Paul McAuliffe
Question:32. Deputy Paul McAuliffe asked the Minister for Finance if he will provide an update on his work to address the issue of uninsured drivers on the road; and if he will make a statement on the matter. [20550/22]
View answerInsurance Coverage
Questions (32)
Written answers
At the outset, it is important to recognise that uninsured driving is a criminal offence and a road safety issue, and as such certain efforts to tackle this issue are relevant for my colleagues the Ministers for Justice and Equality, and Transport, respectively.
I am cognisant of the fact that the cost of uninsured drivers is ultimately borne by innocent policyholders. The Motor Insurance Bureau of Ireland compensates victims of road traffic accidents caused by uninsured and unidentified vehicles, the cost of which is added to motor insurance premiums. The Minister of State at the Department of Finance, Seán Fleming, has had engagements with the Garda Commissioner, the Motor Insurance Bureau of Ireland and the Department of Transport on this issue.
I am informed the Road Traffic and Roads Bill 2021, which is currently before the Dáil, will further develop a database of all motor insurance policies in the State - the Motor Third Party Liability database, which the Department of Transport has been working collaboratively with stakeholders on. This, along with the Automatic Number Plate Recognition system, will enable Gardaí to identify and apprehend uninsured vehicles on our roads. I welcome the contribution to date from the insurance industry to this important project, the completion of which should reduce the levels of uninsured driving, thereby acting as a lever to lower costs for both policyholders and insurers.
The Minister of State and I will continue to engage with our Ministerial colleagues, industry and other stakeholders to address this pressing issue, and to ensure that the benefits of improved enforcement are passed on to and felt by policyholders.
Question No. 33 answered with Question No. 22.
Cost of Living Issues
Questions (34)
Richard Boyd Barrett
Question:34. Deputy Richard Boyd Barrett asked the Minister for Finance if he is proposing a mini-budget to address the cost of living crisis; and if he will make a statement on the matter. [21446/22]
View answerWritten answers
The Government has intervened on four occasions to address increases in the cost of living, at a combined cost of approximately €2.1 billion.
Firstly, Budget 2022 contained an income tax package amounting to €520 million. On the expenditure side, a social welfare package worth €558 million was introduced, including, among other measures, a general €5 rate increase for working age and pension age recipients, and a €5 increase in the fuel allowance.
A suite of measures was then introduced in mid-February, amounting to €505 million. Measures included an energy credit of €200 to every household in the country, a once-off lump sum payment in respect of the fuel allowance, and a 20 per cent reduction in public transport fares.
In March, Government agreed to VAT-inclusive reductions in excise duty of 20 cent per litre in respect of petrol, 15 cent per litre in respect of diesel and 2 cent per litre in respect of Marked Gas Oil.
Finally, earlier this month, Government announced a further set of measures amounting to around €180 million. These measures include a reduction in the VAT rate for electricity and gas to 9 per cent, from 1 May until end-October, an additional payment in respect of the fuel allowance, and an extension of the reduction in excise duty to mid-October.
In summary, therefore, it is clear that the Government has been pro-active in limiting the fallout from the impact of higher energy and other prices, there is a limit as to what can be done. That said, many of the drivers of the increased cost of living are global in nature, and Government cannot insulate all from the burden of higher global prices.
Finally, it is also worth pointing out that borrowing costs are now rising, meaning that the Government's capacity to run large deficits is more constrained than during the pandemic.
Covid-19 Pandemic Supports
Questions (35)
Bríd Smith
Question:35. Deputy Bríd Smith asked the Minister for Finance if the employment wage subsidy scheme will end for all recipients on 30 April 2022; the supports that will be available for any sector that continues to be affected by a downturn as a result of the pandemic; and if he will make a statement on the matter. [21408/22]
View answerWritten answers
The Employment Wage Subsidy Scheme (EWSS) is an economy-wide support with the objective of supporting employment and maintaining the link between the employer and the employee. The EWSS is operated on a self-assessment basis with the onus on applicants to satisfy themselves that they fully meet the eligibility criteria for the scheme as set down in the legislation and to self-declare to Revenue that they correctly qualify for the scheme.
As part of Budget 2022, the Government agreed the future of EWSS including its graduated exit strategy. These arrangements were subsequently enhanced on a number of occasions in response to the public health circumstances. The Finance Act 2021 and the current Finance (Covid-19 & Miscellaneous Provisions) Bill 2022 provide for the phased exit arrangements for the scheme. The EWSS remains in operation until 30 April 2022 for most eligible businesses, with a graduated step down in rates taking place in the run-up to the end of the scheme.
In recognition of the public health situation in late December 2021, I announced on 21 January 2022 that businesses availing of EWSS that were directly impacted by the public health restrictions of December 2021 would continue to receive the enhanced rates of subsidy for the month of February and the graduated step-down in subsidy rates would be delayed by one month with such firms continuing to receive support under the scheme until 31 May 2022 at a flat rate of €100 per employee. Furthermore, the employer must have a tax clearance certificate to be eligible for EWSS and must continue to meet the requirements for tax clearance throughout the scheme.
The relevant public health restrictions are those that were in place between 20 December 2021 and 22 January 2022 and imposed an 8pm closing time on hospitality venues, including restaurants, bars and cafes, and reduced capacity on many indoor events, thus directly curtailing the ability of the businesses to trade.
Revenue is operating these changes to the scheme on an administrative basis, pending enactment of the current Finance (Covid-19 & Miscellaneous Provisions) Bill 2022.
The Employment Wage Subsidy Scheme represents a substantial and key part of this Government’s response to the Covid crisis. It has been an extremely successful policy intervention and one which has greatly assisted us in maintaining the link between employers and employees. The overall support provided to date (21st April) is €7.79 billion, comprising direct subsidy payments of almost €6.76 billion and PRSI forgone of €1.03 billion to 51,900 employers in respect of 734,200 employees.
Without the support of EWSS, many businesses would simply not be in existence today and would certainly not be in a position to adapt as responsively as they have to the reopening of all sectors of our economy.
The EWSS operates as a highly effective and responsive instrument. At the same time, we must seek to ensure it is withdrawn at the right time.
By end April 2022, a wage subsidy scheme (TWSS or EWSS) will have been in place for over 2 years. Any further prolongation of EWSS runs contrary to the original objectives of the EWSS as an emergency measure to assist businesses through the pandemic. We are now, correctly, in the final phase of the scheme which is important for everyone, including the businesses themselves and the wider body of taxpayers given the substantial cost to the Exchequer.
Finally, the EWSS is one of many supports provided by the Government during the pandemic. The full range of supports can be located on the Department of Enterprise, Trade and Employment’s website at the following link - enterprise.gov.ie/en/What-We-Do/Supports-for-SMEs/COVID-19-supports/
Tax Code
Questions (36, 42)
Cathal Crowe
Question:36. Deputy Cathal Crowe asked the Minister for Finance if he will engage with his counterparts in the European Union in order that the VAT treatment of home heating oil in Ireland can be revised, similar to be recent VAT reduction in electricity and gas. [21337/22]
View answer
Peadar Tóibín
Question:42. Deputy Peadar Tóibín asked the Minister for Finance if he will outline any engagement he or his Department has had with the European Commission in relation to the temporary reduction of VAT on fuel. [21257/22]
View answerWritten answers
I propose to take Questions Nos. 36 and 42 together.
At the outset, the Deputy should note that I wrote to Commissioner Gentiloni in early March regarding the need for Member States to have greater flexibility when responding to the energy crisis, particularly in relation to the VAT and Excise Directives. In addition, officials in my Department and their colleagues in Brussels are in frequent contact with the European Commission across a wide range of issues, including how to respond to the energy crisis.
As the Deputy will be aware, following lengthy negotiations, amendments to the VAT Directive were provisionally agreed in December 2021 with final sign off on the amended text at ECOFIN in April 2022. This new agreement came into effect on 5 April 2022.
Under this new agreement, Annex III of the VAT Directive was expanded to include gas and electricity. This means that Ireland can apply a reduced rate of 9% to these products in line with other goods and services to which a reduced rate applies. The Government has made a decision to avail of this flexibility from 1 May, the start of the next VAT period.
In relation to VAT on home heating oil, this new agreement on VAT rates also preserved Ireland’s historical derogations in relation to fuel and oil despite them not being included in Annex III. It is on this basis that Ireland applies its 13.5% reduced rate of VAT to the supply of fuel and oil for domestic and commercial use. The current 13.5% VAT rate applied to energy products is a ‘parked rate’, and cannot be reduced below 12%. It should be noted that other Member States must apply their standard rate of VAT to this product.
I and my officials have sought and will continue to seek the maximum degree of flexibility for Member States with respect to VAT as it applies to domestic energy and fuel use. That engagement will continue as I work with my European counterparts and the EU Commission to respond to the current energy crisis.
Housing Schemes
Questions (37)
Catherine Connolly
Question:37. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 11 of 22 February 2022, the status of the promised review of the help-to-buy scheme; the terms of reference of the review; the person or body carrying out the review; and if he will make a statement on the matter. [20077/22]
View answerWritten answers
In my Budget 2022 address, I announced that a formal review of the Help-to-Buy scheme would take place this year. The exercise is intended to be fundamental in nature and to help inform decisions for Budget 2023 and Finance Bill 2022.
The terms of reference for the review are as follows:
"To examine all aspects of the Help-to-Buy scheme (s.477C of the Taxes Consolidation Act 1997) including its design, its operation, the extent to which it has met its key policy aims of assisting first-time buyers of new homes to fund their deposit and encouraging the building of additional new properties.
In doing so, the review should explore the cost effectiveness of the scheme to-date, including the issue of deadweight. It should also examine the impact of the scheme on house prices since inception.
The findings should present an assessment on a national basis while highlighting any regional aspects.
Having regard to the Government’s Housing for All strategy, and in particular to other initiatives included in Housing for All that have the same broad policy objectives as currently apply for the scheme, to examine whether there is a continued role for Help-to-Buy and, if so, to present options on how such role might best be fulfilled in the most efficient and cost-effective manner in the medium to long term, including on the question of any transitioning.
As part of the overall context, the review should draw on experience internationally and offer views in this regard as appropriate.
The study should be completed by c.o.b. Friday, 24 June 2022."
A request for tenders for the review exercise closed on 8 April 2022. My Department is currently managing the tender review process and it is expected that a contract for the review exercise will be awarded in the shortly.
Cost of Living Issues
Questions (38)
Sorca Clarke
Question:38. Deputy Sorca Clarke asked the Minister for Finance if he will introduce further targeted measures to support lower and middle-income families in response to the level of inflation projected for 2022; and if he will make a statement on the matter. [21460/22]
View answerWritten answers
The Government has intervened on four occasions to address increases in the cost of living, at a combined cost of approximately €2.1 billion.
Firstly, Budget 2022 contained an income tax package amounting to €520 million. On the expenditure side, a social welfare package worth €558 million was introduced, including, among other measures, a general €5 rate increase for working age and pension age recipients, and a €5 increase in the fuel allowance.
A suite of measures was then introduced in mid-February, amounting to €505 million. Measures included an energy credit of €200 to every household in the country, a once-off lump sum payment in respect of the fuel allowance, and a 20 per cent reduction in public transport fares.
In March, Government agreed to VAT-inclusive reductions in excise duty of 20 cent per litre in respect of petrol, 15 cent per litre in respect of diesel and 2 cent per litre in respect of Marked Gas Oil.
Finally, earlier this month, Government announced a further set of measures amounting to around €180 million. These measures include a reduction in the VAT rate for electricity and gas to 9 per cent, from 1 May until end-October, an additional payment in respect of the fuel allowance, and an extension of the reduction in excise duty to mid-October.
While the Government has been pro-active in limiting the fallout from the impact of higher energy and other prices, there is a limit as to what can be done. Many of the drivers of the increased cost of living are global in nature, and Government cannot insulate all from the burden of higher global prices.
Finally, it is also worth pointing out that borrowing costs are now rising, meaning that the Government's capacity to run large deficits is more constrained than during the pandemic.
Inflation Rate
Questions (39)
Seán Haughey
Question:39. Deputy Seán Haughey asked the Minister for Finance his assessment of the impact on inflation of the reduction in VAT on gas and electricity to 9%; and if he will make a statement on the matter. [20564/22]
View answerWritten answers
Inflation picked up sharply over the course of the last year and in March stood at 6.9 per cent. Almost every advanced country in the world is in the same position, with euro area inflation reaching an all-time high of 7.4 per cent in March. The key driver of inflation over the past six months or so has been increases in wholesale energy prices, driven by the rapid rebound in global demand and, more recently, the war in Ukraine. In Ireland, energy prices are currently contributing almost 4 percentage points to the annual inflation rate.
The Government is very conscious of the impact of rising energy prices on citizens, in particular on those on low incomes, and has introduced a series of measures in recent months at a cost of over €2 billion to help address the rising cost of living. Specifically, this month, the Government announced measures amounting to almost €200 million, including a temporary reduction in the VAT rate for electricity and gas to 9 per cent, which will help offset some of the recent increases in energy prices. Households will make estimated savings of around €50 on gas supplies and €70 on electricity supplies on annualised basis from this measure. An additional once-off lump sum payment of the fuel allowance will also be made and the reduction in excise duty will be extended to mid-October.
These measures are in addition to the reduction in excise duty of 20 per cent per litre for petrol and 15 per cent per litre for diesel announced in March as well as the cost of living package introduced in mid-February, which amounted to around €500 million. Among the measures introduced in February were an energy credit of €200 to every household in the country and a once-off lump sum payment of the fuel allowance. Additionally, Budget 2022 contained a combined income tax and social welfare package amounting to almost €1.1 billion.
Together these measures will help alleviate some of the cost pressures currently facing households and businesses. However, it must be stressed that resources are limited; the priority is to minimise the impact on those who most affected, but we cannot cushion the impact for all. Given the current dynamics at play, we must remain prudent in our approach – conscious that broad fiscal measures at this point in time could lead to further inflationary pressures which would be counterproductive in nature. My Department will continue to monitor the inflation situation closely and take appropriate actions when necessary.
Question No. 40 answered with Question No. 25.
Banking Sector
Questions (41)
Richard Bruton
Question:41. Deputy Richard Bruton asked the Minister for Finance if he has assessed the support to consumers in rearranging their affairs as banks exit the Irish market; and if he has discussed the matter with the Central Bank. [21003/22]
View answerWritten answers
It is a key priority for the Minister for Finance and the Central Bank of Ireland that customers receive the appropriate support in rearranging their affairs as certain banks exit the market.
Officials met with the Central Bank on 19 April 2022 to discuss the withdrawal of Ulster Bank and KBC from the market and in particular the support required for consumers in moving their accounts to other financial service providers. These meetings will continue on a monthly basis.
The Central Bank and the Minister expect all retail banks to have plans in place to manage the impact of the broader changes and consolidation in the retail banking sector in Ireland. On 25 June 2021, the Central Bank engaged with all banks on its expectations of how they manage issues and consumer risks during this period of change, and it is actively monitoring compliance with these expectations.
It is the responsibility of the individual banks to ensure that they are putting their customer first, ensuring fair treatment of customers and that customers understand what the changes mean for them.
In particular banks are required to:
- Be transparent and clear in communications, communicating effectively and in a timely manner with all affected customers across all channels (e.g. in person, advisory, digital etc.), providing them with sufficient information and avoiding risk around information overload.
- Provide as much notice as possible on account closures, product/service withdrawals etc.
- Consider specifically the impact of their decisions on vulnerable customers and provide the assistance necessary to reasonably mitigate those impacts and retain access to basic financial services.
I have been informed by the Central Bank that this week it wrote to the CEOs of the five main retail banks to set out its expectations on some key items related to the account migration process. The purpose of these letters is to reinforce and, to any extent necessary, clarify the application of the expectations set out in the Central Bank's previous letter of June 2021. The letter also includes an invite to a roundtable meeting, hosted by Director General, Financial Conduct, Derville Rowland on the following five key issues/risks:
- Notice periods
- Application of the switching process
- New provider making commercial decisions in a manner that facilitates a customer making and executing a switch
- Direct debit originators and/or other service providers
- Vulnerable customers
The Department of Finance is also engaging with the Competition and Consumer Protection Commission, and the Banking and Payments Federation of Ireland to ensure a cohesive approach regarding consumer protection and information provision.
Officials are also meeting with other current account providers including Credit Unions and An Post to discuss how they can support customers that need new accounts because of the withdrawal of both Ulster Bank and KBC.
Question No. 42 answered with Question No. 36.
Fiscal Policy
Questions (43)
Gerald Nash
Question:43. Deputy Ged Nash asked the Minister for Finance the status of ongoing discussions on the European Union fiscal rules; the position adopted by the Government on any changes to the fiscal rules; his views on the recent recommendation of an Oireachtas Budgetary Oversight Committee report (details supplied) which notes the need for certain well defined expenditure areas such as climate and public housing spending to be excluded from the fiscal rules and for a more accommodating set of rules toward public capital investment; and if he will make a statement on the matter. [21426/22]
View answerWritten answers
As the Deputy will be aware, the European Commission published a Communication in October 2021 which relaunched the review of the economic governance framework. I have strongly welcomed the re-opening of the Commission’s review.
Discussions on the future of the European fiscal framework have been ongoing at the relevant EU sub-committees since the relaunch of the review. These discussions have been grouped around four main themes: 1) fiscal sustainability, 2) encouraging investment, 3) encouraging counter-cyclical fiscal policy/stabilisation and 4) improving governance and compliance.
The Commission has stated that it will provide orientations on possible changes to the economic governance framework with the objective of achieving a broad-based consensus on the way forward ‘well in time’ for 2023. In terms of discussions regarding specific reforms, the Commission has yet to bring forward any detailed proposals. However, Ireland supports reforms that improve the transparency and predictability of the rules.
In regards to the recommendation of the Oireachtas Budgetary Oversight Committee report, I am firmly of the view that investment in the productive capacity of our economy is key to our future prospects. In particular, robust public capital investment will be needed to achieve our ambitions in the context of the green and digital transitions, as well as meeting the Government’s housing targets.
In this context, it is important to note that the current EU fiscal framework does not place any limits on public investment, as additional expenditure is always possible provided it is financed by revenue-raising measures or matched by offsetting reductions in current expenditure. That being said, we must also recognise that, prior to the pandemic, there was already evidence of an investment gap across Europe. The role of the EU fiscal framework in tackling this investment gap is a complex question but one which I believe we must consider at both a national and European level, particularly in the context of the EU’s long-term strategy to move to an economy with net-zero greenhouse gas emissions by 2050.
My officials and I will continue to actively engage in these discussions with our European partners, but it must be recognised that there are difficult trade-offs involved. This means that finding agreement from all Member States will be challenging.
Tax Reliefs
Questions (44)
Rose Conway-Walsh
Question:44. Deputy Rose Conway-Walsh asked the Minister for Finance when he will conclude the review into providing agricultural contractors with a similar status to farmers regarding the carbon tax on green diesel; and if he will make a statement on the matter. [21406/22]
View answerWritten answers
The present position is that agricultural contractors are not entitled to avail of relief from increases in the carbon tax on farm diesel under section 664A of the Taxes Consolidation Act 1997. This is because farming, which is defined in section 654 of the Taxes Consolidation Act, requires the occupation of farmland. Agricultural contracting does not involve the occupation of farmland. The measure is specifically targeted at the farming sector to address the particular problems faced by family farms.
However, it should be noted that, currently, those who incur expenses in relation to farm diesel in the course of their trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.
My officials met with contractors' representatives in December 2019 and advised that my Department was intending to schedule a review of the scheme (and related aspects) in the context of a wider report on agri-tax reliefs and the Government's Climate policy.
The onset of the Covid-19 pandemic in the intervening period caused the review to be deferred and the formal elements of same have yet to take place. In the meantime, the status quo has remained in relation to the application and scope of section 664A. I have since received further correspondence from contractors' representatives, most recently on 15 February 2022. I indicated to Deputy Matt Carthy during the Committee Stage of the Finance (Covid-19 and Miscellaneous Provisions) Bill 2022 on 6 April last, that I expected that the review would be completed in advance of Budget 2023. In fact, the exercise is likely to be completed by the early part of Q3 this year.
As the Deputy will appreciate, decisions regarding taxation measures are made as part of the annual Budget and Finance Bill process at the appropriate time and having regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. Furthermore, I must also have regard to ensuring that any tax measures are broadly aligned with the need to meet our Climate Action Plan targets.
Financial Services
Questions (45)
Bernard Durkan
Question:45. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which his Department monitors activities in the banking and financial services sectors with particular reference to the need to ensure that inflation is not generated from that area given the extent to which monies are made available throughout Europe at a low interest rate; and if he will make a statement on the matter. [21410/22]
View answerWritten answers
Monetary policy for the euro area is formulated by the Governing Council of the European Central Bank (ECB) and implemented by the Eurosystem. The Governing Council sets its key lending and deposit rates with regard to its monetary policy objective of price stability.
Any change in monetary policy will depend on how the economy evolves and how the Governing Council assess the outlook. While inflation has increased significantly this year, and is projected to remain high over the coming months, I can inform the Deputy that the ECB has committed to a gradual, flexible and data dependent approach to the calibration of monetary policy in order to deliver on its mandate. Financing conditions will be monitored closely as they are an important part of the transmission mechanism that links the monetary policy instruments controlled by Central Banks to the ultimate objective of achieving medium-term inflation goals.
It is a commercial matter for individual banks and other lenders to set their own lending and deposit rates, having regard to commercial considerations when operating in the market. As Minister for Finance, I have no role in prescribing or setting these interest rates.
Tax Code
Questions (46)
Richard Boyd Barrett
Question:46. Deputy Richard Boyd Barrett asked the Minister for Finance if he is planning any new tax measures to address growing income inequality in view of the recent reports of increases in senior executive pay; and if he will make a statement on the matter. [21447/22]
View answerWritten answers
Ireland has one of the most progressive personal income tax systems in the world, which plays a crucial role in the process of income redistribution. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI. A broad-based, progressive income tax system, where the majority of income earners make some contribution but according to their means, is the most fair and sustainable income tax system in the long term.
The ‘Gini coefficient’ is a standard measurement of income inequality used internationally, whereby 0 represents a situation where all households have an equal income and 1 indicates that one household has all national income. The position is that in Ireland, income inequality measured on the basis of disposable income using the Gini coefficient stood at 0.29 based on the latest OECD data for 2018. This figure is below the OECD average and points to the strongly redistributive nature of the tax and welfare system in Ireland.
The contribution of the tax and welfare system to enhancing income equality can be measured by the relative fall in the Gini coefficient between market and disposable incomes. The latest OECD data show that Ireland recorded the third largest fall in the Gini coefficient between market and disposable income (after Finland and Belgium), with most of this reduction achieved due to welfare measures.
In addition, the ESRI have shown that Ireland’s tax system does more than any other country in the EU to reduce the gap between market and disposable incomes.
In terms of the progressivity of the income tax system, the Revenue Commissioners estimate that in 2022, the top 1.6 per cent of income earners will pay 27.7 per cent of total income tax and Universal Social Charge (USC) receipts. Furthermore, just over 55 per cent of total income tax and USC receipts will be paid by the top 8.3 per cent of taxpayer units (those earning over €100,000).
It should also be noted that the suite of tax and welfare policy changes introduced in Budget 2022 are broadly progressive, with the gains from the package of direct taxes and welfare measures combined more keenly felt by those in the lower income deciles.
In the normal run of events, the issue of proposed increases to senior executive pay is largely a matter for individual employers. However, the Department of Finance monitors income inequality, particularly in the context of the distributional impact of tax and social welfare measures introduced as part of the annual Budget.
The broad economic and fiscal parameters for the Budget in the autumn will be presented in the Summer Economic Statement. It is within this context and the overall macro-fiscal position that budgetary options, including those relating to income tax, will be considered.
Vacant Properties
Questions (47, 55, 77)
Alan Dillon
Question:47. Deputy Alan Dillon asked the Minister for Finance his views on the high residential vacancy rates in parts of Ireland; and if he is considering a new vacant property tax to help tackle the issue of long-standing residential vacancy and dereliction to increase housing supply in towns and cities. [21458/22]
View answerCatherine Connolly
Question:55. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 23 of 22 February 2022, the status of the research and collection of data on property vacancies by his Department with a view to introducing a vacant property tax; if the data collection has been concluded to date; when he expects to bring proposals for the vacant property tax before Government; and if he will make a statement on the matter. [20078/22]
View answer
Pádraig O'Sullivan
Question:77. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will report on the collection of data on vacancy levels as per the Housing for All plan; the status of the proposed vacant property tax; and if he will make a statement on the matter. [21369/22]
View answerWritten answers
I propose to take Questions Nos. 47, 55 and 77 together.
The Government’s strategy ‘Housing For All’ includes an action for my Department to collect data on vacancy with a view to introducing a Vacant Property Tax. The timeframe for delivery on this commitment is the second quarter of 2022. The Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information in relation to the occupancy status of residential properties including , where unoccupied, the duration and reason for this, in the Local Property Tax (LPT) return forms submitted by residential property owners in respect of the new LPT valuation period 2022-2025. This information, together with information from other available sources, will be used to assess the merits and impact of introducing a Vacant Property Tax.
In considering the case for such a tax it is important to have a sound understanding of the quantity, locations and characteristics of long-term vacant properties. It is also essential to identify the reasons for vacancy, and whether this is long or short-term in nature. There may be genuine and acceptable reasons for vacancy such as refurbishment work, the temporary absence of the owner for medical reasons or pending the grant of probate for a deceased person’s estate.
Revenue have completed a preliminary analysis of the LPT returns received to date which has been shared with my Department. The results of the preliminary analysis suggest that levels of vacancy are low across all counties. The Minister for Finance will consider the issue in consultation with his colleagues before reverting to Government with proposals on the appropriate response. I understand Revenue intends to publish a profile of the occupancy data from the LPT returns in due course.
Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the Government, as evidenced in the Housing for All Strategy where one of the four pathways in the plan is specifically dedicated to this area.
Tax Code
Questions (48)
Pádraig O'Sullivan
Question:48. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will consider, as part of budget 2023, a reduction in VAT on electric vehicles given the European Union's decision to offer member states greater flexibility around VAT reductions; and if he will make a statement on the matter. [21368/22]
View answerWritten answers
Officials in my Department are currently reviewing the options now available to Ireland in setting VAT rates. This will include consideration of the new options available to Member States as a result of the recently updated EU VAT rules when setting VAT rates as well as the new limitations introduced on how reduced rates may be applied.
Decisions about tax changes are generally taken in the context of the Budget and, as part of our normal annual Budget preparations. In this context, various options for tax policy changes will be considered by the Tax Strategy Group prior to Budget 2023.
EU Meetings
Questions (49)
Neale Richmond
Question:49. Deputy Neale Richmond asked the Minister for Finance if he will report on the recent meeting of the Eurogroup; and if he will make a statement on the matter. [21167/22]
View answerWritten answers
The most recent Eurogroup was held on 4 April in Luxembourg.
Eurogroup opened with a discussion on economic developments related to the military aggression in Ukraine. The European Commission and the European Central Bank updated Ministers on the economic outlook for the euro area, and the European Stability Mechanism presented market updates. We acknowledged that we entered this crisis with solid fundamentals and robust growth prospects, but the challenges we are facing require an agile response.
Ministers restated their support and solidarity with Ukraine and the need to continue coordinating economic and fiscal policies in this uncertain environment.
Our next agenda item was an exchange of views on the digital euro project, focussing on the trade-offs in design between privacy and other important policy objectives such as preventing money laundering and illicit financing. The ECB presented design options, informed by findings from their recently concluded public consultation. Ministers confirmed that full anonymity is not a viable option for a digital euro, and supported further exploration of options for a risk-based approach, with selective privacy in the case of low value transactions and offline functionality. This would encourage the adoption of the digital euro while also supporting financial inclusion, which is a key objective. This project will continue to feature on the Eurogroup agenda in the coming months.
Eurogroup agreed a work programme of thematic discussions in September 2021, and in this meeting we exchanged views on housing market developments in the euro area, informed by a Commission note on the topic, with a focus on affordability for citizens.
We then held a meeting in Banking Union format. The Chair of Banking Supervision and the Chair of the Single Resolution Board (SRB) informed Ministers about the latest activities of their institutions, with updates on the euro area banking sector. The SRB Chair also presented recent resolution cases, demonstrating the effectiveness of the resolution framework and outlining lessons learned.
Insurance Industry
Questions (50)
Holly Cairns
Question:50. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to reduce the burden of insurance costs for the hospitality sector. [21421/22]
View answerWritten answers
While, under EU law, neither the Minister for Finance nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, I can assure the Deputy that this Government is committed to improving the cost and availability of insurance for all consumers, businesses and community groups, including the hospitality sector.
The whole-of-Government approach, being taken through the Action Plan for Insurance Reform, sets out 66 actions which aim to improve both the cost and availability of insurance, particularly for businesses. The Second Implementation Report, which was published on 1 March 2022, shows that 80 per cent of these actions are being delivered.
Among the key developments so far are the implementation of the new Personal Injury Guidelines, which significantly reduce award levels for many categories of common injuries, particularly those of soft tissue. Recent data from the Personal Injury Assessment Board (PIAB) show that award levels have fallen by an average of 42 per cent, providing stability and certainty to the claims environment.
As part of the effort to increase competition, the Department of Finance is working closely with the IDA to broaden the supply of insurance in the Irish insurance market, including in areas which have been identified as ‘pinch-points’, such as the hospitality sector. The IDA has commenced a multi-phased engagement process with targeted underwriters and will seek to leverage the developments of the Government insurance reform agenda to date.
Furthermore, rebalancing the duty of care is now a high priority action for Government and is being led by the Department of Justice. Overhauling this legislation should help to address the issue of “slips, trips and falls”, which are particularly prevalent in high-risk/heavy-footfall areas such as hospitality. Minister McEntee has noted in the Justice Plan 2022, published earlier this month, her intention to bring forward legislative proposals to reform the law in this area.
In conclusion, I wish to assure the Deputy of my intention to work with my Government colleagues to ensure further implementation of the Action Plan which should have a positive impact on the affordability and availability of insurance for all consumers.