Thursday, 1 Feb 2024

Written Answers Nos. 141-159

Primary Medical Certificates

Questions (142, 158)

Catherine Connolly

Question:

142. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 91 of 23 November 2023, for an update on the Disabled Drivers Medical Board of Appeal; to clarify if appeal hearings have recommenced to-date, and if not, the timeline for same; the number of people currently on the appeal hearing list; the expected timeline for the clearing of the backlog of appeals; and if he will make a statement on the matter. [4382/24]

Pauline Tully

Question:

158. Deputy Pauline Tully asked the Minister for Finance to detail the number of persons who are currently on the waiting list for the Disabled Drivers Medical Board of Appeal; and if he will make a statement on the matter. [4543/24]

Written answers

Minister for Finance

I propose to take Questions Nos. 142 and 158 together.

At the outset the Deputy should note that the Disabled Drivers Medical Board of Appeal (DDMBA) has recommenced.

The DDMBA members were formally appointed in September 2023. After the completion of preparatory work including developing working methods, determining clinical criteria for prioritising the waiting list and scheduling appeal hearings, the DDMBA recommenced the appeals process in December 2023.

As of 26 January 2024 there are 1,007 appellants on the waiting list. 94 appellants have been assessed since the appeals process recommenced.

The Board is independent and wholly determines the approach and methods for the appeals process. I understand however that they have issued a validation letter to all those on the waiting list and are using clinically-based criteria to prioritise the order of appellant cases. It is not possible to estimate the time it will take to clear the backlog.

Question No. 143 answered with Question No. 94.

Inflation Rate

Questions (144, 233)

Bernard Durkan

Question:

144. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department continue to monitor economic progress with a view to ensuring that inflation continues to be curbed and that the reduction in inflation is passed on to the consumer by way of lower prices; and if he will make a statement on the matter. [4547/24]

Bernard Durkan

Question:

233. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to observe inflationary tendencies in this economy with particular reference to the need to identify their origin; and if he will make a statement on the matter. [4872/24]

Written answers

Minister for Finance

I propose to take Questions Nos. 144 and 233 together.

Inflation reached multi-decade highs in 2022, averaging 8.1 per cent with a peak of 9.6 per cent in June 2022 (as measured by the HICP). Whilst the initial driver of this inflationary pressure was a surge in global energy prices it subsequently became increasingly broad based as price pressures spread throughout the economy.

Since the second half of last year, inflation has in general followed a downward trajectory, averaging 5.2 per cent for the year as a whole. Key to this moderation has been the partial reversal of energy prices from extremely high levels. In December 2023 energy prices declined by -9.9 per cent on an annual basis.

While this decline lead to a substantial drop in headline inflation, inflation has spread to all aspects of the economy and core inflation is proving more persistent with an annual rate of 4.3 per cent in December. Core inflationary pressures are expected to remain somewhat more persistent and will ease at a more gradual pace than headline inflation.

My Department expects the downward trajectory in inflation to continue throughout 2024. At the time of Budget 2023, the Department forecast average headline annual inflation of 2.9 per cent for this year. This reflects the decline in wholesale energy prices feeding into retail prices lowering the price of energy for Irish households. More broadly, the slowing pace of growth in the economy, should allow for an easing in supply and demand imbalances.

This lower level of inflation will be a welcome relief to consumers. However, despite the expected continued decline in inflation it is important to note that the overall price level is not expected to fall back to previous levels.

Throughout this period of high inflation, the Government has been at the forefront in supporting the most vulnerable. By responding swiftly and decisively to the cost of living challenges, the Government has helped to mitigate the impact of inflationary pressures on both businesses and households. The temporary and targeted nature of the measures taken by Government have been designed to avoid adding to the inflationary burden whilst providing support to those most in need.

Tax Code

Questions (145)

Richard Boyd Barrett

Question:

145. Deputy Richard Boyd Barrett asked the Minister for Finance if he will consider and introduction of a wealth tax, given recent reports by an organisation (details supplied) and the Central Bank on the wealth distribution showing ever growing concentration of wealth in the hands of the very wealthiest households. [4570/24]

Written answers

Minister for Finance

I am aware that Oxfam International recently (on January 15th 2024) produced a new report regarding global wealth inequality entitled “Inequality Inc.” which advocates for a tax on wealth. While I understand the background to calls for a specific wealth tax in Ireland, it is not the case that wealth in Ireland is untaxed, as taxes on wealth are already in place here.

While calls for a specific wealth tax are often made, there are already a number of wealth taxes in place including Capital Gains Tax, Capital Acquisitions Tax and Local Property Tax. Certain forms of Stamp Duty also act as taxes on wealth charged in a number of ways, including on the acquisition of shares, stocks and marketable securities of Irish registered companies, and on the acquisition of property both residential and non-residential.

In total, the provisional net receipts from these forms of tax came to €3.9 billion in 2023. Finalised net receipts for these forms of tax will be available in the Revenue Annual Report later this year.

A 2022 report from Commission on Taxation & Welfare identified challenges that would impede the implementation of a specific wealth tax. They found that a new tax on net wealth should not be introduced without in the first instance attempting to substantially amend Ireland’s existing taxes on capital and wealth. Rather than introducing a specific tax on wealth, the Commission maintains that it would be more effective to re-examine the primary existing forms of wealth tax, CGT and CAT. These are taxes on wealth that have well-established, but distinct, bases and are well-understood in their operation.

The Government has also taken action against inequality through our tax and welfare system. The strong redistributive role of the Irish tax and welfare system is evident in the range of supports that were introduced to help mitigate the impact of the Covid-19 pandemic and in the series of measures designed to limit the impact of the current cost of living pressures. Our redistributive tax system has been acknowledged by the IMF, the OECD and the ESRI.

Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country. The current structure of the income tax system operates as an effective means of income redistribution, helping to reduce the comparatively high levels of market income inequality to around the EU average.

It is projected that the top one per cent of taxpayer units, who are those with annual income in excess of €290,000, will pay just over 24 per cent of total Income Tax and USC in 2024. This is a very large proportion of the total Income Tax and USC take from such a small cohort of taxpayers. In comparison, 80 per cent of taxpayer units, which is the cohort of income earners with annual income of less than €69,500 and account for about 2.74 million taxpayer units, will pay 21 per cent of total Income Tax and USC.

Therefore, I do not have immediate plans to introduce another wealth tax in addition to those set out above. As with all areas of tax policy, the taxation of wealth, will be kept under review throughout the annual budgetary process.

European Investment Bank

Questions (146)

Darren O'Rourke

Question:

146. Deputy Darren O'Rourke asked the Minister for Finance the progress to date to promote opportunities for the European Investment Bank to invest in relevant climate projects in Ireland; if a working group has been established; how many times the working group has met; if will he report on these meetings; and if he will make a statement on the matter. [4483/24]

Written answers

Minister for Finance

At the outset, the Deputy should note that as Minister for Finance, and a Governor of the European Investment Bank (EIB), I have no role in the negotiation of contracts between the EIB and any borrowers here in Ireland. In addition, in my role as a Governor of the EIB, I have no role in the allocation of financing in Ireland, nor do I have the authority to specify which sector funding should be allocated to. This said however, I am keen that suitable projects in Ireland can access EIB financing, where it is possible, in relation to: priority projects for climate and environmental sustainability; innovation and skills; infrastructure; small and medium-sized enterprises; cohesion, and development. In that regard, the Deputy may be aware that the EIB has provided in the region of €1 billion in financing to Irish projects per annum in recent years, with climate financing being a significant part of this overall financing.

To ensure that this level of financing is maintained or augmented, I and my Department are happy to play a facilitation role to promote opportunities for EIB investment. Firstly, I engage regularly with the EIB President, including at meetings of the EU Council of Finance Ministers and other fora, and meet EIB officials where possible during their missions to Ireland. I hosted a meeting with the EIB’s former President, Dr. Werner Hoyer, in October 2023, and hope to host the new President, Ms. Nadia Calviño, in the coming months. In addition, my Department facilitates the organisation of the EIB-Ireland Financing Group. The EIB-Ireland Financing Group, co-chaired by me and the President of the Bank, brings together my Ministerial colleagues from relevant Government Departments, including the Department of the Environment, Climate and Communications, and representatives from the Bank to engage on opportunities for future EIB financing. This political level meeting meets at least once a year, and is supported, when necessary, by official level sub-groups. I co-chaired the Group’s most recent meeting in June of 2023 with former EIB Vice-President Ricardo Mourinho-Felix, in Cork.

At this meeting, we were able to flag potential opportunities for financing in the regions. In terms of 2024, my officials are engaging with the EIB in relation to the organisation of meeting of this Group and its sub-groups where necessary.

In addition to this formal structure, my Department also engages regularly with the EIB Group’s Office in Ireland, and assists the Office in engaging more widely with stakeholders, including relevant Government Departments and State Bodies. The EIB Office, which opened in recent years, is key to assisting interested parties, including private sector stakeholders, in engaging with the EIB, whether it be for advisory or financial support. The Deputy will appreciate that advisory support is important as it can lead to financial support subsequently.

My Department has supported engagement by stakeholders with the EIB’s advisory hub in a number of sectors, including the climate sector. EIB advisory support to Peatlands Finance Ireland (PFI) in relation to funding models for peatland restoration is an example of this. As well as the Dublin Office, officials from my Department have regular and extensive engagements with EIB officials at its headquarters in Luxembourg and in Dublin. This aims to build on the existing positive relationships between the Bank and my Department to deepen and widen the areas funded by the EIB in Ireland, covering both the private sector and Government Departments/Agencies.

Finally, by way of information to the Deputy, it is worth noting a number of important recent climate-related projects that have benefitted from EIB Group support. These include the provision of financing towards the Celtic Interconnector between Ireland and France, the ESB’s Smart Meter Implementation Programme, and a number of on-shore wind farms. In addition, the EIB Group has provided counter guarantees to various State-backed lending schemes, such as the SBCI’s Growth and Sustainability Loan Scheme, supported by the Department of Enterprise, Trade and Employment and Department of Agriculture, Food and Marine. This scheme provides SMEs and Small Mid-Caps, including farmers and fishers, with long-term financing to either encourage the growth and resilience of their enterprise or invest in climate action and environmental sustainability measures designed to improve their performance. The EIB Group has also confirmed its support for the Government’s new ‘Home Energy Upgrade Scheme’, through a counter-guarantee. The Scheme will have €500m capacity for government-backed, low-interest home energy upgrade loans. A full overview of EIB Group financing in Ireland by year is available on the EIB’s website (www.eib.org/en/projects/index.htm)

Question No. 147 answered with Question No. 94.

Question No. 148 answered with Question No. 121.

Tax Code

Questions (149)

Fergus O'Dowd

Question:

149. Deputy Fergus O'Dowd asked the Minister for Finance if he is considering any further easing of VAT rates for retrofitting or renewable energy works or products for domestic purposes, to assist homeowners in reducing reliance on energy providers in what is a crippling energy crisis; and if he will make a statement on the matter. [4444/24]

Written answers

Minister for Finance

The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT and can also apply a zero rate to certain goods and services. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive.

As the Deputy is aware following amendments to Annex III of the VAT Directive, agreed in April 2022, it is now possible to apply a zero rate of VAT to "the supply and installation of solar panels on and adjacent to private dwellings, housing and public and other buildings used for activities in the public interest." Consequently, as the Deputy will be aware, I introduced such a zero rate of VAT for the supply and installation of solar panels on private dwellings last year and on the supply and installation of solar panels on schools from 1 January this year. It should be noted that outside of this zero rate of VAT the supply and installation of other solar panels may be subject to VAT at the reduced rate of 13.5% under the two-thirds rule which applies in the construction sector. 

The only other area where Annex III applies some latitude in relation to reduced rates for energy work purposes is in relation to heat pumps. Whilst they cannot be reduced to zero there is scope to reduce the VAT rate in highly efficient low emissions heating systems to a reduced VAT rate. In Ireland that would mean a rate of 9% or 13.5%.

However, these systems have to comply with very specific technical requirements, meeting the emission benchmarks laid down in Annex V of Commission Regulation (EU) 2015/1189 and in Annex V of Commission Regulation (EU) 2015/1185 respectively and also have to be attributed an EU energy label to show that the criterion referred to in Article 7(2) of Regulation (EU) 2017/1369 is met.

It should be noted however that while heat pumps have the standard rate of VAT applied they have an effective rate of 13.5% VAT due to the 'two-thirds rule' which applies to construction. This rule means that if the cost of the goods used in carrying out work does not exceed two-thirds of the total price, the rate which applies to the service then applies to the entire transaction. Finally, as the Deputy is aware, any changes in VAT rates are considered as part of the normal annual Budget and Finance Bill process.

Question No. 150 answered with Question No. 127.

Fiscal Policy

Questions (151)

Ruairí Ó Murchú

Question:

151. Deputy Ruairí Ó Murchú asked the Minister for Finance to provide an update on the work being done to ensure that cash cannot be refused in retail and other premises; and if he will make a statement on the matter. [4577/24]

Written answers

Minister for Finance

You will be aware that the Retail Banking Review, published in November of 2022, made two clear recommendations for my Department regarding payments: (1) to develop Access to Cash legislation and prepare a related Heads of a Bill in 2023; and (2) to lead on the development of a National Payments Strategy (NPS) in 2024.

I published the terms of reference for the NPS in June 2023, and work on the NPS has commenced, taking account of the changing payment landscape and ongoing legislative developments at EU level, including proposals on instant payments, payment services, legal tender and the digital euro.

My Department is seeking views from across Irish society though a public consultation. A Consultation Paper on the National Payment Strategy has been prepared to guide the discussion and is available on the Department’s website, consult.finance.gov.ie/en. This consultation is now open for submissions until 14 February 2024. The responses to the public consultation will form an important part of the National Payment Strategy to be published in 2024.

The Consultation Paper has three main areas of focus:

• Payments roadmap

• Acceptance of cash

• Access to cash [the development of the access to cash legislation is a separate work stream]

Focussing on the Deputy’s question posed in relation acceptance of cash, there is a need to ensure that cash can be accepted as a means of payment where appropriate. The NPS work will, therefore, look at the acceptance of cash and consider if legislation should be introduced to require certain sectors or sub-sectors to accept or facilitate the acceptance of cash. By extension, it will have to be considered whether it should be policy of the Government to require the public service to accept or facilitate the acceptance of cash.

In September of 2023 I recommended a pause in any changes to the acceptance of cash by public bodies until the NPS is finalised in 2024. That is to say, public bodies should continue to accept cash where they currently do so and not remove this option as they may be subsequently required to revert back to accepting, or facilitating the acceptance of cash.

Additionally, on 28 June 2023, the European Commission published a proposal for a Regulation on Legal Tender, which looks at both access to and acceptance of cash.

As regards the acceptance of cash, the European Commission's draft Regulation proposes that cash acceptance should be mandatory across the Euro Area. However, it also provides flexibility around mandatory acceptance in circumstances where there is a prior agreement in place between both parties regarding payment method, or if the refusal is made in good faith. The exceptions to mandatory acceptance are largely in common practice in Ireland currently.

The draft Regulation proposes that the competent authority in each Member State would be required to monitor the acceptance of payments in cash on an annual basis against a set of common indicators to be formulated by the European Commission and to take remedial measures if this monitoring shows that the mandatory acceptance of cash is being undermined. The draft Regulation specifically draws attention to the need to monitor the level of 'ex ante unilateral exclusions of payments in cash'. It defines such exclusions as including a 'no cash' sign.

The recitals to the proposed Regulation state that a Member State should, if it concludes the level of unilateral exclusions of cash undermine the mandatory acceptance of euro banknotes and coin, take effective and proportionate measures including requiring specific sectors, such as healthcare, supermarkets, post offices and pharmacies, to accept cash.

At domestic level, the work is being undertaken through the NPS, whilst the European Commission work is complementary.

Insurance Coverage

Questions (152)

David Stanton

Question:

152. Deputy David Stanton asked the Minister for Finance to outline the situation with respect to community groups and festival committees acquiring insurance for the staging of local community events; if he is satisfied with the work of the Office to Promote Competition in the Insurance Market to make insurance available for such events; and if he will make a statement on the matter. [4598/24]

Written answers

Minister for Finance

At the outset, I wish to reassure the Deputy that I recognise the concerns felt by many local community groups across the country around the cost and availability of insurance cover. Insurance reform is a key priority for this Government and is being delivered via the Action Plan for Insurance Reform with the vast bulk of the actions now either delivered or initiated. Accordingly, I understand there are providers that specialise in this area and who may take advantage of the improving insurance market conditions to expand their footprint in the sector.

Last summer, one of the key “asks” of both the insurance industry and reform campaigners was delivered – the rebalancing of the Duty of Care. The amendments to the Occupiers’ Liability Act 1995 will deliver major benefits to businesses, sporting groups and community and voluntary organisations in particular. In time, cost savings from reduced claims should also help to lower premiums for such organisations, particularly those engaged in high-risk/high-footfall areas, where claims associated with ‘slips, trips and falls’ are more prevalent. This should benefit, in particular, businesses in the tourism, hospitality and recreation/activity sectors including local community events.

One of the main changes is that the law now allows for a broader range of scenarios where it can be shown that a visitor or customer has voluntarily assumed a risk resulting in harm. In addition to being a legislative change, it is hoped that this signals the start of a cultural shift surrounding the claims environment in Ireland, which would bring us more into line with our European Union peers.

At the same time, the Office to Promote Competition in the Insurance Market, chaired by Minister Carroll MacNeill, continues to work to expand the risk appetite of existing insurers and explore opportunities for new market entrants. It has engaged closely with IDA Ireland to promote Ireland as positive environment to write insurance, and is also in regular contact with areas that are experiencing insurance issues. The number of ‘pinch-points’ have decreased significantly with insurance now available in previously difficult areas such as: equestrian activities; inflatable hire; ice-skating; sport clubs; play centres; and SMEs. Building on this success, the Office will continue to facilitate connecting consumers with relevant stakeholders in order to assist sectors in which insurance difficulties arise. 

Finally, I would like to take this opportunity to assure the Deputy that it is Government's intention to ensure that implementation of the Action Plan can have a positive impact on the affordability and availability of insurance across all sectors in the economy, including the staging of local community events. We will continue to monitor developments, including through the Cabinet Sub Committee for Insurance Reform.

Tax Collection

Questions (153)

Thomas Gould

Question:

153. Deputy Thomas Gould asked the Minister for Finance the number of homes for which the increased stamp duty for bulk buys has been paid in Cork. [4604/24]

Written answers

Minister for Finance

Section 31E of the Stamp Duties Consolidation Act (SDCA) 1999 was introduced by the Finance (Covid-19 and Miscellaneous Provisions) Act 2021. It provides for a higher 10% rate of stamp duty to be charged on the acquisition of residential properties situated in the State, excluding apartments, where a person acquires at least 10 such properties during any 12-month period.

I am advised by Revenue that, based on returns for the period since the commencement of the higher stamp duty rate of 10% in 2021, it has applied to the purchase of 172 properties in Cork.

Question No. 154 answered orally.

Question No. 155 answered with Question No. 121.

Question No. 156 answered orally.

Question No. 157 answered with Question No. 127.

Question No. 158 answered with Question No. 142.

Question No. 159 answered with Question No. 121.