Written Answers Nos. 140-164
140. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade if his attention has been drawn to plans in Uganda to introduce laws that would make homosexual acts punishable by law; his plans to convey to Ugandan authorities opposition to such laws; and if he will make a statement on the matter. [43371/19]
Amharc ar fhreagraI am aware of the disturbing reports from Uganda regarding support for the re-tabling of a bill which would impose the death penalty on LGBTI individuals. A similar bill was rejected five years ago by the Constitutional Court of Uganda.
‘The Global Island: Ireland’s Foreign Policy for a Changing World’ states clearly that: “We are committed to promoting the rights of lesbian, gay, bisexual, transgender, and intersex (LGBTI) individuals, who continue to suffer disproportionate levels of violence and face systemic discrimination in many countries.”
This sets a context for the Government’s deep concern relating to this matter. There is no situation in which a person’s fundamental human rights should be prejudiced, stigmatised or endangered in any way because of their sexual orientation.
Although these reports are taken very seriously, a Ugandan Government spokesperson has since clarified that the Government does not intend to introduce any new anti-LGBTI bill. This stance was reiterated by several senior Government Ministers in meetings with EU Ambassadors and officials in the days after this statement issued.
My Department, including through the Embassy of Ireland in Kampala, is closely monitoring the situation in Uganda and working closely with partners in support of the protection and promotion of human rights.
142. Deputy Anne Rabbitte asked the Minister for Finance if his attention has been drawn to the considerable length of time it will take to introduce changes to the approximately 15,000 retail sites that support the retail export scheme, including upgrades to third-party international acquiring EPOS systems and the redesigning of VAT refund marketing collateral in a post-Brexit no-deal scenario; and if he will make a statement on the matter. [43611/19]
Amharc ar fhreagra159. Deputy Anne Rabbitte asked the Minister for Finance if the current retail export scheme refund threshold of €0.01 will be preserved if the UK applies the VAT retail export scheme to EU countries in a post-Brexit no-deal scenario as is the case with duty free shopping; and if he will make a statement on the matter. [43596/19]
Amharc ar fhreagraI propose to take Questions Nos. 142 and 159 together.
The provision concerning the restrictions and conditions that may be applied to the Retail Export Scheme in the event of a no-deal Brexit was included in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019, which became law on March 17 of this year. At that time, I made clear my intention that if the UK did not extend their Retail Export Scheme to visitors from Ireland in the event of a no-deal Brexit, then I would introduce the restrictions provided for in the Act. My plans in this regard have been clearly signalled for some time and it is a matter for businesses to factor this development into their preparations. The only change for retailers at an operational level will be that purchases that do not exceed €175 will not be eligible for the scheme, and these purchases will simply go through the retailer’s conventional sales channels.
143. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter regarding insurance (details supplied); and if he will make a statement on the matter. [42967/19]
Amharc ar fhreagraAs Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies to provide cover to any particular individual or category of individuals, including those that had previously been in the position outlined in the details supplied.
It is my understanding that insurers use a combination of rating factors in making their individual decisions on whether to offer insurance cover and what terms to apply. My understanding also is that insurance companies do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurance companies will price in accordance with their own past claims experience.
To be helpful, my officials contacted Insurance Ireland about this specific issue. Insurance Ireland stated that insurers will generally ask pertinent questions that will be of assistance to them in assessing risk when making underwriting decisions. In addition, they stated that each individual insurers will have their own underwriting and acceptance criteria.
Finally, Insurance Ireland operates a free Insurance Information Service (IIS) for those who have queries, complaints or difficulties in relation to obtaining insurance. Insurance Ireland can be contacted at feedback@insuranceireland.eu or 01 676 1820.
144. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter regarding mortgages (details supplied); and if he will make a statement on the matter. [43004/19]
Amharc ar fhreagraThe Help to Buy (HTB) incentive 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 limits outlined in the legislation.
Section 477C of the Taxes Consolidation Act 1997 outlines the conditions that apply to the HTB scheme. One such condition is that a qualifying first-time buyer must take out a loan in an amount equal to at least 70% of either the purchase price of the property in the case of a purchased house, or the value of the property in the case of a self-build house. The valuation of a self-build house is as approved by the lender, determined in accordance with the Central Bank’s macro prudential rules. These rules stipulate the valuation as being the site cost plus the cost of construction.
I am advised by Revenue that the process for a first-time purchaser will involve two stages. There will be an initial Application, followed subsequently by a Claim for Rebate. In making the initial Application, it is anticipated that a person who intends to avail of the HTB scheme may not yet have made his or her final decision regarding the house or apartment he or she wishes to purchase or the choice of lending institution. To facilitate first-time buyers in making those decisions, following receipt of an Application and subject to the applicant satisfying the terms of the scheme, Revenue will notify the applicant of the maximum tax rebate that may be available to them. The prospective purchaser is then able to share this information with a lending institution when negotiating a loan.
When purchasers have determined the choice of residence and negotiated their mortgage, they can complete their Claim for Rebate. At that stage, they will be in a position to provide Revenue with details of the property, the purchase price / valuation and the mortgage approval. A key requirement for the relief is that the minimum loan-to-value ratio of 70% mentioned above must be observed. As part of the Claim for Rebate process, the vendor will be required to confirm to Revenue the details of the contract to enable the payment of the rebate to be made. In the case of a self-build, the solicitor acting on behalf of the first-time buyer will be required to make the necessary confirmation to Revenue; once verified, the refund is paid.
As the loan-to-value ratio of the property in the case outlined by the Deputy is stated to be less than 70%, that person’s application does not meet the conditions required to qualify for HTB relief.
Revenue does not have discretion to vary the conditions for qualification for relief under the HTB scheme.
145. Deputy Jan O'Sullivan asked the Minister for Finance the progress made in addressing the high cost of insurance for businesses here including the expected implementation of measures in the Judicial Council Act 2019 in addition to other measures that would facilitate small businesses that are in the position of having to close down due to their inability to obtain an insurance quote; and if he will make a statement on the matter. [43108/19]
Amharc ar fhreagraI am aware of the issues facing many small businesses when it comes to the affordability and availability of insurance. Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the price or the level of cover to be provided either to consumers or businesses.
However, I acknowledge the general problems faced by many consumers, businesses, and community and voluntary groups, in relation to the cost and availability of insurance. I also appreciate that there is some frustration about the perceived pace of reform. Unfortunately, there is no single policy or legislative “silver bullet” to immediately stem or reverse premium price rises. This is because there are many constraints faced by the Government in trying to address this issue in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and for legal reasons it cannot direct insurance companies as to the pricing level which they should apply in respect of businesses seeking insurance.
Notwithstanding the above, I wish to reemphasise however that this issue remains a priority for the Government. The Cost of Insurance Working Group (CIWG), which was established in July 2016, has produced two reports, and is continuing to work to implement the recommendations of the Cost of Motor Insurance Report and the Cost of Employer and Public Liability Insurance Report. The Deputy should note that through the work of the CIWG, there is a recognition that the single most essential challenge which must be addressed if we are to overcome the current cost and availability problems is to provide for a sustainable reduction in insurance costs.
In this regard, the establishment of the Personal Injuries Commission and the publication of its two reports, which included a benchmarking of award levels between Ireland and other jurisdictions for the first time has been very helpful in identifying the scale of the problem that is faced. This research showed that award levels for soft tissue injuries in Ireland were 4.4 times higher than in England and Wales. The PIC recommended that a Judicial Council be established and that it should compile guidelines for appropriate general damages for various types of personal injury. In carrying out this exercise, the PIC believes that the Judiciary will take account of the jurisprudence of the Court of Appeal, the results of its benchmarking exercise, etc.
As the Deputy is aware, the Government with the support of all parties in the Oireachtas prioritised the passing of the Judicial Council Act. This Act provides for the establishment of a Personal Injuries Guidelines Committee upon the formal establishment of the Judicial Council. This Committee is tasked with introducing new guidelines to replace the Book of Quantum. While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly. I would note that the legislation requires that the Committee be established within three months of the first meeting of the Judicial Council, and that the first draft of guidelines be submitted to the Judicial Council Board within six months of this date. These guidelines will be reviewed at least once in every three year period following the completion of the first review.
Other steps taken to date to address the spiralling cost of insurance include the following:
- The establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance. The CBI is due to make its first report by the end of 2019, and will make recommendations to me regarding potentially expanding its scope to include employer and public liability insurance;
- Reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019 to strengthen the powers of PIAB around compliance with its procedures;
- Commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to align the timeframes by which claims should be notified to businesses with GDPR time limits on the keeping of CCTV footage to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;
- The reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers, resulting from the failure of Setanta Insurance;
- Various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent raids under Operation Coatee, which targets insurance-related criminality, and;
- The commencement and prioritisation by the Law Reform Commission (LRC) of its work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform.
I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from September 2019 show that the price of motor insurance is now 24% lower than the July 2016 peak). The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, particularly those relevant to businesses.
In conclusion, I would like to assure the Deputy that important reforms are taking place and that I am confident that if the level of awards are reduced as a result of the Personal Injuries Guidelines Committee, then the insurance premium and coverage issues that are being experienced by the leisure, sports and tourism sectors and many businesses more generally should recede.
146. Deputy Seán Haughey asked the Minister for Finance if he will consider introducing a long paying tax credit for PAYE taxpayers who have been consistently paying tax for over 30 years or more as a gesture of gratitude for their contribution to the State; if such tax payers are recognised in the tax code at present; and if he will make a statement on the matter. [43214/19]
Amharc ar fhreagraI am satisfied that, in the context of limited resources, the tax code already recognises those who have contributed to the State for a long period through measures that reduce the amount of tax that such persons pay in retirement.
For example, a person aged 65 and over is fully exempt from income tax where his or her total income from all sources is less than the relevant exemption limit of €36,000 in the case of a married couple or civil partners and €18,000 for a single individual. Where a couple have dependent children, the exemption limit is increased by €575 per child for the first 2 children and €830 for each child thereafter. Where an individual exceeds the exemption limit, he or she is liable to tax based on the normal system of tax rates, rate bands and tax credits, subject to the application of marginal relief where relevant.
Other supports for the over 65s may apply depending on personal circumstances, including the Age Tax Credit which is available to all individuals aged 65 or over who do not qualify for an exemption from income tax. This credit is currently set at €245 for single individuals or €490 for a married couple or civil partners.
It should also be noted that those over 66 are exempt from Employee PRSI, and those over 70 with a total annual income of less than €60,000 benefit from a reduced rate of Universal Social Charge. And other income tax credits may also be available depending on the personal circumstances of the individual, such as the personal tax credit, those for widows/widowers, for blind individuals, for those caring for incapacitated children or dependant relatives, and for health expenses incurred by the taxpayer. These apply in addition to the various expenditure measures that give support to those aged 66 and over, including the State Pension and the Free Travel Scheme.
147. Deputy Seán Haughey asked the Minister for Finance if he will increase the threshold for inheritance tax in respect of a sibling leaving a house to another sibling; the factors to be taken into account when determining this threshold; when it was last increased; and if he will make a statement on the matter. [43215/19]
Amharc ar fhreagraCapital Acquisitions Tax (CAT) is the overall title for both gift and inheritance tax. The tax is charged on the amount gifted to, or inherited by, the beneficiary of the gift or inheritance. CAT at a rate of 33% applies on the excess over the tax free threshold.
There are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer.
Group A threshold applies where the beneficiary is a child of the disponer. This includes adopted children, step children and some foster children.
Group B threshold applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer.
Group C threshold applies in all other cases.
In Budget 2020, I increased the Group A threshold in which applies primarily to gifts and inheritances from parents to their children from €320,000 to €335,000.
The Group B threshold was last changed in Budget 2017, when it was increased by €2,350 to its current value of €32,500 and the Category C threshold was also increased by €1,175 to €16,250.
The options available for providing increases to CAT thresholds is normally considered in the context of available resources, must be balanced against competing demands and take into account the need to maintain the yield from CAT. In addition, all Governments have favoured changes to the Category A threshold and there has always been a significant difference between the Category A and B and C thresholds.
The Deputy will appreciate that there would be a significant cost in making substantial changes to all three thresholds. For example, the estimated cost of increasing the CAT A threshold alone from its current €335,000 to €500,000 is €74.3 million.
Increasing the B threshold by €4,500 would cost in the order of €12.7m and indeed increasing the Group B and C thresholds to bring them into line with the Group A threshold is estimated at approximately €251.9 million.
In relation to the inheritance of a property from a sibling, there is also an exemption from CAT where dwelling houses are bequeathed by individuals who live there to successors who:
- have lived there for a specified period of time before the inheritance,
- will continue to live there for a specified period of time after the inheritance, and
- who have no beneficial interest in any other residential property at the date of the inheritance.
This exemption is not dependent on the relationship between the beneficiary and the disponer.
148. Deputy Carol Nolan asked the Minister for Finance if he will apply the 0% VAT rate to food supplements on 1 November 2019 and legislate for the preservation of 0% VAT on vitamins and food supplements; and if he will make a statement on the matter. [43231/19]
Amharc ar fhreagraAs the Deputy is aware, the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Irish VAT legislation does not provide a zero rate for food supplement products; instead there is a legislative provision for zero rating food and drink. Article 110 of the VAT Directive 2006/112 is the basis for the zero rate for food in Irish VAT law. Under that Article, Member States which, at 1 January 1991, were applying zero rates or reduced rates of VAT lower than the minimum rate of 5% may continue to apply those rates. Member States are not permitted under that provision to introduce new derogations or extend the scope of the derogations existing as at 1 January 1991. The legislative provision for food and drink was in place on 1 January 1991, however there was no legislative provision for food supplement products and therefore they cannot be legally zero rated.
I will be introducing a reduced rate of VAT of 13.5% to all food supplement products in Finance Bill 2019 which will take effect from 1 January 2020. Food supplement products currently liable to the standard rate of VAT (23%) and food supplement products that were zero rated on a concessionary will be liable to the reduced rate of VAT (13.5%) from 1 January 2020.
Foods for specific groups such as infant follow-on formulae and infant foods, foods for special medical purposes and specially formulated foods (e.g. total diet replacement for weight control) will remain zero rated. These are well established and defined categories of food that are essential for vulnerable groups of the population. Fortified foods, such as yoghurts and cereals fortified with vitamins and minerals, will also remain zero rated as they are food.
Folic acid, vitamin and mineral human oral products which are licenced or authorised as medicines by the Health Products Regulatory Authority (‘HPRA’) will remain zero rated under a different VAT provision.
149. Deputy John Lahart asked the Minister for Finance the steps which will be taken regarding the €500 million due to be paid into the rainy day fund in the event of an orderly Brexit. [43254/19]
Amharc ar fhreagraThe commencement of the Rainy Day Fund (RDF) will involve the transfer of €1.5 billion from the Ireland Strategic Investment Fund (ISIF). My initial intention had been to supplement this with a transfer of an additional €500 million from the Exchequer.
Under the disorderly Brexit scenario in which Budget 2020 was framed, the Exchequer will run a Budget deficit of 0.6 per cent of GDP in 2020. If the €500 million contribution was made next year it would have to be borrowed. It simply would not make sense to borrow in order to fund the RDF.
Further decisions on the timing of transfers to the Fund will be taken when there is greater clarity on the impact of Brexit and in the context of the prevailing economic and budgetary position.
150. Deputy Michael McGrath asked the Minister for Finance the amount paid out in compensation from the insurance compensation fund in relation to the liquidation of a company (details supplied) to date; the number of persons partially compensated at this stage; the number of persons fully compensated at this stage; the number of persons still awaiting compensation; the number of persons whose claims have not yet been settled in court or otherwise; the anticipated remaining amount required for compensation from the fund; the anticipated amount that will be retrieved by the fund from the liquidation process; and if he will make a statement on the matter. [43293/19]
Amharc ar fhreagraSetanta Insurance ("Setanta") was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. As it was a Maltese incorporated company, the liquidation is being carried out under Maltese law.
I am very conscious of the effect of the delays in the payment of compensation to Setanta third party claimants, and this is one of the reasons why the Government brought forward the Insurance (Amendment) Act last year to ensure that such claimants are compensated in full, and to put in place revised arrangements for the ongoing management and administration of the Insurance Compensation Fund, including for applications to the High Court. However as previously outlined neither I nor the Department of Finance have any role in the process including the making of applications to the High Court or the making of payments.
I have been informed by the State Claims Agency that the amount paid by the Insurance Compensation Fund (‘ICF’) to date in respect of Setanta Insurance is €43.7 million.
Since the enactment of the Insurance Amendment Act 2018 all third party personal injury claimants submitted to the ICF have now received 100% compensation. Claimants settled prior to the Act who initially received 65% were subsequently resubmitted to the ICF in November 2018 and the shortfall of 35% was paid at that time.
796 claimants have been fully compensated as of October 2019. However, as with any litigation, negotiations to agree associated legal costs are still ongoing in some instances. As of October 2019 a further tranche of 89 claimants have been agreed by the State Claims Agency who are making an application to the ICF for these claimants to be paid early next month. There are currently 284 claimants that have not yet settled.
The total potential call on the ICF is likely to be circa €104 million in respect of the liquidation of Setanta Insurance as per actuarial estimates. As previously stated the amount paid by the ICF to date in respect of Setanta Insurance is €43.7 million and the current application to the ICF referenced for October 2019 amounts to €6.8 million. Therefore there is potentially a further €53.5 million which may be required from the ICF. It is estimated that the amount retrieved by the Fund from the liquidation process to be not greater than 22% of the anticipated amount.
Finally any individual (or their solicitor) who has queries about their payment should contact the liquidator via phone at +353 (0)818 255 255 or via email at iesetanta@deloitte.ie.
151. Deputy Mattie McGrath asked the Minister for Finance the consultancy service providers engaged by his Department from 1 January 2018 to 1 January 2019; the costs associated with each (details supplied); the reason for each service engagement; and if he will make a statement on the matter. [43314/19]
Amharc ar fhreagraIn the Details Supplied the Deputy refers to the Revised Estimates 2019 which provides for expenditure for the year 2019, in the body of the question the Deputy refers to expenditure made during 2018.
In 2018 the REV provided an allocation of €50,000 in the administration category for consultancy services. Under this heading my Department incurred no costs.
In 2019 the REV provided an allocation of €20,000 in the administration category for consultancy services. To date under this heading my Department has incurred no costs.
However we were provided in both years with an allocation for programme consultancy under separate heading within the years 2018 and 2019 within which we did incur expenditure details of expenditure incurred under this heading are regularly published on my Department's website.
152. Deputy Mattie McGrath asked the Minister for Finance the details of each value for money and policy review conducted by his Department from 1 January 2018 to 1 January 2019; the cost of each exercise; and if he will make a statement on the matter. [43331/19]
Amharc ar fhreagraThe Department of Public Expenditure and Reform's 'Public Spending Code' sets out the rules and procedures that apply to ensure that value for money standards are upheld across the Irish public service.
No projects were carried out with expenditure levels above the various thresholds as set out in this policy, therefore no value for money and policy reviews were undertaken in the Department of Finance during the time frame in question.
153. Deputy Mattie McGrath asked the Minister for Finance the details on the rural proofing analysis conducted by his Department prior to the publication of measures contained in budget 2020; and if he will make a statement on the matter. [43343/19]
Amharc ar fhreagraPrior to the publication of Budget 2020, the Departments of Finance and Public Expenditure and Reform prepared an analysis on the distributional impacts of the direct tax, indirect tax and welfare measures contained in the budget using the ESRI's SWITCH micro-simulation model. The model cannot take account of the rural/urban split but found that on average the first three deciles gained from the tax and welfare measures and the rest of the deciles were left broadly unchanged.
Importantly, this analyis shows that the negative impact on incomes from the increase in the carbon tax, a key concern of rural citizens, is offset by other tax and welfare changes. Income gains were largest for the first decile, followed by the second and third which indicates that the tax and welfare measures in Budget 2020 were broadly progressive.
As with any model, the SWITCH analysis has limitations, and cannot take into account other targetted expenditure measures such as increased expenditure that will benefit rural communities. As I outlined on Budget Day, the Government is investing nearly €2 billion in rural Ireland in 2020. This includes an additional €51 million for the Department of Agriculture, Food and the Marine and €17 million for the Department of Rural and Community Development. This reflects the fact that agriculture and rural development are cornerstones of our economy, supporting thousands of jobs across the country.
In addition, a number of targeted provisions for rural communities were introduced in Budget 2020 to provide supports for rural households to transition to a low carbon economy. These include funding for the Just Transition Fund targeted at the Midlands to aide in the retraining of Bord na Móna workers in adjusting to the low carbon transition. The Just Transition Fund also provides for the restoration of the bogs to their original state as natural absorbers of carbon, creating 70 jobs in its first year, rising to 100 as the programme progresses. A group housing retrofitting programme geared towards social housing in the Midlands will commence in 2020, supporting 400 jobs directly and indirectly. The aforementioned measures will be spearheaded by the Just Transition Commissioner who will engage with all relevant stakeholders to ensure timely and efficient implementation of these measures.
I have also made provision for the biggest ever allocation of funds to the Warmer Homes Scheme which is targeted towards the most vulnerable in our society. €52.8 million is being made available for the retrofitting of homes of those living in energy poverty or those at risk of entering energy poverty. I believe that this measure combined with the increase in the fuel allowance of €2 per week will be of particular assistance to those low-income rural households who currently rely on fossil fuels to heat their homes.
Ring-fencing of funds for investment in sustainable transport is a crucial aspect of the transition to a low carbon economy and is of particular importance to rural communities who might have limited access to public transport. €14 million of additional funding for electric vehicle grants has been granted as part of Budget 2020 of which €8 million will be sourced from ring-fenced carbon tax revenue.
Finally, as part of the National Broadband Plan, which is committed to bringing high-speed broadband to the – largely rural –1.1 million people who currently do not have access to broadband, the Government has provided for €119 million in Budget 2020. High-speed broadband opens up new opportunities for rural Ireland including the increased opportunity for workers to work from home, impacting positively on rural commuters, making life in rural communities more environmentally sustainable.
154. Deputy Willie O'Dea asked the Minister for Finance if his attention has been drawn to the fact that the insurance industry has refused flood insurance for a number of domestic dwellings in the Limerick city area on the basis of a flood map prepared by a private company based in London and that particular flood map conflicts directly with the most recent flood map for those areas prepared by the OPW; his views on whether the OPW map should be the relevant map for determining flood risk; if the insurance companies will be instructed accordingly; and if he will make a statement on the matter. [43428/19]
Amharc ar fhreagraAs previously indicated the OPW flood maps are community based ones and provide a useful resource for planning, however they cannot be used for commercial purposes. The Disclaimer and Conditions for Use of OPW Flood Maps on floodinfo.ie includes a provision that states specifically that users of the website must not use the flood maps, or any other content of the website, for commercial purposes. Consequently, in making a decision as to whether it will provide cover in a particular area an insurers will often use their own flood modelling tools for assessing the level of risk that they are is willing to underwrite in relation to individual properties.
As to why there is a conflict between OPW flood risk maps and those of private insurers, I cannot comment, but the Deputy could seek further clarification from OPW on this matter.
Finally, it is important to make clear that neither I as Minister for Finance nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (Solvency II Directive) which expressly prohibits Member States from doing so.
155. Deputy Michael McGrath asked the Minister for Finance the nominal fiscal resources available in each year between 2021 and 2025 assuming there is an orderly Brexit; if there is a general Government surplus as set out in table 3 of the Summer Economic Statement accounting for the announcements made in budget 2020, excluding disorderly Brexit announcements, accounting for pre-committed expenditure, that is, capital expenditure, carryover costs, public sector pay increases and demographic costs; if there is compliance with the European fiscal rules most notably the expenditure benchmark, the medium-term objective and the debt to GDP ratio in each year in tabular form; and if he will make a statement on the matter. [43533/19]
Amharc ar fhreagra156. Deputy Michael McGrath asked the Minister for Finance the nominal fiscal resources available each year between 2021 and 2025 assuming there is an orderly Brexit; if there is a general Government balance of €0 in each year accounting for the announcements made in budget 2020, excluding disorderly Brexit announcements, accounting for pre-committed expenditure, that is, capital expenditure, carryover costs, public sector pay increases and demographic costs; if there is compliance with the European fiscal rules most notably the expenditure benchmark, the medium-term objective and the debt to GDP ratio in each year in tabular form; and if he will make a statement on the matter. [43534/19]
Amharc ar fhreagra157. Deputy Michael McGrath asked the Minister for Finance the nominal fiscal resources available each year between 2021 and 2025 assuming there is an orderly Brexit; if there is a general Government surplus of 0.4% of GDP in each year accounting for the announcements made in budget 2020, excluding disorderly Brexit announcements, accounting for pre-committed expenditure, that is, capital expenditure, carryover costs, public sector pay increases and demographic costs; if there is compliance with the European fiscal rules most notably the expenditure benchmark, the medium-term objective and the debt to GDP ratio in each year in tabular form; and if he will make a statement on the matter. [43535/19]
Amharc ar fhreagra158. Deputy Michael McGrath asked the Minister for Finance the nominal fiscal resources available each year between 2021 and 2025 assuming there is an orderly Brexit under the expenditure benchmark and the medium term objective of the European fiscal rules accounting for the announcements made in budget 2020, excluding disorderly Brexit announcements and accounting for pre-committed expenditure, that is, capital expenditure, carryover costs, public sector pay increases and demographic costs; and if he will make a statement on the matter. [43536/19]
Amharc ar fhreagraI propose to take Questions Nos. 155 to 158, inclusive, together.
Budget 2020 was presented on the basis of a disorderly exit by the United Kingdom (UK) from the European Union (EU). Given uncertainty around the manner and timing of the UK’s departure this was the correct approach to take.
Should the UK leave the EU on an orderly basis, Ireland’s fiscal position will, inter alia, improve with increased revenues and lower expenditure than forecast at Budget 2020. The Summer Economic Statement (SES), published in June 2019, is instructive in this regard.
The SES was based on the assumption of an orderly exit of the UK from the EU and, as such, the economic impact was minimal. The path for the headline deficit, which involved tax reductions of €600 million each year and an increase in current spending of 3¼ per cent each year, is set out in table 1. As the economy is in broad balance over this timeframe, the headline balance broadly corresponds to the structural balance.
Table 1 – SES ‘orderly’ baseline
|
|
2020 |
2021 |
2022 |
2023 |
2024 |
|
GGB (orderly baseline) |
0.4 |
0.6 |
0.8 |
1.0 |
1.2 |
|
Indicative tax package |
|
600 |
600 |
600 |
600 |
|
Voted Current exp @ 3.25% y-on-y increases |
|
2000 |
2000 |
2100 |
2200 |
|
Voted Capital exp |
|
600 |
300 |
600 |
600 |
|
Available resources |
|
3,200 |
2,900 |
3,300 |
3,400 |
The term “available resources” used in table 1 is defined as the quantum of taxpayers money that could be used to finance additional public expenditure and/or taxation reductions. In defining available resources in this way, it moves away from the concept of ‘fiscal space’ which, as I highlighted in the Summer Economic Statement 2019 (SES), is “clearly inappropriate for the Irish economy at this point in the economic cycle”
On this basis, available resources amount to a total of c.€12.8 billion over the period 2021-2024, the equivalent of c.€3.2 billion per annum. Some of these resources have been pre-committed for demographic change and other factors. Table 2 outlines a summary of pre-committed expenditure in the years 2021 and 2022.
Table 2 – Pre-committed Expenditure 2021 – 2022 (€bn)
|
|
2021 |
2022 |
|
Demographics |
0.5 |
0.5 |
|
PSSA |
0.3 |
|
|
Budget 2020 Carryover |
0.2 |
|
|
Capital Expenditure |
1.0 |
0.3 |
|
Total |
2.0 |
0.7 |
Since publication of the SES, there has been a deterioration in the global economic environment. Consequently, the Department of Finance revised downwards its forecast for economic growth in 2020 under a ‘deal’ scenario, from 3.3 per cent to 3.1 per cent. Lower economic growth will have knock-on impacts on the projected fiscal position, irrespective of an orderly exit deal being agreed between the UK and EU.
160. Deputy Willie Penrose asked the Minister for Finance the tax exemption available to a single person under 25 years of age; the income a person can earn which is totally exempt from tax as a single person; and if he will make a statement on the matter. [43614/19]
Amharc ar fhreagraThere are no income tax credits or exemptions that are specifically ring-fenced to single people who are under 25 years of age.
However, depending on their circumstances, they are likely able to benefit from a number of income tax credits and exemptions that are generally available. For example, it is likely that they would be entitled to the Personal Tax Credit of €1,650 and could either qualify for the Employee Tax Credit of €1,650 or the Earned Income Credit which will be €1,500 from 1 January 2020.
As a result, an individual who is an employee can earn up to €16,500 before paying income tax at 20%, while an individual who is self-employed can earn up to €15,750.
Depending on their individual personal circumstances, they may also be able to avail of a number of additional credits and exemptions which would further reduce the amount of income tax they would have to pay. For example, the Single Person Child Carer Tax Credit is a tax credit of €1,650, which is available to a single parent (whether widowed, separated, deserted or a single parent) with a qualifying dependent child. The Blind Person’s Tax Credit is a tax credit of €1,650 is available to individuals who have impaired vision. There is also a reduced rate of USC that is available to medical card holders with total annual income of less than €60,000.
In addition to the above, income tax relief is generally available for pension contributions, third-level fees and certain health expenses. Details of all personal tax credits, reliefs and exemptions that are available are listed on the Revenue website at the following link; https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/index.aspx.
161. Deputy Barry Cowen asked the Minister for Finance the estimated cost of making trade union subscriptions tax deductible; and if he will make a statement on the matter. [43648/19]
Amharc ar fhreagraTax relief for Trade Union subscriptions was previously provided for under section 472C of the Taxes Consolidation Act 1997. The relief was introduced in 2001 and abolished from 2011 onwards.
A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by my Department in 2016 and included in the 2016 report on tax expenditures published on Budget day 2016. The review may be found at the following link:
(http://www.budget.gov.ie/Budgets/2017/Documents/Tax_Expenditures_Report%202016_final.pdf)
The review concluded that:
"...analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.
The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight."
Given the conclusions of the review, I have no plans to reintroduce such a relief.
I am advised by Revenue that the cost and the numbers availing of the relief prior to its abolition are available at the following link:
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
The following table sets out details of the cost of the relief in the seven years immediately prior to its end.
|
Year |
Cost (€ million) |
No. of Claims |
|
2004 |
10.7 |
248,300 |
|
2005 |
11.8 |
272,100 |
|
2006 |
19.2 |
294,300 |
|
2007 |
20.7 |
316,300 |
|
2008 |
26.4 |
341,900 |
|
2009 |
26.7 |
345,800 |
|
2010 |
26 |
337,500 |
I am further advised by Revenue that these figures may not provide an accurate indicator of future costs of a new scheme and there is no other basis available to Revenue on which to estimate such costs.
162. Deputy Alan Kelly asked the Minister for Public Expenditure and Reform the expenditure on Project Ireland 2040 in 2018 and to date in 2019. [42919/19]
Amharc ar fhreagraProject Ireland 2040 sets out the overall strategy for capital investment from 2018 to 2027.
The provisional Exchequer gross capital expenditure for 2018 is €5.9 billion.
The latest data available for 2019 is contained in the end-September Exchequer Statement, which shows a gross capital spend of €4.1 billion.
163. Deputy Mattie McGrath asked the Minister for Public Expenditure and Reform the details on the poverty proofing analysis conducted by his Department prior to the publication of measures contained in budget 2020; and if he will make a statement on the matter. [43342/19]
Amharc ar fhreagraSignificant progress has been made in recent years in reducing the prevalence of poverty in our country. CSO data shows that the proportion of those living in consistent poverty dropped from 9.0% in 2013 to 6.7% in 2017. CSO data on poverty is available at the following link: https://www.cso.ie/en/releasesandpublications/ep/p-silc/surveyonincomeandlivingconditionssilc2017/povertyanddeprivation/#d.en.181339
For most people, employment is the primary path out of poverty and we have created thousands of new jobs, with a record 2.3 million people now at work in our economy. Our income tax system is considered progressive by international standards; our tax revenue funds a wide range of services, with an emphasis on providing support to the groups in our society who need it the most.
Budget 2020 was framed in unique circumstances. What might be seen as normal Budgetary elements such as modest income tax reductions and across-the-board welfare rate increases did not feature. What did feature, however, were sizeable targeted expenditure increases in a number of sectors. These will have a positive impact on society to be factored into a balanced assessment of the Budget, rather than focusing solely on the fact that income tax and welfare payments remain largely unchanged.
Employment Affairs and Social Protection
A carefully targeted social welfare package, benefiting the vulnerable elderly, families and carers was introduced in Budget 2020. The Living Alone Allowance, which is targeted at the most vulnerable pensioners, was raised by €5 per week; the Fuel Allowance was also increased, so that the increase for those in the lowest income deciles who receive it will more than cover the costs associated with the increase in the carbon tax. There were further increases for qualified child dependants in all weekly payments. There was an increase in the earnings disregard for those in receipt of the One Parent Family Payment, and an increase of €10 in Working Family Payment thresholds for recipients with up to three children. In addition there was an increase in the hours that carers can work or study outside the home. Finally, I announced payment of a 100% Christmas Bonus in 2019.
Distributional Impacts
The Department of Finance prepared an analysis on the distributional impacts of the direct tax, indirect tax and welfare measures contained in Budget 2020 using the SWITCH micro-simulation model. This analysis found on average the first three deciles gained from the tax and welfare measures and the rest of the deciles were left broadly unchanged. Gains were largest for the first decile, followed by the second and third which indicates that the tax and welfare measures in Budget 2020 were broadly progressive. The SWITCH analysis cannot take into account other expenditure measures such as increased expenditure in health or education.
Annex B of the Tax Policy Changes document published by the Department of Finance on Budget day also sets out a distributional analysis of Budget 2020 Measures on a variety of household family types across a range of income levels. The document is available at the following link: http://budget.gov.ie/Budgets/2020/Documents/Budget/Budget%202020%20Tax%20Policy%20Changes.pdf
Expenditure
As set out in Expenditure Report 2020, the focus of the core element of Budget 2020 is on providing for sustainable increases in public expenditure. This is in recognition of the key role of public services and infrastructure in supporting our citizens and promoting the resilience of our economy, particularly in light of the increasing risks in the global economic environment. Particular focus was placed on maintaining and improving supports for children and families, as well as for elderly people.
In order to protect the most vulnerable in society, Budget 2020 provides an allocation of over €21 billion for the Department of Employment Affairs and Social Protection. The significant provision of supports provided through the Social Protection system represents an important strand of the Government’s commitment to tackling poverty and social inequality in Ireland.
Gross current expenditure for the Department of Children and Youth Affairs will see an increase of over 6% in 2020, rising to almost €1.6 billion. As well as increased funding for Early Years Care and Education, central to this allocation is funding for the continued roll-out of the National Childcare Scheme.
€17.4 billion in current expenditure will be allocated to the Health sector in 2020, a year on year increase of over 6%. This investment reflects the Government’s commitment to create a more responsive, integrated and people-centred Health system. New measures such as a reduction of prescription charges for over 70’s, the expansion of free GP care to all children under 8 and free dental care for children under 6 will all contribute to improving access to health and social services across the country.
The Housing programme in the Department of Housing, Planning and Local Government will see an increase of 11% compared with 2019, bringing the total allocation to almost €2.6 billion (including current and capital expenditure). This allocation will support the Social Housing needs of over 27,500 households in 2020. This includes the delivery of 11,167 new social homes through build, acquisition and leasing programmes as well as supporting 16,350 new households under the HAP and RAS schemes.
Further details of these measures and all Budget 2020 allocations can be found in Expenditure Report 2020, which can be found on budget.gov.ie.
Carbon Tax
Budget 2020 included an increase in carbon tax of €6 per tonne, which is expected to raise €90 million in 2020. The funding raised is to be directed to support increases to existing climate related schemes or new schemes that would not have been provided in the absence of this increase. Government has been clear that the importance of clear action in this regard must be balanced with measures to promote equity during the transition. The revenue raised in 2020 will support:
- €34 million in funding to protect the vulnerable through an increase in the fuel allowance and energy efficiency upgrades;
- €31 million for schemes to ensure a just transition to a low carbon economy, including measures with a particular focus on the midlands;
- €25 million for programmes that can help all citizens to reduce their carbon footprint.
These measures are set out in more detail in the paper published alongside the Budget on October 8th , ‘The Carbon Tax Increase – What it Will be Spent On’. This paper can be found on the Budget website: http://www.budget.gov.ie/Budgets/2020/Documents/Budget/The%20Carbon%20Tax%20Increase_What%20it%20will%20be%20spent%20on.pdf
Equality Budgeting
An Equality Budgeting pilot was adopted for the 2018 budgetary cycle, built on the existing performance budgeting framework. Equality Budgeting aims to provide greater information on the likely impacts of proposed and ongoing budgetary measures, which, in turn, enhances the potential to better facilitate the integration of equality concerns into the budgetary process, avoid unintended adverse outcomes and enhance the Government’s decision making framework. It involves Departments setting concrete measurable targets for equality objectives in the Revised Estimates Volume and reporting on progress in the Public Service Performance Report. For the pilot exercise, a number of diverse policy areas were selected with associated objectives and indicators. The learnings from the pilot were used to inform the expansion of the equality budgeting initiative to further develop the gender budgeting elements, and to broaden its scope to other dimensions of equality including poverty, socioeconomic inequality and disability. An Equality Budgeting Expert Advisory Group has also been established. This group is comprised of a broad range of relevant stakeholders and policy experts to provide advice on the most effective way to advance Equality Budgeting policy and progress the initiative.
Future direction will now be assisted by the recent publication of the OECD Scan of Equality Budgeting in Ireland which sets out a path forward with a number of recommendations for consideration. This work was commissioned by both the Department of Public Expenditure & Reform and the Department of Justice & Equality. The scan recommendations are aligned with international experiences of best practice in this field. Implementation of the Report’s recommendations will be carried forward in close consultation with the Equality Budgeting Expert Advisory Group. The OECD report can be found at http://oe.cd/equality-budgeting-ireland.
Social Impact Assessment
The Social Impact Assessment (SIA) series of papers aims to provide an evidence based methodology to examine the impact of public expenditure on households. This framework is designed to examine the demographic profile of public service users, and how they are impacted by budgetary policy decisions. This approach complements the budgetary impact assessments carried out using the SWITCH (Simulating Welfare and Income Tax Changes) model by the Department of Finance and the Department of Employment Affairs and Social Protection, and externally by the Economic and Social Research Institute (ESRI). SIA papers published with Budget 2020 focused on topics such as the Domiciliary Care Allowance and Public Service Obligation (PSO) funding for Public Transport. More information about the SIA series is available at https://www.gov.ie/en/policy-information/615fe5-social-impact-assessment-framework/.
National Childcare Scheme
The importance and value of quality early years care and education is well-documented. The international evidence shows a wide range of benefits for children, families and society at large. High quality services provide long-lasting cognitive, social and emotional benefits for children, supporting children to enjoy their childhood and realise the full potential of their future. However, affordability and accessibility of quality childcare is a major concern for many parents and can act as a barrier to employment which, in turn, increases the risk of poverty. The National Childcare Scheme (NCS) aims to improve children's outcomes, support lifelong learning, make work pay, reduce child poverty and tangibly reduce the cost of quality childcare for thousands of families across Ireland.
A Focused Policy Assessment (FPA) on the NCS published by DCYA in October 2018 presented the impacts as:
- Increased labour force participation amongst parents with children ages 0-15 (incl. female participation)
- Higher quality childcare provision than currently available
- Positive outcomes for children
- Reduced poverty among families with children.
Taken as a whole, therefore, there is a wealth of information published in the context of Budget 2020 which provides important insights into the wide range of targeted benefits and public service improvements that have been delivered, and to their impact on citizens' lives and wellbeing.
164. Deputy Eoin Ó Broin asked the Minister for Public Expenditure and Reform if an investment package will be sought from the European Commission and additionally funded by the British and Irish Governments for the north-west city region of counties Donegal, Derry and west Tyrone in a post-Brexit scenario. [43523/19]
Amharc ar fhreagraThe border region of Ireland currently benefits from two EU-funded programmes, PEACE and INTERREG, with a total value of €550 million over the period 2014-2020.
These programmes are 85% funded by the EU through the European Regional Development Fund under the European Union's Cohesion Policy.
The two programmes are important drivers of regional development in a cross-border context. Through EU-funded cooperation, a range of organisations, North and South, have engaged in and benefited from a variety of cross-border and cross-community projects.
The Irish Government has been clear and consistent about its commitment to the successful implementation of the current programmes and to a successor programme post-2020. My officials and I have been working to ensure that this important source of funding for the border region continues post-Brexit.
As far back as December 2017 both the EU and UK undertook to honour their commitments to the current programmes and to examine favourably the possibilities for future programmes.
I am pleased, therefore, that the draft Withdrawal Agreement would enable the two programmes to be completed without interruption or amendment. I am also pleased that, in the event of no agreement, the EU has adopted a special regulation to allow their continuation even in the event of a disorderly Brexit. This will provide confidence for those benefitting from the programmes that this important element of North South cooperation will continue to be financed from the EU budget, under current management structures and with funding levels unchanged, until the end of 2020.
As regards a future programme, the European Commission has responded to the Irish Government’s support for a future programme with a proposal for a special new PEACE PLUS programme that will build on and continue the work of PEACE and INTERREG into the future.
This proposal builds on the commitment in the draft Withdrawal Agreement by both the EU and the UK to a future programme post-Brexit, a commitment that is carried through to the draft Political Declaration setting out the Framework for the Future Relationship between the EU and the UK.
