Committee on Budgetary Oversight díospóireacht -
Wednesday, 27 Sep 2023

Pre-Budget Engagement (Resumed): Ministers for Finance and Public Expenditure, NDP Delivery and Reform

An Cathaoirleach

I welcome the Minister for Finance, Deputy McGrath, the Minister for Public Expenditure, National Development Plan Delivery and Reform, Deputy Donohoe, and their officials to the meeting. Before we begin, as is customary I wish to explain some limitations to parliamentary privilege and the practice of the Houses with regard to references witnesses may make to other persons in their evidence. Witnesses are protected by absolute privilege in respect of the presentation they make to the committee. This means that they have an absolute defence against any defamation action for anything they say at the meeting. However, witnesses are expected not to abuse this privilege and it is my duty as Chair to ensure that this privilege is not abused. Therefore, if witnesses' statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks and it is imperative they comply with any such direction.

I again remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him, her or it identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of the place in which the Parliament has chosen to sit, namely Leinster House, in order to participate in public meetings. I will not permit a member to participate where they are not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts will be asked to leave the meeting.

I invite the Minister, Deputy McGrath, to make his opening statement.

Minister for Finance (Deputy Michael McGrath)

I thank the Cathaoirleach and wish my colleagues a good evening. I thank them for the opportunity to attend the committee today to discuss budget 2024, which the Minister for Public Expenditure and Reform, National Development Plan Delivery and Reform, Deputy Donohoe, and I will present to the Oireachtas on Tuesday, 10 October.

I will begin by outlining the economic and fiscal context for budget 2024. Over the past few years, our economy and society have been confronted with a succession of once-in-a-generation crises. There was the shock of Brexit, a pandemic without precedent in living memory and, most recently, the Russian invasion of Ukraine and the associated fallout for energy prices and the cost of living generally. Any one of these shocks on their own would have represented a profound challenge. That we have weathered these challenges so well is a testament to the fundamental strength of the Irish economy and to the resilience of our people. Just a year after we emerged from the pandemic, we now have more people at work in this country than ever before and our public finances, at least at the headline level, are back on a positive footing. That is a remarkable achievement and we should not take it for granted. The fact is that the strength and speed of our recovery from the pandemic, and our resilience throughout the energy price shock, have been made possible by the decisive action taken by this Government. We took the decision to provide unprecedented levels of fiscal support to households and businesses throughout the pandemic, maintaining the link between employee and employer and ensuring that long-term economic scarring was kept to a minimum and the labour market could rapidly rebound once the virus had been brought under control. This came, of course, at an enormous fiscal cost but the results speak for themselves. It was the right call.

Since then, the shock to energy markets arising from the Russian invasion of Ukraine has, of course, had severe implications for Ireland. While inflation has now receded from last year's peak of 9.5%, we remain far ahead of the 2% target of the European Central Bank, ECB. Core inflation is still elevated at 4.8% in August. This points to both continuing bottlenecks on the supply side as well as an economy that is now operating at, or even beyond, full capacity.

Once again, Government’s response has been forceful and decisive. We have made available some €12 billion in direct relief to assist with the cost of living, protecting the most vulnerable from the most severe impacts of rising prices and striking the right balance by providing support without unduly adding fuel to the fire of inflation. This was a necessary and economically appropriate response to this historic challenge.

It is evident that this is not a Government that will shy away from taking whatever action is necessary, given the circumstances, to protect incomes and maintain our public services when faced with shocks. Those of us in government, however, have a responsibility to look beyond the immediate term and ensure that the decisions we take today help to build a stronger and more resilient economy for the future. This is a responsibility we take very seriously. The positive headline fiscal picture provides us with a real but brief window of opportunity to prepare now for the challenges we know are on the horizon. That window of opportunity is rapidly closing. The headline surpluses expected over the medium term are heavily reliant on windfall corporate tax unlinked to our domestic economy. We know from our recent history the dangers of relying on such volatile windfall revenues. Indeed, just last month we saw a sharper than expected drop in corporate tax receipts. My Department will be updating the fiscal projections for this year as part of the budget but it seems likely there will be a levelling off of growth in corporation tax compared to the extraordinary levels of the last few years. This reinforces the importance of following an approach to fiscal policy that, on the one hand, ensures we have the space available to take the necessary action to invest in our public services, improve our infrastructure and assist with the cost of living, but also maintains our public finances in the strongest possible position for the future.

The budget package for budget 2024 is €6.4 billion, comprising a little over €1.1 billion for taxation measures and core expenditure of just over €5.2 billion. This brings net core spending growth for budget 2024 to 6.1%. This is, of course, above the original 5% expenditure target set out in the Government's original medium-term strategy. However, this is because we have had to take into account the new economic landscape. Inflation, while easing, is still at elevated levels and I think it is right and appropriate that Government responds to this.

The increased budget package provides us with the scope that we need to continue to provide support to businesses and households, protect our public services and invest in the productive capacity of our economy without adding excessively to inflationary pressures. In short, we believe a package of this size strikes the right balance.

In addition to the package for 2024, given capacity constraints and inflationary considerations, there will be a limited amount of space available this year for temporary, once-off supports to assist with the cost of living, focused, as always, on the most vulnerable.

My aim in drafting budget 2024 with the Minister, Deputy Donohoe, is to provide the Government with the flexibility to act as necessary today without jeopardising our ability to respond as necessary to the challenges of the future. The progress we have made in recent years means we have the opportunity to prepare now for those future challenges. If we take the right decisions now, we can build upon that progress and ensure that our economy and society remain resilient for years to come. This will be the cornerstone of budget 2024.

Minister for Public Expenditure, National Development Plan Delivery and Reform (Deputy Paschal Donohoe)

I wish everybody a good afternoon. I thank the Cathaoirleach and members of the committee for the opportunity to be here today as part of the pre-budget scrutiny process. When I appeared before the committee in July, the Government had just published the summer economic statement and the committee discussed the agreed budget parameters. Today I can address developments that impact on our budgetary considerations ahead of budget day on Tuesday, 10 October.

The Minister for Finance has already touched on the impact inflation has had on households and businesses since late 2021 and throughout this year. The Government has, as the committee knows, deployed numerous measures to reduce this burden and help with the challenge of rising prices, particularly higher energy costs. There is no denying that inflation continues to pose a real policy risk, principally in finding a balance in responding with support while not adding to inflation growth. This is a challenge we think we have met successfully to date.

My Government colleagues and I allocated €12 billion in total expenditure and taxation measures since budget 2022 to address the impact of price rises on the cost of living. These measures, both permanent and temporary in nature, were brought in to protect society from the worst effects of this historically high inflation with particular focus on those with the lowest incomes. We have, in other words, been giving more help to those who need it most.

The use of temporary measures prevented once-off supports being built into the core annual expenditure of Departments while helping households and businesses with elevated costs. This will, in the future, also minimise the inflationary impact of Government interventions. The success of the two most recent budgets can be seen not only in what they have meant for our national finances but also in respect of the changes and improvements that have been made to public services and infrastructure. Those include the increase in capital investment under the national development plan, the expansion of service delivery across the public service to meet increasing demand from a growing population, the reduction of the cost of key public services and the extension of a public sector pay deal that delivered and maintained industrial peace in a challenging period. We also delivered considerable support to meet the challenges of Covid-19 and, soon after, the challenge of providing a humanitarian response for the people of Ukraine.

Thankfully, inflation has fallen from its historic high of an 8.1% average in 2022. This reduction is estimated to continue in 2024 and 2025. This forecasted reduction, if and when it materialises, will be welcomed and means the Government can plan to return to its medium-term expenditure strategy. However, in the short term, we are aware of the impact of higher prices on the standard of living for so many. We must respond to the immediate challenge of stubborn prices as we wait for the inflation path to smooth.

To that end, discussions are being finalised within the Estimates process to bring forward targeted, impactful measures that will benefit those most in need and be conscious of the impact that higher prices are having on our society. These measures will be temporary in nature, as they were a year ago. They will be limited and of a smaller proportion than that in the budget last year when prices were at their very highest.

To reiterate the Government’s budget 2024 strategy discussed at this committee in July, we outlined that there will be an expenditure ceiling rise to €95.5 billion. Core spending next year will reach €91.2 billion, non-core spending will reduce to €4 billion in total and an additional €250 million will be made available for capital projects. The package is designed to assist us in dealing with the effects of a stubborn inflationary cycle while attempting not to add to those price pressures. It reflects a significant, prudent and sustainable level of investment in the quality of life in Ireland and in our wider society.

It is important to plan an expenditure approach that responds to the economic environment but remains fiscally sustainable. As set out in the summer economic statement, this increased ceiling will provide for an expenditure budget of €5.2 billion in 2024. This is an increase of 6.1% on the estimated core expenditure for 2023. This adjustment over the target 5% rate of growth in core expenditure balances the need to protect core public services, sustain our investment in the NDP while minimising the risk that the expenditure policy contributes to the risk of inflation growing in the future.

Approximately 3% or €2.3 billion of the core current expenditure increase is available to meet existing levels of service. This includes: the full-year impact of measures carried over from budget 2023; funding for demographic developments, notably to support a growing population; and meeting public service pay commitments.

Capital expenditure under the NDP will increase by a further €900 million in 2024. Overall capital investment will reach €12.8 billion in 2023, including €200 million from the national recovery and resilience plan. This represents an increase of 10%, in line with the NDP. It is worth noting that capital spending has increased from €3.7 billion in 2015 to almost €13 billion this year. This clearly shows that capital expenditure has been prioritised in recent years and continues to be a Government priority. The remaining amount of approximately €2 billion will fund new measures in the budget, including measures in the social protection realm, childcare and health measures, and I hope the ability for a new public sector pay agreement. This will, of course, require appropriate prioritisation of the numerous demands across so many different sectors.

The Government is also providing €4 billion in non-core expenditure for temporary measures to provide humanitarian supports for refugees arriving from Ukraine and a more limited Covid-19 provision. There are also small provisions for funding from the national resilience and recovery plan, Brexit-related projects and REPowerEU funds. As with last year, this approach facilitates responsive fiscal policy that can provide supports to key emerging issues while protecting day-to-day spending.

The Government has also agreed to provide additional capital funding, from windfall receipts, of €250 million to expedite projects in 2024 that are at an advanced stage. In total, €2.25 billion will be provided in additional windfall capital between 2024 and 2026. This means that the year-on-year growth across the years 2023 to 2026 in capital allocations will be 6.7%, 10.2%, 9.8% and 7.7%, respectively.

Budget 2024 negotiations will not require a focus on capital allocations for 2024 or 2025. After the budget, there will be a focus on sectoral allocations from the NDP for 2026 to 2028 inclusive, to include the windfall funding for the years that I referenced earlier.

Managing the delivery of public services within budgetary allocations is, of course, a key responsibility of each Minister and his or her Department. Officials in my Department are in regular communication with colleagues across all Departments to ensure expenditure is managed within the overall budgetary parameters and that there are many measures in place to ensure the budgetary targets are met. These are seen on a monthly basis in our Exchequer returns. Budgetary reform remains central to public expenditure management. To this end, the mid-year expenditure report, published by my Department every July, provides details of the different processes that are undertaken to deliver this.

In just under two weeks, the Minister for Finance and I will bring forward what we believe will be a balanced, affordable and sustainable budget package to address, what is hopefully, the last of our inflationary challenges while providing for further investment in our economy, public services and infrastructure.

As I said to the committee when last here, the careful management of the public finances over the past decade has allowed us to do the following: increase our investment in core public services; build more houses, schools and other vital projects through the NDP; and help at a time of great pressure as we confront pandemic and a period of soaring inflation. The budget will continue this approach. There has been a decade of investment in our society by the Government. Budget 2024 will see further growth in capital investment and public services. However, in framing this, the Government is well aware that the economy is at full employment and we must begin the smooth back to 5% expenditure targets to ensure long-run sustainability.

An Cathaoirleach

I thank the Minister. Members may now put questions relating to the content of the Ministers’ contributions. I call Fine Gael’s Deputy Durkan.

Deputy Bernard J. Durkan

I thank the Ministers for attending and being so frank in outlining their budgetary proposals. We cannot ask them to elucidate much more at this stage, but we will strongly support what we have seen of the budgetary policy so far while being mindful of the needs arising from the cost of living and of the various sectors they referred to that may need treatment of a specific nature.

If they can, will they indicate the extent to which they continue to review those agencies that are in particularly sensitive areas like education, health and housing, to name just three? To what extent can they assist those in the budget without adding further to inflation and still reassure and encourage people who have felt the cold winds of inflation upon them over the past year in particular?

An Cathaoirleach

Will the Minister, Deputy Donohoe, take the question on expenditure in education, health and housing?

Deputy Paschal Donohoe

Yes. I thank the Deputy. This is a key area of engagement between me and the Ministers responsible for those sectors. Currently, we are engaging with their three Departments, which are among the largest spending Departments and, consequently, have a significant impact on our overall spending and budgetary plans. We are examining the funding we need to maintain the current level of service. For example, how many more teachers and nurses are needed to maintain our current commitments to pupils and patients? As that process is completed, we will examine whether it is possible to fund new measures in many of the areas where we would want to see progress being made.

A really important part of how we will build on progress we have made recently and meet the many needs that are there is how we will address the additional capital needs those Departments have to build more homes and more schools. We are already seeing an increase in capital expenditure next year of more than €900 million. Those Departments have had sight of that money now and have had it included in their plans since the Minister, Deputy McGrath, did the NDP. After the budget I will engage with those Departments again to see, out of the additional capital that is available due to the decision that has been made to reallocate some of the temporary corporate tax receipts, if their capital plans need to be strengthened further between now and 2026. That will be a separate process to respond to that.

Deputy Bernard J. Durkan

I further ask the extent to which it is expected to accelerate progress on the NDP, given the challenges that have appeared, the rate of progress in the past, specifically the recent past and the fact that people's expectations are greater now than they were, while recognising also that the cost of delivery has increased by virtue of various forms of inflation.

Deputy Paschal Donohoe

I will in the time ahead prioritise three steps that will be really important to making faster progress on the NDP. The first is the legislation the Minister, Deputy Darragh O'Brien, will bring before the Oireachtas. That will be huge legislation that, if passed by the Oireachtas, will bring more stability to how planning decisions are made within our country and greater clarity as to how those decisions will be made in the future. From a planning perspective, I see that legislation, once published, being enacted and being critical to how we will deliver against our ambitions in the national development plan.

The second issue will be how we can resource our planning system to ensure that decisions on big planning applications for really important infrastructure projects are made in a more timely way. I have been working with the Minister on this topic over this year to make more resource available to An Bord Pleanála to allow that to happen.

The third piece, again looking ahead, will relate to the allocation of the further €2.25 billion to maintain the real value of the capital plan at a time inflation has been high. It will also look at what opportunities are there to move forward some projects that, for example, have got through the planning process but may need further funding to be turned into a reality.

Those are the three issues I will highlight for the rest of this year and into early next year that will help with the delivery of the national development plan.

Deputy Bernard J. Durkan

Will the Minister, Deputy McGrath, indicate the extent to which it might be expected to monitor the extent to which receipts from corporation profits tax come in and fund the economy in a way that can be linked with the need for reserves and savings in the event of perhaps another pandemic, a cyberattack or whatever the case may be that would impact the economy and the stability to deliver?

Deputy Michael McGrath

I thank the Deputy for his question. Overall, across the year so far, corporation tax receipts are on profile. We anticipated when we published the stability programme update, SPU, in April that corporate tax receipts would grow by approximately 7% over 2022 levels. In the year to the end of August, we are pretty much on profile, with 7% growth, notwithstanding the reduction relative to last year in the corporation tax receipts in the month of August, which underlines the volatility of that tax head, which the Minister, Deputy Donohoe, and I and the Government have repeatedly spoken about.

Of course, corporate tax receipts are heavily dependent on the financial performance of multinationals across the FDI sector and various industries, and their performance is directly linked to their ability to manufacture and export to the global economy. It is certainly the case that we have seen a weakening of the external environment. Many of Ireland's main trading partners will experience little if any growth in the current year, and that inevitably will have an impact. We have seen a particular weakness in exports in the pharma sector. That is related to the very high level of performance last year, much of which was Covid-related. We are also seeing weakness in the area of semiconductor exports. Contract manufacturing is a very relevant issue here. It feeds into our GDP figures, which ultimately feed into our corporate tax figures.

The question the Deputy raised as to what we do with receipts that we all acknowledge are inherently volatile in nature is, therefore, important. It is a twin-track approach for us. We believe we need to spend more on infrastructure and public capital investment. That is why the Minister, Deputy Donohoe, and I have made the decision to allocate an extra €2.25 billion over the next three years to the NDP. We also have to provide for the future, however, and Deputy Durkan will have heard me and other colleagues in government speak about the need to make provision for the future. I anticipate that on budget day we will make a further policy statement on that issue.

Deputy Bernard J. Durkan

Chairman, may I ask one last question?

An Cathaoirleach

Yes. You have a minute. Proceed.

Deputy Bernard J. Durkan

I ask the Minister to indicate the extent to which he continues to observe the activities of our competitors in the marketplace, both in the international markets generally and in Europe. Some indications appear to have arisen that our corporation tax profits might become an issue again, notwithstanding the fact that this has been dispatched.

Deputy Michael McGrath

As the Deputy knows, we have invested a lot as a Government in the OECD process, which the Minister, Deputy Donohoe, was very much involved in negotiating and helped to shape. That was a very significant moment for Ireland because the 12.5% rate has been a bedrock of our industrial policy for a significant number of years, but we made the decision to be part of a global deal to provide certainty about our offering in the future, recognising the reality of digitalisation and the need for a change in the way in which corporate profits are taxed globally.

Our focus now is on the implementation of that OECD base erosion and profit shifting, BEPS, agreement. Those members who serve on the Select Committee on Finance will see in a number of weeks, when I bring forward the finance Bill, the complexity and the length of the provisions required in law to transpose pillar 2 of that agreement in the form of the EU minimum tax directive. Our focus in respect of corporate tax is very much on that issue. That does mean that, given that we are increasing the rate for the largest companies, that is, those with turnover in excess of €750 million, we have to see what more we can do to ensure that our offering remains competitive. That involves looking at the different levers and options we have in that regard and modernising other aspects of our corporate tax system.

While the participation exemption might not make the news headlines, it is an important policy initiative we have taken in recent weeks that will help to bring Ireland into line with most other developed economies in adopting aspects of a territorial tax system as opposed to a worldwide basis. That is an important reform. We are planning other reforms over the period ahead to ensure we continue to renew and refresh the offering to the foreign direct investment community in order that we remain competitive. The Deputy mentioned our competitors. The Minister, Deputy Donohoe, and I and the Government get daily reminders of the level and intensity of the competition that is there. We should never take for granted the success we have had so far in winning international investment. It is a very competitive environment out there and the Government will continue to refresh and improve on the offering where we see opportunities to do so.

Deputy Pearse Doherty

I welcome both Ministers to the committee. In relation to the spending rule, on 15 June, the Minister for Finance stated the following in response to a parliamentary question:

The spending rule is calibrated on the basis of ‘net’ spending i.e. spending net of discretionary taxation measures. Accordingly, the expenditure ceiling would be different – higher or lower – if the Government introduced discretionary tax changes.

Therefore, core expenditure is to go up by 6.1% but there is also the net taxation of €1.1 billion. Based on what the Minister said in the DáiI, will the spending rule be an increase of 7.5%? Is that correct?

Deputy Michael McGrath

It is a net spending rule so it is open to the Government to raise additional taxation through policy decisions and that then creates additional room if we want to stay within the 6.1%, which is the summer economic statement policy decision. That enables us to do more on taxation or expenditure. That is the way in which the net spending rule works.

Deputy Pearse Doherty

If the Government does not do discretionary tax raising but does do discretionary tax reductions, as outlined in the plan, is it not the case that the core expenditure increase and the tax package have to be added to give the net spending rule under the Minister's own criteria and therefore it is a 7.5% increase?

Deputy Michael McGrath

No. If we are to make any decisions to raise additional debt relief notices, DRNs, with which the Deputy will be familiar, that increases the scope we have in the budget, either on taxation in terms of reductions or on the spending side, so it is a net spending rule. We are applying the 6.1% on the spending side because on the taxation side, if we were to do nothing it would automatically generate in the region of €1.1 billion in additional revenue. If we go beyond that, it creates additional headroom either on the tax or on the expenditure side.

Deputy Pearse Doherty

That is definitely one way of looking at it if the Minister wants to make the numbers work for him in that way. The Minister is not suggesting the €1.1 billion package is discretionary. Is that correct?

Deputy Michael McGrath

We raise in the region of that figure from non-indexation of the system. That is the manner in which we apply the net spending rule.

Deputy Pearse Doherty

Okay, I am not going to go any further with this. I thank the Minister for his interpretation of his own rule. I assume the Minister is sticking with the parameters of €2 billion additional expenditure on new measures or non-allocated measures and €1.1 billion on tax. Is the Minister still on that or is he going to change these numbers in two weeks' time?

Deputy Michael McGrath

The Minister for Public Expenditure, National Development Plan Delivery and Reform and I are working to implement the summer economic statement parameters. We brought it to Government. We endorsed it and we got a mandate to proceed to develop a budget consistent with the summer economic statement. That is what we intend to do and that work is now well under way

Deputy Pearse Doherty

Is the Minister going to stick with these numbers - €2 billion in additional expenditure and €1.1 billion in tax?

Deputy Michael McGrath

The overall package is €6.4 billion. The Deputy is referring to one component of that. In overall terms, the package is €6.4 billion. The split is as we set out in the summer economic statement and the Government has not made any decision to change that figure. It is our intention to proceed on the basis of the summer economic statement.

Deputy Pearse Doherty

Let us look at the €2 billion envelope. This is just for budgetary oversight and to try to get an understanding of policy and what the numbers mean. The €2 billion number refers to the expenditure measures to be allocated. Must the public sector pay deal, when it is negotiated and struck, come out of that €2 billion? I assume it does and the Minister has confirmed that. Will he indicate how that is treated given that we do not have a pay deal? Last time, we did have a pay deal so the Minister was able to be upfront and clear about it. How will that be treated in the budget book in two weeks' time?

Deputy Paschal Donohoe

The answer to the Deputy's first question is "Yes". That has to come out of the €2 billion. We are engaging with public sector unions, and will continue to engage with them over the coming weeks, on when we will engage on the future of public pay. We are open to engagements before the budget. I will make a decision closer to the point regarding how we present or indicate what provision might be in place for public pay in the future.

Deputy Pearse Doherty

How will that be dealt with? Will it be clear? Obviously negotiations are ongoing so if it is a 3% split over two instalments, it could be close to €500 million. If it is 5%, it could be €750 million. Is the Minister just going to settle on a figure?

Deputy Paschal Donohoe

I have not decided yet because engagement is under way with the unions on this matter. The core point the Deputy has put to me, that it will come from the €2 billion, is correct.

Deputy Pearse Doherty

Let us deal with the other known unknown, for want of a better expression. I am referring to the health overrun. We will require a Supplementary Estimate for the health budget this year. I am not going to go into the rights or wrongs of that. I am just dealing with how we are accounting for this. For 2024, I assume that a portion of the health overrun for this year is recurring and needs to be factored into the base. Is that assumption wrong? If it is the case, does it have to come out of the €2 billion or is there already some of that in the base? If it is not the case, will the Minister give us an indication, even in the range of €250 million, because that is unfortunately the scale of what we are hearing in terms of the health overrun? We heard from Mr. Bernard Gloster that it could be €1.1 billion by the end of the year. That does not necessarily mean that it will be repeated in 2024. Can the Minister give any indication to the committee of how much of that needs to be provided for in 2024?

Deputy Paschal Donohoe

I cannot give the Deputy that indication this afternoon because that is a very important process which is under way with the Department of Health. I do not want to prejudge what the outcome of that will be, given the importance of this matter to our health services and budgetary plans. We are looking to identify better what share of the overspend will recur and therefore what impact that will have on new policy measures for next year. It is fair and important to state that a health overspend of that scale has very serious consequences for our ability to plan the health budget for next year. It is being treated very seriously by me and the Government.

Deputy Pearse Doherty

I appreciate that and I know the discussions are ongoing. The Committee on Budgetary Oversight has in its terms of reference scope to deal with this matter. We are 13 days away from the budget and there is an overspend of €1.1 billion. I am not asking the Minister to give me a number but to give me a range to within a quarter of a billion euro or even half a billion euro. Is it in the zero to €500 million range or the €500 million to €1 billion range? I am not asking the Minister to pinpoint but it is only fair that the Committee on Budgetary Oversight would have an indication regarding this policy measure. We could bandy numbers around. The Minister thinks there is €2 billion available but if the health overrun has to be provided for again next year, it leaves a big hole.

Deputy Paschal Donohoe

I do not want to be disrespectful to the Deputy or the work of the committee but it is a big question he is asking me to give a clear answer to given that work is under way in relation to it. It would be fair to say that at other points in dealing with them, health overspends have already been many hundreds of millions of euro. Even at this point, I prefer not to give an indication of what the range could be because this work is happening as we speak.

Deputy Pearse Doherty

I do not want to get into a spat about this but that is completely unacceptable. The Minister has a unit within his Department that monitors health spending. The fact that the Minister cannot tell the Committee on Budgetary Oversight whether there is €1 billion or €500 million overspend that needs to be provided again next year is not acceptable. I think the Minister has an indication and, if not, I would worry for the budgetary process that only 13 days from the budget, the Minister does not know whether the overspend that will be repeated next year will be €250 million, €500 million or €1 billion.

Regarding the national development plan and capital expenditure, the Minister will be aware that the Central Bank recently published an article about managing the public finances in a full employment economy. It noted:

Combining the effect of downward revisions to nominal General Government capital expenditure along with the impact of higher than expected inflation, the level of real public investment from 2022-2025 is now projected to be €3 billion lower per annum on average than had been expected in 2021.

The Central Bank is saying that we are €3 billion lower in terms of real capital expenditure compared with what was planned and the target of 5% of GNI* is not going to be reached. It now stands at 4.2%. Given that even though the nominal figure has increased, real public investment is now lower than was expected, is there not now a real need to increase capital expenditure way beyond the €250 million the Minister is talking about? Real public investment is projected to be €3 billion lower per annum on average than was expected just two years ago.

Deputy Paschal Donohoe

I will deal with the point on what is or is not unacceptable with regard to me answering a question from the Deputy. My preference and duty is to give the Deputy an exact figure, rather than a range. I stand by what I said earlier and reiterate that point. When that work is complete, I will be back in the Oireachtas and will give the Deputy a figure and explain it.

On the Deputy’s point regarding capital spending, I am aware of the critique from the Central Bank but it is also the reason we have increased capital expenditure in the coming years by €2.25 billion. The Central Bank is also warning the Government, correctly, of the consequences of significantly increasing capital expenditure in an environment of full employment with high inflation. The Central Bank is entitled to point to the risks that are there. On one hand, it is noting real output is declining while, on the other, it is warning the Government not to add to inflationary fuel. We are trying to get that balance right.

Deputy Pearse Doherty

It also states clearly: "With a reduced level of real expenditure now expected out to 2025, the actual delivery of specific projects will be lower than originally planned under the NDP.” Two weeks out from the budget, the Minister is planning to deliver less than originally planned under the NDP.

An Cathaoirleach

Allow the Minister to respond to that.

Deputy Pearse Doherty

This is in the middle of a housing crisis. It is nearly unforgivable that this is the case.

An Cathaoirleach

You have made that point, Deputy Doherty. Let the Minister respond to it.

Deputy Paschal Donohoe

I am pleased to be able to correct the Deputy on that.

Deputy Pearse Doherty

It is not me; it is the Central Bank.

Deputy Paschal Donohoe

Our plans for next year are focused on, for example, maintaining and building our housing output and ensuring the Minister, Deputy Darragh O’Brien, has the resources he needs to meet the targets laid out in Housing for All because we are conscious of the social need. It is fine to quote that part of the Central Bank analysis but that body also warned about the Government making decisions that make inflation worse. It is the same institute. The Minister, Deputy McGrath, and I are trying to get that balance right. I am exceptionally aware of the need to maintain housing output for next year and we aim to do that.

Deputy Michael McGrath

I want to reaffirm the point the Minister made. The Deputy quotes the article correctly but the Central Bank, as a body offering policy advice to Government, is not advising the Government to spend more money. If he is to be consistent and if he supports what the Central Bank advocates in that article, the Deputy presumably supports the overall position on fiscal policy the bank has taken in its advice. Therefore, he has to say where we should be spending less. It is important we are all consistent in this debate.

Deputy Richard Boyd Barrett

As the Ministers know, we are very consistent in that regard. We think the Government has to spend more but needs to raise it elsewhere. There is general acceptance and acknowledgement that those who are less well-off and on lower incomes, and even people on modest incomes, have been disproportionately hit by the cost-of-living crisis, whether it is the proportion they have to spend on putting food on the table or on putting a roof over their head, paying energy bills or other basic needs families have. The lower your income is, the worse you have been hit by energy price hikes and by increases in rent, mortgage interest rates, grocery costs and so on.

The Ministers’ central narrative is they have huge budget surpluses but that it would be imprudent to spend surpluses from revenues that are potentially volatile in the medium to long term, so we should not do it. They also state it would be inflationary to throw lots of money around, given capacity constraints and so on. However, is it not reasonable to say compensating lower and medium-income households would not be inflationary because it would simply ensure they maintain the level of buying power they had before the cost-of-living crisis took off? It would be entirely fair to families being hammered by that crisis, but also prudent within the terms the Ministers set out, to ensure people are not losing income in real terms. There is no reason to believe that would be inflationary, particularly if they gave income increases to pensioners, social welfare recipients or workers in the pay talks, while dealing with the inflationary concerns they have by taking it from those on very high incomes or who have accumulated and are accumulating significant wealth in the current situation.

I asked the Central Bank about this in the finance committee recently. Its net household wealth figures are always quite helpful. It points to the fact that net household wealth has again increased dramatically but is highly concentrated. It gave a note at the end of last year stating the wealthiest 10% have 54% of net household wealth. In other words, that 10% has more than the other 90%. Would it not be reasonable to make sure the majority of low- and middle-income people do not suffer and are given enough in increased income or pay that they are not worse off, taking that from those whose wealth has increased or who are not being severely impacted by the current crisis? There is a fair bit of evidence to suggest the people at the top are benefiting from the cost-of-living crisis because they have income derived from bank shares, shares in energy companies that are doing very well or corporations whose profits have gone through the roof. Would that not be a fair approach to take, and a prudent one? It would not cause inflation but would ensure the impact of the cost-of-living crisis is not put on the backs of ordinary working people, pensioners and those dependent on disability or social welfare payments.

Deputy Michael McGrath

There is no getting away from the fact the inflation we have experienced in the past year and a half or so has really hurt people. We have not seen inflation at these levels for about 40 years. It has had a significant impact. I am sure the Minister, Deputy Donohoe, will point out in a moment the analysis his Department has done on the combined impact on lower income households of all the measures the Government has introduced, namely, the core budget measures, the temporary budget measures including the energy credits and so on. The combined impact has been very significant on the lower decile income groups, which is absolutely the way it should be. The independent assessment of the last budget has been that it was progressive in nature. The same applied to the one before that. The Government provided more supports to those who most needed them. That is the way it should be and that will continue to be the approach of the Government.

The Deputy made a point about the inflationary impact of different types of allocation decisions. Where resources are provided to people who are better off, they may well not spend that money because they do not need it, so that is not inflationary. Of course, we have to take into account wider issues and focus resources on those who need them most.

There is no doubt but that for many, living standards took a step back over the past 12 months because their income did not grow in line with inflation. The evidence backs up my argument that when we look at the distributive analysis of the combination of Government measures, they have largely protected lower income groups. We have worked really hard to target as much of the resources as we possibly could to ensure that outcome. The Minister, Deputy Donohoe, has the analysis here and he might just take us through it.

Deputy Paschal Donohoe

I concur with what the Minister, Deputy Michael McGrath, has just said. We published our expenditure report for the year in the aftermath of budget 2023. What it indicated is that for the lowest income decile within society, the combination of the energy credits, social welfare, tax changes, and changes in regard to public transport, the change in income for them across this year due to the budget was 6%. For the next decile, it was 5.4% and for the third decile, it was 4.2%. This is before the impact of any increase in pay during that period. We are not saying for a moment that the entire effect of inflation for any one worker or one citizen within the country has been offset by these measures. Everybody's income and living standard is different. We can make the case that for many, the combination of one-off measures, tax changes and wage growth has meant that most of the impact of inflation on living standards was absorbed by measures that were brought in this year.

Deputy Richard Boyd Barrett

The mantra has been that we cannot fully protect people from the impact. It is not just those on the very lowest income but also the average working family who are dealing with higher costs at every level. They have been hammered, whether it is with energy costs, groceries, mortgage interest or rent. There are loads of different estimates on this but in real terms, low- and middle-income people are worse off even with the measures that have been introduced.

My point is that there is a group of people at the top who are not worse off. Surely the right and fair thing to do is to ensure that we fully protect those at the bottom who are on the lower incomes and who can least afford to be less well-off, by looking at the increased wealth of those at the top. Is it not time to do that, faced with this unprecedented cost-of-living crisis?

My point is that to do so would not be inflationary. The Minister says that if wealthy people have more money that is not necessarily inflationary because they might put it in the bank and save it. The bank they give the money to is then going to lend it to people and, by and large, it will lend it to people who they consider a good bet. In other words, they tend to lend it to people with more money, often to do things like speculate on how they can make more money, perhaps to buy a few rental properties or to invest in a real estate investment trust, REIT, or buy a yacht. That is the sort of expenditure we could do less of, in order to fully protect the people at the bottom who are really losing out and who can least afford to lose out.

I do not buy the argument that we cannot fully protect the low- and middle-income section of Irish society. It is always the working people and the poor who end up paying the price when it is very obvious when we look at the level of corporate profit and the concentration of net household wealth rising and overwhelmingly concentrated in the hands of a small group, that what we are actually seeing with the cost-of-living crisis is a redistribution of wealth from the less well-off to the wealthy and to very profitable corporations. Is that not a fair assessment of what is going on?

Deputy Paschal Donohoe

All I can do in response to the points the Deputy makes is to reiterate the reality of what happened this year. For those within our society who are on the lowest income, through a combination of the €12 increase in core payment rates and the one-off measures, the additional double payments that were made last autumn, the additional measures that were repeated before the summer, plus the three energy credits that were brought in, objectively speaking, we have protected the average citizen within that group from most of the inflationary impact and in some cases all of the inflationary impact. That has happened.

I agree with the Deputy that high inflation is redistributive and it redistributes from those who have the most to those who have the least, but that is why we brought in such a huge budget last year with so many measures in it.

An Cathaoirleach

The time is up.

Deputy Richard Boyd Barrett

I have one brief question.

An Cathaoirleach

The Deputy can have one very brief question. It is the usual for him.

Deputy Richard Boyd Barrett

I am asking it on behalf of Mental Health Reform, which has asked me to ask the Minister a question today. We have had a big debate already about the health overruns. The mental health organisations should not fall victim to that because there has been massive underspending and underinvestment in mental health.

An Cathaoirleach

I thank Deputy Boyd Barrett. He has made his point.

Deputy Richard Boyd Barrett

I just want to bring that point to the Minister.

An Cathaoirleach

As many others could.

Deputy Michael McGrath

With your indulgence, Chair, I will just add a word in response to the earlier exchange and the Minister, Deputy Donohoe, will come in on the funding issues for mental health.

The Deputy is correct, overall, on the issue of corporate profitability. This is something the IMF has examined and published. That is why, in the case of energy for example, the Minister, Deputy Eamon Ryan, has brought forward the solidarity contribution and the cap on market revenues. We can go into that in a moment if the Deputy wishes. It is also a reality that the more we spend as a Government, the more we add to inflation. The very people we seek to protect and help will end up carrying the burden of that. It becomes a vicious circle if we seek to address inflation by spending more and more money, and thereby keeping inflation higher for longer, which will help to keep interest rates higher for longer. We will just end going around in circles and the phase we are in now in this cycle, will just last for longer than is necessary.

The Deputy is correct that the priority must be to protect people who are most vulnerable. We do believe the combination of all that we done so far has gone a long way towards doing that. We are not suggesting for a moment that anybody has been fully insulated in reality. The Deputy is right that when it comes to costs that are unavoidable such as heating a home, groceries, and transport costs, it has been really tough. The Government did not cause this level of inflation. We are trying to respond in an appropriate way that helps people in the best way we can, while also trying to allow inflation to fall because we all benefit from that.

Deputy Paschal Donohoe

I am well aware of the concerns of those in the mental health sector in regard to funding for their services for next year in the context of the overspend that has now fully developed in other parts of the health service. I am doing all I can to try to protect the other health services. I assure Deputy Boyd Barrett that I am well aware of the risk. That issue is very important in the discussions we are having at the moment regarding the health budget for next year.

Deputy Ged Nash

I am glad that at the latter end of his contribution the Minister, Deputy McGrath, mentioned corporate profitability and how that is in fact contributing to the high-inflation environment we are experiencing at the moment and, to be fair, the actions the Government has taken to the cap on market revenues in terms of energy companies. The Minister says he is happy to discuss this. I am interested in establishing exactly how the resources we generate for the State will be used to bring down the cost of electricity bills. I will refer to a reply to a parliamentary question I received from the Minister, Deputy Ryan, today. He informed me that capital market revenues will be collected by the regulator, that is, the Commission for Regulation of Utilities, CRU, and the proceeds from the cap will be retained and used in the electricity sector to lower prices for consumers.

How will that revenue be deployed? What does the Minister mean when he says that the revenue will be retained and used in the electricity sector directly? What precisely does he mean by that?

Deputy Michael McGrath

I thank the Deputy. To take the two areas of additional revenue and to start with the one he raised specifically, namely, the cap on market revenues, as he knows, the legislation giving effect to that is currently before the Oireachtas. As the Minister, Deputy Eamon Ryan, alluded to in his reply to Deputy Nash, the proceeds from that will be collected by the Commission for Regulation of Utilities and will be redistributed to support consumers of electricity. I understand that will be through reduced market tariffs. Reduced charges will be passed back directly to customers in the form of a reduction of those tariffs on their bills. The cap will apply to the revenue generated in the seven-month period from December 2022 to June 2023, inclusive.

To take the second issue, which is the temporary solidarity contribution, as the Deputy knows that was operationalised through legislation in July and commenced on 2 August. At the time, the estimated Exchequer proceeds were in the range of €200 million to €450 million across this year and next. The first payment in respect of the contribution, which relates to last year's profits, is expected to be received into the Exchequer this month and as such, estimates of the revenues to be raised across the two-year period will be subject to revision in the budget 2024 fiscal projections. I should have said regarding the cap on market revenues that provisional scenarios suggest that somewhere between €80 million and €150 million can be raised as a result of that initiative.

Deputy Ged Nash

Will that go to reduce standing charges on bills, for example? Is that the idea?

Deputy Michael McGrath

To reduce tariffs, yes.

Deputy Ged Nash

Okay, to reduce tariffs.

Deputy Michael McGrath

On your bill.

Deputy Ged Nash

Okay.

Deputy Michael McGrath

That is my understanding.

Deputy Ged Nash

Okay, that is interesting. I will go back to a point made by both Ministers in response to remarks made earlier by Deputy Boyd Barrett. There is no doubt that the simulating welfare, income tax, childcare and health policies, SWITCH, model analysis produced alongside budget 2023 stated clearly that the budget, on an overall basis, was progressive. That was a certain interpretation of the budget because when we strip away the once-off measures including those in budget 2024, that was not the case. There was a bit of a three-card trick going on immediately after the budget. The presentation of the budget suited a certain narrative. Ministers were warned last September by others and by me that once those once-off measures dissipated in January, there would be a requirement to provide additional resources to those who needed them the most in the springtime. The Minister did, in effect, admit that by having what I can only describe as a second go of this, a second or mini-budget in February. Is the Minister leaving room in his forecasts for similar initiatives next spring, if and when required?

Deputy Michael McGrath

Our focus is on budget 2024. That will be the main fiscal event of the year and will lay out our plans for all of next year. We have indicated that we will again bring forward a package of temporary one-off measures. I note the Deputy's comments in relation to those one-off measures. I think there has been an attempt to almost devalue the value of those one-off measures. They were real and the payments were of great value to people who received them and they were very warmly welcomed.

Deputy Ged Nash

They were welcomed, yes.

Deputy Michael McGrath

Many people were able to use those payments over a period of time. Of course it is different in nature to a weekly payment. We acknowledge that but we know that they were welcomed by many of those who received them. We have no plans to do anything in the spring of 2024. We are preparing the budget now for next year. There will be some additional measures that we will lay out on budget day, in particular for payments across the final few months of this year.

Deputy Ged Nash

The Central Bank and the Irish Fiscal Advisory Council, IFAC, met this committee last week. The Central Bank stated that, based on the budgetary parameters published in the summer economic statement, budget 2024 will be expansionary. The Central Bank's point was that looking at the figures set out in the summer economic statement, SES, this will be a procyclical budget. Looking at the proposed tax cuts as well, that may be inadvisable in the context of an economy that is pretty red-hot. Based on the Central Bank's own assessment, its view - and IFAC agreed with this - was that this kind of budget and these kinds of expenditure and tax cuts could add 0.2% to 0.7% to inflation next year. Does the Minister, Deputy Michael McGrath, agree with that analysis and is he mindful of that when he is about to develop and formulate the budget in two weeks' time?

Deputy Michael McGrath

First of all, I strongly defend the parameters of the budget. We have had a difficult balance to strike and I think we have stuck the right balance. People will form their own views of that in just under two weeks' time when they see the budget.

We want to provide help to people where we think it is warranted. We need to spend enough money to do that. At the same time we do not want to start pushing inflation in the wrong direction. It is a difficult tightrope that the Government has to walk in that sense. On the question of taxation, were we to do nothing we would be consigning people, including low- and middle-income workers, to paying a higher proportion of their incomes in tax. It is not just that they would pay more tax in cash, they would pay a higher effective rate of tax. Therefore to characterise it as a tax cut in the way the Deputy does, is I think misleading. For many, even what we do in real terms will not represent a tax cut but will prevent them from having an increase of their tax burden in real terms. That would be-----

Deputy Ged Nash

I understand the argument for indexation, I absolutely do. I think that is broadly understood but I think USC cuts are being considered as well, is that not the case? It has been reported in the media at least or are the media wrong?

Deputy Michael McGrath

We have a programme for Government commitment on income tax that provides for the indexation of bands and credits. There are different options and combinations that are possible as part of that. As the overall envelope is just over €1.1 billion on the tax side, I will bring forward a fair and balanced tax package which will provide benefits for all income earners. Of course, I will be conscious of the need for low- and middle-income earners to benefit from those measures as well. No decisions have been made at this stage about the role of income tax and USC but I will be of course guided by the commitment the three parties in government have made.

Deputy Ged Nash

I have a final question in the limited amount of time I have available. It is now more than 12 months since the Commission on Taxation and Welfare published its report. The Ministers and their officials have had a lot of time to consider that particular report and recommendations from that report on how the tax base ought to be broadened and deepened. Can we expect anything in this budget that might directly link back to some of the core recommendations of the Commission on Taxation and Welfare report? Have we learned anything from it that the Minister would like to put into practice for this budget?

Deputy Michael McGrath

I am very conscious of the work of the commission and the report is on my desk. Of course I am dipping in and out of it and looking at the various recommendations. I will not give any indication on any specific measure but if the Deputy looks at the broad point it makes, it makes the point that into the future there will be a need for additional taxation to fund the running of the State. That just underlines the need for us to make provision now for the future in order that we can mitigate some of the otherwise unavoidable tax increases. I refer to the need to a savings fund which will deliver an annual return for us in time. That will help to mitigate if not fully offset the impact of the fiscal decisions we would otherwise have to make to give effect to what is the central conclusion of the Commission on Taxation and Welfare.

Deputy Ged Nash

I will conclude on the proposed saving fund idea. I note in the legislative programme that there are plans for legislation over the next period for what I think is described as the future Ireland fund. Will the Minister make significant announcements on budget day in terms of the framework of that fund and what it will involve? Can we expect to hear more on budget day?

Deputy Michael McGrath

Yes, the Minister, Deputy Donohoe, and I are working actively on that at the moment. We see it as a very important part of the overall picture and an opportunity to help future-proof the future of the country's finances. We acknowledge the need to spend more in capital and we will do that but we have to take the opportunity that is afforded to us now from receipts that are unreliable.

They are volatile in nature and will not be there forever. We will be making provision and laying out some of those plans on budget day.

An Cathaoirleach

Deputy Michael Healy-Rae is still on the line. If he wants to make a contribution, he can indicate across the IT systems. In the meantime, I call on Deputy Canney.

Deputy Seán Canney

Apologies, but I am double-jobbing. I am going between the disability matters committee and this committee. I thank the Ministers for their presentations. There are two aspects that I would like to address. There is the whole issue of the upcoming budget, the expectations and all the money we have in the country creating pressures on Government to deliver everything to everybody. I want to home in on the issue of the windfall tax that has been introduced and the Minister's plans to create a savings pot for that to create a rainy day fund or, better than that, a fund from which we can use the interest to help us. Is that fund something the Minister would envisage as being invested totally outside of this country? Has he come to any conclusions on that? What level of funding does the Minister see going into it over the next two to three years?

Deputy Michael McGrath

As the Deputy is aware, we published a scoping paper earlier this year. The Central Bank kindly hosted an event that various contributors who have expert knowledge in this area attended and spoke at, and gave evidence of the international experience. We have been looking at different models around the world to see what we can learn from that to help influence and shape our own plans in Ireland. What the Deputy has outlined is broadly the thrust of it. The idea is that we invest annually for a period of time, and that will earn an annual rate of return. That annual rate of return provides resources that can be used to help fund the running of the State. In terms of where the fund will be invested, we will be engaging, and are engaging on an ongoing basis, with the National Treasury Management Agency, NTMA, which has a lot of expertise in this particular area. We are not precluding the possibility, of course, that some of the resources will be invested in Ireland. However, we must bear in mind that the principal purpose is to spread the risk and earn a rate of return for the country. We have other mechanisms, including the Ireland Strategic Ireland Investment Fund, ISIF, which has a mandate to invest in Ireland. There is a multibillion euro package there that ISIF is managing at this point in time. We have other bodies that are entirely domestically focused. It would be unwise to have this long-term fund solely investing in Ireland. The precise investment strategy, which I think will be broadly global in nature, will be set out based on the advice and the guidance of the NTMA.

Deputy Seán Canney

With that fund, does the Minister envisage that, for instance, for capital spending in the national development plan we will have a situation where we have funding to deal with the dips so that we can have a continuous flow of projects being delivered to try to attract more of our construction workers back into this country, where they will have a better guarantee that they will have a more sustainable career rather than having ups and downs? It is one of the issues that has left some people over in Australia not coming back because they cannot trust where our cycles are going. They are going too high and then too low and there is a lack of certainty. Will this fund be a mechanism to try to create that certainty? As I described, will it be a mechanism to ensure that we have projects in train that will be delivered to a plan over ten years, and if one project falls off or is delayed there will be another one to pick up on? Some of the money could be used to get these projects ready in such a way that they would be what I would deem to be shovel-ready. All of the preliminary planning consents would be done so that projects could be done when they need to be done to keep the flow of work going. I do not know if I am making sense.

Deputy Michael McGrath

Absolutely. The Deputy is spot-on. We have to ensure that we invest through the cycle in the future, and that we get away from the peaks and troughs, feast or famine approach. The Deputy is right. People who are deciding on careers and on where they want to base themselves into the future need to have an assurance that there will be a sustained level of public capital investment over the years ahead. What we are broadly looking at is that as part of the overall fund structure, there will be a public investment fund which will have certain access criteria. However, the event of a downturn or a shock, where the Exchequer might otherwise be looking to cut capital expenditure, it will be able to avoid that by having access to resources in that scenario. The Minister for Public Expenditure, National Development Plan Delivery and Reform and I, and his officials and mine, who have a lot of expertise in managing public spending on capital infrastructure, are developing and scoping that idea in conjunction with the party leaders at this point in time.

Deputy Seán Canney

So, in effect, it is an opportunity to correct some of the mistakes that would have been made in past, and that kind of thing. Very good. The other question I have relates to budgetary concerns that arise from current spending and trying to deal with social welfare. As a member of the Joint Oireachtas Committee on Disability Matters, I know that a lot of investment is needed there. How does the Minister see the shape of things to come to make sure that people with disabilities and people on fixed incomes are taken care of, while at the same time creating the incentive for people to enter the workforce and to have the benefit of work, where work pays? How does he see that balancing and how does he envisage doing that?

Deputy Paschal Donohoe

As I answer that I want to emphasise how important the work is that is under way regarding this fund for our country that will give us the best chance possible of making sure that the ups and downs of how economies grow and fall do not ruin again our ability to keep on building homes and investing in our future. The work that the Minister for Finance has just updated the Deputy on is of huge importance to the future of our economy and society, and will be a big part of our budgetary work. On the Deputy's point regarding citizens with disabilities and how we can support them, there are three points. First, this is a matter that the Minister for Social Protection is very much aware of. I have been engaging with her on this in terms of particular measures within our social welfare package to be announced on Tuesday week that can give support to citizens with disabilities and help them with their standard of living, and hopefully find ways of continuing to bring them back into the workforce. Secondly, from an employment perspective, it is why our community employment, CE, schemes are important in the role that they can play in supporting those who need additional help in their journeys and work and the role of CE in that. Of course, from an employer point of view, the State, in its role as an employer, has plans by Government Department to ensure we are playing our part in employing those who need additional support within the workplace. Finally, I will make the broad point that making work pay is so important for citizens who have disabilities and for those who do not. It is why the approach that the Minister for Finance outlined on personal taxation is so important. At a time of high inflation and at a time in which living standards are under such pressure, all we are seeking to achieve - and it is a really important objective - is that high inflation does not take away from people's ability to take a job or get a wage increase by them paying more tax. That is it. They are the three different prongs by which we are coming at that issue.

Deputy Seán Canney

We talked earlier on about energy and the energy windfall tax. Are there any plans to look at the banks and the profiteering that is taking place at the moment? Are there plans to look at how that money could be turned back into helping people with mortgage interest relief or by cutting out bank charges for people to make it easier for them to bank, rather than what we are seeing at the moment? While everybody is paying the price for the cost of living, we are seeing the banks make great profits.

What can be done to take some of that profit back to the State to help those people who have mortgages?

Deputy Michael McGrath

I thank the Deputy. We are collecting revenue from the banks every year in the form of the bank levy. The bank levy is due to end in law at the end of this year but I have made it known publicly that it will be continued into 2024. I am taking the opportunity of the budgetary context to examine the appropriate scope of the levy and its amount. I will lay out on budget day what the response to that is, and will take on board all the points the Deputy and others have made on this matter.

We need a banking system where there is competition. Unfortunately, there are now only three main retail banks in Ireland. Before the global financial crisis, it was more than a dozen. That reduction has been to the detriment of customers and consumer choice. In some respects, the level of profits being experienced are associated with monetary policy and the current funding environment. Those profits may well be temporary in that respect. However, I will consider all the factors and make a decision. I intend to announce that on budget day.

Deputy Seán Canney

I met with the Irish Farmers Association, IFA, earlier. One of the matters that came up was the residential zoned land tax, RZLT, and what may be happening with that. My understanding is that functional farmers will be exempt from paying the tax and lands that are zoned R2, which are secondary lands, for residential development will also be excluded. However, I understand from the IFA that farmers who have sought dezoning are being refused it. How will that match up with the commitment that this would not happen and that R2 lands would also be exempt?

Deputy Michael McGrath

This is a tax that is due to come into effect on 1 January. The legislation is in place and is being given effect to. Part of that involves many landowners engaging with their local authority and subsequently by appeal to An Bord Pleanála, if they believe they should be outside the scope of the tax or if they are seeking to have their land dezoned. In the lead-up to the budget, and given that we are essentially on the eve of the tax coming into effect, I am taking the opportunity to examine the legislation to see what improvements or changes may be required. Whatever decision the Government makes will be set out on budget day.

Deputy Michael Healy-Rae

I thank the Chair. I will try to be brief because the committee is working very diligently and I do not want to hold things up.

An Cathaoirleach

As if we do not always.

Deputy Michael Healy-Rae

I will take up from where the Minister finished. To be polite about it, I hope the Minister is just being coy in not wanting to divulge what will be in the budget. We obviously do not expect him to do that. We know he cannot do that. However, I have a memory and I am not stupid. When he was questioned about the RZLT, the Taoiseach put on the record of the Dáil that common sense will obviously have to apply, if primary legislation is needed to make adjustments that agricultural land that is actively being farmed cannot be taxed. All the committee members have much more experience than me. They know the Taoiseach cannot come to the Dáil and say something on the record unless it is factual, true and he believes it.

I will tell the truth. I am telling farmers to look at what the Taoiseach said on the record of the Dáil, if they are genuine farmers, or if their land is leased or rented and is being actively farmed. I am not talking about nonsense such as somebody with two donkeys, a lovely pony or something, like Father Ted's "My Lovely Horse", who are only codding and the land is actually being hoarded. If somebody is hoarding land, I have no problem whatsoever with the full implementation of the tax. That is fine. There is no problem. I do not disagree with the thrust of what the Government is doing. I know, however, there are farms in the middle of towns where people are milking cows. There are people in Killarney town who are actively milking 70 cows and are within the 30-mile limit. They are near schools and everything but have active farms and are milking cows there. To ask those people to pay a tax is ridiculous and, to be fair, the Taoiseach was very clear on it. All I am assuming and presuming is that the Minister does not want to declare anything tonight. I certainly hope that common sense will prevail. This cannot be fudged. A farmer, or anybody using land for agricultural purposes, cannot be asked to pay a tax on it because to do so would be crazy.

I will briefly raise a couple of other issues. A fair share of the Brexit Adjustment Reserve, BAR, fund must be ring-fenced for farmers. We are facing potential displacement in the UK market in 2024 of maybe €300 million of beef and €75 million of sheep meat due to the Australia and New Zealand trade deals. We have to be very careful about how we will protect our farmers. To date, only 5% of the fund has gone to primary agriculture. No BAR funding should be returned to the EU and the December 2023 deadline should be extended.

With regard to funding for environmental measures independent of the Common Agricultural Policy, CAP, the IFA is continuously seeking substantial additional funding independent of CAP. It is required to support farmers in achieving their environmental objectives. People cannot be made achieve something without support. They do not have a bottomless pit of money. There is no reserve of money. This funding must also address the significant income loss suffered by farmers whose land was designated in prior years without appropriate compensation. One of the things we always knew and said, going back to when I was on Kerry County Council, was there could never be designation without compensation. That was the mantra. I hope the Minister will take on board what I said.

I heard some of the freedom fighters from the Labour Party today. In the interests of keeping my nose clean, I will declare an interest in the property market and the provision of accommodation to all sectors of society. I heard Labour Party members say that it was ridiculous for the Minister to even consider reducing the tax rate for property owners. It should be remembered they are not landlords but are people who were there long ago. They are not in existence anymore. They are people who own properties and rent them out. I will make it quite clear. I would not be doing my job right if I did not raise this with the Ministers. Just because I am involved in the business, does not mean I am debarred from talking about it.

People who are property owners in County Kerry are saying to me to say to the Ministers that something must be done from a taxation point of view. I hear people in the Dáil talking about a tax rate of 50% or 52%. Obviously, none of them is paying it or they would know it is actually 56%. I am not picking on my good friend and colleague, Deputy Boyd Barrett, but I remind him and others that when a person who owns a property gets rent of €1,000, he or she has €440 to pay the bank, to pay maintenance, to pay for the white goods, and to pay and compensate for people who do not pay the rent at all, who wreck the property, and go away down the road and leave you with that. That is obviously not everybody. It is a small percentage, but it is a fact that it is a cost that has to be taken into account by anybody in that business. Property owners get €440 out of €1,000. The biggest takers in rent are the Minister for Finance, the Exchequer and the Government. Something should be done about that. The number of people who have left the market is obvious. I keep hearing people say, "small property owners".

What is a small property owner? There are people who could have two properties or multiple properties, but my main focus is the small operators because, at the end of the day, it is just a business, the same as milking 20 cows or 200 cows. Something must be done for those people. They are relying on this budget and if this change does not happen, we will be in a bad way in this country because a share of those who are left will make a swift exit. I am fully confident of that and I am terrified of that because I know what the consequences are going to be, given the number of people who are coming to me. I voted in the past for the extension of the eviction ban and I supported People Before Profit today because of the number of people who are coming to me in Kerry who are detrimentally affected.

Obviously, I can see it from both sides. There are property owners who want their property back but if the person in the house does not have a place to go to, and if they are paying their rent and keeping the property right, we have to be fair. I respect the right of a person to get their property back but, at the same time, we have to be fair in this world. If they are paying their rent, I do not see why the property owner should be able to force them out. I really do not agree with that and, again, because of what I do, I can understand it. I know there are people who are angry with me for saying this, but the political side of me sees the social need and sees that people cannot make themselves homeless.

I know local authority homeless facilities are stretched and there is no more they can do for people. We literally could have people out on the street, and we cannot have that. I am not just asking, I am saying on behalf of the private rental sector to please do something, but do something meaningful. Do not let it be tokenism so people will say “For God’s sake, is that the best we are going to do?”, and then put their property up for sale. The problem we will all have then is frightening. I do not want us to face that nightmare scenario because it will be horrendous.

It is bad enough trying to keep the people who are in the private market in it, never mind trying to encourage new people into it. That will not happen. The only new people who are going to get into the rental market in Ireland are the really big people, the people who come in and buy 1,000 units, 500 units or 300 units. The ordinary person who would buy a property and then rent it out does not exist at present and they are not going to be coming into it. This is a fire brigade action of trying to keep the people we have in the business and keep them providing accommodation.

I apologise if I have gone on too long but I had to say those couple of things.

Deputy Michael McGrath

I thank the Deputy. We have enjoyed a fine close-up view of him for the past few minutes and he is coming across loud and clear. As he will expect, as Minister for Finance, I cannot get into detail on any individual tax issue so close to budget day. The residential zoned land tax was introduced as an activation measure. The point has been made by many, in addition to the points the Deputy has made, that the impending implementation of that measure has resulted in some land coming to the market that will result in homes being built for the people we all want to see having an opportunity to purchase or rent a home into the future. As I said earlier, in the lead-up to budget day, of course, I am examining the full suite of the taxation code, including the residential zoned land tax, given it actually comes into effect in the coming months, on 1 January.

With regard to landlords and people who provide accommodation for rent in our society, they provide a valuable service and that should be acknowledged and supported. We need to have an adequate supply of rented accommodation, not just in our cities, but in small towns and villages all over Ireland. The truth is that landlords, in particular small landlords, have been leaving the market for a number of reasons. Taxation is cited as a reason or a factor for some, and it may well be, but there are other reasons, including the interest rate environment, the fact some may be of an age that they want to get out of the market, some may be out of negative equity for the first time ever and are taking the opportunity, and some may have issues with the nature of regulation or their engagement with the Residential Tenancies Board, and so on. The truth is there are many reasons. Of course, in the context of the budget, I am examining the rental sector to see what more we can do to bring stability and to ensure that we have a continued supply of rented accommodation, but that is not to commit to any specific measure at this point.

I would make a broad point overall about expectations because I have an overall envelope of just over €1.1 billion in respect of taxation, and that will only go so far. The Deputy will be familiar with the concept of limited resources. While I note the points that he has made, I also have to be clear with all of the different interests and stakeholders who are making the case that they should get a very large share of the resources I have available. It is a limited amount and it will only do so much. I have to prioritise. I will do the very best I can in respect of a whole range of issues but, as always on budget day, there are constraints.

Deputy Paschal Donohoe

With regard to the Brexit Adjustment Reserve, BAR, fund, of the €565 million that was available under that for 2023, €238 million of it was available for the Department of Agriculture, Food and the Marine. The BAR is coming to an end this year. That is the period of eligibility that was contained in the regulation that was passed by the European Parliament, and I need to be honest and candid with the Deputy that it is not going to be changed. It will fall to the Exchequer, to me and to the Minister, Deputy McConalogue, to see if we can put in place additional measures to support Irish exports at what could be a challenging time. Irish food and our food exports have continued to flourish in the aftermath of Brexit but, of course, I am aware of the risk of cheaper food becoming available in the UK from other exporters and what that could mean for our farmers. These are matters that we will have to fund out of our own resources in conjunction with the support that we get from the Common Agricultural Policy.

An Cathaoirleach

Three other members have the opportunity to raise further questions. I call Deputy Conway-Walsh.

Deputy Rose Conway-Walsh

Most of the questions have been answered at this stage and I thank both Ministers for their statements and answers. I want to ask about existing levels of service, ELS, funding. We have looked at the 5% spending rule that was untenable when we had such high inflation. Has any discussion taken place on the ELS and how that is impacted by inflation? In this inflationary environment, is 3% adequate to account for the real cost of maintaining the existing levels or are we building in structural underfunding?

Deputy Paschal Donohoe

The level of ELS that is available to different Departments forms a very big part of our discussions with them because it then sets the scene for the negotiation regarding plans for next year. Has the inflationary environment that we are still in had an impact on the real value of ELS? I would say the answer to that question is that, yes, it has. That, in turn, is one of the reasons the Minister, Deputy McGrath, and I agreed to increase the overall amount that is available for spending to 6.1% growth as opposed to nearer 5%, which I had hoped we would be at if inflation had come down. Yes, it does have an effect. We are increasing year-on-year the funding that is set aside for ELS. I am reasonably confident that when we complete our budgetary work and publish our budgetary documentation, we will again see increases in ELS in a number of Government Departments.

Deputy Rose Conway-Walsh

Therefore, we are not building in structural underfunding. That is probably one of the main things. If the Minister has discussed that and worked it out, I do not need to press the point.

Deputy Paschal Donohoe

I do not believe we are. In the engagement I have with Departments and on the Deputy's point on the effect of inflation on ELS, my assessment is that inflation is having a bigger impact on the delivery of capital programmes, the number of companies that want to bid to deliver projects for the State and the cost of those projects. In this area, the carry-through from inflation into the spending of money is a lot bigger. I would say it is still about the accumulated effect of demographics and the need for us to continue to better model demographics in the future is having a bigger impact than inflation on our ELS work at the moment. In any event, one of the major reasons we decided to go beyond 5% again was the anticipation that more ELS funding would be needed for a number of Departments, because inflation will still have an effect.

Deputy Rose Conway-Walsh

On the approved housing bodies, AHBs, and spending in this regard since the reclassification in 2018, the sums are obviously counted in the general government balance. When does the AHB spending show up in the figures for the general government balance? The budgetary strategy, as outlined in the summer economic statement, sets out the projected government balance of €11.7 billion if the budget package is implemented. Is the projected AHB expenditure also taken into account in the same way in the general government balance, the budgetary strategy or the €11.7 billion, or is it only netted up in retrospect once the AHBs report their actual expenditure?

Deputy Michael McGrath

The figures are included in the budgetary numbers we publish.

Deputy Rose Conway-Walsh

I thank the Minister. That answers the question.

The €2.25 billion reflects a major policy outside the spending rule covering the coming years. Could they talk a little more about the rationale behind it?

Deputy Paschal Donohoe

That is a reflection of the fact that we expect to have corporate tax receipts at a high level for some time more, but I, like the Minister for Finance, am absolutely certain that they will begin to diminish. When they do, we will have to be ready. For some time more, they will be at the level included in the Department of Finance's forecasts. While the Government believes it is important to use the time to deepen our insurance policies for the future, it is also very conscious of the issues in the here and now. Given the obvious need to build more homes and do better on climate change, the Government decided a portion of the higher corporate tax receipts would be used to increase our capital ceiling temporarily. As totally committed as I am to bringing forward the reserve arguments and not spending this portion, I believe it is appropriate that a small share of the corporate tax receipts be spent, but spent on capital. For me, those two ideas complement each other.

Deputy Rose Conway-Walsh

Does the Minister for Finance want to say anything further on that?

Deputy Michael McGrath

No, I think the Minister, Deputy Donohoe, covered it very well.

Deputy Rose Conway-Walsh

Does the offer made to the retained firefighters, for instance, come from the ELS because it was agreed in advance of the budget?

Deputy Paschal Donohoe

That is a matter I will work on with the Minister for Finance. Any agreement or offer made from an industrial relations perspective always comes from the budget of the Department involved in the issue. Any in-year sector-specific pay changes that result from an issue such as the one the Deputy has referred to will come from the Department involved. I do not have a central fund anywhere from which I allocate in these matters. However, this is exactly the kind of issue that the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, and our two Departments are engaging on at the moment. We will have to decide where the moneys in question are paid from and the impact of this on the housing budget overall. We are working on that at the moment.

Deputy Rose Conway-Walsh

I have asked all my questions. I thank the Ministers.

Deputy Patricia Ryan

I thank the Ministers and officials.

I am sure both Ministers are aware of the recent report showing many older people are falling into poverty or are already living in poverty. We are living longer, increasing demand on social, health and pension services. Deputy Boyd Barrett also referred to this. When deciding how to allocate funds based on a budgetary perspective, what measure would be considered to alleviate poverty among the elderly and, further, mitigate the risk of more falling into poverty?

I take on board the Minister for Finance's statement that income standards had taken a step back. I fully agree with that. Fixed incomes are suffering most in the cost-of-living crisis. My question is for whichever Minister wants to answer it.

Deputy Michael McGrath

It is relevant to the work both of us are doing. It is relevant to the Estimates discussion the Deputy Donohoe is having with the Minister for Social Protection, Deputy Humphreys, but also with others because the work of different Ministers and Departments can have an impact on the quality of life, living standards and incomes of older people.

The issue of access to services is very important to the elderly also, as is the issue of the costs they face, whether those costs relate to nursing home care, home care or the purchase of goods and services in day-to-day life. All of these issues are taken into account in the decisions we make. We have certain provisions in our taxation system that are specific to people of an older age. Of course, those are examined in the work I do and, therefore, it comes down to our assessment of the impact of all the budget measures combined on different groups of people in society. Of course, they are not homogenous. The circumstances of older people are diverse. Some are better off and able to absorb the cost of living and the level of inflation that we have experienced, while others are very dependent on the fixed income they get from the State. That is why measures such as the fuel allowance and eligibility improvements that the Minister for Social Protection introduced following the negotiations we had last year are really welcome. The, Deputy Donohoe, and I have met a range of stakeholders in the lead-up to the budget, going back as far as the national economic dialogue, which I believe was held in June. In recent weeks, we have met stakeholders directly advocating on behalf of older people. Now we are at the point of negotiating with our colleagues in government. We have many decisions yet to make but the Deputy can be assured that looking after the welfare of older people will be front and centre in our minds when making them.

Deputy Patricia Ryan

Is the Government going to take into account the submissions of, say, Alone and Age Action such that there will be something for them?

Deputy Paschal Donohoe

I met the Minister for Social Protection this afternoon and we engaged on this very issue. We are well aware of the needs of our elderly citizens, particularly those on fixed incomes whose only income may be the pension from the State. I am well aware of how hard the past several years have been for them. As is always the case with any group representing a particular part of our society, no matter how valued, we will not be able to meet all the needs and demands in respect of which we are called upon to deliver, because we have to meet a variety of other needs. However, the Deputy can rest assured that in making the decision on the working-age payments – in other words, the core social welfare payments – the needs of our pensioners will be a crucial factor.

Deputy Patricia Ryan

I will ask my final question. The other questions have been answered.

The Irish Fiscal Advisory Council is of the view that one-off support measures are no longer justified due to energy prices reducing. Only wholesale energy prices have reduced. Energy suppliers are only going to pass on a percentage of the reductions, on a phased basis, to ordinary customers this coming November. This will come after the Government's two intended fuel price increases. We debated this last night in our Private Members' business. It seems to negate any supposed benefit ordinary people may have gained. Given the ongoing and most likely worsening cost-of-living crisis, should the Government factor in one-off supports as they would clearly be justified in the circumstances I have mentioned?

Deputy Michael McGrath

While we are seeing inflation fall and the environment change in that respect, I do not believe the changes in the inflationary environment and, in particular, the price levels people are seeing warrant our going from the level of support offered through one-off measures last year to zero this year.

That is where the Government and I disagree with the council. We believe that some additional temporary one-off supports are warranted because we are on a journey of inflation falling but price levels remain elevated. That said, we do also have to be conscious that inflation is falling. We do not want to push inflation back up. We want to allow inflation to fall because that is in everybody's interests. That is why the package of temporary one-off measures that we will bring forward on budget day will be of a lower magnitude. We think that is appropriate and warranted. In so far as we possibly can, we will target much of those resources at those who need it the most.

Deputy Patricia Ryan

I was going to ask whether the right people will get the right amount. Can I assume that the people who do not need assistance will not?

Deputy Paschal Donohoe

I have little doubt that if our package contained no broad measures at all, we would be criticised for that. What we are trying to do is get the package overall right. As the Minister for Finance just said, the package needs to reflect the fact that inflation is now a lot lower last year than it was this year. As a result, the scale of the package must and should be smaller. We are trying, in engagement with party leaders and other Ministers, is get the mix right regarding what the measure should be. We are doing that at the moment and working to aim to do that.

Deputy Patricia Ryan

How do the Ministers expect the additional corporation tax receipts will be stored? Is there a preference for an easy access savings approach, short-term liquid investments, a more long-term investment process or a hybrid approach for more flexibility?

Deputy Michael McGrath

We have yet to design the investment strategy. We will engage with and rely on the advice of the NTMA, which has considerable expertise in this regard. It is not a short-term fund. It is a fund with a medium- to long-term focus. That will be reflected in the investment strategy to give us the best possible chance of earning the maximum return that we can because those resources will come back to the Exchequer and the public, thus enabling future Governments to make decisions that will be in the interests of the people whom they serve. That is broadly our approach. We will have more to say on budget day. An important part of our overall considerations is making the best use of this window of opportunity that we have now because it will close over the period ahead. The buoyancy that we have seen in corporation tax receipts will not last forever and we are already seeing a levelling off in the level of growth in the receipts. The receipts continue to grow but at a much more slower rate than in recent years. We foresaw this. We knew this was going to come. We think there will be further changes in the future on the negative side when the full pillar 1 and pillar 2 elements of the OECD deal are implemented in their entirety so we have to plan for the medium to long term as well as doing the best that we can for people now in the forthcoming budget.

Deputy Patricia Ryan

When does the Minister envisage that design will be complete?

Deputy Michael McGrath

I envisage that the Minister, Deputy Donohoe, and I will bring the heads of a Bill to Government very shortly.

Deputy Richard Boyd Barrett

I have asked the Minister for Finance for information on corporation tax before and he gave it to me but I cannot find his note. Is the projected corporate tax receipts for 2022 in the region of €22 billion? I would be delighted to have the figure for 2023. If he does not have the figures now he can forward them.

Deputy Michael McGrath

2022 is historic so we have the figure and it is €22.6 billion. The forecast for 2023 is €24.3 billion, which is 7% growth.

Deputy Richard Boyd Barrett

I ask the Minister to please resend his note. The projection must be based on a projected gross level of pre-tax profits. I know that the receipts run behind so the Minister does not know the exact figures. These are projections. Obviously that level of receipts must be based on projections for what in the tables are, I think, called gross trading profits before deductions, allowances, etc. I ask him to please supply both figures for both years.

Deputy Michael McGrath

I will see what is available. Revenue publishes an enormous volume of material on corporate tax and the basis of the receipts that are collected so I believe we do have that and we will make that available.

Deputy Richard Boyd Barrett

Please forward that to me.

Deputy Michael McGrath

Yes.

Deputy Richard Boyd Barrett

Is there any change in the projections for the level of surplus and windfall profits, notwithstanding all the caveats about how long this may last? Is the projection still a €65 billion surplus over the next four years?

Deputy Michael McGrath

We published the projected general government balances out to 2026 in the SPU in April. We will update those on budget day. Please bear in mind that we had forecast that there would be more than €16 billion for 2024. Now, because we are making provision for non-core expenditure for 2024, which would not have been baked into the SPU, the Deputy will have seen in the summer economic statement that the revised forecast for 2024 is €11.7 billion. The €65 billion, to which he referred, is taken from the SPU is not representative of the reality that we expect to develop because non-core expenditure must be provided for, and it is unlikely to disappear in terms of its need next year or beyond. We will update the forecasts on budget day and we will seek, in so far as we can, to take account of what is likely to be the requirement to make provision for other costs.

Deputy Richard Boyd Barrett

I am out of time but I wish to mention one issue.

An Cathaoirleach

The Deputy is out of time.

Deputy Richard Boyd Barrett

I ask the Minister to consider this question and I do not expect an answer now. The CSO publishes figures, including those for immigration and migration. They show that there has been the highest level of emigration for many years at 65,000 people. We still have net migration. A lot of people are leaving. I presume many of them are young people and skilled. The Ministers should think very seriously about who they are and why they are leaving. If we are talking about capacity constraints and skills shortages, we need to ask very seriously who is leaving, what skills have they got and how can we stop them leaving when we need to deal with skills shortages and capacity constraints.

An Cathaoirleach

I thank the Ministers and their staff for making themselves available. I thank the Ministers for their detailed presentations and responses to various questions.

We acknowledge that we remain on course to meet the summer economic statement commitments in the budget package as a whole. We acknowledge the difficulties associated with ongoing discussions around the health budget and the classifications necessary regarding spends. We also appreciate the provision for public pay talks and what may arise from that. We respect that it would be ill-advised to quantify any funds associated with those deliberations.

I am particularly glad that we have accepted in all parties and none apart from the likes of Deputy Boyd Barrett who acknowledged that we cannot spend in perpetuity regarding windfall gained taxes.

Deputy Richard Boyd Barrett

We should just raise it with taxes on wealth.

An Cathaoirleach

The Deputy has learned well from the past obviously. We acknowledge that.

On the previous occasion the Ministers were in, and notwithstanding the record spending associated with housing, the huge commitments contained within the NDP, that they view as particularly important, and especially relevant to the success of the plan and the housing commitments that have been made, we discussed the Planning and Development (Amendment) Bill, and not only in terms of housing but commercial activity and the State's spend on infrastructure. That is a big responsibility that the Government and the Dáil has to ensure that the legislation is in form, passed and can lead to better outcomes in the future.

Deputy Paschal Donohoe

Absolutely.

The select committee adjourned at 7.40 p.m. until 5.30 p.m. on Wednesday, 4 October 2023.