Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 21 Sep 2021

Vol. 1011 No. 3

Ceisteanna Eile - Other Questions

Covid-19 Pandemic Supports

Jennifer Murnane O'Connor


6. Deputy Jennifer Murnane O'Connor asked the Minister for Finance the number of companies in counties Carlow and Kilkenny that have registered under the business resumption support scheme. [44780/21]

James Lawless


14. Deputy James Lawless asked the Minister for Finance the number of companies in County Kildare that have registered under the business resumption support scheme. [44791/21]

Joe Flaherty


16. Deputy Joe Flaherty asked the Minister for Finance the number of companies in counties Longford and Westmeath that have registered under the business resumption support scheme. [44869/21]

Marc MacSharry


25. Deputy Marc MacSharry asked the Minister for Finance the number of companies in counties Sligo, Leitrim and Donegal that have registered under the business resumption support scheme. [44820/21]

Barry Cowen


37. Deputy Barry Cowen asked the Minister for Finance the number of companies in counties Offaly and Laois that have registered under the business resumption support scheme. [44797/21]

Christopher O'Sullivan


41. Deputy Christopher O'Sullivan asked the Minister for Finance the number of companies in counties Cork and Kerry that have registered under the business resumption support scheme. [44793/21]

John Lahart


50. Deputy John Lahart asked the Minister for Finance the number of companies in Dublin city and county and the number of companies in County Wicklow that have registered under the business resumption support scheme. [44788/21]

Brendan Smith


54. Deputy Brendan Smith asked the Minister for Finance the number of companies in counties Cavan and Monaghan that have registered under the business resumption support scheme. [44786/21]

Dara Calleary


62. Deputy Dara Calleary asked the Minister for Finance the number of companies in counties Mayo and Roscommon that have registered under the business resumption support scheme. [44800/21]

The new business resumption support scheme, BRSS, for businesses with a reduced turnover as a result of public health restrictions was launched earlier this month and is open until 30 November this year. Can the Minister tell me the number of companies in counties Carlow and Kilkenny that have registered for the scheme?

Question No. 6 is grouped with a number of other questions. I advise Deputies that if the discussion on this group of questions has not concluded after 18 and a half minutes, I will draw it to a conclusion at that point.

I propose to take Questions Nos. 6, 14, 16, 25, 37, 41, 50, 54 and 62 together.

The business resumption support scheme is a new support for businesses impacted by Covid-19. It is administered by Revenue. To qualify for the scheme, a business must carry on a trade or trading activities the profits from which are chargeable to tax under case I of Schedule D. The business must possess a valid tax clearance and continue to maintain tax clearance for the duration of the application period. Under the scheme, businesses with a turnover that reduced by 75% in the reference period, that is, 1 September 2020 to 31 August 2021, compared with 2019, will be eligible to apply for a once-off payment based on a percentage of their average weekly turnover for 2019, subject to a maximum payment of €15,000, provided they meet the qualifying criteria. The payment is calculated as three times the sum of 10% of the average weekly turnover, up to €20,000, and 5% on any excess of average weekly turnover above €20,000, subject to a maximum payment of €15,000.

Registration for the scheme opened on 6 September 2021. Once registered, eligible businesses can make a claim at any time up to 30 November 2021 for a single-payment support via the Revenue online service. I am advised by Revenue that, as of 16 September, 420 businesses, covering 438 trades, have applied for the scheme. A total of 154 businesses have claimed the BRSS in Dublin, as well as 44 in Cork, 20 in Kerry, 18 in Mayo and 14 in Westmeath. When there are fewer than ten businesses registered for any scheme, the exact number is not provided due to Revenue's statistical disclosure protocols, which support the obligation to protect taxpayer confidentiality. In counties Carlow, Cavan, Donegal, Kildare, Kilkenny, Laois, Leitrim, Longford, Monaghan, Offaly, Roscommon, Sligo and Wicklow, between one and nine companies have applied for the BRSS in each case.

Revenue publishes detailed statistics each week on the operation of Covid-19 support schemes, which now include information on the BRSS. These statistics are available on the Revenue website.

This new support scheme for businesses with a reduced turnover as a result of the public health restrictions is most welcome. It is especially welcome that it is open to businesses that may have previously qualified for the Covid restrictions support scheme, CRSS. My chief concern is to ensure enough information is out there about what supports are available. A number of schemes have had criteria that many businesses could not meet. Certainly, there was much confusion in this regard among people who came to me for assistance. It is important that we look at this issue carefully in order to help as many businesses as we can. I am concerned that the new scheme is not very well advertised. Given the figures the Minister gave, I remain concerned. There have been instances where businesses got lost in whether they qualified for different schemes. It is important that we have other schemes working alongside the new scheme. We must ensure the information is out there and gets to the businesses that qualify for the BRSS. I acknowledge that criteria were given but it is important that the information gets to people. I have concerns about the uptake thus far.

I thank the Minister for his reply. First, I want to acknowledge that the Government has supported businesses extremely well through the lockdowns and for the past 18 months. As a Kildare representative, I acknowledge the additional supports given in the second lockdown that Kildare endured, which some counties did not. There were comments from Opposition Members a few moments ago noting that the budget and finances are under pressure. Of course they are. Deputy Tóibín has left the Chamber but I say to him and any other Member raising this point that they cannot have it every way. They cannot complain about a deficit arising and also complain about businesses and individuals not being supported. We cannot do it all but the Government has tried admirably to balance different needs. Extraordinary measures were taken in extraordinary times, and taken without reservation. I commend the Government on doing so.

I share Deputy Murnane O'Connor's concerns about businesses' awareness of the new scheme. I am a little concerned that Kildare is one of the counties with fewer than ten applicants. I canvassed a number of business owners before tonight to see what the reaction has been to the scheme. I agree there is a degree of confusion about it. It was put to me that the requirement for a 75% reduction in turnover is an issue. A business, especially a bricks-and-mortar business, that has had a turnover reduction of 75% may not be in business any more. That is a cause for concern. We must all do our best to advertise the scheme following this discussion.

I commend both the Minister, Deputy Donohoe, and the Minister, Deputy Michael McGrath, on the extensive supports provided to date. Like many other Deputies, I toured my constituency over the summer and met people who have reopened their businesses. Most of them told me they would not have been in a position to do so without the extensive support provided under the CRSS, the restart grant, the employment wage subsidy scheme and, for many in hospitality, the outdoor dining scheme, which was incredibly important. The BRSS is a further boost for businesses. I am surprised to hear the uptake figure of 44 for County Cork. I would have expected it to be higher. However, businesses have until the end of November to register and I encourage them to do so.

Will the Minister comment on a specific issue? We have a situation where, because of international issues, utility and energy bills have skyrocketed. This will have a massive impact on SMEs in particular. I ask him to consider including in budget 2022 some measures to cushion the blow for the SMEs that will incur extra costs.

I thank the Deputies for the points they made, some of which I will try to address.

First, in terms of the number of covered companies and employers that have registered for the support scheme, this reminds me of where we were with the CRSS, in that registration at the start of the scheme tended to be lower than I expected. When we launched the scheme, I was asked in the early phase of that why more employers did not register. What happened is that towards the latter end of the registration, the number of companies in the scheme increased considerably. While I take the point that the figure at the moment of less than 500 is low, it is what I expected and the key point will be how many companies are registered as we move into October, and we will certainly look at that.

Regarding awareness about the scheme, I take the point that was made by the Deputy. We will examine how we can publicise and explain the scheme a bit more because it is a good scheme, and we want to make sure businesses are aware of it.

I thank the Minister. I wrote to him regarding concerns from many businesses that were locked out of the previous supports, which asked what reopening might look like and how long it might take for them to recover. Supports such as these are a significant help. It is testament to the commitment of the Government to the country to get it up and running, which is so important. I especially welcome that the schemes are open to those who do not have a physical premises. It is most welcome that we are working together to support vulnerable and viable businesses.

What is most useful is that self-employed people, charities and sporting bodies that may have missed out previously can now access assistance. The Covid-19 crisis showed us that without doubt charities, community and voluntary organisations and social and sporting enterprise are at the heart of a strong country, but with supports that are vulnerable. It is great to see them being able to avail of such supports, which are so important. The Minister knows that €445 million was lost to charities, as many clubs and charities were not able to fundraise. The supports for them are most welcome.

Many businesses availed of the CRSS and previous schemes, but at one stage there was an issue in that an applicant had to be a rate payer to avail of it. I welcome that the schemes have been broadened since. Some businesses made a success of lockdown and managed to become continental in their outdoor offerings. In some businesses that was easier to do than in others. We all adapted to that. There were pop-up businesses all over my constituency, which thrived and did quite well, that may not have existed previously. People got into a new way of living and local butchers and grocers were supported perhaps more than previously as people were at home and were able to spend extra time cooking and suchlike as well. Perhaps some businesses saw an unexpected bounce, dare I say, albeit that the overall prospect was bleak.

Regarding the 75% turnover, it was said to me that a business that has seen a drop of 75% in turnover would be lucky to still be in business no matter what the business might be. The Government has done what it can to mitigate that, and I commend it on that.

I believe that the uptake of the scheme will increase significantly as time goes by. I want to come back to the energy crisis and the cost of electricity for small businesses. It was encouraging to hear the comments of the Minister for Public Expenditure and Reform, Deputy Michael McGrath, about measures in budget 2022 for individuals and households in terms of social welfare payments, the fuel allowance, the living alone allowance, etc., to cushion the blow. I would love to see some similar measures for SMEs that are struggling to make those margins. The higher cost of electricity will contribute to that as well. I would love to hear a comment from the Minister on that.

Of course the Government will consider if we can do anything on the issues the Deputies raised. The EWSS is in place and we have to make a decision as part of the budgetary process regarding the future of the scheme, how long it will be in place and what subsidies will be available for its future duration. A scheme such as that will contribute to the ability of employers to recover from the harm of Covid and deal with the costs they have to confront as they look to reopen. When the Tánaiste is working on the proposals for his Department, I am sure he will also examine whether any measures can be taken to support businesses at this challenging time.

I will take on board the comments that colleagues have made on the BRSS and I hope when we next debate this in the Dáil, we will see an improvement in registration for the scheme.

Insurance Industry

Aindrias Moynihan


7. Deputy Aindrias Moynihan asked the Minister for Finance if he is satisfied that insurance premiums are being successfully reduced for motorists, businesses and other users in line with the revision of guidelines for personal injury awards; and if he will make a statement on the matter. [44813/21]

The cost of insurance is a significant burden for drivers and many businesses. We have often heard from the insurance companies that the cost of claims is a big feature in driving the cost of premiums. The Government is getting stuck in and dealing with the cost of insurance, but we need to know that it is being filtered through, that the insurance companies are acting on it and passing on the benefits such as the personal injury awards being capped, and that consumers are going to get the benefit of those kind of measures.

Seeking to secure a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for the Government. It is my intention, along with the Minister, Deputy Donohoe, to work to ensure that the commitments outlined in the programme for Government are progressed in accordance with the Action Plan for Insurance Reform. One of the key achievements of the action plan was the adoption of the new personal injuries' guidelines in April this year, which was approximately seven months ahead of the expected date. I thank all of those involved for working to bring the guidelines forward as early as possible. They provide much greater certainty regarding award levels, in addition to reducing awards for many common injuries, and should encourage greater use of the Personal Injuries Assessment Board, PIAB, to settle claims. We need to make sure that the guidelines achieve these key aims and we will monitor their implementation as part of the action plan. In that regard, it will be important that insurers respect the guidelines in direct settlements, so they do not risk undermining them from the outset.

The Deputy should rest assured that both I and the Minister have been holding the insurance industry to account in respect of commitments that it has made with regard to lowering insurance premiums arising from reduced personal injuries guidelines award levels. I have held meetings with the main insurance companies in the market. These engagements were positive, with insurers indicating that consistent implementation of the guidelines should result in lower premiums. I will meet with them again soon to review their response to the guidelines and other insurance reforms.

Separately, I note the Central Statistics Office's most recent consumer price index, CPI, data show continuing decreases in the price of motor insurance. In that regard, motor insurance prices are now 36% lower than at the peak in 2016. As such, I believe that we need to look at the price reductions in the context of the Government's overall reform strategy, as important reforms to the duty of care and reform of the PIAB will further help to improve the affordability and availability of insurance for all customers. That is now a key priority in the period ahead. I assure the Deputy that work remains ongoing across the Government to deliver these elements of the action plan.

It is positive to note the various meetings with the insurance companies because many people feel that while the Government has taken measures such as the capping of personal injury awards, insurance companies are not passing on the full benefit of that. For example, a young driver, James, taking out his first insurance policy earlier this year received a quote in April, before the cap, and again two months afterwards and bought at the same price, getting no benefit from it. The insurance companies passed on no benefit. Similarly, another person buying van insurance secured only 5% of a drop in the cost of insurance. There is a limited market where one can buy insurance products for vans. It is not clear that insurance companies are giving the full benefit and I want to make sure that they do. What measures are being taken to ensure that they give the full benefit to motorists in reduced premiums?

I thank the Deputy for highlighting the situation for motor insurance policies and for van drivers. The man or woman with the van, as the case may be, is a key priority for the Government because they are the small employers or self-employed people who are the backbone of many industries in locations throughout the country.

What I will say is that, in July, before the recess, we met with PIAB and it said the early indications of settlements at that stage were they were being implemented by the insurance companies and by PIAB in line with the new judicial guidelines that had been published towards the end of April. The rate of acceptance will depend on how many people choose to take those to court, and we will be seeking updated information on that now that they have been in operation for a couple of months.

The benefit of all of this is that it will ultimately lead to a reduced number of actions going to court and the consequent legal costs will reduce as well. That should feed further into price reductions for motorists.

Many businesses will have specialist insurance and will have only a limited number of providers available to them. Again, it is coming back to that limited market, like the man in the van, or businesses such as bouncy castles, or the example we saw on RTÉ in the leisure services. They are dealing with a very limited number of insurance companies and they are seeing increases or are not able to get services. Despite the fact these measures have been taken, insurers are not passing on the benefit, it seems. The leisure business we saw on RTÉ, for example, saw more than a trebling of its insurance policy to more than €80,000. What teeth can be brought to bear on these insurance companies to ensure they pass on the benefits they are now getting from those capped insurance claims?

Deputy Pearse Doherty wishes to come in on this issue. I understand that is at my discretion. I call Deputy Doherty.

Deputy Moynihan is absolutely right. We need the legislation to look at whether they are passing on the full amount of reductions. We all want the same thing here - we want money in people's pockets - but the Government needs to bring forward that legislation. Even with the changes Liberty Insurance has brought in, it is next to impossible now to compare the new quotes because it has changed its whole structure in terms of how it is issuing quotes. I renewed my insurance with Liberty Insurance just last week. The base price for a new customer, and I went in as a new customer because I am not going to get sucker-punched by them, was €300 less than a renewal quote. That is what is happening in insurance. Deputy Moynihan is 100% right. The Government needs to take out the stick. We have waited long enough. The proper reductions are not happening as a result of legislation this House has passed.

I thank both Deputies for those remarks. It proves the point that one of the main actions in the Government action plan for insurance is to promote competition. That is the office I chair. I insist that when people get their insurance premium, the first thing they must do is lift the phone and make an inquiry. Normally, we have found, when people make an inquiry, they get a reduction. If people choose not to do so, we will be encouraging them through increased competition.

Another point I would make to people who have insurance, especially on the business side, is that if they are dealing with a broker and they are having difficulty getting quotes, they should please try another broker. Some people are slow to do that. They need to move around.

In regard to the leisure services, obviously, I cannot comment on an individual case that was highlighted on RTÉ recently but we have to look at the risk and any claims that can arise in this particular industry, and that was exacerbated by Brexit. That is why I have met and am meeting with the IDA to encourage new companies to come into the country, and we have had positive news on that in recent months.

Tax Code

Gerald Nash


8. Deputy Ged Nash asked the Minister for Finance his position in respect of the OECD corporation tax reform process; and if he will make a statement on the matter. [44840/21]

Bernard Durkan


209. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department continue to monitor the situation around the proposed corporation profits tax and its potential impact on Ireland's potential to attract investment; and if he will make a statement on the matter. [45155/21]

Bernard Durkan


211. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he expects Ireland’s competitiveness in terms of foreign direct investment to continue notwithstanding any changes in corporation profits tax; and if he will make a statement on the matter. [45157/21]

Bernard Durkan


227. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which Ireland remains an attractive location for foreign direct investment; and if he will make a statement on the matter. [45265/21]

Amid all the noise on global corporation tax reform and the process, it is appropriate at this stage that the Minister would update the House on his engagement with the OECD on the global corporation tax process. He will be aware from the Labour Party submission to his Department's public consultation process, a process I called for and that I welcome, that our considered assessment is the State should sign up in full to both pillars of the process, including a commitment to a marginally higher minimum effective rate of corporation tax than the 12.5% headline rate we had in operation for the past quarter of a century.

I propose to take Questions Nos. 8, 209, 211 and 227 together.

The 140 members of the OECD's inclusive framework on base erosion and profit shifting, BEPS, continue to work on a two-pillar proposal towards finding a consensus solution to address the tax challenges of digitalisation and globalisation of the economy. Many of the key policy decisions of the two-pillar proposal, including the rate of the proposed minimum effective tax rate, remain undecided.

I have been very clear on my position. I am broadly supportive of the agreement but have a very significant and serious reservation, in particular in respect to a commitment to a rate of "at least 15%" for a global minimum effective tax rate. While I remain very committed to and supportive of the process, that is the reason Ireland is not currently in the consensus. Given the economic importance of the OECD proposals to Ireland, I held a public consultation on the proposals which ran until 10 September. These submissions are now under consideration by my Department. There is a desire for Ireland to be part of the international agreement but, at this stage, there is a lack of clarity on what is in the agreement. The process must bring about certainty and there are too many significant unknowns for now.

Ireland has long been an attractive place for foreign direct investment and has become home to many of the world's largest multinational enterprises. Aside from the headline rate of taxation, there are a significant number of advantages Ireland has to ensure it will continue to be an attractive location for foreign direct investment. As we move forward, I remain committed to engaging in the OECD process but I believe that, in any of the scenarios or horizons Ireland will confront, we will continue to be in a position where we can be competitive and continue to be in a position in which work can be created and jobs created and kept in our country.

I thank the Minister for that reply. I have some appreciation of the situation he is in and I genuinely believe he believes the decision at this stage not to sign up formally to pillar 2 of the process is, as he sees it, in the national interest. We have two different, competing perspectives in terms of what the national interest is. That is informed, I believe, by our different political and economic philosophies and traditions, and I respect and fully understand that.

During our consultation process internally in our own organisation and with academics, business leaders and others, we became convinced that Ireland can live with a marginally higher rate of corporation tax. We are convinced of that and persuaded of that. This is not 1997, when it was first announced by my colleague, the then Minister for Finance, Ruairí Quinn. It is not 2007 either. It is 2021. I think we are in a good position to trade on our strengths, our skills, our productivity and our competitiveness, and not necessarily any longer with a disproportionate focus on what is, by any objective stretch of the imagination, a low rate of corporation tax. I hope the Minister is reassured by remarks made, for example, today, by people like Feargal O’Rourke that we do not have anything to fear in terms of the continued pipeline of investment into Ireland because of our attractiveness as a destination for multinational corporations.

I thank Deputy Nash for his point and I, of course, respect also the judgment he is bringing to bear on this and the view of the Labour Party on it.

The key point I would make to the Dáil this evening, however, is the current text in relation to this agreement contains far too many uncertainties for me to be able to recommend to the Government and then to the Dáil that we should sign this agreement. The Deputy in good faith made the point about a marginally higher tax rate. The phrase at the moment is "at least 15%". I have an understanding of the process that lies behind any agreement within the OECD and how it would be implemented globally and within the European Union. The description of a potential rate as "at least" a figure does not give the confidence and certainty that I need to be able to make a recommendation to this Government.

It is but one of a number of issues and these are issues that I will be working on with the OECD and other international partners across the coming period.

I thank the Minister for further clarifying his position, and that is what I understood it to be.

My preference would have been that the State would have signalled our intention to fully sign up and explicitly support pillar 2 for a range of different reasons. I fear, because of the continued delay in us committing to signing up to pillar 2 - I appreciate the unknowns that the Minister is reflecting on - that will mean that we are coming at this from a position of relative weakness rather than relative strength.

I understand the point the Minister makes regarding a rate of at least 15%. It has been damaging in the sense that we have wasted some opportunities over the last period of time to build alliances to ensure that we may only go to 15% rather than a rate that may be above 15% that might cause the Minister and the Government some difficulty. That is the concern that I have.

What this over-reliance on a very small number of multinational corporations to fund our services reveals is a disproportionate focus on investment of multinational corporations when, in fact, we should be probably focusing more on a new industrial strategy that would allow us to support indigenous Irish enterprise to innovate and go global from Ireland.

At the conclusion of this process, it will be appropriate for me to give a broader perspective on the work that has happened in the OECD, in the European Union and elsewhere in pursuit of our objectives regarding corporate tax policy and the stability of the rate. This is a project that has been going on for a number of years. It is one in which I have been totally involved.

We will get to a point in the coming weeks or months, or maybe beyond that, in which we as a Dáil and as a Government will need to make a very significant decision on an important part of our tax policy. That decision will be whether we enter into or stay out of this agreement. Either decision that we make will carry consequences that the Government and the Dáil will need to be fully aware of.

I would say briefly to Deputy Nash, if I may, that if I had entered the agreement earlier in the process a question that Irish industry and the Dáil would be putting to me is, what I believe the rate will be in the future. As long as it is described as at least 15%, that certainty is not there.

Housing Schemes

Niamh Smyth


9. Deputy Niamh Smyth asked the Minister for Finance if consideration will be given to extending the help-to-buy incentive until 31 December 2022. [44723/21]

Catherine Connolly


13. Deputy Catherine Connolly asked the Minister for Finance his plans to phase out the help-to-buy scheme; and if he will make a statement on the matter. [44834/21]

Can the Minister outline his views on the rent-to-buy scheme? Obviously, it is something that should be coming to an end in December 2021. It is a matter the Minister will be considering in the upcoming budget and I wondered if he would make a statement on the matter.

I propose to take Questions Nos. 9 and 13 together.

This is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive gives a refund of income tax and deposit interest retention tax, DIRT, paid in the State over the previous four years, subject to certain limits.

The scheme was enhanced in 2020 as part of the July stimulus and, in the Finance Act 2020, the enhanced arrangements were extended until the end of this year. Following a commitment in the Housing for All strategy, my Department carried out a review of the scheme as part of its tax strategy group deliberations. The resultant paper was published last week and is available on the Government website.

In the coming weeks, in the run up to the budget, I will be taking stock of where matters stand and taking decisions regarding the help-to-buy scheme having regard to a number of elements, including the overall policy context in which the scheme operates and my Department's deliberations as set out in the recent tax strategy group paper.

My experience, from meeting with constituents, is it has been a useful and helpful scheme, particularly to young people trying to get on the property ladder. The Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, has, within his Housing for All, a suite of measures, but this is one particular one I would advocate should continue.

The Minister will be aware that many of the housing authorities or housing bodies have called for consideration of an extension of the help-to-buy scheme not only to cover new properties or properties that are to become first-time homes, but also second-hand homes. The pandemic has had implications for construction. I suppose the fear is that it will also exacerbate the concern around the cost of building and, ultimately, be passed on to the buyer.

To reiterate the point, if it was at all possible, there is plenty of evidence to show it was a scheme that worked. It is a scheme that we should consider for the future, and also perhaps widening the breadth of it.

I come to this from a different perspective.

I have had the opportunity to read the review of the help-to-buy scheme. I note from the review that the scheme has cost more than four times what was anticipated. This year alone, it will cost €177 million. It was introduced as a temporary scheme. It was announced in 2016, it came into operation in 2017 and as the Minister said, was enhanced later. It was always envisaged to be temporary.

When I look at the review of the help-to-buy scheme - the Minister talks about the options - there were five options mentioned in it. One of them, that would apply to derelict property, was not given much priority, which I am pleased to agree with. The group talked about ending the scheme this year, keeping it for another two years, keeping it the way it was before the Minister enhanced it or else tapering it out. The Minister also points out that there has been no formal review in over three years. The Minister might comment on some of that.

If I may begin with Deputy Connolly, the value of the tax strategy group paper is it lays out different options that the Government can consider in the run-up to the budget.

At this point, I cannot indicate the future of the scheme because the Government has not made a decision on it. It will be made on budget day.

I note what the tax strategy group papers stated about the need for a more fundamental review of the scheme because it has been enhanced. It is now costing more than it has been in recent years. That is because more home buyers are using it and more homes have been built.

I am aware, in answer to Deputy Niamh Smyth, of the value of the scheme and the constituents who were raising this issue with her. I believe this scheme has played a valuable role in allowing and encouraging more homes to be built. I will weigh up all these views in the run-up to the budget.

The Minister stated he will consider that in terms of the upcoming budget. To reiterate the point, my experience has been from speaking with first-time buyers and young couples trying to get on the property ladder and own their own home. This has been very helpful.

In terms of the vacant buildings and second-hand buildings, it is something that perhaps could be considered by Government in the upcoming budget.

I am concerned with the Minister's answer in the sense that I would like it confirmed that there will be a formal review of this scheme. A formal review has not been carried out in three years and if the Minister is to extend the scheme, I would it confirmed that there would be one.

It has been pointed out by the ESRI and Social Justice Ireland that the scheme has contributed to house prices. It has also been pointed out that 40% of the first-time buyers making a claim already had a deposit.

What is even more interesting now is that the Minister stated that more people are using it and that is why it is four times more costly. This is not accurate, when one looks at the paper, for example, taking 2020 and 2019. There were 6,713 applicants in 2019 and the scheme cost €102 million. The following year, there were fewer applicants than in 2020 and it cost more. I ask the Minister to explain that to me now. That is only one example, where there are fewer applicants, 6,227, and it is costing more. In addition, it cost more than four times the original estimate for what was a temporary measure. As has been pointed out in the policy document, there is now a change in policy and there are many other schemes to help first-time buyers. It needs a serious reconsideration.

The reason fewer purchases happened is because of how long the economy was locked down in 2020. There were fewer opportunities for homes to be bought than there would have been in the previous year.

The reason the cost went up is because in the middle of the year we enhanced the scheme. That is the reason.

As to the point Deputy Smyth made, as I stated a moment ago, I am well aware of the importance of the scheme.

If Deputy Connolly is concerned about the answer I gave, she would even be more concerned if I indicated a budget day decision three weeks before the budget. All of these matters will be dealt with on that day.

Flexible Work Practices

Jennifer Carroll MacNeill


10. Deputy Jennifer Carroll MacNeill asked the Minister for Finance the tax incentives and measures that are currently being considered to support continued remote and flexible working options; the potential impact of the increase of remote working options on the financial services sector; and if he will make a statement on the matter. [44684/21]

Emer Higgins


35. Deputy Emer Higgins asked the Minister for Finance the tax incentives and measures under consideration to support remote and flexible working options; and if he will make a statement on the matter. [44681/21]

Aindrias Moynihan


38. Deputy Aindrias Moynihan asked the Minister for Finance if an urgent review will be carried out of the current 10% rate allowed under the e-working tax relief towards heating and electric expenses incurred from working from home given there is no legal obligation in place for an employer to pay an allowance to recompense an employee directly for working at home; the measures that are being taken to address this economic disparity; and if he will make a statement on the matter. [44814/21]

Neale Richmond


56. Deputy Neale Richmond asked the Minister for Finance the tax incentives and measures that are under consideration to support remote and flexible working options. [44880/21]

My question has two parts, the first of which is to ask what tax or other incentive measures are being considered to sit alongside the proposal to have a right to work remotely. Recognising how many financial services firms moved following Brexit, the second part has to do with the impact on them of changing OECD guidance on permanent establishment and tax treatment if some of their employees have moved back to Britain or elsewhere.

I propose to take Questions Nos. 10, 35, 38 and 56 together.

I thank the Deputies for their questions. I am advised by Revenue that, while working remotely does not entitle PAYE workers to a specific tax credit, a combination of legislative provisions and administrative practices provide relief for remote workers who incur certain expenditure in the performance of the duties of their employment from home. It is acknowledged that remote workers may incur expenditure in the performance of their duties from home, such as additional heating, electricity and broadband costs. Revenue currently allows an employer to make payments of up to €3.20 per day to employees, subject to certain conditions, without deducting PAYE, PRSI or USC.

Revenue has also advised that the provision of equipment such as computers, printers, scanners and office furniture by the employer to enable the employee work from home will not attract a benefit-in-kind charge where the equipment is provided primarily for business use. Furthermore, the provision of a telephone line, broadband and such facilities for business use will not give rise to a benefit-in-kind charge where private use of the connection is incidental. Revenue has provided detailed guidance and details of how claims for e-working expenses should be calculated and submitted. All of this is outlined in the tax and duty manual, "e-Working and Tax", which is available on the Revenue website.

Regarding Deputy Carroll MacNeill's broader question on the future of these allowances, I will consider that matter during the budgetary process. As she knows, the Tax Strategy Group, TSG, paper that we published a couple of days ago outlined an international comparison of our rules and grants and how our schemes stacked up versus elsewhere. It also laid out some options for me to consider.

On the Deputy's final point, my Department published just before the summer a publication dealing with the impact of remote working on financial services and the operation of our economy. I do not have a sense at the moment that home working has had any more of an impact on the competitiveness of our financial services sector than it has on any other part of our economy. Indeed, job announcements made in recent days, and even today, show how many large employers and Irish employers have been able to make home working and employment growth happen together. It should be a sign of encouragement to us for what the coming years can bring as we come up with new ways of working away from the office.

We will deal with the matter of support for working from home in the coming weeks. Regarding financial services, while there has been change, I do not currently believe that it has been at the expense of our competitiveness.

I thank the Minister. I know he is considering these matters in the round for the budget, and we are raising them in that spirit. There is an opportunity to enhance people's lives by continuing remote working, which can reduce costs for employers and free up property, particularly in city centres, for repurposing for residential use, which would be attractive.

In terms of employment and taxes accruing, Ireland has benefited considerably from the relocation of financial services firms. Under regulatory requirements, the permanent place of establishment, where board meetings are held, tax treatments and the place of effective management are criteria in determining which territory has primary taxation rights. The OECD relaxed the rules considerably in January, so the situation has changed over time. My concern is that local tax rules take account of these changes and that we not unduly lose employment in the sector.

This week, tens of thousands of people went back to the office or other place of work, but not everyone is back in the office yet. Many are continuing to work from home or are moving to a hybrid model, and we need to support them.

In that context, it is important that we acknowledge the increase in utility bills. The Minister spoke about this matter in his initial contribution. Electricity and heating bills in particular have increased due to energy price rises as well as people working from home. Remote working has been positive for rural Ireland, with towns and villages seeing regeneration. It has been positive for the many people who have had better work-life balances and has had a positive impact on the environment due to less time spent commuting.

Given the benefits of remote working, it is imperative that the Government delivers on its promise to make remote working work. What actions will it take to incentivise working from home and keep utility costs down?

Larger numbers of people have been working from home and, as a result, businesses have experienced reduced costs for electricity, including lighting, rent and so on. Some businesses have been paying the €3.20 daily rate to their employees. Others may not have been able to or chose not to, and their employees must claim tax back. In light of how the daily rate is set up, though, there is a mismatch, in that employees can only claim back a smaller amount than the €3.20. For example, €3.20 over the space of a year is equivalent to approximately €830 whereas someone claiming tax back may get as little as €200. This mismatch needs to be balanced so that people are not disadvantaged if their employers choose one route over the other.

I concur with the points made by my colleagues in response to the Minister's reply, for which I thank him. I emphasise how important it is that, as we conclude the budgetary process over the coming weeks, the Minister and his Government colleagues be truly ambitious in this sphere. The measures that he announced and that are in place are a good start and stand up favourably internationally, but if we are to utilise the opportunities that the pandemic has presented us in many areas, the best opportunity is to ensure that remote working and working from home continue in the positive way that we have seen. The Government's ambition is for 20% of public sector workers to work remotely or from home within a couple of years, but we have to ensure that that is the ambition in every sector. It is vital that we look beyond the status quo. The Minister mentioned a report that had been presented to him this week. It contains a great deal. I ask that he be ambitious and inventive.

Will you be ambitious, Minister?

Always, a Cheann Comhairle. However, we have to ensure that the ambition of today is also affordable tomorrow. This is a matter that the Government Deputies at least are aware of. I am aware of the importance of how we support the move to working away from the office.

Deputy Moynihan made an important point that I will consider, and I thank him for raising it.

Regarding the contributions made by my party colleagues, I will make two points. As they will agree, it needs the agreement of a protocol between employers and employees that is capable of realising the ambition that Deputy Richmond correctly raised. I am eager to see that ambition being realised.

Deputy Higgins made a point about costs, including additional utility bills. This is an issue not just for the Government, but also for employers. I am sure the Deputy will agree that, if there is additional cost, which there will be in many cases, involved in working from home, the role of the employer in how that cost should be defrayed is a dialogue that needs to happen.

If working environments are changing and there is an opportunity for costs to be reduced, it is not appropriate that all of that additional saving is not made available in some way to defray the costs that can arise from working from home. In terms of the protocol - Deputy Carroll MacNeill touched on the changing financial services - these are the kinds of issues employers and employees need, with Government support, to find a way through.

I appreciate both of the points made by the Minister, in particular in regard to the protocol and around the savings business are making and how they need to be passed on to their employees. It is important to make the point that in a lot of cases employers are not necessarily at a point where they can downsize or downscale their offices and, consequently, some of those costs are still there. On the energy costs and bills that are reducing, however, I agree totally that a lot of that should be passed on to employees who are feeling an increase in their household bills.

I welcome that the Minister is considering the supports in the context of the budget. Currently, there are two tools available. It depends on which one the employer chooses, which yields different outcomes for the employee depending on which way it goes. Will the Minister ensure employees will not be disadvantaged any longer by a decision being made by the employer? Will he also ensure whatever change is made will yield a meaningful outcome for employees, especially in a climate where there is a such a change and increase in energy costs, in particular heating, which is one of the biggest portions of the cost?

I acknowledge the change made over the past year in regard to broadband. It was a positive move. I ask that that would be further increased and, generally, that the rate of supports would be increased such that people do not end up disadvantaged because of the chosen option of their employer.

I am grateful to the Minister for his reply and constant ambition not just in this regard but throughout his entire brief. He rightly speaks about the cost, but straying into the Tánaiste's ministerial brief, we need to look at the potential benefit in this area for Ireland not just economically but socially to make us the best country in the world for people to work remotely or from home. This is the potential the pandemic offers. Every facet Government can do, working with industry, working with an entire societal, has huge tangible benefits not just in an economic sense but in terms of a regional dispersion of our population and improving services, quality of life, family time and everything that goes with it.

To go back to the issue the Deputies' touched on a moment ago, Deputy Carroll MacNeill made the point about the financial services sector. It is the case that many companies in the services sector have become more profitable and more successful during this period. In the context then of working from home and the additional costs of that, this is an issue employers and employees need to work together on. It is not always the Government which can step in and provide additional money because the additional money we are referring to is the people's money, which is fixed and finite. In many cases, some employers have become considerably more profitable. The issue of the contribution they can make to home working arrangements is a legitimate point, as the Deputy acknowledged.

On the point made by Deputy Richmond in his concluding remarks, which was touched on by Deputy Moynihan as well, in regard to remote working and all of the opportunity that offers for our country, I can remember when I made the decision to go ahead with the national broadband plan. I can remember the decision and the debate in the House when the then Minister, Deputy Bruton, and I made that decision. I dread to think what the debate on broadband would be like now if we were not in the process of rolling it out.

Question No. 11 replied to with Written Answers.

Credit Unions

Holly Cairns


12. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to fulfil the programme for Government commitment to review the policy framework within which credit unions operate. [44839/21]

Holly Cairns


42. Deputy Holly Cairns asked the Minister for Finance the steps he is taking to enable the credit union movement to grow as a key provider of community banking in the country. [44838/21]

Jennifer Murnane O'Connor


67. Deputy Jennifer Murnane O'Connor asked the Minister for Finance his plans for reform of the credit union sector. [44781/21]

Due to changes introduced in recent years, we have a disconnect between the Department of Finance, which has responsibility for credit union policy, and the Central Bank, which is responsible for regulation but has no remit to appreciate the credit union as a volunteer-led, democratic organisation. The programme for the Government commits to reviewing the credit union policy framework. When will this review be complete and when will the much-needed reforms be put in place to support community banking?

I propose to take Questions Nos. 12, 42 and 67 together.

The programme for Government includes a number of commitments relating to the credit union sector that the Government is progressing. The review of the policy framework is at an advanced stage. Since September 2020, the Department has held extensive engagement with credit union representative bodies to seek their feedback. During June and July of this year, I met with ten credit union stakeholders, including representative bodies, collaborative ventures, service providers, the Credit Union Advisory Committee and the Registry of Credit Unions to gather further information to help inform the next steps of the review.

In terms of supporting and enabling the sector to grow and expand, the following are some recent developments in lending and investment regulations, SME lending, access to finance for retrofit, additional services and investment in approved housing bodies. These developments highlight the potential of the sector to fulfil a role in community banking.

The Central Bank has in recent years completed reviews of both the lending and investment frameworks. Following the introduction of the new lending regulations in 2020, credit unions now have a combined capacity to provide up to approximately €1.1 billion in additional SME and mortgage loans, with further lending capacity available to credit unions that can comply with certain conditions or on approval by the Central Bank. As of June 2021, credit unions had a combined mortgage and SME loan book of circa €372 million, an increase of 18% on the previous year.

The revised investment regulations took effect in March 2018. Under these regulations, credit unions are permitted to place their surplus funds that have not been lent to members in a range of investments, including tier 3 approved housing bodies for social and affordable housing. I am particularly pleased to share with the Deputy that in the past week we have announced that two credit union-backed funds have received approval from the Central Bank. Credit unions will be able to invest up to €900 million in these regulated funds, which will subsequently lend to approved housing bodies. This will provide an additional funding channel for approved housing bodies that have a large role to play in the recently announced Housing for All action plan. I want to make it clear that each of the new funds is open to every credit union in Ireland. The fund will then lend to the approved housing bodies. This was only cleared in the past week or so. It took some months for that process to go through the Central Bank because it was a new process but the funds are now there. I emphasise that the funds for which the regulator gave approval last week are in addition to everything that was in the Housing for All policy announced in recent weeks. As I said, this only got regulatory approval in recent days. This is in addition to what was announced in the Housing for All plan.

In regard to SME lending, 19 credit unions, supported by the Irish League of Credit Unions, ILCU, the Credit Union Development Association, CUDA, and Metamo, were approved in early 2021 by the Department of Enterprise, Trade and Employment for participation in the Covid-19 credit guarantee scheme. Further development of SME lending in a controlled manner could also assist credit unions in growing and diversifying their loan book. SME lending has grown 5.6% year on year to the end of June 2021.

The Government significantly increased the funding available to support retrofit in budget 2021. My officials have been engaging with the Departments of Environment, Climate and Communication and of Public Expenditure and Reform and with the Sustainable Energy Authority of Ireland to support increased credit union participation in green retrofit loan schemes. The Deputy may also wish to note that under the additional services regime set out in the 2016 regulations, credit unions can seek approval from the Central Bank to offer additional services such as current accounts and debit cards. Sixty credit unions have been approved to provide the member personal current account service and a further group of credit unions have recently begun distributing insurance products to their members.

Credit unions play an essential role in so many communities. You are guaranteed to meet a staff member and not to be directed to a machine. We cannot underestimate the importance of that in terms of accessibility. Credit unions have also provided flexible services to people and families who would have been refused by other financial organisations. I would not have been able to do my masters had it not been for my local credit union in Skibbereen.

However, current financial regulations fail to appreciate their community function as cooperatives and the importance of the common bond. Instead they must have excessive limits on their services, and therefore their potential.

They are particularly limited on business and mortgage lending. Concentration limits in the 2019 regulatory requirements put artificial and anti-business limits in place on how much credit unions can lend for these purposes. Will the Minister remove these limits? Credit unions should be monitored through supervisory and reporting tools, not by legislative barriers. Will I be able to come back in?

No, the time is up. There is only one minute.

The Minister of State mentioned some of the engagements he has had. I ask to prioritise engaging with the Credit Union CEO Forum and the ILCU.

On this particular issue, it would feel wrong to not mention Donal O'Driscoll, CEO of the Access Credit Union in west County Cork, who passed away last week. He was a kind and thoughtful man who embodied the principles of the credit union movement. His loss is deeply felt by his family and everyone in the community.

I apologise to the Minister of State but we are out of time. We must proceed to the next item on the agenda.

Written Answers are published on the Oireachtas website.