Thursday, 10 Nov 2022

Written Answers Nos. 214-223

Budget 2023

Questions (215)

Bernard Durkan

Question:

215. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which measures taken in budget 2023 will continue to ensure economic stability; and if he will make a statement on the matter. [56041/22]

Written answers

Minister for Finance

Following the full easing of pandemic-related restrictions earlier this year, economic activity rebounded strongly with little, if any, evidence of permanent ‘scarring’ to the economy. However, the invasion of Ukraine and Russia’s weaponisation of energy supply has triggered a large energy price shock and undermined global economic prospects. Inflationary pressures have risen sharply and remained elevated over the last number of months, with an annual inflation rate of 9.6 per cent recorded in October. This has reduced the purchasing power of households and squeezed firm margins. These effects have slowed prospects for economic activity generally. The Department has revised down its forecast for Modified Domestic Demand growth by -2¾ percentage points next year, with growth of around 1¼ per cent now expected.

Against the backdrop of a highly inflationary environment, Budget 2023 was focused on providing relief to households and firms without making the inflationary situation worse. The Budget package for 2023 amounts to €6.9 billion. In addition to this, we have provided for a one-off package of direct cost of living supports of €4.1 billion, most of which will be implemented in the fourth quarter this year. While this brings the total size of the Budget package to €11 billion, the temporary nature of the deviation from our five per cent expenditure growth rule and the one-off nature of the cost of living supports will ensure that policy does not compound the inflationary problem.

Amongst the cost of living measures announced, Budget 2023 includes three energy credits of €200 each, a €500 tax credit for renters and the Temporary Business Energy Support Scheme (TBESS) to assist businesses with their energy costs over the winter months. Further cost of living measures implemented include an increase in income tax credits and an adjustment of income tax rate bands to reduce the tax burden on middle-income earners.

My Department is confident that the measures taken in Budget 2023 will continue to ensure economic stability. We have struck the right balance between supporting those most in need and avoiding exacerbating inflationary pressures. The one off and targeted nature of these cost of living supports underpins the balanced and sustainable approach to the measures implemented in Budget 2023.

Economic Policy

Questions (216)

Bernard Durkan

Question:

216. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which Ireland's economy remains stable, attractive and capable of combatting inflation to the greatest extent possible; and if he will make a statement on the matter. [56042/22]

Written answers

Minister for Finance

The Irish economy began this year on a solid footing. As we emerged from pandemic-relating restrictions, economic activity rebounded strongly with little, if any, evidence of permanent ‘scarring’ to the economy.

However, the global economic outlook quickly deteriorated as Putin’s war in Ukraine and weaponisation of energy supply sparked inflationary pressures. We are clearly heading into some very choppy waters with the international economy in a particularly precarious position. Inflation continues at high levels in Ireland and abroad and this is eroding household incomes and squeezing firm margins. However, Ireland enters this period from a position of strength, both in terms of the economy at large as well as our public finances.

Ireland’s labour market continues to perform strongly, with well over 2½ million people at work and an unemployment rate of just 4.4 per cent in October – close to the lowest on record. The unemployment rate is expected to increase marginally over the remainder of the year but is forecast to remain at low levels of around 5 per cent throughout next year despite mounting economic headwinds.

Reflecting the strength of our public finances, I announced a generous package of cost-of-living supports in Budget 2023 to combat inflation and safeguard the stability of the Irish economy. The total package for Budget 2023 amounts to €11 billion, €4.1 billion of which is in the form of temporary cost-of-living measures. The temporary and targeted nature of these measures will ensure that those hit hardest by inflation are supported without inflationary pressures becoming inadvertently exacerbated by government actions.

Despite the headwinds we may face, the fundamentals of the Irish economy remain strong. We have a record number of people at work, we will run a budget surplus this year and capitalise our National Reserve Fund, while at the same time supporting households and businesses to help alleviate the rising price pressures.

Economic Policy

Questions (217)

Bernard Durkan

Question:

217. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains confident that the Irish economy, including mortgage borrowers, are protected insofar as is possible from inflationary costs generated from within or outside the country; and if he will make a statement on the matter. [56043/22]

Written answers

Minister for Finance

The Consumer price (HICP) inflation picked up sharply over the course of the last year and in October stood at 9.6 per cent. Almost every advanced country in the world is in the same position, with euro area inflation reaching a record 10.7 per cent in October.

The key driver of global inflationary pressures at present is the sharp rise in energy, food and other commodity prices as a result of the war in Ukraine. Spillover effects from higher energy prices are also being felt in other sectors, such as food (via fertilisers and fuel costs) and consumer goods and services (via higher energy inputs). As a result, non-energy inflation has picked up sharply in recent months, indicating broad based inflationary pressures.

In response to rising inflation, central banks across advanced economies have begun tightening monetary policy. Indeed, the ECB has raised interest rates by a cumulative 2 percentage points so far this year. As Minister for Finance, monetary policy is not a part of my remit and it is not my place to comment or speculate on the setting of Eurozone interest rates. However, interest rates changes do have an impact on the economy as an increase in interest rates will increase the cost of borrowing, making it more costly for households and businesses to borrow money and invest.

Against this backdrop, the primary focus of Government, in Budget 2023, has been to do as much as possible to provide relief to households and firms without making the inflationary situation worse. Budget 2023 includes an overall package of €6.9 billion for next year, including adjustments to income tax bands and increases in social welfare and pension rates. Complementing this is a set of one-off measures amounting to €4.1 billion, which take effect from the final quarter of this year. The one-off package includes three €200 electricity credits to each household, an additional social welfare payment, a double payment of child benefit, the extension of the reduction in excise duties and the VAT rate on gas and electricity to end-February as well as the Temporary Business Energy Support Scheme.

This approach balances the need to provide necessary fiscal support to households and firms while at the same time, avoiding a situation in which the Government’s fiscal response becomes part of the inflation problem.

Public Sector Pensions

Questions (218)

Thomas Pringle

Question:

218. Deputy Thomas Pringle asked the Minister for Public Expenditure and Reform if a request has been received from Coillte to increase the pensions of past employees, given they have not received an increase since 2007; and if he will make a statement on the matter. [55960/22]

Written answers

Minister for Public Expenditure and Reform

Under paragraph 11 of the rules of the Coillte Teoranta Main Superannuation Scheme, Coillte may grant discretionary pension increases which are subject to the approval of the Minister for Agriculture, Food and the Marine, with the concurrence of the Minister for Public Expenditure and Reform.

In line with the Code of Practice for the Governance of State Bodies 2016 and Department of Public Expenditure and Reform Circular 16 of 2021, the authorisation of the Minister for Agriculture, Food and the Marine for a pension increase has been communicated to my Department along with a request for my concurrence.

Officials in my Department are currently reviewing the business case and a determination will be made in the near future.

Flood Risk Management

Questions (219, 220, 221, 222, 223)

Denis Naughten

Question:

219. Deputy Denis Naughten asked the Minister for Public Expenditure and Reform when the Shannon flood risk state agency co-ordination working group held its last meeting; if he will call an emergency meeting of the working group in view of the impending serious flooding in the Shannon catchment; and if he will make a statement on the matter. [55988/22]

Denis Naughten

Question:

220. Deputy Denis Naughten asked the Minister for Public Expenditure and Reform if the water levels on Lough Allen, Lough Ree and Lough Derg were dropped to cater for winter flooding in advance of the significant rainfall experienced over the past number of weeks within the Shannon catchment; the level that each lake was dropped to; the date of the reading; and if he will make a statement on the matter. [55989/22]

Denis Naughten

Question:

221. Deputy Denis Naughten asked the Minister for Public Expenditure and Reform if the maximum volumes of water are being spilled from Parteen weir and through the turbines at Ardnacrusha; when the maximum throughput was achieved at both locations; the volumes involved at each location; if he will confirm that this is being maintained; and if he will make a statement on the matter. [55991/22]

Denis Naughten

Question:

222. Deputy Denis Naughten asked the Minister for Public Expenditure and Reform the most recent date when all of the sluices were opened and boards completely removed at Meelick weir and at the New Cut on the River Shannon; and if he will make a statement on the matter. [55993/22]

Denis Naughten

Question:

223. Deputy Denis Naughten asked the Minister for Public Expenditure and Reform if he will outline the conclusions drawn from his examination of the legislative landscape and review of the current regulatory environment regarding the management of the River Shannon in line with his commitment to Dáil Éireann on 4 November 2020; and if he will make a statement on the matter. [55994/22]

Written answers

Minister of State at the Department of Public Expenditure and Reform (Deputy Patrick O'Donovan)

I propose to take Questions Nos. 219 to 223, inclusive, together.

The Deputy will be aware that the Shannon Flood Risk State Agency Co-ordination Working Group was established in 2016 by the Government to enhance the ongoing co-operation across state agencies involved with the River Shannon.  The Group recently met in Athlone on 20th October 2022.  At that meeting, the Group discussed a range of issues relating to work underway to assist with flood risk management along the River Shannon. 

The ESB, as a member of the Group, has provided the OPW with the following information in relation to its actions regarding the management of water levels on Lough Allen, Lough Ree and Lough Derg, and the management of water levels at Parteen weir.

The Shannon catchment has experienced high levels of rainfall over the last number of weeks and particularly since late-September.  This has resulted in increasing water levels in the River Shannon and its tributaries.

All lakes were at or below the target levels as set out in the ESB’s regulations and guidelines for control of the River Shannon in advance of the aforementioned rainfall which commenced towards the end of September.

Specifically:

1. Lough Allen was below the normal operating band (48.7 – 49.1 mOD Poolbeg) until 4th October 2022.

2. Lough Ree was below the target level for the end of August (37.49 mOD Poolbeg) until 6th October 2022, with all sluices in Athlone closed (due to rising callows levels) on the 17th October 2022.

3. Lough Derg levels were within the normal operating band until increased inflows greater than station throughput caused it to enter flood on Thursday 3rd November 2022. The capacity available in the lakes by being at or below target levels has now been used up as a result of the rainfall that has fallen on the Shannon catchment since the end of September.

The rate at which the water travels to Ardnacrusha is primarily a result of the natural topography of the river and the natural restrictions in the river. It takes many days for water to travel down the Shannon. All of the water arriving at Parteen weir is discharged either via Ardnacrusha station or down the old Shannon channel. The ESB does not store any water upstream of Parteen weir in the Parteen Basin.

In a flood situation,  (Lough Derg is currently in flood since last week), the ESB discharges the most amount of water operationally possible through Ardnacrusha station via the Headrace canal away from flood prone areas of the Lower Shannon.

The ESB continues to maximise the discharge of water from Lough Derg via Parteen weir. Discharge at Parteen weir down the old River Shannon Channel as of Wednesday, 9th November is 135 m3/s.  This is combined with discharge from Ardnacrusha Station which is operating at full throughput operationally possible (approximately 368 m3/s currently).

Discharging more water than the current volume would result in lowering water levels in Parteen Basin and the Headrace canal below safe operating limits with the risk of causing stability issues to the Category A Earthen Embankment Dams that form Parteen Basin and the Headrace canal. The ESB can only manage the flow of water as it arrives at Parteen weir from Lough Derg. The water flow from Lough Derg to Parteen Basin is restricted by the flow capacity of the outlet channel from Lough Derg at Killaloe. The capacity restriction acts like a bottleneck limiting the discharge from Lough Derg. The ESB will continue to maximise the discharge of water from Lough Derg within its Dam Safety constraints.

Predicted water levels and expected discharge amounts based on the latest Met Éireann forecast as well as water levels throughout the three lakes and Ardnacrusha discharges are available on the ESB’s website at: Hydrometric Information (esb.ie).

Waterways Ireland, as a member of the Group, has provided the OPW with the following information outlining the position in relation to Meelick weir and the New Cut.

Waterways Ireland has been operating the water level regime on the Shannon in line with the protocol and in conjunction with the ESB.

  In the case of the Lower Shannon:

- All sluices are open on Meelick weir (12) and the New Cut (18) at present and have been open since 16th October 2022.

- The tilting gates on Meelick weir are in the down position and have been since 7th October, 2022.

- Sluices on Athlone weir have been closed since 17th October, 2022.

Waterways Ireland has advised that there is no further action that it can take at Meelick.

An analysis of the legislative landscape and the current regulatory environment regarding the management of the River Shannon has been carried out. On the recommendation of the Attorney General, the OPW obtained legal services to support the examination of the legislative powers underpinning the bodies involved with the River Shannon.

The outcome of this legal analysis has informed a proposed approach which is currently with the Minister for Public Expenditure and Reform for his consideration.

Question No. 220 answered with Question No. 219.

Question No. 221 answered with Question No. 219.

Question No. 222 answered with Question No. 219.

Question No. 223 answered with Question No. 219.