For the record, Questions Nos. 1, 2 and 6 will be grouped. I call Deputy Doherty.
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
My understanding is that priority questions cannot be grouped.
Yes, priority questions cannot be grouped.
I have been informed that they can be grouped.
I have never seen that in the history of the Dáil. Priority questions are-----.
They can be grouped with other priority questions but not with other oral questions.
I ask that they not be grouped, with the indulgence of the Chair. It is not fair for them to be grouped. Question No. 1 relates to a major issue.
I apologise for being a few minutes late. I was not aware of the change in the time. I did not mean to keep the Cathaoirleach Gníomhach or colleagues waiting. I am in his hands with regard to this. Important announcements were made last night. I am happy to answer questions in whatever way the Cathaoirleach Gníomhach sees fit or whatever way can be agreed by the Dáil. I have been briefed to the effect that these questions are grouped but I am happy, given the seriousness of the issues involved, to handle them in any way the Cathaoirleach Gníomhach feels is appropriate.
I propose that we not group them
I am happy with that.
I thank the Cathaoirleach Gníomhach for that.
Trade Relations
Pearse Doherty
Ceist:1. Deputy Pearse Doherty asked the Minister for Finance to outline the potential impact on employment and tax revenues from possible US tariffs; and if he will make a statement on the matter. [16502/25]
This question relates to the potential impact on unemployment and tax revenues as a result of the announcement of US tariffs. We heard what Donald Trump had to say last night, with 20% tariffs being imposed on this State. Pharmaceuticals will not be the subject of a tariff, although we hold our breath in relation to that. We have the Economic and Social Research Institute, ESRI, and Department of Finance modelling on 25% tariffs and a reciprocal tariff from the EU and their impact in the context of job losses and potential income from taxation. Has any early work been done on what these tariffs will look like when it comes jobs? In all circumstances, the analysis shows that employment will continue to grow, even on the basis of the 25% tariff scenario. The modelling to which I refer estimates that the impact on the public finances would be approximately €500 million. Given what was announced yesterday, it appears that the impact will be somewhat less. Will the Minister elaborate on this matter?
Before I get into the important specifics the Deputy raised, I will reflect on the announcements relating to the tariffs introduced by the Trump Administration. Free trade has been at the centre of the Irish and European economies for many decades. However, it is clear that the global economic landscape has changed. Tariffs are being imposed in respect of trade into the United States at a level that is historically high. We are moving into a trading and economic world that will change. This will have consequences for the Irish economy and the global economy.
To better calibrate how we respond to these unprecedented challenges, we must first aim to understand their potential impact. To that end, my Department and the ESRI recently published an analytical paper where several tariff scenarios were modelled. The analysis showed that modified domestic demand, which is the most meaningful way of measuring our economy from a jobs and income point of view, would be 1% to 2% below its non-tariff baseline over the medium term, depending on the extent of tariffs.
The potential impact on GDP is greater, between 2.5% and almost 4%, although changes in GDP have less impact on the ground. From an employment perspective, we assume it would be around 2% to 3% lower compared with the non-tariff baseline. In that context, we are talking about 55,000 to 85,000 jobs that either might not be created or could be lost or affected due to these measures.
To go back to Deputy Doherty's specific question, given that the position relating to tariffs only became clear last night, the global response is not yet clear. What we will do is begin modelling in respect of what we know. The Government will aim to publish that modelling in the annual progress report that is due to take the place of the stability programme update. We are aiming to do that in the coming weeks.
Given that the ESRI and the Department of Finance have worked out these models, I put it to the Minister that we should very quickly have information on the 20% scenario outlined by the Trump Administration last night. The analysis done by the ESRI and the Department of Finance examined the potential impact of a US Administration tariff and gave us the numbers for it. They also looked at the impact of countermeasures from Europe. These are still unknown, but different scenarios were assumed. In all circumstances, in the context of jobs, public finances, tax, the economy and businesses, it was shown that countermeasures from the European Union would have a significant impact on Ireland.
On modified domestic demand, the analysis carried out was based on a 25% tariff. The Minister referred to it decreasing by 1% to 2% from the baseline. Am I right in saying that we would still see growth right throughout the four-year period that has been assessed? In other words, modified domestic demand and GDP will continue to grow in all scenarios. Indeed, employment would also continue to grow, despite it being reduction from what would be the case in a non-tariff scenario.
Based on the papers published and the analysis we have done, the answer, which is subject to a number of assumptions, is that the Deputy is broadly correct. The issue is what happens to the assumptions. The assumptions in the paper in question assume that investment levels will be stable in our economy. The question is whether the assumption relating to the decisions made, their impact on the global economy and the ability of American companies to invest elsewhere will hold in the time ahead. The second assumption in the paper relates to the fact that we could not at that point identify the impact of sectoral-specific measures and what that impact might do to individual companies or groups of companies in our economy. I have been making the point that on the basis of what we know, we are moving into a scenario of lower growth and lower employment growth. However, I have been equally clear that there are other scenarios that could effect that. This is why, in the time ahead, it is critical that we look at how we can negotiate with the US to see if we can avoid the darker and more damaging scenarios coming to pass.
The key here is negotiation and de-escalation. We need to get to a point where sensible and cool heads prevail. What happened yesterday was an act of economic sabotage by the US Administration in respect of its own economy. What was done will push up prices for American consumers. Obviously, the analysis was based on a 25% tariff, which was more severe than what we have seen, particularly as a tariff of 20% on pharma has been excluded at this point. This would probably allow for GDP growth of approximately 2% to 2.5% in the next number of years, which would be positive. Would that be correct?
In the context of EU countermeasures, I am deeply concerned that we could have a scenario where, as the ESRI and the Department have indicated, countermeasures will impact on jobs, economic growth and the public finances and will obviously push up prices for consumers. What is the Minister's concern in this regard and in the context of the fact that EU countermeasures could give rise to a proper trade war? The US Administration has adopted a unilateral position. We need to get into dialogue with the US Administration in order to try to de-escalate matters and get it to reverse its decision. We have to be careful that we do not step into a trade war.
I am struck by the value the Deputy places on negotiation and dialogue, particularly as his party made clear it would not go to the Oval Office. The Deputy's party leader and the First Minister of Northern Ireland indicated they would not engage with the United States across the St. Patrick's Day programme.
Not true.
That is the case.
She was on a trade mission there the week before.
Given that his party made clear it would not engage politically with the Trump Administration, why is he advocating the benefits of negotiation? Why is he making the case for the benefits of dialogue? I welcome the fact he was doing so, but how is that consistent with the announcement his party made, to some fanfare and prominence, that it did not want to engage with the political Administration and leadership of the United States of America? With regard to the narrative he is developing here, if he does want to see negotiation happening, how does he believe that negotiation could be successful in the absence of the European Union being willing to either consider or implement measures to respond to what the US has done?
It is interesting that the Minister would not answer my question on support for tariffs that will lead to prices for Irish consumers increasing. For his information, Michelle O'Neill was on a trade mission to the US in the week before St. Patrick's Day. We will continue to use our influence. If Deputy Donohoe, as Minister for Finance, wants to score political points on this serious issue, that is disappointing, particularly in light of what we are facing.
Trade Relations
Cian O'Callaghan
Ceist:2. Deputy Cian O'Callaghan asked the Minister for Finance the mitigation measures his Department will implement given the recent ESRI working paper on the impact of deglobalisation and protectionism; and if he will make a statement on the matter. [16440/25]
Given the very serious announcements last night, what mitigation measures are going to be put in place?
The response the Government will put in place has three different levels. First is the engagement we will have with the institutions of the European Union and other governments in the EU to look at what the response should be. We believe any response should be proportionate and needs to create the incentives and environment within which negotiation can take place. Second, through IDA Ireland, we will engage with companies that will be affected by what has happened. It is important to be open and to continue to be honest by saying that what we need to do now is to focus our efforts on how we can identify new markets. We must also look at how we can engage and support our companies in engaging with other trading partners with a view to increasing trade and investment. Third, as we take those two steps, we will have to examine whether there is an opportunity for us to engage with the United States of America through the EU in all this. I hope and believe such an opportunity will develop.
The measures put in place by President Trump will not only affect the economy of the world, they will also have a significant effect on the economy of America. The President of the European Commission has been very clear in outlining that we want to negotiate and see if we can find a scenario in which jobs and incomes are not further affected and the progress we have made with inflation will not be jeopardised. Those are the three different layers of our response, namely engagement with the EU, engagement with companies here in Ireland that are going to be affected and then, I hope, an opportunity for negotiation develop with the United States.
I agree that the priority must be to minimise the damage. A major amount of work will have to be done on that. In respect of support measures for impacted workers and sectors, will anything be done domestically? Will anything be done at EU level? I previously suggested that the European Globalisation Adjustment Fund should be repurposed to support specific sectors during this crisis.
In the context of the differential in tariffs between the UK and the EU, of 10% and 20%, respectively, has modelling been done on the potential impacts of this and on the issues that could arise in terms of the effect on cross-Border trade? Is that a particular risk that Ireland faces? What are the Minister's views on that? What can be done about it?
The Deputy referred to three issues. First, the impact on our economy of the response to what has happened in the US was modelled in the paper published by the Department of Finance and the ESRI.
The response of the EU to this will become clearer in the time ahead and we will aim to influence that and, of course, be part of it.
Second, the Deputy is correct; the issue of the implication of all of this across trade flows on our island is an important matter. The Government, through the Department of Foreign Affairs and Trade, will now have to engage closely with colleagues in the Government of the United Kingdom and obviously within the Northern Ireland Executive as well to look at how we can understand and deal with this issue.
Finally, in terms of how we then deal with the issue of supports for companies that are affected, tomorrow, the Tánaiste has convened a trade forum where the different representative bodies of the employers that are affected by this will be present. We will look, through the Industrial Development Authority, IDA, and Enterprise Ireland, EI, at what response can be put in place but our first priority at the moment is to look at negotiation and see whether we can avoid the worst becoming permanent.
With regard to the EU response, I agree that it needs to be level-headed, and that negotiation is the way to go. I also accept as part of that there is the potential for further actions by the EU. It is not realistic to think that that will not be on the table if negotiations do not work. There is a particular risk for Ireland in terms of the differential trade tariffs between the EU and the UK. We could have a scenario where the EU is taking retaliatory action and the UK is not, which could make that gap even more severe. Is that particular issue being worked on in terms of our interactions with the EU and how that could affect Ireland more than other EU member states?
Again, that is an important point. Every country is affected in different ways by the changes that have happened. However, there is a particular uniqueness to what it could mean due to the vital arrangements and agreements that are in place to recognise and protect the all-island economy in the context of dealing with Brexit. We understood this was a risk. It is one that has already been raised with the European Commission. It is an issue, of course, on which we will have to engage very closely with our colleagues in the Northern Ireland Executive.
At this point in time, given the announcements are only a few hours old, I am sure the Deputy will appreciate it is not possible for us to go into the detail quite yet of how we will deal with this, but it is an extremely important issue that is important to acknowledge here today. In terms of the response from the European Union to this, clearly, none of us wants to be in this position. There is a clear consensus from contributions so far regarding the need to negotiate and see whether we can get an agreement to lead us away from the precipice we are now on. It is not clear to me, however, that we will get to that point unless we indicate how the EU would be willing to respond from a trade point of view. However, the European Commission, correctly, is going to take time to engage with member states of the EU on this but stressing that negotiation is our preference.
Mortgage Interest Rates
Pearse Doherty
Ceist:3. Deputy Pearse Doherty asked the Minister for Finance the steps he is taking to protect mortgage prisoners from extortionately high mortgage interest rates; and if he will make a statement on the matter. [16503/25]
The scandal of selling off mortgages to vulture funds has never been addressed. Just this week, the Financial Services and Pensions Ombudsman, FSPO, legislation passing through the Seanad is finally giving people access to the financial ombudsman. That was only one of the many promises that mortgage holders would be treated the same that was broken. What steps is the Minister going to take to protect mortgage prisoners from extortionately high mortgage interest rates? We know they are being fleeced by the vulture funds. The Minister promised, along with others, that there would be no difference if their loans were sold on to mortgage funds. What an empty promise when we now see so many people paying extortionate interest rates in the hands of these vulture funds.
I am, of course, very aware of the difficulties the increase in interest rates in recent years has caused to many mortgage borrowers. From a regulatory perspective, the Central Bank has put in place a range of measures to protect consumers who have or who are taking out a mortgage. The consumer protection framework, which applies in the same way to all regulated mortgage entities such as banks, retail credit firms and credit servicing firms, seeks to ensure that lenders are transparent and fair in all their dealings with borrowers.
Specifically with regard to variable rate mortgage holders, the Central Bank's consumer protection code requires all regulated mortgage creditors to explain to borrowers how their non-tracker variable interest rates have been set and to clearly identify the factors which may result in changes to variable interest rates. In this context, the Central Bank is continuing to update its consumer protection framework, and Deputies will be aware that it launched an enhanced consumer protection code this week which, following an implementation period, will come into effect next year.
The Central Bank has also engaged intensively with regulated firms on the operation of specific aspects of the consumer protection framework to make sure there is capacity in place to: manage applications by borrowers to switch their mortgage or mortgage provider; ensure there is no discrimination against borrowers based on where they currently hold their mortgage; ensure changes in mortgage interest rates are in line with mortgage terms and conditions; and have supports available to borrowers in or facing arrears.
Also, a number of measures were introduced by industry in 2023 to support borrowers who wish and are in a position to switch their mortgage. This included the provision of an aligned industry-wide set of initial eligibility criteria to facilitate people who are switching their mortgage from a non-bank to a bank.
That is all cold comfort to people who are mortgage prisoners. The Minister was one of the cheerleaders who cheered this on and told them all there would be no difference and that it would be no problem whatsoever and they would have the same protections. However, he failed to deal with the main issue we are addressing.
There are 7,000 mortgages holders that are now being charged over 8.5% with the vulture funds. There are 100,000 mortgage holders who saw their interest rate go up over 6% last year. To give a bit of context, if somebody has a mortgage of €300,000 and is paying 6%, he or she is paying €1,800 per month, which is over €6,000 more than somebody with a high street lender fixing at just over 3%. That is €6,000 more out of people's pockets. If someone is one of the 7,000 who is being charged 8.5%, he or she is paying €12,000 more because his or her loan was sold to a vulture fund. We know that during that time, Fine Gael and Fianna Fáil sold the Irish people a fairy tale, telling them that they would be no worse off. The reality is that these mortgage prisoners are worse off, and they need a way back to normal banks. They cannot switch because some of them are in arrears or have been in arrears in the past. Has the Minister anything to say with regard to providing a pathway back for these people so that we have normal lending rates as opposed to what is now happening with rates of 8.5% and 6% and with over 100,000 mortgages in that position?
I have three points in response to that, the first of which is that the best prospect we have to see all mortgage holders pay lower interest on their loans in the time ahead is to see a change in general interest rates within our economy. I welcome the decisions that have been made in recent months by the European Central Bank, ECB, in that regard.
Second, I emphasised at all times during this very difficult period for those who had their mortgages sold on that their rights from a legal point of view would not be affected. That is the case. I outlined that in my answer.
That was not the case.
Third, what we have seen is some switching take place and I, of course, want to look at how we can see further switching take place from the non-bank back to the bank sector.
First of all, that is not true. It was not the case. On vulture funds, until last week those people were not able to even go to the Financial Services and Pensions Ombudsman, a legal provision that everybody else had until I pointed it out to the Minister and forced that to be changed.
The Minister said he would not mind if his mortgage was sold to the vulture funds. He made that statement to try to guarantee or give comfort to people that everything would be okay. I put it to him that there are 7,000 homeowners who are being charged an interest rate of over 8.5%. There are 100,000 homeowners who are being charged an interest rate of over 6%. They are all with the vulture funds. Why did this happen? Because the Minister, and Fine Gael and Fianna Fáil, allowed this to happen. They blocked legislation that would stop this happening. They told people they would not be better off. The Minister should talk to the family that has now been paying €12,000 more per year on their mortgage because that loan was sold off to a vulture fund. That is the change. That is the difficulty. To tell them they have the same rights and entitlements is not the issue here. The are being screwed royally by these vulture funds, and the question is: what is the Government going to do? Is it going to continue to sit back and allow tens of thousands of Irish consumers to be fleeced in this way?
I always acknowledge, and will do so again, that it was difficult and there were moments of high anxiety for those who saw the ownership of their loans or the mortgage on their homes or properties switching. I know that the impact on those affected has been difficult. For many, it has resulted in their mortgage payments and their interest rates being high.
At the same time, I must be honest in emphasising what I can and cannot do. What I can do is look at the changes that have been made in the consumer protection framework to ensure there are rights in place and levels of protection are available. I have outlined that to the Dáil. What I could not do was intervene to block decisions banks were making. Had I done so, it would have had other consequences for our banks and their ability to lend, contribute to our economy and, in turn, support others who wish to access mortgages and loans.
National Treasury Management Agency
Catherine Connolly
Ceist:4. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 95 of 4 July 2024, the timeline for the NTMA to fully divest from all Ireland Strategic Investment Fund, ISIF, global portfolio investments in companies on the UN Human Rights Council database of business enterprises; the details of the ISIF’s direct investments in companies on the UN database totalling €4.2 million; the details of the ISIF’s indirect investments in eight companies on the UN database totalling €9.4 million; and if he will make a statement on the matter. [15674/25]
As the Minister knows, for more than eight years, the UN has maintained a database of businesses involved in specific activities in the occupied Palestinian territories. I followed my original question up with a number of questions. What is the timeline for the NTMA to fully divest from all of Ireland's strategic investment and global portfolio investments on that UN list and the details of ISIF's direct and indirect investments into the companies on same?
The Ireland Strategic Investment Fund is a €15 billion fund comprising the discretionary portfolio of €8.4 billion and the directed portfolio of €6.2 billion. It has a double bottom line mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland.
According to the most recent NTMA annual report, from inception to the end of 2023, ISIF generated an annualised investment return of 3.1%, or more than €2.3 billion, in investment returns across its portfolio, affecting and supporting 42,454 jobs in the economy. ISIF has complete independence in implementing its investment strategy under the NTMA Acts under an investment committee reporting to the NTMA’s board.
The UN maintains a database of businesses involved in certain specific activities relating to settlements in the occupied Palestinian territories. It was developed in 2020 with an update in 2023.
At the end of 2023, direct investments by the Ireland Strategic Investment Fund in companies on the UN database were approximately €4.2 million in 11 companies and its indirect investments were €9.4 million and included eight companies. ISIF divested from six of these companies, with a total value of approximately €2.95 million, across 2024. The six companies were Bank Hapoalim BM, Bank Leumi Le-Israel BM, Israel Discount Bank Limited, Mizrahi-Tefahot Bank Limited, First International Bank of Israel Limited and Rami Levi Chain Stores Limited. At the time, ISIF determined that the risk profile of these investments was no longer within its investment parameters. The level of holdings at the end of December regarding companies on the UN list was €4.2 million in 11 companies.
I thank the Minister. I will look at those figures and I appreciate his answer. I respect the NTMA and the subgroup. I was on the public accounts committee and remember the NTMA's proactive approach to divestment from fossil fuels and to former Deputy Thomas Pringle's Bill. I welcome that, and the NTMA grasped the nettle when the time came.
The Minister listed several Israeli banks and a retail chain. It is welcome that we have divested from them, but we are still investing. In the overall scheme, it is a small sum of money, but we are still investing in companies and banks in territories that are illegally occupied. I want to know the timeline of when we will divest directly and indirectly from those companies, given our stance on Palestine.
I thank the Deputy for recognising the work the NTMA has done in this and other areas and particularly the work ISIF has done. The Deputy is familiar with that. I have outlined the divestment that has taken place and it is important for me to emphasise to Deputy Connolly that the operational independence of ISIF is very important to this space. It manages €15 billion of our money, which is invested in jobs in Ireland and contributes to the economic growth and development of our country at a time when we will need new sources of economic investment and growth. It operates independently of me and is well aware of the sensitivity and importance of the investments the Deputy has referred to and, indeed, the questions being put to me.
I respectfully make the case, which the Deputy has already acknowledged, that these investments as a share of ISIF's total portfolio, not to mention as a share of the investment in the overall Israeli economy, are extremely small. However, Deputy Connolly is raising issues of principle and I am aware of the correct and deep concern the Irish people have regarding the suffering of the people of Gaza.
In a previous answer, I was told by the former Minister for Finance: "My officials are in contact with the NTMA on an ongoing basis across a range of issues, including those arising from the Illegal Israeli Settlements Divestment Bill 2023." I fully understand ISIF is independent but there is a policy issue in respect of illegal occupation. The Minister admits and accepts there is a country committing genocide and that we are investing in its trading companies. We still have a sizable proportion, albeit not in the overall scheme of things. Direct and indirect, it comes to more than €10 million. To bring home and put focus on what we are talking about, this refers to: the supply of surveillance and identification equipment for settlements; the wall and checkpoints directly linked with settlements; and the supply of equipment and materials facilitating the construction and expansion of settlements. This is the list drawn up by the UN more than eight years ago to say we should not be investing in those companies. I appreciate the Minister is making the case it is a small percentage, but it is morally significant, not to mention the genocide taking place.
I thank the Deputy for raising this. While I make the case that the share of the overall portfolio of ISIF's investments is a small one, millions of euro is a lot of money for the Deputy and me. I accept that point.
The Deputy raises very important foreign policy and human rights issues. My Department engages with ISIF and the NTMA on these and other matters. The concerns and issues the Deputy has raised are very well understood.
The Deputy referred to issues of policy. I must emphasise again that, given the scale of the portfolio ISIF manages and how much of our money it manages overall, it is important that I respect and support the independence of the board and the decisions it makes. Divestments have already taken place and the ISIF board will determine what is the right investment in a way that is consistent with our independence and the mandate it has. It is well aware of the issues the Deputy raises and the exchanges the Deputy and I have had on a regular basis on this.
Housing Policy
Pearse Doherty
Ceist:5. Deputy Pearse Doherty asked the Minister for Finance to outline any engagement he has had with the Central Bank on tax incentives and other demand-side measures for housing; and if he will make a statement on the matter. [16504/25]
What engagement has the Minister had with the Central Bank regarding tax incentives and other demand-side measures for housing and will he make a statement on the matter, particularly in light of what appears to be the Governor of the Central Bank pouring cold water on the latest apparently back-of-the-envelope policy on housing from the Minister for housing? It is reported that the Minister, Deputy Donohoe, will meet the banks regarding that proposal. What discussions has he had with the Central Bank on this and what is his view regarding banks lending and reducing the level of equity builders would need to have when lending for housing?
My officials and I regularly engage with the Central Bank. However, I have not had any engagement recently with the Central Bank on the specific issue the Deputy has raised, which is the issue of tax-based support for housing.
The issue in the Irish housing market and so many of the social and economic difficulties that it is now causing are caused by a shortfall in supply. For more than a decade, the level of homes we have been building has not been in line with the needs of our society and the change in our demographic and economic growth. An increase in the supply of new homes remains a priority aim of Government policy. I will continue to work with my Cabinet colleagues to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of public money and boost the supply of homes in the public and private sectors.
A range of tax-based measures are already in place, namely, the help to buy scheme, the rent tax credit, the vacant home tax, the residential zoned land tax and the residential premises rental income relief. The Deputy will appreciate that decisions regarding taxation measures are made in the context of the annual budget. He will also know that I am not going to comment in advance of any decisions that are yet to be made.
We discovered during the election period that many of the Minister's colleagues, maybe himself included, went out and argued that there were going to be 40,000 houses delivered last year, which we know was a big lie because the Department of Finance had provided an assessment to the then Minister before the election that that was not possible. Indeed, there was a risk of fewer being built than in the previous year, which is what actually transpired.
The Central Bank is pouring cold water on and disputing the Government's housing projections for the next three years. It believes that the Government will deliver 13,000 fewer homes than projected over the next three years. The Government is trying to justify measures whereby banks should lend to developers where developers have less skin in the game themselves. The Central Bank has come out and poured cold water on that.
Surely the Minister, as Minister for Finance, is engaging with the Central Bank on this matter or is his Cabinet colleague doing a solo run? Double-digit price inflation is back for the first time in eight years. It was 11.6% last year. There is a role for the Central Bank in controlling inflation.
It is reported that the Minister is to meet the banks concerning this idea about less equity from builders and more lending by banks. Is that actually on the cards?
I will be meeting our banks to engage with them on the greater role they can play in regard to housing because we all know how much more we need to do. However, I have to recognise two different points. First, the banks are independent of the Government. Second, they are independently regulated. I will be engaging with them to see what further measures we can put in place that lead to more lending and more homes being built. However, I fully respect the independence of the Central Bank, as does the entire Government, because we know the stability of our financial sector is vital to more homes being built in the time ahead. We will consider additional measures, as we always do, in the run up to the budget from an investment point of view and also in the context of the review of the national development plan that is taking place.
Will the Dáil be given some clarity as to the Minister for Finance's position? Does he agree with his Cabinet colleague that banks should lend more to developers on the basis that the developers would have less equity? That is the proposal that has been made. It seems a bit hare-brained and Celtic tiger era, but it is not the first time we have seen something like it.
We deserve to know what the Department of Finance and the Minister for Finance's position is. The Governor of the Central Bank has clearly poured cold water over the idea. I could not believe that the Minister for housing would make a statement like that without even discussing it with the Minister for Finance or the banks, but then, it is Fianna Fáil we are talking about, so I will leave it at.
What is the Minister for Finance's position? What is the position of the Department of Finance? Does the Minister for Finance agree with the Minister for housing's assessment that banks should lend more to developers with less equity provided by those developers? Will the Minister answer that question clearly because I would like to know, in his engagement with the banks, whether that something that is going to be under consideration?
I absolutely support all of the excellent work that the Minister for housing is doing in looking at what further measures can be put in place to lead to more homes being built. Regarding the Deputy's question, I support looking at ideas that will make more loans and more support available in our economy to lead to more homes being built. However, the Minister for housing and I do not want to see anything happen that leads back to the return of levels of lending and commercial practices that only create further difficulty. The Minister for housing will have the same view as me in that regard. What he is doing, as is his right, is looking at the different options that can be put in place to lead to more homes being built. He and I are clear that we do not want to see anything happen that is a source of additional financial risk because if that additional financial risk happens, it will only lead to more homes being built in the time ahead-----
Does the Minister support the proposal or not?
I have answered the Deputy's question.
It is still not clear. Does the Minister support the proposal?
Trade Relations
Naoise Ó Cearúil
Ceist:6. Deputy Naoise Ó Cearúil asked the Minister for Finance the proactive measures his Department is implementing to mitigate and support the most vulnerable sectors of the economy from the potential risks for substantial economic disruption due to impending US tariffs. [15890/25]
Given the recently announced 20% US tariffs on EU goods, which is double the 10% rate applied to Britain and Northern Ireland, and considering the exposure of the Irish economy, particularly export-reliant sectors and jobs, what proactive and specific steps is the Minister's Department taking to support those most vulnerable, including multinationals, SMEs and workers in mitigating these deeply concerning economic risks?
I thank the Deputy for raising the significant announcements that were made during the night. The Government is initiating a number of steps, but the Deputy will understand that I need to be honest and clear in setting expectations of what we can do. This is a deeply serious issue. Unfortunately, it is a significant moment in how global trade is conducted and what that can mean for jobs, income and prices all over the world, most particularly the country that the Deputy and I are trying to play a role in guiding through all of this.
As to our engagements and proactivity, it has been in publishing our best estimate regarding what it will mean for our economy. I have been engaging with fellow finance ministers in the EU and across the world on this. A further meeting on this situation will be happening at the end of next week in Warsaw where we are being hosted by the Polish Presidency of the European Union. The Tánaiste and Minister for Foreign Affairs and Trade will be engaging with fellow governments as early as Monday. Before that happens, he has convened a meeting of our trade forum in which all Ministers who are involved in this will be present along with all of the representative bodies. I believe that meeting will happen as soon as early tomorrow afternoon, given the seriousness of this issue.
Regarding the supports that we can make available to companies and how we engage with them, that engagement will be through such organisations as the IDA and Enterprise Ireland, EI. We are talking about trade, for Ireland alone, of tens of billions of euro. If that was affected in any way, no Government could put in place measures that could take the place of that trade. What we will have to do is engage with companies individually to see how we can assist them in finding new markets or dealing with negotiation that awaits.
It is very serious, but by working within our economy, we will find ways of adjusting and responding to the difficult announcements of the night.
I thank the Minister. I appreciate the immediate steps the Minister, the Taoiseach and the Tánaiste are taking but Ireland is uniquely exposed. Our export economy depends heavily on the US, which accounts for nearly one third of our total exports. Unlike Britain and Northern Ireland, which face a 10% tariff, we are hit with the 20% rate as members of the European Union, which puts us at a disadvantage. Key sectors such as agrifood and advance manufacturing are now vulnerable, not just in terms of competitiveness, but also in terms of employment, as the Minister mentioned. This morning, IBEC already announced a forecast of a 2% to 3% hit on exports in the short term.
There is a real risk in terms of job losses, investment slowdown and pressure on regional economies that rely on trade-driven growth, particularly around Cork, where people have been quite vocal in the news this morning. The situation is compounded by Northern Ireland's position under the Windsor Framework, which could see trade diverted away from the Republic. We cannot afford to be passive.
I appreciate that negotiations are a key part of this and that the Minister is playing a crucial role in that.
It is vital that we keep the Dáil informed of this and that all TDs be aware of what is taking place. I am aware that employers and workers in Cork will be feeling particularly worried today. It is something that affects everybody but I am conscious that large life science and medicine producers are located in Cork, many of which have been there for decades. Some very important food and drink manufacturers, farmers and suppliers that are located in Cork are also worried about what this will mean for their food, agricultural and drink exports to the US. I am very much aware of this. We are engaging with them to hear their views. We will have to work to see if we can avoid the worst happening in the short term. That is why negotiation is vital, but we will see a big change happening in the global economy and we will need to support employers and firms in moving to that new equilibrium. They know this is happening and we will have to work with them to see how we can continue to support the growth of our economy. As the Deputy notes, our forecasts based on what is currently happening are for a lower level of growth but for our economy to still have very high levels of employment.
I should mention Intel and Kerry Group in my constituency of Kildare North and the impact they might face.
As the Minister noted, we need a co-ordinated and multilayered response to this. First, we should push diplomatically, particularly to our partners in the EU, for a negotiation of exemptions or reductions, especially for high-value sectors like agrifood in Ireland. Second, I would love to see a financial support package to be made available, with grants, bridging finance and tax reliefs for those firms directly affected. This would come under the Minister's Department. Third, workforce supports such as upskilling, reskilling and job transition schemes must be activated. Finally, we must protect not only our businesses, but also our workers and the communities that depend on them.
I pay tribute to the late Mick O'Dwyer, whose passing was announced this morning. Micko was a legend of the GAA, particularly in Kerry, but we have a great fondness for him in Kildare for delivering two Leinster titles and bringing us to an all-Ireland final. I was quite young at the time but they are very positive memories. I acknowledge him and his contributions to Irish life and society over his many years. Ar dheis Dé go raibh a anam.
May he rest in peace. Many members of the GAA family in Kildare will be feeling particularly sad today. I thank the Deputy for mentioning that.
Regarding the Deputy's constituency, employers like Intel have made a magnificent contribution to the employment and growth of our economy, but they also make an important contribution to the European economy through the work they do in semiconductors and a high level of technologically advanced manufacturing. We will of course engage with companies like those because they and many other employers have been in our country for decades and have contributed to the US. By being globally present, they have allowed US companies to become even more successful. Even at this late stage, that is the case we continue to need to make. Through their presence in Ireland, those US companies have been more successful in the US. Being in Europe has contributed to their global performance. We will continue to make that case and will take on board the important issues raised by the Deputy about employers in his constituency.
I acknowledge the Deputy's comments on Mick O'Dwyer. I had a personal involvement with him in Wicklow GAA. I was sponsor and he was manager. He was one of the most amazing characters I have ever come across. The legacy he has left the GAA world is priceless.