Written Answers Nos. 44-63
44. Deputy Clare Daly asked the Taoiseach and Minister for Defence if a person can be discharged from service at their request when there is an A7 complaint pending against them; the Defence Forces procedures in this regard; and if he will make a statement on the matter. [48780/18]
Amharc ar fhreagraThe provisions for discharge of enlisted personnel are set out in Defence Forces Regulation (DFR) A.10 made pursuant to the Defence Act 1954 (as amended). The Regulations set out the specific details required to be met to effect a discharge such as reasons, conditions and prescribed military authority for effecting the discharge.
45. Deputy Clare Daly asked the Taoiseach and Minister for Defence if personnel that have left the Defence Forces but have a grievance that they felt was never properly addressed can approach the Defence Forces Ombudsman; and if he will make a statement on the matter. [48781/18]
Amharc ar fhreagraSection 6(2) of the Ombudsman (Defence Forces) Act 2004, provides for the making of complaints by former members of the Defence Forces. It states
(2) A former member of the Defence Forces may, subject to this Act, make a complaint to the Ombudsman concerning an action if it has affected that former member and was taken while he or she was a serving member of the Defence Forces by or on behalf of
(a) a serving member of the Defence Forces,
(b) a former member of the Defence Forces while he or she was a serving member of the Defence Forces, or
(c) a civil servant.
(3) A complainant shall make a complaint referred to in subsections (1) and (2) not later than 12 months from
(a) the date of the action concerned, or
(b) the date on which the complainant became aware of the action, whichever is the later.
Further information may be obtained from the Office of the Ombudsman for the Defence Forces, 15 Lower Hatch Street, Dublin 2.
46. Deputy Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade the degree of diplomatic efforts through the EU that Ireland has made to ensure South Sudan’s peace deal remains in place; his plans to continue to support the humanitarian efforts in South Sudan; the level of co-operation on same he has had with other supporting states; and if he will make a statement on the matter. [48705/18]
Amharc ar fhreagraSouth Sudan continues to endure an ongoing crisis, in large part the consequence of civil war. Since the most recent outbreak of conflict in 2015, over 50,000 people have been killed and more than 7 million people are in need of humanitarian assistance. On 12 September last, the President of South Sudan, Salva Kiir, signed a peace agreement with the opposition. While this peace agreement has the potential to mark a new departure, it is critical that South Sudan’s leaders implement it without delay. Achieving lasting peace will require sustained effort and commitment as well as a genuinely inclusive approach to building the future South Sudan.
Ireland strongly supports efforts to build peace in South Sudan. In November 2017, during his visit to Addis Ababa, the Tánaiste met representatives of IGAD (Intergovernmental Authority on Development) and the African Union to discuss the situation in South Sudan. On that visit, the Tánaiste announced funding to the IGAD High Level Revitalization Forum, the process which delivered the revised peace agreement. Ireland will continue to support IGAD’s work on monitoring and evaluating the implementation of the agreement in 2019.
Our Embassy in Addis Ababa which is accredited to South Sudan, monitors the situation and engages with local, regional and international parties on an ongoing basis. The Irish Ambassador in Addis Ababa visits Juba frequently where she meets with key government, UN, NGO, Red Cross and diplomatic partners, including the EU Delegation. She plans to visit again next week.
Two Departmental officials have been seconded to the EU Delegation in South Sudan, which is working to support the peace process, in particular by providing support to the implementing and monitoring bodies of the peace agreement. Ireland also cooperates closely with other EU member states on the issue of South Sudan in the European Council where Conclusions on South Sudan were adopted in April.
The EU Special Representative for the Horn of Africa, Alexander Rondos, appointed in 2012, contributes actively to achieve lasting peace, security and development in the region; this month he visited Dublin to brief the Tánaiste on current dynamics in the Horn of Africa, including South Sudan.
Ireland is responding to the continuing humanitarian need in South Sudan, with over €61 million in humanitarian assistance provided since 2012. Over €10 million in Irish funding has been provided so far this year, including to the South Sudan Humanitarian Fund and UNICEF to assist them in reaching the most vulnerable with lifesaving supplies and basic services. Irish funding will continue to support both those in need inside South Sudan as well as South Sudanese refugees in neighbouring countries. Ireland is also a significant contributor to the UN Central Emergency Response Fund, which has allocated $187 million to alleviate the crisis since 2011, and to the EU, which has provided more than €90 million so far this year.
47. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade the efforts being made to address the ongoing repression of peaceful protesters by the Ortega regime in Nicaragua; and if he will make a statement on the matter. [48719/18]
Amharc ar fhreagraThe situation in Nicaragua remains deeply concerning. The reports of violence, arbitrary detention, and persecution of civil society leaders, peaceful protesters and those who have assisted them paint a troubling picture of repression. I once again strongly condemn any use of violence and reiterate my calls on all actors to respect the right to peaceful protest and to freedom of expression. I also call on authorities to ensure full accountability for all acts of violence, while ensuring due process for all prisoners.
I am aware of the reports to which the Deputy refers and the worrying accounts they contain of a pattern of human rights abuses and repression. Compounding this climate of impunity is a lack of official cooperation with the international missions investigating human rights abuses.
The UN Office of the High Commissioner for Human Rights (OHCHR) was expelled from the country following the publication of its report. The Group of Independent Experts (GIEI) and the Follow-Up Mechanism of Nicaragua (MESENI), set up by the Inter-American Commission of Human Rights (IACHR), have also both reported difficulties in working with the authorities. I urge the Government of Nicaragua to allow the OHCHR officials to re-enter the country, and to cooperate fully with the GIEI and MESENI, so that they can effectively carry out their important work.
Ireland regularly engages on this issue at EU and international level. The EU and its Member States, including Ireland, calls on the government of Nicaragua to act on the findings and recommendations by the IACHR and OHCHR, to ensure full accountability for perpetrators of human rights abuses and the disarming and disbanding of armed groups.
Ireland also supported the declaration in October by the EU High Representative on behalf of the EU on the situation in Nicaragua.
The statement expressed the EU’s serious concern at the situation, and urged the government of Nicaragua to allow the return of the OHCHR to enable it to continue its mission, as well as calling on the government of Nicaragua to stop the disproportionate use of force against demonstrators, halt arrests based on laws which criminalise peaceful protest, allow free peaceful demonstrators and re-establish the full respect of due process for all detainees.
I echo the EU call on the government of Nicaragua to resume the national dialogue. I believe that inclusive dialogue remains the only way of negotiating a peaceful and democratic resolution to this crisis, and of restoring the trust of the Nicaraguan people in the country’s institutions.
Ireland supports EU action taken to support international and local initiatives to address the human rights situation, promote a culture of peace, and to provide support to victims of the crisis and their families. It is important to monitor the humanitarian consequences of the crisis and its impact on the population. Officials in the Department of Foreign Affairs and Trade, both in Dublin and in our Embassy in Mexico, which has responsibility for diplomatic relations with Nicaragua, have been monitoring the situation closely. The Deputy Foreign Minister of Nicaragua, Valdrack Jaentschke, was met by officials in my Department on 1 October last and was informed of our strong attachment to the European Union position on Nicaragua. He was also advised of the importance we attach to the establishment of a genuine national reconciliation process.
We have been engaging regularly with partner organisations on the ground, and raising the issue at international level where appropriate. Ireland greatly values the work of these partner organisations and will continue to engage with them.
48. Deputy Niall Collins asked the Minister for Finance the reason a gaming licence was granted (details supplied); and if he will make a statement on the matter. [48666/18]
Amharc ar fhreagraThe legal framework for the approval of a Gaming Licence is as follows. An operator of gaming machines is required to hold a Gaming Licence for each premises where gaming machines are available for play. Section 19 of the Gaming and Lotteries Act 1956 provides that Revenue shall, on the application of a person to whom a certificate for a gaming licence has been granted by the District Court and on payment by that person of the relevant excise duty to Revenue, issue to that person a gaming licence. Applicants to Revenue for a Gaming Licence are also required to hold a current tax clearance certificate. Where an applicant satisfies these requirements a Gaming Licence is issued.
In addition to a Gaming Licence, section 43(3) of the Finance Act 1975 provides that a gaming machine shall not be made available for play in a public place unless a Gaming Machine Licence is displayed in a conspicuous position on the machine concerned. Section 43(4) of the same Act provides that a Gaming Machine Licence may only be granted by Revenue to a holder of a Gaming Licence. I am also advised by Revenue that the details supplied are not sufficient to allow any more information to be provided, but in any case the restrictions imposed by section 851A of the Taxes Consolidation Act 1997 would limit their ability to provide information that could be associated with or related to an identifiable taxpayer.
49. Deputy Catherine Murphy asked the Minister for Finance the number of homes the construction of which has been funded by NAMA; and the number of these that have been sold, by local authority and by year; and if he will make a statement on the matter. [48669/18]
Amharc ar fhreagraI am advised that, from Q1 2014 to Q3 2018, NAMA funded the construction of 8,013 new residential units in Ireland on residential development land under the control of its debtors and receivers. It is important to note that NAMA can only fund developments which are under the control of its debtors and receivers and which are commercially viable.
The breakdown by local authority area of the units funded by NAMA to end-September 2018 is set out in the following table.
|
Local Authority |
Units |
|
Dun Laoghaire Rathdown County Council |
2,003 |
|
South Dublin County Council |
1,482 |
|
Fingal County Council |
1,328 |
|
Dublin City Council |
908 |
|
Cork County Council |
681 |
|
Kildare County Council |
577 |
|
Wicklow County Council |
308 |
|
Galway City Council |
201 |
|
Meath County Council |
127 |
|
Cork City Council |
102 |
|
Laois County Council |
75 |
|
Wexford County Council |
56 |
|
Kilkenny County Council |
42 |
|
Clare County Council |
37 |
|
Monaghan County Council |
36 |
|
Waterford County Council |
34 |
|
Galway County Council |
16 |
|
Total |
8,013
|
The following table provides a breakdown by year of residential units funded by NAMA.
|
Year |
Units |
|
2014 |
1,502 |
|
2015 |
1,029 |
|
2016 |
2,117 |
|
2017 |
2,503 |
|
2018 (to end-Sept) |
862 |
|
Total |
8,013 |
As regards the data for 2018, I am advised by NAMA that the information is based on units that have been confirmed as delivered during the first three quarters of the year. There is a lag of approximately two months from the point at which units are completed to the point at which written confirmation of completion is received from monitoring surveyors. I am advised that the fourth quarter of each year is typically the busiest period for completions and that NAMA expects that a substantial number of units will be delivered in Q4 2018.
It is NAMA policy that units delivered through its residential delivery programme are openly marketed for sale. I am advised that, in the market conditions which have prevailed since 2014, NAMA debtors and receivers have not experienced any major delays in selling completed units. Accordingly, while the information set out in the tables above relate to completed units, I am advised that it corresponds closely to sales data.
50. Deputy Mattie McGrath asked the Minister for Finance the detail of the most up to date analysis conducted by his Department on the economic impact of a no-deal Brexit; and if he will make a statement on the matter. [48790/18]
Amharc ar fhreagraThe Government has welcomed the agreement reached between the EU and UK negotiators on a draft Withdrawal Agreement. Our priority now is to work towards the finalisation of that draft Withdrawal Agreement and the political declaration on the EU-UK future relationship. However any Brexit scenario will mean considerable change and impact for Ireland.
The Government’s contingency planning for Brexit was initiated well in advance of the UK referendum in June 2016 and my Department has been to the fore in producing and funding a number of economic assessments on Brexit, both before and since the UK’s referendum decision in June 2016, all of which are available on the Department’s website.
The regular updates of my Department’s macroeconomic forecasts, as part of the Budget process, analyse the impact of Brexit on the Irish economy. My Department’s forecasts in Budget 2019, published last month, assume, as a central scenario, that the UK will make an ‘orderly’ exit from the EU. This involves a transition period being agreed between 2019 and 2020, and a free trade agreement thereafter. This feeds through to our fiscal projections.
The impact of Brexit on Irish output is outlined in Box 5 in the Budget 2019 Economic and Fiscal Outlook. In this box my Department sets out the potential economic impact of a central (‘orderly’ exit) scenario and an alternative (‘disorderly’) exit scenario. This shows that under the central scenario, after five years, the level of Irish output would be close to 2 per cent below what would be the case under a no Brexit baseline. There is of course still a great deal of uncertainty regarding the post-exit arrangement. Under the ‘disorderly’ exit scenario, the level of Irish output would be around 3¼ per cent lower than under the no Brexit baseline.
With regard to the long term impact, joint research by my Department and the ESRI published in 2016 shows that the potential impact of a hard Brexit is significant. After ten years the level of output would be almost 4 per cent below what it otherwise would have been in a no-Brexit scenario. The level of employment in Ireland would be 2 per cent lower, with the unemployment rate nearly 2 percentage points higher.
I should also point out that the Department of Finance has been to the fore in producing and funding a number of Brexit-related studies, both before and since the UK's referendum decision, covering overall macroeconomic and sectoral impacts.
It is important to stress that the economic models may not capture the full impact, given the difficulty in modelling financial market effects, non-tariff barriers and other factors. Therefore, these quantitative effects should be seen as a minimum as opposed to a maximum impact.
While it is still Government’s view that a ‘no deal’ outcome remains unlikely, we are planning for all scenarios. It is imperative to boost the resilience of the Irish economy in order to minimise, in so far as is possible, any future disruption. Since the UK referendum in 2016, all of our national Budgets have been framed to prepare for the challenge of Brexit. The economic and fiscal policies, which we have pursued, mean that the economy is now in a better position to weather the impacts of Brexit.
51. Deputy Jonathan O'Brien asked the Minister for Finance if the rainy day fund codified in the National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018 could be used to recapitalise the banks; and if he will make a statement on the matter. [48650/18]
Amharc ar fhreagraUnder section 10 of the National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018, the only place to which a drawdown of the Fund can be made is the Exchequer. Any movement onward of funds for any purpose will be subject to the full rigour of the public financial procedures and will require a resolution of the Dáil.
52. Deputy Jonathan O'Brien asked the Minister for Finance if steps will be taken to lower the threshold of high wealth individuals from those holding €50 million worth of assets to €10 million; and if he will make a statement on the matter. [48651/18]
Amharc ar fhreagraI am assured by Revenue that it has maintained a focus on High Wealth Individuals (HWIs) over a long period. HWIs have been managed by dedicated units within its then Large Cases Division since it was established in 2003. Revenue recently split its Large Cases Division into two divisions, one of which is now focused on HWIs, avoidance and pensions. I am advised by Revenue that one of the current criteria to be considered a HWI, and come within the management of its Large Cases HWI Division, is to have net assets of over €50 million.
The new Division is in the process, as reflected in one of the recommendations in the Annual Report by the Comptroller and Auditor General (C&AG), of reviewing the case base with a view to increasing the number of HWIs managed in the Division. As part of this review the threshold of €50 million in net assets will be re-assessed to identify the most appropriate threshold. I understand that Revenue’s structural realignment is also being supported by an expansion in the number of specialist and experienced staff assigned to the oversight of the new Division’s case base.
The Deputy will be aware that Revenue is independent in its administration of the tax and duty system. I am advised by Revenue that cases not previously or currently meeting the criteria for inclusion in its Large Cases Division were and are subject to ongoing risk evaluation and, where necessary, intervention programmes. This applies to all taxpayers including those not within the responsibility of the Large Cases HWI Division. For example, I understand that Revenue has established a new Medium Enterprises Division to manage the affairs of the tier of cases, both corporate and individuals below the Large Cases Division. This Division has a branch which will focus on wealthy individuals that fall within its case base.
Finally, the Deputy should be aware that measures were introduced in the 2006, 2007 and 2010 Finance Acts to restrict the use of certain tax reliefs and exemptions by high income earners. These measures ensure that these individuals have an effective tax rate of approximately 30%. The report on the ‘Analysis of High Income Individuals’ Restriction 2016’ published by Revenue in September of this year shows that these restrictions impacted on 521 individuals in 2016 resulting in the collection of additional income tax of €38.5m.
53. Deputy Michael McGrath asked the Minister for Finance if homeowners who have had work done to their home can qualify for the home renovation incentive scheme in circumstances in which a dispute has arisen with the contractor and the contractor has not entered the required information on the online HRI system with the Revenue Commissioners; and if he will make a statement on the matter. [48675/18]
Amharc ar fhreagraSection 477B of the Taxes Consolidation Act 1997 provides for the Home Renovation incentive (HRI). As the Deputy will be aware, HRI provides a tax relief by way of an income tax credit on repair, renovation or improvement works on principal private residences or rental properties carried out by tax compliant contractors.
A key element of obtaining relief is that the contractor must be a qualifying contractor for the purposes of the Incentive and must complete the relevant documentation in electronic form. Where the contractor does not comply with these obligations, then no relief is due to an individual under the Incentive.
I am advised by Revenue that full details on the operation of the HRI scheme are available on their website at http://www.revenue.ie/en/tax/it/reliefs/hri/index.html
The Revenue guidance for homeowners includes material on ‘Choosing a HRI contractor’. The guidance emphasises that it is important for a homeowner to check the Revenue system online to see that the details of works have been entered before the work commences. It clearly states that if a contractor is not a qualifying contractor, he/she will not be able to enter the details on the Revenue online system and that the homeowner will not be able to claim the HRI tax credit.
If the Deputy knows of a contractor who is not co-operating with an individual to allow them make a claim under HRI, he should provide the relevant details to Revenue.
54. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of indexing the standard rate cut-off point for each of the next five years; and the cumulative cost. [48715/18]
Amharc ar fhreagra55. Deputy Pearse Doherty asked the Minister for Finance the cost of indexing all tax bands and credits for each of the next five years with a breakdown of all elements; and the cumulative cost in relation to same. [48716/18]
Amharc ar fhreagra64. Deputy Michael McGrath asked the Minister for Finance the estimated full year cost of increasing the standard tax band to €50,000 for a single person and increasing the standard tax band to €100,000 for a couple, respectively; and if he will make a statement on the matter. [48809/18]
Amharc ar fhreagraI propose to take Questions Nos. 54, 55 and 64 together.
I am advised by Revenue that the estimated full year cost of increasing the standard rate cut off point for all income tax bands by €14,700 which would bring it to €50,000 for a single person and €100,000 for a couple in a single year, would be approximately €2.3 billion.
This estimated figure has been generated by reference to projected 2019 incomes, calculated on the basis of actual data for the year 2016, the latest year for which returns are available, and adjusted for income, self-employment and employment trends in the interim. The estimate is provisional and may be revised.
In relation to the questions from Deputy Doherty about indexation, it is not clear at what rate the Deputy is suggesting the credit should be indexed.
However, I would draw attention to the information available in the Post-Budget 2019 Ready Reckoner, which is available on the Revenue Statistics webpage at: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx
This Ready Reckoner presents a range of forecasting information, including, on page 10, a table showing the estimated cost to the Exchequer of a 1% indexation of credits, rate bands and exemption limits for Income Tax and the Universal Social Charge.
Revenue does not forecast future inflation rates and is, therefore, not in a position to provide a cost estimate beyond 2019.
56. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department continues to monitor specific inflationary tendencies within the economy including inflated rental prices; his plans to address such issues; and if he will make a statement on the matter. [48734/18]
Amharc ar fhreagraInflation in Ireland has been subdued for several years. Based on the Harmonised Index of Consumer Prices (HICP) inflation was just 0.3 per cent in 2017, this marked the fifth consecutive year in which inflation has been below 1 per cent. The subdued level of inflation has continued into 2018, with average inflation of just 0.7 per cent in the first ten months of the year. By contrast, inflation across the euro area accelerated to 1.7 per cent over the same period.
The divergence between inflation in the euro area and Ireland can in part be attributed to the impact of euro-sterling appreciation on consumer prices in Ireland. In turn this reflects the importance of the UK as a source of imports of consumer products, which have fallen in price recent years as a result of the appreciation.
While overall inflation has been subdued, services inflation has been relatively robust, averaging 1.6 per cent in the first ten months of the year. One important factor driving the increase in services inflation is strong growth in residential rents. Annual rent inflation averaged 6.4 per cent in the first ten months of the year.
The pace of growth in rent prices, which in part reflects the ongoing shortage of housing, is a concern. Although rental market policy is primarily the responsibility of my colleague the Minister for Housing, Planning and Local Government, the rapid growth in rents has implications for the macroeconomy and as such my Department continues to monitor inflationary tendencies in the residential rental market on an ongoing basis.
The Government’s primary response to mitigating rental inflation is to increase the supply of residential property. ‘Rebuilding Ireland: An Action Plan for Housing and Homelessness’ sets out a comprehensive package of actionable measures designed to restore the housing market to a sustainable equilibrium. The construction sector is expanding strongly, and this is now feeding into the growing supply of residential property. New house completions in the four quarters to Q3 2018 are up 33 per cent to 17,161, while planning permission for 26,855 new units was granted in the four quarters to Q2 2018, up 39 per cent year-on-year. Over time, the growth in housing supply will mitigate the pressure on residential rents.
57. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to make provision for issues arising from Brexit in such a way as to maximise opportunities for the economy; and if he will make a statement on the matter. [48735/18]
Amharc ar fhreagraThe Government priority now is to work towards the finalisation of the draft Withdrawal Agreement and the political declaration on the EU-UK future relationship. Any Brexit scenario will mean change and impact for Ireland.
My Department is working within the whole-of-Government framework overseen by the Department of Foreign Affairs to mitigate the economic impact of Brexit and to maximise opportunities. The key elements of the Government approach are:
- prudent management of our economy and the public finances to enable us to meet future challenges;
- negotiating effectively, as part of the EU27, with the objective of reaching an agreement that sees the closest possible relationship between the EU and the UK while also ensuring a strong and well-functioning EU;
- supporting business and the economy through a broad range of Government measures, programmes and strategies;
- exploring existing and possible future EU measures that could potentially assist Ireland in mitigating the effects of the UK’s withdrawal on specific Irish businesses and economic sectors; and
- maximising any economic opportunities arising from the UK’s decision to leave the EU.
The Government has recently launched a new Getting Ireland Ready public awareness campaign, with information on the Government’s latest preparedness and support measures, as well as holding a series of public outreach events throughout October in Cork, Galway, Monaghan and Dublin. These events had strong participation from business and community. Further public outreach events are planned for this month.
In addition to preparing for the challenges of Brexit, Government and state agencies are working hard to fully exploit any opportunities that may arise. This includes promoting Ireland as an English speaking member of the EU with unfettered accesses to the EU market, and as a preferred destination for inward investment.
In the Department of Finance, my colleague the Minister of State Michael D’Arcy TD, who has responsibility for Financial Services and Insurance, continues to implement the Government’s IFS2020 Strategy for driving growth in the international financial services sector. In a post-UK referendum environment, the IFS2020 Strategy provides a framework to maximise opportunities that may arise in the international financial services sector. Public announcements to establish or expand operations have already been made by a number of companies. The Government will continue to leverage our IFS2020 Strategy to maximise those opportunities and to drive growth in the IFS sector.
58. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to have discussions with his counterparts at EU level with a view to preventing an economic crash in the future; and if he will make a statement on the matter. [48736/18]
Amharc ar fhreagraAs Minister for Finance, I attend the Economic and Financial Affairs Council of the European Union (ECOFIN) which is responsible for EU policy in areas including economic policy. I also attend meetings of the Eurogroup, where the Ministers of the euro area Member States discuss matters concerning their shared responsibilities related to the euro. The Eurogroup’s main task is to ensure close coordination of economic policies among the euro area member states and to promote conditions for stronger economic growth.
At both the ECOFIN and Eurogroup meetings, Ministers of the Member States work alongside the European Commission and the European Central Bank (ECB) to take stock of the latest economic situation in the EU and euro area, including on the risks to the European economy’s growth prospects.
The European Semester was initiated in response to the crisis in 2010. It provides a framework for coordination of economic policies across the European Union in which guidance is provided to Member States before they take policy decisions at national level. The guidance is provided in the context of the Stability and Growth Pact (SGP) and the Macroeconomic Imbalance Procedure (MIP). As part of the Semester process, the Commission makes country-specific recommendations to provide tailored policy guidance to each EU country on how to boost jobs and growth, while maintaining sound public finances. Following the economic crisis, budgetary surveillance was enhanced with the 'Six-Pack' and 'Two-Pack' regulations which seek to complement the European Semester through enhanced monitoring and surveillance of the fiscal policies of EU Member States.
Following exceptionally strong growth in both the EU and the euro area in 2017, the broad based expansion is continuing in 2018 albeit at a slower pace, given the weakening in foreign demand. The latest estimates from Eurostat, the statistical office of the European Union, show that the euro area economy increased by 1.7 per cent in Q3 2018 compared to a year earlier. Growth continues to be steady due to the strength of domestic consumption and investment.
However, the European Commission’s Autumn 2018 Economic Forecast highlights that downside risks have increased of late, and dominate the outlook. Uncertainties continue in relation to the UK’s exit from the EU, escalating trade conflicts, geopolitical tensions, and changing global financial conditions. These risks require policy action that my fellow Finance Ministers and I are committed to addressing. At a global level, we must safeguard the open, rules-based, global trading system which has been associated with strengthening macroeconomic stability and raising living standards throughout the world. In Europe, we continue to make progress on developing Economic and Monetary Union, in particular through working to complete Banking Union, to reduce uncertainty and enhance financial stability. In addition, national authorities must implement prudent fiscal policies to achieve sustainable and inclusive economic growth for all.
59. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he expects the economy to grow in the context of 2019 and subsequent years, notwithstanding the threat of Brexit and-or other external factors; and if he will make a statement on the matter. [48737/18]
Amharc ar fhreagraIreland’s economy is expected to continue to grow at a robust pace in the coming years. As I outlined in Budget 2019, my Department has forecast GDP growth of 7.5 per cent this year and 4.2 per cent in 2019.
This growth is expected to be broad based, with both domestic demand and net exports making positive contributions. Indeed, modified domestic demand, which strips out some of the volatile components of demand associated with the activities of multinationals, is forecast to grow by 5.2 per cent this year and by 4.1 per cent in 2019.
In the subsequent years (2020-2023), GDP growth is expected to average just under 3 per cent annually, broadly in line with potential growth. These forecasts take into account our central scenario with regard to Brexit, namely that a transition period will be agreed that extends or replicates existing frameworks until end-2020, in other words, the UK is assumed to remain in the single market and customs union until that point. From 2021 onwards, the baseline forecasts assume that the EU and UK will conclude a free trade agreement. This is expected to lower the level of GDP by almost 2 per cent over the period 2021-2023, relative to a baseline scenario of no Brexit, which is accounted for in my Department's forecasts.
As well as Brexit, there are a number of other external risks I am monitoring closely. These include a disruption to world trade due to protectionism, a faster-than-expected normalisation of monetary policy, and policy changes in other jurisdictions that affect the competitiveness of Ireland’s corporate tax regime.
As Minister for Finance, the best means available to me to mitigate these risks is to continue careful management of the public finances, and improve the resilience of the economy, including by implementing competitiveness-oriented policies.
60. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he continues to identify issues such as housing and-or rental prices that remain likely to impact negatively on economic expansion; his plans to address these issues; and if he will make a statement on the matter. [48738/18]
Amharc ar fhreagraThe Department of Finance continues to monitor developments in the construction and housing sectors with a view to identifying potential macroeconomic risks. The biggest such risk is a continuation of the present situation, in which supply falls significantly short of demand. If left unchecked, this shortage could increase affordability pressures, damage our competitiveness and harm our ability to attract investment. Due to the seriousness of the issue, housing supply is specifically listed as a domestic macroeconomic risk in the Economic and Fiscal Outlook published as part of Budget 2019. As such, it is accorded the highest priority within my department and in government more generally.
In response to this challenge — and in addition to the measures being implemented by my colleague the Minister for Housing, Planning and Local Government under ‘Rebuilding Ireland’ — Budget 2019 contained initiatives aimed at increasing the supply of new homes. In 2019, a total capital investment of €1.4 billion will be made in housing. A further investment of €310 million over three years will be made for delivery of affordable homes through the Serviced Sites Fund. Budget 2019 builds on actions taken in Budget 2018, which included the creation of Home Building Finance Ireland (HBFI), increases in the Vacant Site Levy and an increase in the rate of non-residential stamp duty.
The only long-term solution to inflation in both the owner-occupier and rental markets is to increase supply. Recent figures on new home completions released by the Central Statistics Office, show that we continue to have significant year on year increases. New home completions increased by 33 per cent in the 4 quarters to Q3 2018, to 17,161. Statistics on planning permissions and commencement notices are similarly positive. Planning permission for 26,855 new units was granted in the four quarters to Q2 2018, up 39 per cent year-on-year. Commencement notices – a measure of housing starts - increased by 20 per cent in the 12 months to August 2018, to 20,371. The Department of Finance will continue to monitor developments in the housing sector in the context of maintaining our strong economic growth.
61. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that the economy remains competitive in all aspects; and if he will make a statement on the matter. [48739/18]
Amharc ar fhreagraThe economic recovery in Ireland was driven by a significant improvement in competitiveness, through productivity increases and wage and price moderation. The economy maintains this competitiveness today. Ireland’s real harmonised competitiveness indicator, a widely-used measure of competitiveness published by the Central Bank, has improved by approximately 21 per cent since its peak in 2008.
It is important that we preserve this competitiveness to facilitate continued growth. The recovery in the economy has not yet translated into a material rise in inflation. As measured by the Harmonised Index of Consumer Prices (HICP), inflation has averaged just 0.7 per cent on an annual basis thus far in 2018.
As outlined in my Department's recent economic forecasts, published with Budget 2019, the domestic economy is expected to be a driver of growth over the medium term. This could place upward pressure on prices and wages and lead to a reduction in competitiveness.
To avoid this, we must focus on maintaining competitiveness-oriented policies and prudent fiscal policy. As announced, the Government will achieve a balanced budget in 2019. We are also increasing public capital investment via the National Development Plan to further build capacity within the economy. This will address the bottlenecks to growth which emerged during the economic recovery, for example the need for residential development and public infrastructure investment.
My Department will continue to closely monitor all developments related to competitiveness to avoid complacency and continue to achieve balanced growth.
62. Deputy Bernard J. Durkan asked the Minister for Finance when the benefits of the review of the motor insurance sector will accrue in terms of reduced premiums; and if he will make a statement on the matter. [48741/18]
Amharc ar fhreagraAs you are aware, the Cost of Insurance Working Group published its Report on the Cost of Motor Insurance on 10 January 2017. The Report makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, set out in an Action Plan within the Report.
Work is ongoing on the implementation of the recommendations by the relevant Government Departments and Agencies and there is a commitment within the Report that the Working Group will prepare quarterly updates on its progress. The seventh such update was published earlier this month and shows that of the 59 separate applicable deadlines within the Action Plan set to the end of Q3 2018, 45 relate to actions which have now been completed. Substantial work has also been undertaken in respect of the nine action points categorised as “ongoing”.
I believe that the continued implementation of the recommendations from the Report on the Cost of Motor Insurance, in parallel with the implementation of the recommendations from the recently-published Report on the Cost of Employer and Public Liability Insurance, will make a difference to the pricing of insurance premiums. It is envisaged that the implementation of all the recommendations from the two primary Reports cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, will achieve the objective of delivering fairer premiums for consumers and businesses alike.
In this regard, it should be noted that the most recent CSO data (for October 2018) indicates that private motor insurance premiums have decreased by 22.9% since peaking in July 2016. There was a drop of 9.1% year-on-year in October, the 19th consecutive month with a year-on-year reduction.
While the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore there are many people who may still be seeing increases. However, I am hopeful that this greater stability in pricing will be maintained with the result that premiums should continue to fall from the very high levels of mid-2016. Furthermore, it remains important for consumers to shop around when it comes to premium renewals.
63. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the economy in terms of economic performance rates alongside other EU and non-EU states including eurozone members; and if he will make a statement on the matter. [48742/18]
Amharc ar fhreagraAs published in Budget 2019, my Department has forecast GDP growth of 7.5 per cent this year and 4.2 per cent in 2019. This growth is expected to be broad based, with both domestic demand and net exports making positive contributions. Indeed, modified domestic demand is forecast to grow by 5.2 per cent this year and by 4.1 per cent in 2019.
As a barometer of how well our economy is preforming, there is no story more positive than the one emanating from our labour market, with more people working in our economy than ever before. In addition, further output growth should continue to pay dividends in the labour market next year, with over 60,000 jobs likely to be created and an unemployment rate converging towards 5 per cent.
In an EU context, Ireland remains one of the fastest growing Member States. The strong growth and performance seen in our economy is also clearly illustrated by a comparison with the performance of our main trading partners – the euro area, the UK and the US. Following stronger than expected growth last year, the pace of expansion in the euro area and EU economies is expected to ease. For the euro area the Commission is forecasting growth of 2.1 per cent this year, moderating to 1.9 per cent and easing further to 1.7 per cent in 2020. For the UK, modest GDP growth of 1.3 per cent is expected this year slowing slightly to 1.2 per cent for both 2019 and 2020, based on a technical assumption of status quo in terms of trading relations between the EU27 and the UK. The US economy continues to benefit from several tailwinds, supporting GDP growth of 2.9 per cent this year, although this is expected to moderate to 2.6 per cent next year and to 1.9 per cent in 2020. In common with Ireland, there has been a recovery in employment growth in all our main export markets – though at a more modest pace – with a corresponding reduction in unemployment.
