Dáil Éireann Debate, Tuesday - 2 April 2019
128. Deputy John Curran asked the Minister for Finance the way in which the tax yield from the carbon tax was spent in the years since the tax was first introduced; and if he will make a statement on the matter. [15283/19]
Amharc ar fhreagraRevenue raised from carbon tax is remitted to the Exchequer and to date has not been hypothecated. Hypothecation is not a feature of the Irish tax system in general as it reduces the flexibility of the Government to prioritise and allocate funds as necessary at a particular time, constraining expenditure decisions and potentially distorting the allocation of resources, which can result in reduced value for money and sub-optimal outcomes.
Having said that, the additional revenues collected through the Carbon Tax and other sources of revenue can be used to fund measures such as the winter fuel allowance and the Better Energy Warmer Homes scheme to address fuel poverty issues.
The Government is committed to tackling the issue of climate change and in advance of Budget 2019 I commissioned a study by the ESRI as a first step in better understanding the environmental, social and economic impact of increasing carbon tax rates. The ESRI is building upon its work in this regard by developing a multi annual model to better inform our decision making into the future. The Report of the Joint Oireachtas Committee on Climate Action published last week recommended that the Government should consider the impacts on low-income families of any future increases in Carbon Taxes and introduce specific policy measures to assist those who may not be in a position to immediately transition from fossil fuels. It is my intention to use the work of the ESRI, the Oireachtas Committee and the Climate Change Advisory Council to develop proposals for Budget 2020.
