the TSG paper raises.

The Deputy may also wish to note that Ireland is exceptional in having a domestic relief such as Transborder Workers’ Relief. There is no comparable measure in the United Kingdom nor in many countries in mainland Europe that share land borders.

Question No. 230 answered with Question No. 229.
Question No. 231 answered with Question No. 229.

Fiscal Policy

Questions (232)

John Lahart

Question:

232. Deputy John Lahart asked the Minister for Finance his plans to implement recommendations (details supplied); and if he will make a statement on the matter. [61900/21]

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Written answers (Question to Finance)

Under the Ministers and Secretaries (Amendment) Act 2013 there is a requirement each year for Government to agree an overall Government Expenditure Ceiling for each of the following 3 years, to allocate this into Ministerial Expenditure Ceilings and then to inform Dáil Éireann.

To comply with this requirement, in line with the approach taken in 2021, expenditure ceilings for 2022 were provided in the 2022 Expenditure Report and indicative technical expenditure ceilings for 2023 and 2024 will be laid before the Dáil before the end of this month. The overall amounts to be included in these ceilings will be consistent with those agreed under the medium term expenditure strategy set out in the Summer Economic Statement (SES) which laid out overall ceilings for the period to 2025.

The SES set out the Government’s reformed medium-term fiscal architecture, which anchors budgetary policy via an expenditure rule whereby core expenditure growth will be kept in line with the trend growth rate of the economy.

The objective of this rule is to de-couple expenditure policy from cyclical variations in the economy and from windfall tax revenue. In its Fiscal Assessment Report, the Irish Fiscal Advisory Council welcomed this innovation to Ireland’s fiscal framework. I further note the Council’s view that the Government’s fiscal stance for next year strikes the appropriate balance between continuing to provide the necessary fiscal support to the economy while returning the public finances to a sustainable trajectory.

Finally, I have noted the Council’s recommendation in relation to the Government’s expenditure rule and I will take this advice under consideration.

I will formally respond to the Fiscal Assessment Report in the coming weeks.

Tax Code

Question No. 234 answered with Question No. 233.

Questions (233, 234)

John Lahart

Question:

233. Deputy John Lahart asked the Minister for Finance further to the recent report by the Irish Fiscal Advisory Council, the way he intends to address the Government’s continued over-reliance on corporation tax receipts, in which one in five euro of tax receipts were from corporation tax in 2020 and more than half of those receipts were from ten corporate groups; and if he will make a statement on the matter. [61904/21]

View answer

John Lahart

Question:

234. Deputy John Lahart asked the Minister for Finance if he intends to heed the advice of the Irish Fiscal Advisory Council with regard to a matter (details supplied); and if he will make a statement on the matter. [61905/21]

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Written answers (Question to Finance)

I propose to take Questions Nos. 233 and 234 together.

Corporation tax receipts recorded strong growth throughout the pandemic, increasing by almost €950 million last year to reach €11.8 billion, which was, at the time, the highest level on record. As of November this year, corporation tax receipts stood at €13.6 billion.

These receipts are welcome, and a reflection of the success of our industrial policy in attracting high-quality firms to Ireland. There is evidence that, in particular, the pharmaceutical and ICT sectors have contributed to the record level of receipts received over the last two years. The continued strength in corporation tax revenues means that we are borrowing less than would otherwise be the case.

However, as I have stated on many occasions, corporation tax receipts are subject to exceptional volatility and unpredictability because, as the Deputy notes, receipts are vulnerable to the business decisions of a relatively small number of large, multinational firms, with the top ten payers accounting for more than half of all receipts in 2020.

Additionally, Government is planning for changes to the international tax environment which may impact upon revenues. Despite the recent clarity offered by Ireland signing up to the political agreement at the OECD Inclusive Framework, at this point it is too early to make any determination on the net costs or otherwise of implementation. There are numerous issues that remain to be addressed, negotiated and resolved at OECD and EU level, as well as within signatory countries.

Given the absence of such relevant information, Budget 2022 forecasts maintained the previous assumption of a €2 billion net loss in corporate tax receipts by 2025 relative to baseline. This assumption will, of course, be kept under constant review and amended as appropriate as negotiations continue.

The volatility and unpredictability of corporation tax receipts underlies the importance of the medium-term framework set out in the Summer Economic Statement, which anchors budgetary policy via an expenditure rule. Keeping core spending growth in line with the trend growth rate of the economy will help ensure that expenditure policy is de-coupled from windfall tax revenue, such as any potential over-performance in corporation tax receipts in the years ahead. This will assist in reducing the over-reliance on corporation tax receipts going forward.

Finally, I have noted the Irish Fiscal Advisory Council’s recommendation in its Fiscal Assessment Report in relation to the Rainy day fund and I will take this advice under consideration.

I will formally respond to the Fiscal Assessment Report in the coming weeks.

Question No. 234 answered with Question No. 233.

Energy Prices

Questions (235)

Pearse Doherty

Question:

235. Deputy Pearse Doherty asked the Minister for Finance if he will consider, in the absence of a reduction in VAT on domestic energy sources including gas and home heating oil, a discount scheme for low and middle income households that would then be reimbursed to providers in a similar manner to the operation of the free electricity allowance; and if he will make a statement on the matter. [61995/21]

View answer

Written answers (Question to Finance)

The final retail price of fuel is determined by a number of factors which include the costs of production, distribution, global market factors, international exchange rates, taxation, wholesale market contracts as well as individual retail pricing policies. The current spike in energy prices arises principally from the global recovery from the Covid-19 pandemic in conjunction with supply constraint issues and is being witnessed across the European Union as well as many other regions.

Wholesale electricity prices both in Ireland and across Europe have risen substantially in 2021, with high international gas prices, low levels of wind, increasing carbon prices (Emissions Trading System), a lingering 2020 winter, low gas storage reserves and gas supply issues in Europe all contributing to rising wholesale electricity prices.

As the Deputy will be aware, the Government today approved the establishment of the Electricity Costs Emergency Benefit Scheme under which a payment of €100 will be made to each domestic electricity customer as a once off measure to mitigate the effects of the unprecedented rise in electricity prices on domestic electricity customers.

Separately, with regard to home heating fuels and taxation, the Deputy will be aware that a reduced rate of VAT applies to all home heating fuels. In relation to the Carbon Tax increase, I have delayed its application on home heating fuels until May 2022 to allow for the passage of the winter heating season. In addition, in line with Government policy, the additional revenues raised from the increase in carbon tax have been allocated to expenditure measures which ensure a just transition through targeted social welfare measures, investment in energy efficiency and through funding for the agricultural sector.

In light of the current upward trend in energy costs, an additional €174 million in carbon tax revenues is being made available to the Department of Social Protection in 2022, an increase of €105 million on the 2021 allocation of €69 million.

This package of welfare measures is informed by ESRI research which finds that the net impact of the measures is progressive. Analysis undertaken by the ESRI shows that as a result of this targeted policy approach, households in the bottom four income deciles will see all of the cost of the carbon tax increase offset, with the bottom three deciles being better off as a result of these measures. This is a tangible demonstration of the Government’s commitment to achieving a Just Transition.

I would like to remind people that there are still very significant savings to be had by shopping around energy suppliers. I would also note that the most effective way to reduce a household’s energy bills permanently is through improving the energy efficiency of their home. The Government is providing a record level of support for energy efficiency this year. This will continue in 2022 with further investment.

In the long run, the best way to protect Ireland from the impact of international fossil fuel prices is to reduce our dependence on them. We will achieve this through the progressive decarbonisation of Irish society and through the steps that will be taken to meet the Government’s commitment to reach net zero greenhouse gas emissions by 2050.

Energy Prices

Questions (236)

Pearse Doherty

Question:

236. Deputy Pearse Doherty asked the Minister for Finance if he discussed the rising price of energy at the recent meeting of the Eurogroup; if he has analysed the support package announced by the Italian Government in September 2021 to support households from rising energy prices and the funds allocated to extend that protection into 2022; if he discussed those measures with his Italian counterpart; if he will consider delivering a similar package; and if he will make a statement on the matter. [61996/21]

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Written answers (Question to Finance)

At Eurogroup meetings, we have had a number of discussions on energy prices and inflation to which Finance Ministers from many Member States have contributed. The outcomes of Eurogroup discussions are communicated through the post Eurogroup press conferences and summing-up letters at:

www.consilium.europa.eu/en/council-eu/eurogroup/eurogroup-documents-register/.

While the euro area has performed extremely well and the outlook is positive, we are very alert to the recent rise in prices, much of which reflects energy price developments. In fact, I invited the Director of the EU Agency for the Coordination of Energy Regulators (ACER), Christian Zinglersen, into our October Eurogroup meeting to discuss energy prices. At our most recent meeting in December, it is still firmly our view that the rise in prices is temporary and that inflation will ease in 2022.

In relation to the Government’s response to rising energy prices, in Budget 2022 the Minster for Public Expenditure and Reform announced a range of measures to tackle the rise in prices. These measures included increases to the fuel allowance as well as core welfare rates, which were also designed to counteract the impact of the carbon tax on low income households. The specific measures were:

- An increase to the Qualified Child Payment of €2 per week for children under 12 and €3 per week for children over 12, which will protect low income families and reduce child poverty.

- An increase in the Living Alone Allowance of €3 per week as people living alone are likely to have higher energy needs than average.

- An increase to the Fuel Allowance of €5 per week to compensate a broad range of lower income households. This is combined with a broadening of the threshold for Fuel Allowance eligibility and an increase in the income allowed for the means test that is applied to applicants.

- An increase in the income threshold for the Working Family Payment of €10 per week.

The total cost of these interventions is projected at €146 million in 2022. Cumulatively, these measures will protect the most vulnerable but I would re-iterate the views of the European Institutions and the International Monetary Fund that the recent spike in prices is transitory.

Public Procurement Contracts

Questions (237)

John Lahart

Question:

237. Deputy John Lahart asked the Minister for Public Expenditure and Reform the status of the process underway by the Office of Government Procurement in relation to a new framework for the procurement of cloud video conference services; the expected date for the publication of this framework; the timelines for premarket engagement and evaluation; and if he will make a statement on the matter. [61231/21]

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Written answers (Question to Public)

OGP is currently engaging with its public sector clients in relation to their requirements for cloud services (including collaboration and video conference services) which will inform OGP’s future strategy in relation to potential procurement solutions for cloud services. Any procurement of cloud services will be through public a competition(s) advertised on www.etender.ie. Pre-market engagement relating to any public procurement competition will be conducted in an open and transparent manner through a Request for Information process advertised on www.etenders.ie. Pre-market engagement will not commence until Q1 2022 at the earliest.

Brexit Supports

Questions (238)

Matt Carthy

Question:

238. Deputy Matt Carthy asked the Minister for Public Expenditure and Reform his plans and proposals to ensure that farmers receive direct funding from the Brexit Adjustment Reserve; and if he will make a statement on the matter. [61322/21]

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Written answers (Question to Public)

Ireland will receive just over €1 billion from the EU’s Brexit Adjustment Reserve, the biggest single allocation for any Member State, representing just over 20% of the total funding available.

Approximately 80% of funding will be paid to Member States as pre-financing in three tranches over the period 2021 to 2023. I am pleased that on 6 December 2021 the European Commission approved the payment of Ireland’s first tranche of €361.5 million, making us the first Member State to receive such approval.

The purpose of the Reserve is to help counter the adverse economic and social consequences of Brexit in the sectors and Member States that are worst affected. In Ireland's case, funding will be directed at areas such as enterprise supports; supports for the agri-food and fisheries sectors, reskilling and retraining; and checks and controls at our ports and airports.

To qualify for BAR funding, expenditure must be incurred between 1 January 2020 and 31 December 2023 and a direct link to the adverse consequences of the withdrawal of the United Kingdom from the EU must be demonstrated.

The allocation of BAR resources is being aligned with the annual Estimates process, which has been the vehicle for allocating Brexit resources since the UK Referendum in 2016.

Departmental Funding

Questions (239)

Patricia Ryan

Question:

239. Deputy Patricia Ryan asked the Minister for Public Expenditure and Reform the reason he is discontinuing funding to an organisation (details supplied); if he will reconsider the decision; and if he will make a statement on the matter. [61678/21]

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Written answers (Question to Public)

The Department of Public Expenditure and Reform (DPER) has provided grant funding to Benefacts since 2015. The project was funded as a pathfinder initiative in the area of data analytics on the non-profit sector. Benefacts was initially co-funded with philanthropy, however in recent years the Department has been providing the majority of funding to the entity.

In 2019, DPER received an independent report which it commissioned to provide analysis of the market for data on the non-profit sector. This report examined, inter alia, issues around the demand for the data concerned; methodologies and technologies used; the potential for direct provision by the State of these services itself, and; the maturity of the market to provide these services efficiently. On foot of this report, DPER undertook a review in 2020 which found that the business case for its continued funding of Benefacts was no longer justified and accordingly the decision was made to terminate funding. This decision was notified to the Chairperson of the Board of Benefacts and other relevant stakeholders in June 2020.

Recognising that other public service bodies with direct policy involvement in the not-for-profit sector may have wished to consider whether they had an appreciable business case to continue funding Benefacts, my Department agreed to fund the initiative up to the end of 2021. This provision was made to facilitate relevant public service bodies to consider their position and to assess all of the options in relation to their respective business needs concerning data on the not-for-profit sector.

In April 2021, my Department reaffirmed its 2020 decision to all of the parties concerned. Furthermore, in acknowledgment of the impact of Covid19 on this deliberative process, DPER sanctioned a final three month extension of funding to Benefacts up to the 31st March 2022. As of December 2021, no alternative funding source from among the Departments and agencies who directly avail of the service provided by Benefacts has been identified.

The factors influencing the original decision of April 2020 have not changed materially and, consequently, the decision of this Department to terminate funding remains unaltered.

My officials are continuing to work closely with the executive and Board of Benefacts to ensure that all necessary requirements under the funding agreement will be met, including those which may arise under a wind-up scenario.

Public Procurement Contracts

Questions (240)

Bríd Smith

Question:

240. Deputy Bríd Smith asked the Minister for Public Expenditure and Reform the details of a tender issued for the provision of chairpersons of Government initiated reviews or bodies. [61700/21]

View answer

Written answers (Question to Public)

I am not aware of any tender issued by my Department for the provision of chairpersons of Government initiated reviews or bodies.

Fiscal Policy

Questions (241)

John Lahart

Question:

241. Deputy John Lahart asked the Minister for Public Expenditure and Reform his plans to implement recommendations (details supplied); and if he will make a statement on the matter. [61901/21]

View answer

Written answers (Question to Public)

The Summer Economic Statement (SES) set out the Government’s medium term fiscal strategy which anchors budgetary policy by keeping core expenditure growth in line with the trend growth rate of the economy.

The objective of this rule is to de-couple expenditure policy from cyclical variations in the economy and from windfall tax revenue. In its Fiscal Assessment Report, the Irish Fiscal Advisory Council welcomed this innovation to Ireland’s fiscal framework. I further note the Council’s view that the Government’s fiscal stance for next year strikes the appropriate balance between continuing to provide the necessary fiscal support to the economy while returning the public finances to a sustainable trajectory.

I note the Council's comments in relation to Departmental expenditure ceilings in respect of current expenditure not being published beyond 2022. In line with last year's Budget, technical current expenditure ceilings for 2023 and 2024 will be published before the end of the year, with the final ceilings for these years being fixed as part of the estimates process in the respective years, within the overall expenditure parameters set out in the SES and Expenditure Report 2022. This approach reflects the need to consider in Estimates settlements the unwinding of Covid-19 related expenditure and the allocation of funding from the Brexit Adjustment Reserve.

As usual with the Fiscal Assessment Report. The Minister for Finance will formally respond in the coming weeks.

Fiscal Policy

Question No. 243 answered with Question No. 242.

Questions (242, 243)

John Lahart

Question:

242. Deputy John Lahart asked the Minister for Public Expenditure and Reform the way major budgetary commitments in relation to Sláintecare fit into his plans for future public expenditure given Sláintecare costings have not been updated since 2017; the projected future costings; and if he will make a statement on the matter. [61902/21]

View answer

John Lahart

Question:

243. Deputy John Lahart asked the Minister for Public Expenditure and Reform the way budgetary commitments in relation to climate actions fit into his plans for future public expenditure given there is no estimate for the budgetary cost of implementing the climate action plan as indicated by the Irish Fiscal Advisory Council; and if he will make a statement on the matter. [61903/21]

View answer

Written answers (Question to Public)

I propose to take Questions Nos. 242 and 243 together.

Budget 2022 followed the medium term expenditure strategy laid out in the Summer Economic Statement, which set a sustainable rate of growth for core expenditure in the period to 2025. This will see core expenditure grow each year by just over 5 per cent on average over the period to 2025, broadly in line with the trend growth rate of the economy. The average annual growth rate in current expenditure is just under 4¾ per cent with total capital spending, including that funded by the National Recovery and Resilience Plan, growing by an annual average of over 8½ per cent.

This strategy sees an annual average of €3.2 billion being made available for increases in core current expenditure over the period 2022 to 2024. This includes a provision of 3% of the core current expenditure base in respect of existing level of service costs with the balance in funding being available for priority new current expenditure measures.

The increases in core capital spending, consistent with the amounts set out under the revised National Development Plan, will see increases ranging between €0.8 to €1.1 billion in the period from 2022 to 2024.

In looking at the Health expenditure, it is important to take into account the additional funding allocated in Budget 2021 and Budget 2022. Core current expenditure of €20.4 billion is provided in 2022 for the Department of Health, an increase of €2.9 billion compared to the amount set out in the pre-Covid Revised Estimates Volume for 2020. This has allowed for significant funding to be allocated to new measures including for additional staffing and capacity improvements, with Sláintecare measures being budgeted as part of the new measures allocation to the Department of Health.

As outlined, there are significant increases provided for capital investment. The revised National Development Plan set new five year rolling Departmental capital allocations and overall ten year capital ceilings out to 2030. The NDP sets out a total public investment of €165 billion over the period 2021 to 2030. Looking at the Government’s climate ambitions, extensive efforts have been made to ensure that the National Development Plan will support these ambitions.

The level of resources being set aside for core spending is significant - almost €93 billion in 2025 compared to just over €70 billion in 2020. This additional spending will provide for new expenditure measures, including for priorities such as Sláintecare and Climate Action, with allocations of the additional current funding being decided each year as part of the estimates process.

Question No. 243 answered with Question No. 242.

Houses of the Oireachtas Commission

Questions (244)

Ivana Bacik

Question:

244. Deputy Ivana Bacik asked the Minister for Public Expenditure and Reform the process by which changes to remuneration for those employed under the scheme for secretarial assistance is decided; and if he will make a statement on the matter. [61934/21]

View answer

Written answers (Question to Public)

The Oireachtas Commission oversees the provision of services to the Houses and their Members by the Houses of the Oireachtas Service (the parliamentary administration) in accordance with the Commission Acts.

The primary functions of the Commission are to provide for the running of the Houses of the Oireachtas, to act as governing body of the Service, to consider and determine policy in relation to the Service and to oversee the implementation of that policy by the Secretary General.

The Scheme for Secretarial Assistance is the mechanism under which Secretarial Assistants and others are engaged. Under the Scheme, the Houses of the Oireachtas Commission has the power to regulate the provision of “secretarial facilities” to Members and “qualifying parties”. Secretarial Assistants, Administrative Assistants, Parliamentary Assistants, Administrators and Chefs de Cabinet are employed by Members and by qualifying parties but are paid by the Commission.

The Commission also regulates the number of staff employed under the Scheme and has oversight of the operation of the Scheme. Under the Houses of the Oireachtas Commission Act 2003, the Commission must obtain the consent of the Minister for Public Expenditure and Reform of the day before reaching an agreement with any person in relation to rates of pay, conditions of employment or superannuation rights.

In practice, this means that the Commission advises on matters relating to pay, superannuation or other terms and conditions of employment, and submits proposals to myself for consideration and consent.

In that regard, I am aware that there is a process underway at the Workplace Relations Commission dealing with various issues, including alignment with the current public service pay agreement ‘Building Momentum’, between the Houses of the Oireachtas Commission and SIPTU.

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