Written Answers Nos. 209-230
209. Deputy Ged Nash asked the Minister for Finance his views, based on the experience of the EWSS, on the need to embed a modernised short-time work scheme modelled on the successful German Kurzarbeit scheme, especially in light of the threat of 650 layoffs at the Tara Mines; and if he will make a statement on the matter. [30398/23]
View answerWhile the Deputy refers to the Employment Wage Subsidy Scheme (EWSS), it is important to recall that the EWSS was a unique scheme which was developed and operated in exceptional circumstances during the Covid-19 pandemic. Arising from this, the governance arrangements that applied to EWSS were also exceptional. In the ordinary course of events, the position is that policy responsibility for short-time work support, which is a form of Jobseeker’s Benefit, resides in the first instance with my colleague, the Minister for Social Protection.
The Deputy may be aware that the Pathways to Work 2021-2025 strategy, sponsored by Minister Humphreys and her Department, includes the following commitment: "building on the EWSS/TWSS and drawing on existing international models, explore the possibility of introducing a new Short Time Work Support scheme to enable employers retain people on their payroll in response to short-duration shocks to employment" .
Further details on the Pathways to Work strategy, including the ‘First Annual Progress Report, July 2021 to June 2022’, can be located as follows: www.gov.ie/en/publication/1feaf-pathways-to-work-2021/
210. Deputy Ged Nash asked the Minister for Finance if he is considering providing any assistance to mortgage holders impacted by the series of interest rate increases from the ECB over the past 12 months; and if he will make a statement on the matter. [30399/23]
View answerThe formulation and implementation of monetary policy is an independent matter for the European Central Bank (ECB) and, as the Deputy is aware, the ECB has increased official interest rates over recent months as it attempts to combat inflation.
The level of official interest rates influences the overall level of interest rates throughout the economy. However, the setting of retail lending rates by individual lenders is a commercial matter for that lender and I have no function or role in such decision making matters by financial institutions.
A number of measures are in place to support households who have been impacted by rising interest rates over the last number of months. In particular, the Central Bank has introduced a number of increased protections for variable rate mortgage holders which can which help mortgage holders identify lower cost mortgage options.
Firstly, it made changes to the Consumer Protection Code to require mortgage creditors to explain to borrowers how their non tracker variable interest rates have been set and to clearly identify the factors which may result in changes to variable interest rates. Secondly, it also increased the level of information lenders are required to provide their customers including where there is a possibility for the borrower to move to a lower ‘loan to value’ interest rate band and signpost the borrower to the Competition and Consumer Protection Commission's mortgage switching tool.
More recently, the Central Bank wrote to all regulated firms last November to set out its expectations on how regulated firms should support their customers. With respect to mortgages, the Central Bank is especially focused on ensuring that firms have the resources and arrangements in place to assess applications from existing and new or switching borrowers in a manner that is timely and based on prudent lending standards applied consistently across all applicants.
It should also be noted that this Government has responded swiftly and decisively, multiple times, to help to offset the most severe impacts of inflation, with a particular focus on protecting the most vulnerable.
Overall, €12 billion in direct relief has been made available to counter the effects of inflation, with the policy response designed to avoid generating second round effects that could lead to an inflationary spiral.
211. Deputy John Paul Phelan asked the Minister for Finance if he intends to introduce a tax credit for unscripted content; and if he will make a statement on the matter. [30424/23]
View answerAs part of his Budget 2023 speech, my predecessor Minister Donohoe announced that he had instructed officials to explore opportunities to support the unscripted sector. This process is currently being undertaken within the Department. However, while this process is on-going, it is, as stated, an exploration of options and it should not be taken as an indication that a tax credit or alternative form of support for the unscripted sector will be introduced. My officials will present the outcomes of this analysis to me for consideration when complete.
The Deputy may be aware that there is an audio-visual tax credit in place in the form of the Section 481 film tax credit. This credit does not however cover unscripted works. Section 481 is an approved State aid, it is approved by the Commission on the basis of 107(3)(D) of the TFEU, aid for a cultural and heritage product.
Section 481 provides relief in the form of a corporation tax credit related to the cost of production of certain films. The scheme is intended to act as a stimulus to the creation of an indigenous film industry in the State, creating quality employment opportunities and supporting the expression of the Irish culture.
Finance Bill 2022 provided for the extension of Section 481 from its current end date of 31 December 2024 to 31 December 2028. This extension is subject to European Commission approval. Extension of the relief in advance of this date demonstrates this Government’s commitment to the Irish audio-visual industry, and is intended to provide certainty regarding the future availability of the relief. This certainty will foster further confidence in Ireland as a centre of excellence for screen production.
212. Deputy John Paul Phelan asked the Minister for Finance the changes the OECD pillar 2 will have on Ireland's research and development tax credit; whether certain corporations will end up receiving less of a credit; and if he will make a statement on the matter. [30425/23]
View answer213. Deputy John Paul Phelan asked the Minister for Finance if he intends to increase the research and development tax credit; and if he will make a statement on the matter. [30426/23]
View answerI propose to take Questions Nos. 212 and 213 together.
The Research and Development (R&D) Tax Credit is an important feature of the Irish Corporation Tax (CT) system. The primary policy objective is to increase business R&D in Ireland, as R&D can contribute to higher innovation and productivity. More broadly, the tax credit forms part of Ireland’s corporation tax offering aimed at attracting FDI and building an innovation-driven domestic enterprise sector. The credit enables Ireland to remain competitive in attracting quality employment and investment in R&D.
The Pillar Two minimum effective tax rate will have an impact on the net benefit to large MNCs of the R&D tax credit. Pillar Two will result in a net reduction in the value of the tax credit for claimant companies that are in scope of the 15% minimum tax. This is because the credit value will be treated as income and therefore becomes subject to the minimum tax.
It has been proposed that consideration be given to increasing the rate of the R&D tax credit, so that affected companies obtain the same net benefit from the R&D tax credit after introduction of the Pillar Two rules.
For claimant companies outside the scope of Pillar Two rules, any increase in the R&D tax credit would be a net increase in benefit as they would not be subject to the 15% top-up tax. It would therefore have an Exchequer cost.
It is intended that this matter will be considered further in advance of Budget 2024.
214. Deputy John Paul Phelan asked the Minister for Finance his views on the proposed digital euro; and if he will make a statement on the matter. [30427/23]
View answerIreland is supportive of the examination of the possibility of a digital euro by the EU institutions. A properly-designed digital euro has the potential to unlock major benefits for citizens, businesses, Member States and the overall functioning of our economic and monetary union. It would also contribute towards digitalization efforts within our economies.
At the same time, it could have a number of important economic and societal implications. There are a number of important technical questions to be examined, and experimentations to be done to ensure the robustness and resilience of a digital euro before it is introduced on a large scale.
The ECB published an initial report on October 2020, which examined the idea of Central Bank Digital Currency (CBDC), a “digital euro”. The ECB launched the investigation phase of the digital euro project in October 2021. The investigation phase aims to address key issues regarding design and distribution and is expected to end in October 2023. This phase does not prejudge any future decision on the possible issuance of a digital euro.
The European Commission is expected to propose a Regulation to establish a digital euro in Q2 2023 and the ECB will accommodate any necessary adjustments to the design of the digital euro that may emerge from legislative deliberations.
The ECB Governing Council will review the outcome of the investigation phase in autumn 2023 and decide, on this basis, whether or not to move to a realisation phase. It is important to note that this phase is not the issuance of a digital euro but a further period to prepare for a digital euro issuance.
Ireland therefore supports the work of the European Central Bank and the European Commission as they examine important technical questions to ensure the robustness and resilience of a digital euro before it is introduced on a large scale.
Additionally, further work is required to engage EU citizens, articulating and proving the practical use value that a retail digital euro would have for them, if any.
215. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which provision continues to be made to ensure adequate safety measures to safeguard the fundamentals of the economy in the future; and if he will make a statement on the matter. [30443/23]
View answerDespite the significant headwinds faced over the past year, the fundamentals of Ireland’s economy have proven to be remarkably strong. In the first quarter of the year, modified domestic demand (MDD) grew by 2.7 per cent. The broad based nature of this growth is encouraging, with both consumption and investment contributing to robust growth over the first quarter of the year despite substantial inflationary headwinds. Personal consumption grew by 1.7 per cent on a quarterly basis, reflecting strong labour market conditions, with over 2.6 million people at work and an unemployment rate at historically low levels.
Government supports have played a key role in assisting Irish households as they weathered the impacts of recent economic shocks. By responding swiftly and decisively to the inflationary challenge and providing €12bn in cost of living supports, government has helped mitigate the impact of inflationary pressures on both businesses and households.
Over the medium term, it is anticipated that the Irish economy will face a number of significant challenges with a lower growth outlook expected in the second half of the decade due to the rapid ageing of our labour force. Indeed, by 2030, age-related expenditure alone is expected to be €7-8 billion higher than it was at the start of the decade, while other structural changes including digital and climate transitions will also have implications for the economy and the public finances.
The Government is taking steps to ensure that adequate safety measures are in place to protect the fundamentals of the Irish economy as we face the aforementioned challenges and any other obstacles that may arise. A scoping paper entitled Future Proofing the Public Finances – the Next Steps was recently published by the Department of Finance outlining the merits of establishing a long-term public savings vehicle. Such a savings vehicle would earmark windfall corporation tax receipts for the purpose of helping to meet future budgetary pressures.
Through the National Development Plan, we are putting in place the vital public infrastructure to meet the needs of our society. With this ambitious expansion in capital infrastructure, the Government will boost the productive capacity of our economy and deliver much needed housing investment. This in turn will support long term and sustainable growth in our economy.
216. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department continue to maintain the competitiveness of the economy in the context of European and international markets; and if he will make a statement on the matter. [30445/23]
View answer220. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he is satisfied this country remains a competitive economy and attractive to indigenous investors and foreign direct investors; and if he will make a statement on the matter. [30449/23]
View answerI propose to take Questions Nos. 216 and 220 together.
Ireland’s long-standing reputation as a stable and pro-enterprise jurisdiction is reflected in the continued investment in the economy. The most recent figures show the stock of foreign direct investment (FDI) in Ireland stood at over €1.2 trillion at the end of the first quarter of 2023. The multinational sector contributes to the domestic economy through employment as well as income and corporation tax receipts.
It is important, given the impact of FDI on the domestic economy, that Ireland maintains its competitive position internationally. Ireland’s talented and flexible workforce, strong legal and regulatory landscape, and reputation as a stable economy all contribute to our competitiveness in encouraging both indigenous and foreign investment. Continued investment in skills and infrastructure will help Ireland to remain attractive in this regard.
The domestic economy has proven resilient in the face of various headwinds over the past year and prospects for the Irish economy compare favourably with European and international peers. The OECD for example, in its recently published Economic Outlook, is projecting modified domestic demand growth of 1.8 per cent for Ireland this year, compared to GDP growth of 0.9 per cent for the euro area.
The outlook for the international economy appears to be less pessimistic than had been assumed last year, with the OECD and others having revised up growth forecasts for this year. However, projections for GDP growth globally and in Ireland’s main trading partners are weak by historical standards. Furthermore, there is considerable uncertainty surrounding the outlook for both the domestic and international economy and significant risks remain.
The Government is steadfast in its commitment to creating an environment for further FDI through investment in key infrastructure and skills, while maintaining our strong legal and regulatory landscape into the future.
217. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department have identified the degree to which unforeseen budgetary surpluses need to be set against Government borrowing in order to ensure adequate provision for the future; and if he will make a statement on the matter. [30446/23]
View answerAt the end of last year public indebtedness stood at €225 billion or 83 per cent of GNI*. Public debt this year is projected at €224 billion, almost 80 per cent of national income. A stock of public debt on this scale can be managed, but only if the appropriate policy stance is in place.
That is why this Government is committed to sustainable fiscal policies. As set out in April’s Stability Programme Update (SPU), public debt is projected to fall further to €215 billion by 2026, the equivalent of 65.4 per cent of Modified Gross National Income or GNI*. This is more than €20 billion below the year-end figure for 2021, and represents a significant reduction in the stock of national debt and a further improvement in the debt ratio.
Last year a General Government Surplus of approximately €8 billion was recorded. Going forward, the general government surplus is estimated at €10 billion this year and €16.2 billion in 2024.
However, last year’s surplus was largely driven by corporation tax receipts. The corporation tax revenue stream has effectively doubled since just before the pandemic with analysis by my Department suggesting that a significant portion of this increase is windfall in nature. My Department estimates that when windfall receipts are stripped out, the underlying general government balance is not projected to go into surplus until next year. The level shift in corporate tax receipts, occurring over a very short timeframe, raises legitimate questions regarding the sustainability of this revenue steam.
In this context, my Department recently published a scoping paper outlining a range of illustrative options to help to insulate the public finances from the risks associated with an overreliance on potentially transitory windfall corporation tax receipts, while also putting money aside to contribute to future ageing and other structural costs. The paper also discusses different approaches to using the windfall receipts including using a portion to pay down debt and for additional, targeted capital investment.
Work on proposals for a long-term savings vehicle, paying down debt and targeted capital investment is ongoing and will take into account the analysis contained in the Department’s paper.
218. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which savings in the various financial institutions have fluctuated over the past ten years; and if he will make a statement on the matter. [30447/23]
View answerDespite facing numerous economic headwinds over the past ten years, households have continued to grow their stock of deposits. According to Central Bank data, the outstanding stock of household deposits in financial institutions rose by 65 per cent between April 2013 and April 2023.
The onset of the pandemic brought about a notable uptick in deposits, as public health restrictions limited contact intensive expenditure. The CSO estimates that household savings as a proportion of disposable income, the household savings rate, rose sharply to well over 20 per cent throughout the pandemic.
Since the easing of pandemic related restrictions, savings patterns have gradually begun to return to more normal levels. In the first quarter of this year, the household savings rate stood at 13.7 per cent, a rate comparable to pre-pandemic levels. That being said, household deposits continue to grow at a robust pace over recent months, reflecting the strength of the labour market at present with more people at work than ever before.
Households continue to retain substantial savings accumulated over the past ten years and in particular during the pandemic. This has placed households on a strong financial footing, and may support strong consumption growth or investment in the years ahead.
219. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department continue to monitor the levels of bank charges being imposed by various banks; the basis for such charges, nationally and internationally; and if he will make a statement on the matter. [30448/23]
View answerAs Minister for Finance, I do not have a direct function in the operations of any bank. Although the State is a shareholder in some of the banks operating in the State, they must be run on a commercial and independent basis, and their independence in this regard is protected by the relationship agreement.
The charging of fees is a commercial decision for regulated entities, but this is subject to the regulatory framework which is the responsibility of the Central Bank of Ireland. Under Section 149 of the Consumer Credit Act, 1995, credit institutions must notify the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges, in respect of the provision of any of the following services:
• making and receiving payments;
• providing foreign exchange facilities;
• providing and granting credit; or
• maintaining and administrating transaction accounts.
Each notification received by the Central Bank is assessed in accordance with the specific criteria set out in Section 149 of the Consumer Credit Act 1995. The Central Bank may either approve (in full or at lower levels than requested) or reject a credit institution’s application under Section 149.
In fulfilling its statutory role under Section 149, the Central Bank assesses these notifications in accordance with the following specific assessment criteria as set out in the legislation:
• the promotion of fair competition;
• the commercial justification;
• the effect new charges or increases in existing charges will have on customers; and
• passing on costs to customers.
Approvals are issued in the form of a letter of direction and the entity is legally bound to comply with this letter of direction. The letter of direction sets out the maximum amount the credit institution is allowed to charge.
Credit institutions are free to impose any pricing differentials for the service up to the permitted maximum and are free to waive fees at their discretion for commercial or competitive reasons.
The letter of direction also sets out that credit institutions must publish the charges to be imposed on notices, leaflets, and promotional material etc. which should be made available to customers and on the credit institutions website if appropriate (the withdrawal of the fees will also be notified to the relevant customers prior to withdrawal).
Where a regulated entity intends to introduce new charges or increase any existing charges, under provision 6.18 of the Consumer Protection Code, it must give notice to affected consumers of the introduction of any new charges or of increases in charges, specifying the old and new charge, at least 30 days prior to the charge taking effect.
In relation to current account fees, the Deputy may wish to note that the Competition and Consumer Protection Commission operates a comparison tool for current accounts (including information on fees) on its website. This can be used by consumers to find the account which best meets their needs.
221. Deputy Bernard J. Durkan asked the Minister for Finance how Ireland's economic performance currently compares with other EU countries in the eurozone or outside it; and if he will make a statement on the matter. [30450/23]
View answerEconomic growth prospects across the Eurozone and the European Union remain subdued for the year ahead. In the first quarter of 2023, the European economy flat-lined with Eurozone GDP falling by 0.1 per cent, while GDP growth of 0.1 per cent was recorded for the wider European Union driven by a fall in consumption as incomes continue to be eroded by increasing prices. GDP contracted in Germany and the Netherlands by -0.3 and -0.7 per cent, while the Italian and French economies saw positive growth of 0.1 and 0.6 per cent.
While Irish GDP contracted by an estimated -4.6 per cent, this reflects the disproportionate contribution to Irish GDP by Irish-resident multinational enterprises, with much of this driven by contract manufacturing, i.e. activity which is outsourced to manufacturers outside the state. My preferred metric of domestic economic activity - Modified Domestic Demand (MDD) - increased by 2.7 per cent in the first quarter of the year when compared to the last quarter of 2022. This was driven by strong investment in the construction sector and by firm investment in plant and machinery. In contrast to the wider European economy, private consumption contributed positively to economic growth in the first quarter of the year. Bolstered by a resilient labour market – which has since reached a record low unemployment rate in May of 3.8 per cent - private consumption increased by 1.7 per cent in the first quarter.
Looking ahead, the OECD recently forecast growth of 0.9 per cent for the Eurozone for 2023. While this is an upward revision since the previous round of forecasts in March, it is low by historical standards. For Ireland, the OECD have forecast growth in MDD of 1.8 per cent for 2023, broadly in line with my Department’s projection published in the spring forecasts as part of the SPU. However, given stronger-than-expected growth in the domestic economy in the first quarter, there is a chance that MDD in 2023 could surprise on the upside. Despite this, domestic and continent-wide risks remain tilted to the downside, with persistent core inflation (excluding energy), instability in the financial sector and increased geopolitical tensions posing a threat to growth prospects for the year ahead.
222. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which this country remains in a safe position in terms of borrowing to meet the current international crisis; and if he will make a statement on the matter. [30451/23]
View answerThe National Treasury Management Agency has advised me that sovereign borrowing costs have increased in the last 18 months as global central banks, including the European Central Bank, tightened monetary policy somewhat faster than had been expected in response to significant inflationary pressures. At the start of 2022, Ireland’s 10-year government bond yield stood at c. 0.2%. By the end of 2022, it had increased to over 3%.
Despite this upward shift in borrowing costs, the 2022 interest bill on Ireland’s General Government Debt, at €3.3bn, was largely unchanged on the 2021 position. Moreover, April’s Stability Programme Update 2023 estimates that the interest bill is to remain relatively stable over the period 2023 to 2026, at between €3.3bn and €3.5bn per annum.
This stability is due to several factors which mitigate the impact of higher yields. These mitigants include Ireland’s low average cost of debt (estimated at 1.4% in 2022), strong cash and liquid asset balances, and limited issuance/refinancing needs owing to the improved fiscal position and long average life of the debt portfolio.
So far this year, the National Treasury Management Agency has issued €6bn of bonds, from a target funding range of €7bn to €11bn. Investor demand remains strong for Irish sovereign debt.
223. Deputy Bernard J. Durkan asked the Minister for Finance the extent, if any, to which investment funds are currently funding the house building markets at higher than average interest rates; whether this market should be filled by the Irish pillar banks; and if he will make a statement on the matter. [30452/23]
View answerThe Irish funding landscape has undergone significant change since the Global Financial Crisis in 2008. In order to address the current imbalance between supply and demand of housing across all tenure types, the Government's Housing for All plan aims to significantly increase the supply of housing to an average of 33,000 per year over the next decade. This is an ambitious plan which will provide increased housing supply and affordability.
While the plan is backed by unprecedented State investment of over €4 billion per annum, developing these homes will require a significant amount of development and investment capital, and the Government cannot deliver on this programme alone. The only way we can deliver housing at the substantial scale we need is by also attracting private capital to the market, alongside our public investment.
This private investment is particularly required at the development stage to ensure the provision of social, affordable and private homes – homes of all tenures for families across the country at all price points.
Through updated modelling undertaken by the Department of Finance, it is estimated that €13.5 billion of development funding per annum, comprising both debt and equity, will be required to develop the Housing for All target of an average of 33,000 homes per year. Of this €13.5 billion per annum, an estimated €11.4 billion will be required from private capital sources. While a portion of this will come from our domestic banks, the majority will be required from international sources.
Given recent withdrawals from the banking market, there are fewer retail banks now lending for property development in Ireland than was previously the case. Domestic banks set risk limits around the type and nature of lending activity, resulting in selective and prudent lending practices. It is not desirable that domestic banks provide senior debt at unsustainable levels and levels of debt should appropriately reflect the risk profile of development projects.
As a result, we will continue to also welcome inward investment to our housing market, as we have successfully done with investment in other sectors of our economy. This private and patient capital coming from well-established investors, such as pension funds, is a normal facet of housing investment in many of our European neighbours and beyond.
That said, we have been clear that institutional investment should not displace home-buyers in traditional estates where demand and viability is not an issue, and the pathway to ownership for first-time buyers must be protected and the Government does not support the bulk purchase of residential houses by institutional investors. This is why the Government introduced a new 10% rate of Stamp Duty on such purchases, increased from the rates paid by other purchasers of 1% on values up to €1 million and 2% on values above €1 million.
In order to ensure these new homes can be built, we must support developers in accessing the finance they require to deliver homes at the levels we need.
We know that, in general, the Irish developer community has been equity constrained since the Global Financial Crisis. The availability of private and institutional real estate finance has played an important role in providing developers with access to this equity finance.
Through Home Building Finance Ireland, we are supporting access to debt finance for residential development. By the end of April 2023, HBFI has approved total funding of €1.353 billion to support the potential delivery of up to 6,161 homes across 22 counties in Ireland. HBFI has advanced funding for 60 developments by end 2022 with the number of homes completed through HBFI funding expected to increase significantly over the coming years. A periodic 2-year review of Home Building Finance Ireland was published on 24 May 2023 and found that HBFI has had a positive impact on access to development finance. The review also found that funding gaps in the market persist, and HBFI should continue in operation at this time and should remain agile in responding to emerging funding gaps.
A substantial increase in the supply of new homes is the only route to solving Ireland’s housing crisis. This will require significant private investment alongside our public investment and is necessary to meet the targets set out in the Housing for All strategy.
224. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he is satisfied that cash remains readily available to customers through the banks via ATMs or other means; and if he will make a statement on the matter. [30453/23]
View answerIn recent years, the banking landscape has changed significantly in Ireland. The number of banks serving the sector reduced from 12 to 3 as banks were amalgamated or closed down and foreign owned entrants exited the Irish retail market. There has also been a considerable acceleration in technological developments and the pace of uptake has been accelerated by the COVID-19 pandemic. With that has come a decline in cash usage.
In November 2022, the Retail Banking Review was published by my Department. It concluded that, despite this decline, cash remains an important element of the payments system and the broader economy and it is essential that cash remains readily available to customers through ATMs and other means across the country. It also concluded that there was still reasonable access to cash at the moment but noted that neither the Minister for Finance, nor the Central Bank, had any powers to ensure this.
Accordingly the Review recommended that the Department of Finance should develop Access to Cash legislation and prepare heads of a bill in 2023 with the initial objective of developing criteria that would secure access to cash at about the levels prevailing in December 2022 but also provide for such criteria to be amended appropriately in future as and when cash usage declines further. The key objective is to ensure that evolution of the access to cash infrastructure does not move ahead of society's needs and expectations and that the future evolution is handled in a fair, transparent and equitable manner.
The Review also called on Department officials to prepare heads of a bill in 2023 to require ATM operators to be authorised and supervised by the Central Bank and to provide the Central Bank with responsibility and powers to protect the resilience of the cash system including the authorisation and supervision of cash-in-transit firms in respect of their cash handling activities and related financial services. It is my intention to fully honour this commitment and this work is now well underway by officials in my Department. It is intended that one piece of legislation will be drafted for all three recommendations on access to cash, including the aspects on IADs.
My officials are already working on Heads of Bill for this important piece of legislation and will bring the Heads to Government before the end of this year to seek approval to draft the Bill and to submit it for pre-legislative scrutiny to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform and the Taoiseach.
225. Deputy Bernard J. Durkan asked the Minister for Finance if the role of the banks in this jurisdiction is being replaced by investments funds; and if he will make a statement on the matter. [30454/23]
View answerBanks and investment funds both have a positive role to play in providing financial services within the economy and wider society and can complement each other in this regard.
Ireland, like our partners in the EU, will require significant funding into the future to address strategic priorities. In this regard the EU Capital Markets Union initiative - which aims to get investment and savings flowing across all member states for the benefit of citizens, businesses and investors - stresses the importance of additional and alternative funding opportunities within the EU. This greater diversification of financing sources will reduce the current level of reliance on bank funding, increase private risk sharing within the single market, and is intended to make the EU’s financial system more stable as a result, thereby unlocking additional funding for economic activity in Europe.
226. Deputy Bernard J. Durkan asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the extent to which he continues to ensure adequate and prudent public and current spending policies in the future, with an adequate balance between capital and current spending, while at the same time ensuring a meaningful reserve is maintained to meet emergency calls; and if he will make a statement on the matter. [30444/23]
View answerThe Government’s approach to public expenditure policy is set out in the Medium Term Expenditure Strategy (MTES). The objectives of the MTES are twofold, to ensure that the level of core expenditure growth is sustainable long-term and that investment in expenditure protects and delivers improvements to public services. This framework must be responsive to the economic landscape and is reviewed annually as part of the whole of year budget process including the Summer Economic Statement and the Estimates process.
Careful management of our economy and public finances over the past number of years has allowed Government to do the following:
• Firstly, provide increased resources for core public services, investing in quality of life in Ireland to support a strong, fair and equal society into the future,
• Secondly, deliver significant and essential infrastructural projects through our National Development Plan. These projects support this country’s employment prospects, economic development and regional growth,
• Thirdly, we have put in place considerable supports to provide assistance to our people and businesses towards the external challenges we face, including Brexit, war in Ukraine, Cost of Living and Covid pandemic, and
• Finally, we have achieved all this whilst ensuring our public finances are in a sustainable position.
Managing the delivery of public services within budgetary allocations is a key responsibility of each Minister and their Department and important measures are in place to help ensure that these budgetary targets continue to be met. My Department is in regular communication with all Departments and Offices to ensure that expenditure is being managed within the overall fiscal parameters. The drawdown of funds from the Exchequer is monitored against the published expenditure profiles. There is regular reporting to Government on these matters and information in relation to voted expenditure is published monthly with the Exchequer Returns.
A number of budgetary processes are also in place to broaden the approach to how public expenditure is appraised, implemented and reviewed. They govern not only how and where the money is spent but also the impact of public expenditure across different cohorts of society and the different categories of expenditure. They work in tandem with broader initiatives, such as the establishment of the Irish Government Economic and Evaluation Service (IGEES), to develop capacity and enhance the role of economics and value for money analysis in public policy making.
Additionally, my Department engages regularly in international fora, including the OECD working parties and committees, to discuss and share insights. These discussions focus on spending reviews, budgetary reform and other areas that strengthen public sector institutions’ ability to promote systemic change as way to respond to economic, social and environmental challenges.
In respect of enhancing efficiency and effectiveness of policy delivery, improving and supporting the evaluation capacity within Government Departments has formed an important part of the reform programme. Supported by the establishment of IGEES, this has led to the development of a number of additional processes and reports to support the budgetary framework. This includes the spending review process, managed by my Department, which seeks to assess the effectiveness of public expenditure in meeting policy objectives and fostering engagement. Over 160 papers published since introduction in 2017.
In relation to the 'reserve' or contingency fund, significant additional funding has been provided to respond to a number of externally driven challenges. These include our response to Covid-19 pandemic, Brexit and the war in Ukraine. The Government allocates funding in the form of 'non core' expenditure. This is spending that relates to temporary external challenges requiring additional resources, outside the day-to-day expenditure of Departments. For 2023 an amount of €5.2 billion was allocated. This funding is reviewed on an ongoing basis.
227. Deputy Michael Healy-Rae asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when works can be carried out at Ross Castle, Killarney (details supplied); and if he will make a statement on the matter. [30229/23]
View answerThe OPW have no remit for the channel at Ross Castle. This comes under the remit of Waterways Ireland and the Department of Housing and we cannot comment in this regard.
228. Deputy Paul Murphy asked the Minister for Public Expenditure, National Development Plan Delivery and Reform how a person offered employment in the Civil Service can apply to have a determination made as to whether they are entitled to incremental salary credit for their existing public service; if they must give up their existing employment in order to have a such determination made; the rules governing the awarding of such incremental salary credit the review or appeal processes that are open to a person unhappy with an opening determination made; and if he will make a statement on the matter. [30230/23]
View answerIn general, starting pay on recruitment from open competitions, to all posts in the Civil Service should be at the first point of the scale.
Circular 21/2004, sets out the policy in relation to incremental credit that can be claimed for previous service in the grades of Clerical Officer, Executive Officer and equivalent grades.
This circular was amended by circular 08/2019 in respect of qualifying service, removing the requirement to make deductions of service in order to determine the starting point.
Circular 21/2004, Section 2 (C) states that, in general, applications for incremental credit will only be considered at the point of entry to the Civil Service, that the onus is on the candidate to make a claim and that new recruits should be informed of the arrangements in the letter of offer.
Circular 21/2004 does not provide for an appeals process.
229. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the total spend on consulting services and on business-as-usual outsourcing, as differentiated under the Code of Practice for the Governance of State Bodies 2016, for each commercial public body under the aegis of his Department for 2022. [30264/23]
View answerI wish to advise the Deputy that there are no commercial public bodies under the aegis of my Department.
230. Deputy Colm Burke asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if consideration will be given to permitting those who retired early from the public service or State agencies to take up employment again in the public service or State agencies without losing their current public service or State agency pension; and if he will make a statement on the matter. [30292/23]
View answerAs the Deputy may be aware, the principle of abatement of a public service pension is longstanding within the rules of various public service pension schemes. Pension abatement is an important aspect of the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 (the Single Scheme Act).
The Act provides for the abatement of a public service pension where a retired public servant, whose pension is in payment, is re-employed in the public service such that no more of the public service pension when combined with the remuneration in the new position shall exceed the pensionable remuneration of the old position. It should be noted that it is the pension which is abated and not the salary in the new position. The measure applies across the public service. Where a person returns to work in the private sector the public service pension is not subject to abatement.
Abatement policy is a key component of Public Service pension policy and addresses valid concerns about simultaneous payment of both pension and salary in the Public service. While the operation of abatement is monitored on an ongoing basis, there are no current plans to review pension abatement policy.
