We now have questions to the Minister for Finance and I ask all those who contribute to watch the clock.
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Tax Code
Michael McGrath
Ceist:28. Deputy Michael McGrath asked the Minister for Finance the position on the review of the flat rate expenses system; and if he will make a statement on the matter. [46832/19]
I seek an update on the review being undertaken by the Revenue Commissioners on the flat rate expense allowance system, which is relevant for more than 600,000 workers. According to the Revenue website, the outcome of the review will mean that any change will come into effect on 1 January 2020. I seek an update for the House.
I thank Deputy Michael McGrath. This matter has also been raised with me by Deputy Pearse Doherty.
The flat rate expense allowance regime is an administratively-based practice operated by Revenue, where specific commonality of expenditure exists across an employment category and the statutory requirement for a tax deduction for expenses, as set out in section 114 of the Taxes Consolidation Act 1997, is satisfied, namely, that the expense must be wholly, exclusively and necessarily incurred in the performance of the duties of the relevant employment.
This allowance regime eases the administrative burden on Revenue and on employees in certain sectors by facilitating the automatic granting of a fixed tax allowance to cover allowable employment-related expenses, without the need for annual claims by every employee concerned. It is important to note, however, that the regime does not preclude any employee from making an individual claim for a tax allowance in respect of employment-related expenses, where those expenses meet the statutory requirement for such an allowance.
I am advised that a flat rate expense allowance amount is decided following engagement between Revenue and the relevant representative body for the particular group of employees who incur the same expense. The regime has developed incrementally over the past 40 to 50 years and currently incorporates 53 employment categories, broadly covering some 134 different allowances.
Over the past 18 months, Revenue has been conducting a comprehensive review of the regime. I understand the review is ongoing but is nearing conclusion, with an expected completion date by the end of the year.
As the Deputy is aware, the administration of the tax code is a matter for Revenue, which is independent in the performance of its functions. That being said, I expect that Revenue, as it has demonstrated on many occasions, will implement the outcome of its review in its customary proportionate and fair manner.
Having regard to the fact that we are coming closer to the date on which any changes are due to be implemented, I have written to Revenue this week requesting a factual update on the issue. I will revert to the Deputies who have raised the matter with me, with a view to sharing any information received, as soon as possible.
This is a significant issue for many workers. More than 600,000 workers availed of the flat rate expense allowance system in 2017, with gross claims of more than €160 million, which means a tax saved amount of €48 million. If we take an example such as miners working in Tara Mines, their allowances is €1,312 so their tax saving is more than €500 per annum. As the allowance for many nurses is €733, at the marginal rate it would result in a tax saving of close to €300 per annum.
I am concerned we are getting very close to the deadline and we do not know where all of this is going. There could be a nasty shock in January for tens of thousands of workers, if not more, when they see their payslips. I do not know the nature of the ongoing consultation but before any changes are made we should be made aware of them and we should be given an opportunity to debate the issue in the House. The Oireachtas finance committee should also have an opportunity to discuss with the Revenue Commissioners the nature and scope of this to see whether changes are possible.
I am well aware of the numbers of citizens who will be affected by this. I am also aware of the likely effect it will have on their after-tax income. In my letter to the Revenue Commissioners I also asked whether they can give me further clarity on the number of employees covered by this, the various categories of employees, the cost to Revenue and the benefit to each employee group in order that I have a clearer understanding of the scale of change that may ensue.
I am well aware of the concern regarding this matter and have asked the Revenue Commissioners to give me an update on their work.
Can the Minister confirm that it remains the position that these changes will come into effect on 1 January 2020? Will any changes that will come in not require the approval of either the Minister or this House? Has he any details regarding the nature of this consultation and engagement? Who has it been with? I imagine that it has been with the trade union bodies and employer representative bodies. We are getting a certain amount of feedback through those channels but the key concern here is that many low and middle-income workers, for whom this has become a normal part of their tax code, will be in for a shock and will have their net pay reduced in January 2020 as a result of these changes of which, as of now, we have no advance notice or foresight regarding what is involved.
It is my understanding that these changes are due to come in on 1 January 2020. Regarding my role or that of the Oireachtas, this is a matter for implementation of the tax code by the Revenue Commissioners. As is always the case, I have no doubt that the Deputy and the Opposition will raise the matter directly with me. I do not have the details regarding the bodies with which the Revenue Commissioners have engaged but I would expect that it included the representative bodies. If I am wrong on this, I will communicate that to the Deputy.
Insurance Costs
Pearse Doherty
Ceist:29. Deputy Pearse Doherty asked the Minister for Finance his plans to implement further reforms in view of the rising costs of insurance and the escalating crisis in the market and if he will make a statement on the matter. [46847/19]
Michael McGrath
Ceist:30. Deputy Michael McGrath asked the Minister for Finance the status of the work of the cost of insurance working group with particular regard to compensation award levels and if he will make a statement on the matter. [46833/19]
The insurance crisis gripping this State is one that affects all sectors and regions. We know it is squeezing incomes, crippling businesses, damaging communities, hitting jobs and putting serious pressure on motorists. A recent survey by Public Participation Networks found that 83% of groups in the voluntary and community sector were hit with insurance hikes in the past three years. Despite repeated claims by the Minister that the cost of motor insurance is coming down since the peak of 2016, it is not the case and he should stop repeating that. We know that it increased from 2016 from 2017 and is likely to raise again. These figures are from the insurance industry. When will we see serious change in respect of this? When will we see the sectors that are no longer able to get cover from insurance companies being able to continue to operate? When will motorists see premiums fall and fall significantly? When will we see the enactment of the section of the Judicial Council Act that allows for the review of awards?
I propose to take Questions Nos. 29 and 30 together.
I must correct an inaccuracy uttered by the Deputy. The cost of motor insurance is down 27% from the peak. It is important that we accept the facts. The facts are that the CSO says it is down 27% from the peak, which is progress. The impact has not been as great in areas involving direct interaction with the public such as the hospitality, play centre, leisure or tourism sectors along with certain voluntary groups and the performing arts. We are working on that. I have met representatives from these different sectors on a regular basis over the past 18 months so I am well aware of their frustration about the perceived pace of reform. Unfortunately, there is no single policy or legislative silver bullet to stem or reverse premium price rises immediately. This is because there are many constraints faced by the Government in trying to address this issue, in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and for legal reasons, it cannot direct insurance companies as to the pricing level they should apply in respect of businesses seeking insurance. The Deputy knows both of these facts are true.
The passing of the Judicial Council Act this year will be the game changer. This Act provides for the establishment of a personal injuries guidelines committee upon the formal establishment of the judicial council. This committee is tasked with introducing new guidelines to replace the book of quantum. The commencement of the Judicial Council Act is a matter for the Minister for Justice and Equality. Work to establish the judicial council is well underway. I understand that the full Act can only be commenced when the Judiciary is in a position to establish formally the judicial council but that the Chief Justice has stated that he hopes to be able to do so before the end of this year, which I welcome. For my part, I am very eager to have this up and running.
The Government is doing all it can to facilitate this process. In this regard, I am pleased to note that the Minister for Justice and Equality commenced the necessary provisions of the Act a number of months ago to allow all the necessary background work to be completed in preparation for the formal establishment of the judicial council. In addition, the Minister for Finance allocated €1 million in budget 2020 to enable the process to be expedited by the Judiciary. These steps will ensure that the Judiciary has the necessary means so that when the council is established, its various functions can be operationalised.
With regard to the personal injuries guidelines committee and the subsequent publication of its new guidelines to re-calibrate award levels and replace the book of quantum, it is a matter for the Judiciary to put in motion the necessary process to expedite this. The first important step required by the legislation is for the Chief Justice to make the necessary appointments to the personal injuries guidelines committee. I understand that there have been developments around the designation of judges to be appointed upon the formal establishment of the committee and I anticipate that the Chief Justice may have more to say on that matter next week. It is hoped that this in turn should allow the members-designate to commence their activities on an informal basis so as to progress as far as possible their work prior to formal establishment. The Deputy has heard me speak about the parallel process of this happening before the actual establishment. I welcome this development as it demonstrates that the Judiciary is giving this matter the priority I, the Minister for Finance, the Government and every Member of this House believe it deserves. I also understand that the Personal Injuries Assessment Board has written to the Judiciary to offer its expertise and assistance for the purpose of this re-calibration exercise. I also commit the cost of insurance working group to the re-calibration exercise. Finally, I believe that once award levels are re-calibrated to a more sustainable level and applied consistently, the current problems being experienced by impacted businesses should recede.
The CSO carries out an examination on the basis of one premium. The insurance industry actually looks at how much it charges across every motor vehicle and gives the average price. Its statistics show that the cost of motor insurance did not decrease from 2016 to 2017 but instead increased so I ask the Minister of State to look at the data, accept the facts and stop giving out misleading information.
I have no certainty that this sector, which is completely without insurance, will have insurance based on what the Minister of State has said. There is no State intervention regarding that. I am not sure whether the Government has even discussed the withdrawal from the market of Axa XL, the underwriter that has withdrawn from this market, with that company.
We hear lots of claims. We hear claims that the cost of claims is pushing up premiums. The figures tell a different story. We know that according to published figures, the value of personal injury awards fell by 15% from 2014 to 2018. We know that in the same period, 55,000 fewer motor insurance claims were made and that during the same period, motor insurance premiums went up by 45%.
A number of things need to be done. One of them will happen this evening with my Consumer Insurance Contracts Bill. We need to establish a dedicated insurance fraud unit. This means a commitment from the Minister for Finance to An Garda Síochána that the Government will fund and resource this unit and that it will not come from existing resources. The Government needs to enact the section of the legislation that allows for the judicial council advisory committees to be set up. It could be as long as September 2021 before this work is complete. There are many other things that, unfortunately, time will not permit me to deal with at the moment.
I will start where the Deputy finished. He did not hear what I said in my reply. The Judiciary will establish things in an informal way.
The Judicial Council Act cannot be commenced until all of the committees are formed. That is the law as passed here last summer. With the full co-operation of the Chief Justice and the Judiciary, we hope to announce the judges designated very soon. The Chief Justice will be commenting in that regard next week. The Deputy did not listen to one thing I said. These are the judges who will reduce awards, recalibrate the guidelines and replace the book of quantum that is doing so much damage.
With regard to a dedicated fraud unit, the Deputy is wrong to talk about the establishment of such a unit within the Garda National Economic Crime Bureau, GNECB, in the Phoenix Park. Such a unit would only deal with blatant established cases of full fraud. It would not deal with a case of exaggeration down the country at all. Commissioner Harris's proposal is to have gardaí with relevant experience and knowledge deployed to each division. These gardaí will deal with such cases. The Deputy is talking about a big centralised unit in the Phoenix Park which would not go down the country at all.
Will the Minister of State clarify what he is saying in respect of the personal injuries committee? As of now, we do not have a judicial council. This council is required to set up the personal injuries committee. Is the Minister of State saying that this committee will begin its work informally as soon as next week? Will he please clarify that matter?
The Minister, Deputy Donohoe, needs to personally get more directly involved with regard to the insurance crisis. I received a reply to a parliamentary question recently which showed that, since the Deputy came into office as Minister for Finance, he has only had one meeting with either the insurance industry or any individual company. That meeting was in March 2018 and was held to discuss the issue of US tax reform. The Minister of State, Deputy D'Arcy, has had dozens of meetings with individual companies and with Insurance Ireland. I am not saying that is the only measure of the Minister's involvement on the issue of insurance but he needs to get his hands dirty and to get directly involved. Any attempt to resolve the insurance crisis will require the authority and power of the Minister for Finance. This needs to be a regular issue on the Cabinet agenda. These facts show, however, that the Minister has not directly engaged on the issue of insurance reform.
The Deputy has asked me a direct question about the personal injuries committee. The answer is that we expect the Chief Justice to have more to say about the judges designate next week. That is where we are. The Judiciary has agreed to operate informally. The law is clear. Outside of this informal operation, it cannot operate at all until all of the committees under the judicial council are in place. None of us wants that. I have agreed with the Judiciary and the Chief Justice that they will operate informally. We will have judges designate, who will later form the committee. The committee will, as I have said, be established pretty soon. The Chief Justice will have more to say on this matter next week. With regard to the involvement of the Minister, Deputy Donohoe, and the Government, it will then fall to those justices and will be out of the Government's hands. The Oireachtas and the Government will have done our work. It will then fall to those seven members of the Judiciary to recalibrate the guidelines.
The problem is that I have listened to the Minister of State for a long time and I know his intentions, which are good. I also agree with some of the comments made by others in the House suggesting that he is not getting support at Government level. I know he disputes this suggestion but that is my view. This does not, however, take away from the real issues. As the Minister of State has just stated, when the committees are set up is out of our hands now. It is only at this point that the Minister will be able to finally give the order to commence the legislation we passed earlier in the summer. The Government has not, however, secured any commitment from the insurance industry such as was secured more than ten years ago. At that time, the industry committed to reducing premiums if certain reforms were introduced. This involved a very clear table, a schedule produced at the time which stated that premiums would reduce by a certain amount for each given reform. The Minister of State is taking the industry's words at face value.
I was asked to ask the Minister of State a question this morning. A 19 year old who is trying to get driving on a provisional licence could not get insured so he went to a broker. The best price this broker could get this 19 year old living in rural Ireland was €12,319.78. The Minister of State says that I am wrong but I can give him the quote.
I ask the Deputy to do so please.
I will. I cannot believe the Minister of State is suggesting that I am putting incorrect information-----
I am not saying that. I am saying there is something wrong in what the Deputy is saying.
There is something wrong. The insurance industry is ripping off its customers. It is doing so through dual pricing, exaggerated costs, and the misleading information it puts into the public domain. We need to get a grip on this issue and to deal with it. It is up to the Government to take this industry to heel.
In recent days, Cork BMX Club has had to cancel an event because Cork City Council, which was to host the event, was not satisfied with the insurance cover offered by the parent body of the club. This is just a symptom of what is happening. The scale of this crisis is growing with each passing day. The Minister of State knows well that many businesses, when the time comes to renew their existing policies, will not only be unable to get affordable cover but will be unable to get any cover at all. This is particularly true of businesses in the leisure industry. This is a real issue.
When the Minister of State talks about judges-designate starting work, is he saying that they will start working on the judicial council or that they will start working on the personal injuries committee itself, which is what we need? With regard to fraud, my understanding is that the funding has not been provided to enable An Garda Síochána to do the work it is required to do to tackle fraud, even under the new divisional structure that has been outlined.
I will come in on this matter because a number of the questions were directed at me. Deputy Michael McGrath was good enough to confirm that the measure of my engagement on any particular issue cannot be measured solely on the number of meetings I have. I confirm to the House that I have been directly involved in the completion of each of the steps to which the Minister of State, Deputy D'Arcy, referred in his opening statement, as I should be. He went through the position with regard to the personal injuries guideline committee and the progress that is likely to be made in setting up the judicial council. I have been involved in all of that because of the scale of the issue. I am absolutely aware of the problems this issue is causing for businesses, those involved in leisure activities and those who depend on leisure activities. Deputy Michael McGrath also raised an issue regarding the work of the justices and asked when they will begin work in this area. Their work will begin with the personal injuries guidelines committee.
Straight away.
With regard to Deputy Pearse Doherty's point, key figures within the insurance industry have given a commitment as to how they will respond when this work is under way. The Government and I intend to hold them to account in that respect.
Will the Minister publish that commitment?
State Aid Investigations
Pearse Doherty
Ceist:31. Deputy Pearse Doherty asked the Minister for Finance the legal fees and the companies and firms to which the fees have been paid disaggregated by amount paid to each firm in the appeal case regarding the ruling of the European Commissioner for Competition in 2016 on illegal state aid in respect of a company (details supplied); and if he will make a statement on the matter. [46893/19]
To refer to the last question, there is no written commitment from the industry as there was in the past. I know that only too well. If there is, I would love to see it published. With regard to Question No. 31, there is €14.3 billion sitting in an escrow account which, according to the European Commission, is owed in tax to this State. The Minister's Government is fighting against the European Commission's ruling that Apple made use of illegal tax arrangements. Not only is the Government now trying to throw away €14 billion to which the State is entitled, but it is hiding how much money it is spending on fighting this case from the people and taxpayers of this State. We are entitled to know how much of our money the Government is spending defending the Apple case and to whom it is paying it. Will the Minister tell us that today? He has given us similar information in the past, but he has now decided to hide it.
Ireland has never accepted the Commission's analysis in the Apple state aid decision and is challenging the Commission's decision before the European courts. An application to annul the Commission decision was lodged with the General Court of the European Union. The case was granted priority status and the confidential written proceedings have taken place in private over the last number of years. The oral hearing took place in the General Court of the European Union on 17 and 18 September. The timing of the judgment is entirely at the discretion of the court.
However, it will most likely be several years before the case is ultimately concluded. We fully respect the judicial process and, as can be expected, have robustly defended our position throughout it.
Over the past seven years, approximately €7.5 million, including VAT, has been paid for external services relating to the case, of which approximately €3.9 million relates to the recovery process. This includes all legal costs, consultancy fees and other associated costs. These fees have been paid by the Department of Finance, Revenue Commissioners, NTMA, Central Bank of Ireland, Attorney General's office, and Chief State Solicitor's office. The cost of legal fees is lower than the total cost as other fees, such as those relating to translation services, are not included.
Five companies are covered by the Deputy's question on legal fees and the companies and firms to which the fees have been paid. The approximate totals paid to each of these to date, inclusive of VAT, are as follows: William Fry, €3.2 million; McCann Fitzgerald, €523,000; PwC, €611,000; Baker McKenzie, €148,000; and Hogan Lovells, €3,900. The total paid to external individual counsel engaged is approximately €2.8 million. As the Deputy will be aware, while I previously provided details of payments to individual counsel, I am no longer in a position to do so, based on legal advice provided to my Department. It is not possible to determine future costs of the case. However, as it is an important issue for the State, the case will continue to be resourced as needed.
Gabhaim buíochas leis an Minister for laying out the vast amount of taxpayers' money the Government is using to fight the European Commission to ensure we do not get €14 billion of money it believes we are owed. It would be laughable were it not so serious. Many areas could do with a touch of that €14 billion, on which the Government is spending millions of euro of our money to ensure we never get. The Data Protection Commissioner and the Information Commissioner have laid bare the Minister's deception. There are no rules that would prevent him from releasing the information he is now withholding. The Government is misusing procedure and deliberately misinterpreting rules to hide its true intentions. GDPR is meant to protect consumers. It is not supposed to be used to hide efforts to help millionaires or billionaires rip off the Irish people. The Office of the Information Commissioner stated that data protection legislation does not prohibit the release of personal information relating to third parties. The Data Protection Commission, DPC, has gone even further than that and provided details similar to the ones I am seeking today, for which many Members have been asking for many months. It has provided information on both firms and individual barristers. It did so after GDPR came into effect, and I think the Data Protection Commissioner is more of an expert on data protection than the rest of us. Given what I have said and based on the rulings of the DPC, does the Minister not believe it is now appropriate for him to put all the information on the record of this House?
The Deputy used the word "deception". On what basis is he making that claim? He asked me how much money is being paid, and I answered him. That €14 billion is a huge amount. As he has a deep understanding of these matters, he knows that in the event of us losing this case, many other countries would immediately challenge Ireland for their perceived share of the €14 billion. Our country would face demands from many members of the EU and beyond for what they would perceive as their share of that fund.
The Deputy also claimed that I was in some way unwilling to make this information available. I have made the information on the legal fees available to him. There are differing views on whether GDPR covers this matter, which were brought to my attention. I take those views very seriously. I reviewed the matter yesterday and the legal advice provided to me is clear that I can name the overall total amount paid, the firms, and the total amount paid to individuals, but I am not able to provide the information per individual. I will, or course, make any other information available to the Deputy.
The DPC has provided information on firms as well as individual barristers. That is the key point here. That information was provided after GDPR came into effect under the Data Protection Commissioner, who is an expert on matters of GDPR and data protection. The granular detail I requested is not being provided, and I ask the Minister to re-examine that request.
He claims that other countries would come for a slice of the €14.3 billion that both the Commission and I believe is owed to this State, for which there is no evidence. Which other finance ministers have contacted him directly and said they will come after part of that €14.3 billion if we lose this case? I ask him to put that on the record of the House in order that we can all be informed. Neither I nor my party has been informed of that. If the Minister has been told by these countries that they will be waiting in the wings, ready to take action against this State, then so be it. In that case, at least we would legally have the €14.3 billion and would be spending legal fees trying to protect it rather than to ensure we never see a whiff of it.
The Deputy alleged that I had committed some form of deception. He is only too quick to challenge the Minister of State, Deputy D'Arcy, whenever he raises any issue with him. By making the charge of deception he is alleging that I am concealing something from the House. I was asked a set of questions about cost, which I have answered transparently, as is my duty to the Deputy. He equally has a duty not to make charges of deception against me over which he cannot stand. I have reviewed the advice made available to me on the GDPR consequences of providing information on individual senior counsel. That advice is clear, but I will provide any other information relating to total cost, cost by firm, and the aggregate cost we are paying to individual senior counsel. I accept that €7 million is a significant amount and that I should be held to account by the Oireachtas on how it is spent.
The Apple case has been raised with me by other finance ministers. They have raised it with me and want to know its status.
That is not the question.
I believe that in the event of us losing this case, other jurisdictions will look for access to the money. While I do not believe we will lose the case-----
Have they raised it with the Minister? That is the question.
-----the risk of that happening is the very reason the money cannot be spent. This money is not ours. We are not a global tax collector.
None of the finance ministers said they would take a case against the Government.
We need to defend against this claim.
That is the problem.
EU Budget Contribution
Joan Burton
Ceist:32. Deputy Joan Burton asked the Minister for Finance the progress of talks on the 2021 to 2027 EU budget and the multiannual financial framework, MFF; his views on reports that the contribution by Ireland would raise by a tenth to 0.91% of gross national income, GNI; and if he will make a statement on the matter. [46555/19]
Does the Minister for Finance believe Ireland will have to significantly increase its contributions to the EU multiannual funding budget, which is due in 2021? It has been suggested that Ireland will have to pay, on average, up to €760 million more into the EU budget per year. It has also been suggested that our net contributions will go up to as much as 0.91% of our GNI. This is complicated by Brexit. The cost of this increase could be close to the cost of a difficult Brexit deal.
I thank the Deputy for raising this matter. The MFF was most recently discussed at the October European Council meeting, where leaders exchanged views on key issues such as the overall level of expenditure, the volumes of expenditure in the main policy area, and financing, including revenues and corrections as well as conditionalities and incentives.
In light of the discussion, the Council called on the Presidency to submit a negotiation box with figures in advance of the European Council meeting in December 2019. The discussion largely reiterated the differences among member states on the matter. There was no narrowing of views on the overall level of expenditure, with a number of net contributors reiterating the need to keep the overall level at 1% of EU gross national income, GNI. While there was strong pushback from the net recipients on the Presidency proposals, which they consider too low, they argue for an overall level of 1.1% of EU GNI. On the allocation of volumes between areas, net recipients expressed strong dissatisfaction regarding proposals on the CAP and cohesion, which they view as requiring further cuts to the Commission's proposals, for cohesion in particular. The issue of rebates also highlighted different positions, with some net contributors stating the need for a correction mechanism as their contributions rise, with others in favour of their phasing out.
The Taoiseach has noted that while Ireland's contribution is likely to increase significantly, we need to talk about the benefits and not just the costs of EU membership, including access to the Single Market, which vastly outweighs EU budget contributions. In respect of contributions to the EU budget, Ireland is likely to see significant growth in its contributions as a result of continued economic growth. For example, under a 1.1% GNI ceiling, the average annual contribution will be €3.3 billion. I will outline the various cost consequences if it is below 1.1%.
Additional information not given on the floor of the House
The Commission published data last week on the level of contributions that member states are likely to make under the next multi-annual financial framework, MFF. I welcome the addition of such data to the debate to provide all parties with a realistic framework within which to negotiate. While Ireland recognises the Commission's figures, member states have differing approaches to the calculation of both contributions and receipts, which can lead to differences in forecasts. The exact level of contributions will depend on the final MFF negotiations, not least the level of overall expenditure and the own resources to be applied. Ireland's contributions to the EU budget in 2018 amounted to just over €2.5 billion. In 2019, we expect final contributions to be slightly below this figure.
The Minister agrees it is a significant issue. The vast majority of people welcome and recognise the benefit to Ireland of being a member of the EU. Given the likelihood of the UK leaving the EU, however, and the changes being made in any event in the multi-annual financial funding programme, it is important that the Minister tell the House and the people the parameters of the discussion. As recently as 2017, the contribution by Ireland to the EU budget was €173 million, whereas last year, it rose to €315 million. My understanding, which the Minister has not contradicted, is that for 2021, it is likely to increase by approximately €760 million. We all appreciate that it will be a significant imposition and burden on future budgets. Will he broaden the tax base to ensure that ordinary workers will not pay the bulk of it, and change his view on bank taxation?
Ordinary workers benefit from our membership of the EU. The Deputy asked a question as to the cost consequences of the various scenarios articulated by other member states and I began to outline the answer, the rest of which will be given in written format. If, for example, the ceiling is at 1%, from 2021 the figure will be €2.575 billion, rising to €2.77 billion in 2023. If it is beyond 1%, the contributions will be higher. Ireland has not outlined, and I will not do so now, our preferred figure because I anticipate the negotiation will continue for some time. On many occasions, however, I have made clear the Government's priorities in respect of the matter, namely, continuing to support farmers and the agricultural community through the CAP system and ensuring the appropriate funding is in place, and supporting research and innovation and the programmes that are important to our island. Our ordinary workers benefit from membership of the Union and access to the Single Market. Even on a no-policy-change basis and even if the current way of calculating payments were not to change, the fact that our income is growing means our commitment, too, will grow.
The Minister mentioned the significance and importance of the agricultural budget and the CAP. The proposals are to "green" the CAP. Will the Government agree to that? Our farmers will have to adapt to more green-friendly agricultural policies, including examining carbon emissions and considering ways to decarbonise the agricultural economy. While we all realise how important agriculture is to Ireland, changes are coming down the road and we will not have much of a choice about them. What planning is the Government doing in that regard? It has spoken about forestry but we have not seen any plans. Remarkably, in the Minister's Budget Statement, I never heard the words "tree" or "forest". It was mentioned at the back of some of the budget documents but he never even mentioned it. It is very important for the future of both Irish farming and the budget.
The Deputy used the word "burden" in respect of the contribution we will need to make to the EU. It is the case that we will need to make a higher level of payment but this is in the context that Ireland has only recently become a net contributor. For decades, we were a net beneficiary but that has changed, and we now pay in more than we receive. As we look at how we will frame our negotiations, it is critical that we reaffirm how important it is to be in the Single Market. The fact that our income has grown, in itself, means we will have to make a greater contribution.
The Deputy asked about the status of the likely change to the CAP. The Minister for Agriculture, Food and the Marine, Deputy Creed, is involved in a great deal of work on the matter, in a coalition of like-minded agriculture ministers, to ensure we can progress our priorities for the scale of the CAP and how it will develop. We want to find ways of ensuring that the CAP will continue to be environmentally sustainable while meeting the needs of Irish farmers and agriculture.