Written Answers Nos. 223-244
223. Deputy Carol Nolan asked the Minister for Finance if he will outline the legal requirements financial institutions have to follow in terms of direct debit payments; and if he will make a statement on the matter. [22738/24]
View answerA direct debit means a payment service for debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis of the consent given by the payer to the payee, to the payee’s payment service provider or to the payer’s own payment service provider, generally known as the direct debit mandate.
Payment Service Providers (PSPs) authorised in Ireland or who provide services in Ireland on a cross-border basis, are subject to the requirements of Directive 2015/2366/EU (PSD2). PSD2 was transposed into Irish law with effect from 13 January 2018 by the European Union (Payment Services) Regulations 2018 (S.I. No. 6 of 2018) hereafter referred to as the Payment Service Regulations.
The Payment Service Regulations set out the industry requirements concerning the execution of payment transactions, which includes direct debits. The Payment Service Regulations include a number of provisions relating to direct debits including the following:
• For payment transactions initiated by a payee (e.g. direct debits), the Payment Service Regulations provide for an unconditional refund right (for valid claims) during an 8 week period from the date the funds are debited from the account.
• For direct debits, the Payment Service Regulations also specifically provide that “a payer may revoke the relevant payment order at the latest by the end of the business day preceding the day agreed for debiting the funds”.
In addition, Regulation (EU) 260/2012, the Single Euro Payments Area (SEPA) Regulation, which came into force in 2014, lays out detailed technical and business requirements in respect of direct debit transactions including but not limited to, the use of an International Bank Account Number (IBAN) and the ISO 20022 XML standard for direct debit payments in euro.
Furthermore, the European Payments Council (EPC) developed a rulebook,
www.europeanpaymentscouncil.eu/what-we-do/epc-payment-schemes/sepa-direct-debit/sepa-direct-debit-core-rulebook-and-implementation,
which establishes a set of harmonised rules, practices and standards to allow PSPs in the Single European Payments Area (SEPA) to offer direct debits to payment service users (PSUs). Scheme participants must adhere to the requirements contained within the said Rulebook.
224. Deputy Pearse Doherty asked the Minister for Finance if his Department has estimated the increased revenue through income tax, USC and PRSI receipts as a result of planned increases in the minimum wage towards a living wage; if so, to provide estimates; and if he will make a statement on the matter. [22744/24]
View answerI am advised that my Department has not produced estimates of the impact of future increases in the minimum wage on the income tax yield as changes to the minimum wage are decided by Government annually, informed by the recommendations of the Low Pay Commission.
226. Deputy Rose Conway-Walsh asked the Minister for Finance to outline the criteria that must be met in order allow expenditure from the proposed infrastructure, climate and nature fund; and if he will make a statement on the matter. [19843/24]
View answerI published the Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024 on 25 March 2024. The Bill passed all stages in Dáil Éireann on 15 May.
The Infrastructure, Climate and Nature Fund (ICN Fund) is one of the two new funds being established under this Bill.
Under the proposed legislation, each year from 2024 to 2030, it is intended that €2 billion will be transferred into the ICN Fund. From 2026, it will be possible to make withdrawals from the Fund to support State expenditure in certain circumstances.
The Bill provides for two mechanisms to draw down from the Infrastructure, Climate and Nature Fund. Section 14(2) outlines its aims, to support expenditure by the State:
• in any year from 2026, where there has been, or is likely to be in the subsequent year, a significant deterioration in the economic or fiscal position of the State; and
• in the years 2026 to 2030, on designated environmental projects.
Under the first mechanism, up to 25% of the fund can be used to support State expenditure in a year where the Minister for Finance is satisfied that there has been, or is likely to be a significant deterioration in the economic or fiscal position of the State. This will be determined following an annual assessment by the Minister for Finance. The Minister shall have regard in his assessment to a report prepared by the Irish Fiscal Advisory Council on the same issue, and shall consult with the Minister for Public Expenditure, National Development Plan Delivery and Reform. Withdrawals from the fund for this purpose will be subject to a Dáil resolutions first pausing the payments to the Future Ireland Fund and the Infrastructure, Climate and Nature Fund for that year.
The counter-cyclical element in the ICN Fund has substantial value in cushioning future economic shocks and maintaining growth-enhancing investment through periods of lower or negative growth and often where capital expenditure is reduced as a response to fiscal pressures. These resources will be drawn down from the Fund to the Exchequer and will be allocated through the normal budgetary process.
In terms of the climate and nature aspect of the ICN Fund, the process outlined in the Bill provides for the designation of projects as “environmental projects”, where a relevant Minister is satisfied that the project contributes directly or indirectly, or is likely to so contribute, to:
• A reduction of greenhouse gas emissions in the State;
• The achievement of environmental objectives derived from a number of EU Water Regulations (including those related to the quality of surface water, ground water and marine water);
• The achievement of conservation objectives or the implementation of conservation measures or administrative and contractual measures, established under the Birds and Habitats Directive, or
• The implementation of a plan, programme or strategy, the National Biodiversity Action Plan or guidelines under the Wildlife Act 2000 .
The allocation of funding for “designated environmental projects” will be an administrative process overseen by the Minister for Public Expenditure, NDP Delivery and Reform in consultation with relevant Ministers in line with the standard Estimates process. The Department of Public Expenditure, NDP Delivery and Reform will engage with Departments in this regard.
227. Deputy Michael Ring asked the Minister for Finance the reason the help-to-buy scheme does not apply to first-time purchasers when buying a second-hand property; if this can be reviewed; if he will consider reviewing the scheme to include second-hand properties; and if he will make a statement on the matter. [22830/24]
View answerHelp to Buy (HTB) is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive offers a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in Section 477C of the Taxes Consolidation Act 1997.
An increase in the supply of new housing remains a central and priority aim of Government policy. For this reason, HTB is specifically designed to encourage an increase in demand for new build homes in order to support the construction of an additional supply of such properties. For a property to qualify for HTB, it must be new or converted for use as a dwelling, having not previously been used as a dwelling.
A move to include properties which were previously used as residential homes/second-hand properties within the scope of the scheme itself would not improve the effectiveness of the relief; on the contrary, it could serve to dilute the incentive effect of the measure in terms of encouraging additional supply. Extending the HTB scheme in this way would provide no incentive effect to encourage the building of new homes and would be likely to have a significant dead-weight element and a high Exchequer cost. For these reasons, there are no plans, at present, to extend the HTB scheme to include such properties.
228. Deputy Mairéad Farrell asked the Minister for Finance if he is aware of the situation in relation to the difference in tax treatment of travel and subsistence payments for those working in further education and training (FET) and those working in the secondary education sector (details supplied); the reason for the difference in tax treatment with respect to these payments; and if he will make a statement on the matter. [22845/24]
View answerThe legislation governing the deductibility of expenses incurred in employment is contained in section 114 Taxes Consolidation Act 1997 (TCA). To qualify for tax relief under this section, any expenses of travelling (and subsistence relating to that travel) must be necessarily incurred in the performance of the duties of the relevant employment. For all other expenses, they must be wholly, exclusively and necessarily incurred in the performance of the duties of the relevant employment.
The provisions of section 114 TCA are strictly applied, with a body of case law supporting the interpretation and application of the section. Under the section, the expense must be incurred in the actual performance of the duties of the office or employment or as a direct consequence of those duties and should not arise because of the personal circumstances or preference of the individual.
Expenditure incurred by an employee or office holder which merely puts him or her in a position to exercise his or her employment or office would not be regarded as incurred in the performance of the duties of his or her office or employment. Accordingly, travel expenses between a person’s home and his or her normal place of work are not generally tax-deductible expenses.
The general position as set out in Revenue guidance, is that the normal place of work is where an employee works on a day-to-day basis. An employee's normal place of work is a question of fact that can only be considered based on the specific facts of each case.
Arising from a public consultation on the tax treatment of expenses of travel and subsistence for employees and office holders, legislation was introduced in Finance Act 2015 to exempt certain expense payments from tax. Section 195C TCA provides an exemption in respect of certain payments made by the State Examinations Commission (SEC) to, or on behalf of, an examiner in respect of travel and subsistence incurred by the examiner solely for examination purposes.
For the purposes of section 195C TCA, the following definitions apply:
• “Examiner” means a person who is an employee of the SEC for examination purposes. An Examinations and Assessment Manager is specifically excluded; and
• “Examination purposes” means the development or marking of examination papers or other examination materials, or the carrying out of invigilator duties at an examination.
The main conditions for the tax exemption to apply are as follows:
• the payments must be made by the State Examinations Commission (SEC);
• must not exceed the Civil Service rates; and
• be in relation to an examination listed in Schedule 2 to the Education Act 1998.
The examinations listed in Schedule 2 to the Education Act 1998 are as follows:
• Leaving Certificate Examination;
• Junior Certificate Examination;
• Technological Certificate Examination;
• Trade Certificate Examination;
• Certificate in Commerce Examination;
• Ceardteastas Gaeilge Examination;
• Teastas i dTeagasc na Gaeilge Examination;
• Typewriting Teachers Certificate Examination; and
• Commercial Instructors Certificate Examination.
Where the conditions to qualify for an exemption under section 195C TCA are not met, the normal rules for payment of expenses apply. The provisions of section 195C TCA are specific to the cohort who meet the conditions above.
Further information regarding the “normal place of work” can be found in paragraph 2.2 of Tax and Duty Manual Part 05-01-06 which is available on the Revenue website at: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-06.pdf
229. Deputy Fergus O'Dowd asked the Minister for Finance when he expects the Disabled Drivers Medical Board appeals board to clear the backlog of appellants; the average waiting time for current appellants; and if he will make a statement on the matter. [22863/24]
View answerThe position in relation to the Deputy's question is as follows.
As of 13 May 2024 there are 708 appellants on the waiting list. 321 appellants have been assessed since the appeals process recommenced and, of these, 203 were successful. The Board has prioritised the waiting list using clinically-based criteria. They are working to address the backlog as quickly as possible. Given the recent reconstitution of the Board, data on average waiting times is not yet available.
230. Deputy Duncan Smith asked the Minister for Finance to provide an estimate of the Exchequer contribution made by the pharmaceutical industry in Ireland, including corporation, payroll taxes and other relevant Exchequer contribution; and if he will make a statement on the matter. [22933/24]
View answerI am informed by Revenue that its annual research paper on Corporation Tax includes the most recent sectoral information in respect of Corporation Tax receipts and is available on Revenue’s website at www.revenue.ie/en/corporate/documents/research/ct-analysis-2024.pdf. The Deputy’s attention is drawn to Figure 3 in the paper, which notes the value of chemical and pharmaceutical manufacture contained in corporation tax receipts from the manufacturing sector.
I am advised by Revenue that statistics on corporation tax, income tax, and VAT receipts by sector are available on its website at: revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-sector.aspx. These statistics are provided for the years 2013 to 2022 inclusive. I understand that figures in respect of 2023 will be available on Revenue’s website in the coming weeks. Again the chemical and pharmaceutical sector receipts would be a component part of receipts for the manufacturing sector, however I am advised by Revenue that a more detailed allocation of receipts to the pharmaceutical sector is not available.
The Government recognises and welcomes the contribution of all industry sectors to our economy. Taking corporation tax as an example, the past decade has seen a notable growth in receipts under that tax head, with the pharmaceutical sector playing a significant part in this growth. Our economic success is due in no small part to Ireland’s competitive corporate tax regime which has been built on certainty and predictability. This stability, along with all the other advantages Ireland has to offer, has enabled companies, including MNEs in the pharmaceutical sector, to plan long-term investments in Ireland, generating employment and increasing economic activity.
The Government will continue to support the growth and development of all sectors, including the pharmaceutical sector into the future.
231. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that economic progress continues in line with expectations and best practice; and if he will make a statement on the matter. [22981/24]
View answerDespite facing a number of economic headwinds over recent years, the available evidence suggests the economy is in reasonable shape, at least in aggregate terms.
The brightest spot in the Irish economy is undoubtedly in the labour market. At the end of last year, well over 2.7 million people were in employment – a record level. As a result, the unemployment rate has remained low over the last year or so, consistent with any measure of full employment.
Just like most other advanced economies, Ireland has had to grapple with the effects of significant cost of living pressures, with inflation peaking at just below 10 per cent in mid-2022. Throughout this period of high inflation, the Government has been at the forefront in supporting the most vulnerable. By responding swiftly and decisively to the cost of living challenges, the Government has helped to mitigate the impact of inflationary pressures on both businesses and households. The temporary and targeted nature of the measures taken by Government were designed to avoid adding to the inflationary burden whilst providing support to those most in need.
Fortunately inflationary pressures are now abating, with the latest data showing inflation had fallen to just 1.6 per cent in April, Its lowest rate since mid-2021. Ireland now has one of the lowest rates of inflation in the Euro Area. Looking ahead, my Department anticipates inflation to average around 2 per cent in the coming years, in other words, in line with price stability. Against this backdrop, the domestic economy is expected to experience a pick-up in activity in the early part of the year, with growth then accelerating as the year progresses.
Despite our economic position remaining strong at present, we are nevertheless living through a time fraught with uncertainty. Conflicts around the world, the escalation of geopolitical tensions, a new era of subsidies and tariffs and the fragmentation of global trade could all have knock-on implications for the Irish economy. Whilst we cannot prevent external shock from occurring, we can ensure that we are on the best possible footing to respond to these shocks when they do occur. With this in mind, Government will continue to strike a balance between ensuring that spending is sufficient to meet the needs of today without compromising the future needs of our people in the years to come.
232. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to be reassured that taxation changes in respect of corporation profits tax are not structured in a way to undermine this economy; and if he will make a statement on the matter. [22982/24]
View answer234. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he remains satisfied that EU competition rules are not set to invade the competency of national governments to retain control of tax policy; and if he will make a statement on the matter. [22984/24]
View answerI propose to take Questions Nos. 232 and 234 together.
Taxation remains one of the most effective policy levers available to any Government, and each EU Member State has developed a tax mix appropriate to their particular economy. Ireland has always maintained that tax competition is an important policy tool, particularly for smaller Member States, provided that competition is fair and based on substance.
To that end Ireland has always been, and continues to be, a strong proponent of unanimity in tax matters at EU level. Tax sovereignty is an area close to the heart of Irish citizens and was one of the reasons the Irish people initially rejected the Lisbon Treaty. A subsequent protocol to the Treaty provided guarantees in relation to tax sovereignty, which paved the way for the Treaty's approval in Ireland.
Ireland has shown that we are willing to engage with and agree EU tax directives that seek to improve the single market and implement agreed international best practices in a consistent manner across the EU. Unanimity hasn't prevented the agreement of more than 20 taxation proposals over the lifetime of the last Commission. This includes important Directives on the EU minimum tax, VAT, administrative co-operation, Anti-Tax-Avoidance and most recently the FASTER directive on withholding tax procedures. Through negotiations on these files, Ireland always maintains the principle that matters of direct taxation remain a Member State competence under the treaties, and tax harmonization is contrary to that principle.
In terms of state aid competition rules, in general fiscal aid is prohibited under the Treaty on the Functioning of the European Union (TFEU). However, various categories of schemes are considered compatible, as their positive effects are considered to outweigh their negative impact. The State Aid Framework performs a balancing act of economic policy to prevent distortion of fair competition, while also achieving particular policy objectives.
The EU State Aid legal framework is continually evolving. The development of new tax expenditures and the evaluation of existing ones should have regard to the applicable EU Regulations in force at the time.
On this basis I am satisfied that taxation is, and will continue to remain, a national competence for EU Member States.
Ireland’s participation in global and European tax reform does not indicate that we are conceding any sovereignty in tax matters. Ireland is a proponent of multilateralism being the best solution to global tax problems and this is what underpins our position on EU tax matters and our decision to join the international consensus on the Two-Pillar Agreement at the OECD.
In October 2021, Ireland, along with almost 140 other countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) signed up to an historic agreement to reform the international tax framework as it applies to large corporate groups.
Building on the original BEPS project, the agreement contains a two-pillar solution to address the tax challenges arising from digitalisation and globalisation. The agreement recognises how large businesses across the globe now operate commercially in a digital environment and generate value. These rules are designed to update the international tax framework to keep pace with these developments in a coordinated way.
By transposing the EU Minimum Tax Directive in Finance (No. 2) Act 2023, Ireland and the rest of the EU sought to implement the new global minimum tax. The Directive aims to ensure that there is a consistent application of the rules across the EU and in accordance with EU law.
The Government’s decision in 2021 to join the global agreement was not taken lightly and I fully appreciate the concerns raised by those worried about Ireland signing up to the Pillar One and Pillar Two rules. The OECD agreement has the potential to bring much-needed stability to the international tax framework after the turbulence and uncertainty of recent years. Implementation of Pillar Two in Ireland, which is already well underway with legislation in place, will safeguard Ireland’s future competitiveness by providing a sound and stable basis for business investment decisions in the long-term.
233. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains convinced that Ireland continues to be an attractive foreign direct investment location; and if he will make a statement on the matter. [22983/24]
View answerIreland’s long-standing reputation as a stable and pro-enterprise jurisdiction is reflected in the continued investment into the Irish economy. The latest figures show the stock of foreign direct investment (FDI) in Ireland stood at almost €1.3 trillion at the end of 2023.
It is important, given the impact of FDI on the domestic economy, that Ireland maintains its competitive position on an international stage. Multinational enterprises contribute greatly to the domestic economy by way of jobs, wages and tax receipts. The multinational sector supports more than 300,000 jobs according to the IDA, approximately one-eighth of our labour force, with further spillovers for jobs in the domestic sector.
However, the outlook for the international economy remains uncertain, and as a small, open economy, Ireland is particularly vulnerable to risks in the global economy. Although inflation has eased in many economies, the risk of a renewed energy price shock or of more persistent inflation remains. There is also the risk of an intensification of geo-political tensions or of weaker than expected Chinese economic growth, both of which would have implications for global economic growth.
Given that many of these factors are out of our control, it is important to focus on what we can control to ensure that Ireland retains our competitive advantage. Our strong legal and regulatory landscape, talented and flexible workforce, and our reputation as a stable economy will help us to remain an attractive location in which to invest. We will also need to continue to invest directly in critical infrastructure such as housing and health, making Ireland a competitive place to live and work in, while continuing to invest in education and skills.
The Irish economy has proven resilient in the face of numerous shocks in recent years, and I am confident that Ireland will remain a competitive and attractive location for investment. The Government is committed to creating an environment for further FDI through investment in key infrastructure and skills, while maintaining our strong legal and regulatory landscape into the future.
235. Deputy Bernard J. Durkan asked the Minister for Finance the extent of the different types of tax reliefs available to both PAYE employees and self-employed persons; and if he will make a statement on the matter. [22985/24]
View answerIncome tax on both PAYE employees and self-employment income is calculated by reference to the same rate bands, which will vary depending on the personal circumstances of the individual. A range of tax credits may also apply, again depending on the personal circumstances of the individual.
Income up to a certain limit is taxed at the ‘standard rate’ of income tax, which is currently 20%. This is known as the standard rate band. Any income above this band, is taxed at the higher rate of income tax, which is currently 40%. The standard rate band for a single person for the 2024 year of assessment is €42,000. Depending on the personal circumstances of the individual this may be further increased. The amount of income tax due is then reduced by applicable tax credits.
Revenue has a comprehensive list of the different rate bands and personal tax credits available on its website at: www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx
An overview of some of the main tax credits are set out below.
Personal Tax Credit
A Personal Tax Credit of €1,875 applies to each individual for the 2024 year of assessment. For a jointly assessed couple or civil partners the amount is €3,750.
Employee Tax Credit (PAYE employees)
The Employee Tax Credit is available to individuals in receipt of income taxable under the Pay as You Earn (PAYE) system. This includes wages, benefit-in-kind, occupational pensions and Department of Social Protection (DSP) income. Certain foreign wages and pensions may also qualify for this credit.
The Employee Tax Credit is equal to the lesser of 20% of the individual’s yearly income or the specified amount. The specified amount for the 2024 year of assessment is €1,875. This credit can only be claimed once, regardless of how many employments are held. Civil partners or a married couple are both entitled to claim this credit.
The Employee Tax Credit is not available to a range of individuals such as proprietary directors and spouses/civil partners on directorship income; a spouse, civil partner or child of the person paying the income or a partner in a partnership.
Earned Income Tax Credit (self-employed individuals)
The Earned Income Tax Credit is available to an individual whose income in a tax year includes, or is made up of, qualifying earned income.
Qualifying earned income means earned income which does not qualify for relief under the Employee Tax Credit. This includes, for example, self-employment income from a trade or profession and employment income earned by a proprietary director and his or her spouse or civil partner.
The Earned Income Tax Credit is equal to the lesser of 20% of the individual’s qualifying earned income or the specified amount. The specified amount for the 2024 year of assessment is €1,875.
In some cases, where an individual has earned income from various sources, he or she may be entitled to both the Employee Tax Credit and the Earned Income Tax Credit in a tax year. In such cases the combined value of both tax credits cannot exceed €1,875.
Rent Tax Credit
The Rent Tax Credit was introduced by Finance Act 2022 and will be available in respect of qualifying payments made during the 2022 to 2025 years of assessment inclusive. For 2022 and 2023 the maximum value of this credit is €1,000 in the case of a jointly assessed couple or civil partners and €500 in all other cases. For 2024 and 2025 the maximum value of this credit is €1,500 in the case of a jointly assessed couple or civil partners and €750 in all other cases.
The Rent Tax Credit will, subject to a number of conditions, be broadly available in the following three circumstances:
1. where the claimant makes a qualifying payment in respect of a residential property which he or she uses as his or her principal private residence,
2. where the claimant makes a qualifying payment in respect of a residential property which he or she uses to facilitate his or her attendance at or participation in his or her employment, office holding, trade, profession or an approved course, and
3. where the claimant makes a qualifying payment in respect of a residential property which his or her child uses to facilitate his or her child’s attendance at or participation in an approved course.
236. Deputy Bernard J. Durkan asked the Minister for Finance if investment funds operating or intending to operate here will be brought under the aegis of the Central Bank; and if he will make a statement on the matter. [22986/24]
View answerThe authorisation and broader regulatory requirements applicable to regulated financial service providers operating in Ireland is dependent on the nature of the regulated activities carried out and as such regulated financial service providers may be subject to authorisation and regulatory requirements under different regimes.
The Central Bank of Ireland is responsible for the authorisation and supervision of investment funds established in Ireland. Investment funds are established for the purpose of investing the pooled funds of investors (held as units or shares) in assets in accordance with investment objectives and investment policies published in a prospectus.
There are two main categories of funds authorised by the Central Bank: Undertakings for Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIFs). Further details on the legislation, authorisation process, supervision process, regulatory requirements, guidance and other relevant matters pertaining to regulated funds can be found on the following page of the Central Bank website: www.centralbank.ie/regulation/industry-market-sectors/funds
239. Deputy Bernard J. Durkan asked the Minister for Finance if he remains satisfied that the taxation system in Ireland is sufficiently broadly based to avoid dependency on any one sector to such an extent that it might become a threat to the economy; and if he will make a statement on the matter. [22989/24]
View answerMy Department publishes the Annual Taxation Report each year to provide a structural analysis of the Irish tax system so as to identify emerging fiscal imbalances.
The latest version of the report, published in 2023, examined vulnerabilities in the corporation tax base, highlighting the concentration of this revenue stream amongst both a small number of firms – with over half the corporation tax yield paid by the top ten taxpayers – and in a small number of FDI-related sectors.
This level of concentration presents a clear risk to the sustainability of the public finances. My Department estimates that just under half of this year’s corporation tax take is windfall in nature i.e. is not linked to the domestic economy and could be transient in nature.
I have stated on numerous occasions that we cannot rely on these temporary windfall receipts to fund permanent increases in expenditure. This would result in a repeat of the mistakes of the past.
Government has taken action to mitigate this risk, by publishing legislation to establish two new long-term funds, the Future Ireland Fund and Infrastructure, Climate and Nature Fund, that will enable us to invest windfall receipts to help part-fund the response to the future structural challenges that we know are on the horizon, including an ageing population and the transition to a carbon-neutral economy. This legislation is currently going through the Houses of the Oireachtas.
However, ultimately, the best way to reduce the risk of an overreliance on corporation tax is to keep public expenditure growth at sustainable levels, which will be achieved by following a balanced and sensible budgetary strategy.
240. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which working capital continues to be made available to the farming and business sectors, with particular reference to smaller enterprises; and if he will make a statement on the matter. [22990/24]
View answerAs the Deputy is aware, supporting SMEs and farm borrowers has been a cornerstone policy for Government. It is important that all viable SMEs have access to an adequate amount of credit from various sources. To support SMEs in this regard, the Government has implemented several initiatives to enhance the availability of credit.
In terms of monitoring the working capital requirements for SMEs, my Department commissions annual surveys to ascertain the demand for credit by SMEs. I would draw the Deputy's attention to the most recently published Department of Finance SME Credit Demand Survey, covering the period January to December 2023, which can be found at www.finance.gov.ie.
The results of this survey show that, when pending applications are excluded, 89% of credit applications to banks were approved or partially approved. Working capital/cash flow requirements are provided as the main reason for applying for bank finance with 36% stating this is why they requested bank finance. Expansion requirements were provided as the second highest reason for applying for bank finance with 31% of respondents stating that they required finance for this purpose.
The main reason given for not seeking finance was that that the business had sufficient internal funds (76%). The survey also showed that profitability is up for all company sizes, with medium sized companies reporting the best profit performance. 80% of the medium sized companies reported a profit, up from 76% in the previous wave. Among small sized companies, 75% reported a profit, while 70% of micro companies reported a profit for 2023.
The provision of working capital to the farming and business sectors is a matter for banks and other private lenders in the market. However Government has in place certain measures to enable and support this provision.
The Credit Review Office is available to support SMEs who have had an application for credit of up to €3 million declined or reduced by the participating Irish banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Review also operates an informal “Help Line” service where the Reviewers engage directly with SMEs and farmers who have credit/banking related issues, providing information and updates.
The Strategic Banking Corporation of Ireland, a body under the aegis of my Department, has a key role to play in providing low-cost, flexible, State-backed loans to SMEs, improving their ability to access finance. The SBCI channels its funds through lending partners known as on-lenders, which include banks, credit unions and other entities.
The SBCI’s Ukraine Credit Guarantee Scheme provides low cost finance to fund working capital for SMEs, farmers and fishers affected by the economic consequences of the conflict in Ukraine. These loans can range from €10,000 to €1,000,000, repayable over up to six years, and loans of up to €250,000 do not require a personal guarantee nor collateral.
The Growth and Sustainability Loan Scheme is aimed at supporting SMEs and farmers to grow their businesses and make them more resilient and environmentally sustainable.
Other Government Departments continue to deliver a range of supports to the farming and business communities. In particular, I would like to note that Government has decided to increase the maximum permissible value, from €25,000 to €50,000, for loans from Microfinance Ireland, which lends to businesses that cannot obtain loans from other commercial lenders,
I can assure the Deputy that my Department, working with other relevant Departments and bodies, will continue to advance policies to support Irish SMEs, including farmers, to have sufficient access to finance.
241. Deputy Catherine Murphy asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the amount the OPW has spent to date on the construction of a new public sector data centre; and when this centre will open. [22379/24]
View answerTo date €28,323,757.06 has been spent on the construction of the new Public Sector Data Centre,
This Figure is inclusive of VAT. Substantial completion is scheduled for May 2025.
242. Deputy Paul Kehoe asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the options available for a person or business that wishes to apply for an e-tender but does not meet the minimum €200,000 turnover income threshold for the previous three years; and if he will make a statement on the matter. [22416/24]
View answerIn line with EU and national legislation, the minimum yearly turnover amount shall not exceed twice the estimated contract value, except in duly justified cases. In recognition that the use of high turnover levels as a measure of financial capacity may provide a barrier to the participation of SMEs, contracting authorities are encouraged to consider the risk associated with the contract prior to setting a turnover requirement.
Any supplier with a concern in relation to a live tender process carried out by a public sector contracting body can contact the Tender Advisory Service (TAS). TAS can be used when a supplier has sought answers to their query through the normal clarification process with the contracting authority and where the supplier is not satisfied with the response from the contracting authority. Further information on TAS can be found via the below link:
www.gov.ie/en/service/bd27e-tender-advisory-service/
243. Deputy Marian Harkin asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if there is an indicative list of existing and potential projects that are being considered under the climate and nature fund; and if he will make a statement on the matter. [22482/24]
View answerThe Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024 proposes to establish the Infrastructure, Climate and Nature Fund. This legislation is the responsibility of my colleague, the Minister for Finance. I understand that the Bill passed all stages in Dáil Éireann on 15 May.
It is intended that the ICN Fund will support the economy in times of exceptional need and will be available to support Ireland’s transition to a low carbon economy. A total of €2bn will be invested in the Fund each year from 2024 to 2030 building up to an overall fund of €14bn.
The Fund will support expenditure by the State:
• In any year from 2026, where there has been, or is likely to be in the subsequent year, a significant deterioration in the economic or fiscal position of the State. Up to 25% of the ICN Fund can be used in the given year for this purpose; and
• In the years 2026 to 2030, on designated environmental projects to address climate change issues and nature and water quality degradation. Up to 22.5% of the fund may be drawn down to support designated environmental projects in any given year from 2026 to 2030, up to a cumulative maximum of €3.15bn.
The legislation states that the Minister for Public Expenditure, NDP Delivery and Reform will be required to provide a report to Government by 31 July each year from 2026 to 2030 specifying the total State expenditure on designated environment projects that is estimated to be incurred in that year, and the amount the Minister proposes to be paid from the Fund to the Exchequer up to 22.5% of the net asset value of the Fund in the previous year (to a maximum of €3.15bn).
The intention is that, once the ICN Fund has been established, allocations from the Fund will be carried out in line with the standard Estimates process. My officials will engage with Departments in this regard.
244. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if there are plans to sell the former Dalkey Garda station site; and if he will make a statement on the matter. [22648/24]
View answerI am advised by the Commissioners of Public Works that the Office of Public Works (OPW) like other State bodies, is obliged to follow central Government policies on the disposal of surplus properties including former Garda station properties. The arrangements involved are set out in the following Department of Public Expenditure, NDP Delivery and Reform (DPENDR) Circulars:
• Circular 11/2015: Protocols for the Transfer and Sharing of State Property Assets
• Circular 17/2016: Policy for Property Acquisition and for Disposal of Surplus Property
As a matter of policy, no property is disposed of until there is absolute certainty that there is no alternative State use for that property.
The OPW policy with regard to non-operational (vacant) State property is to:
1. Identify if the property is required/suitable for alternative State use by either Government Departments or the wider public sector.
2. If there is no other State use identified for a property, the OPW will then consider disposing of the property on the open market if and when conditions prevail, in order to generate revenue for the Exchequer.
3. If no State requirement is identified, or if a decision is taken not to dispose of a particular property, the OPW may consider community involvement (subject to a detailed written submission, which would indicate that the community/voluntary group has the means to insure, maintain and manage the property and that there are no ongoing costs for the Exchequer).
In line with the above policy and in accordance with the Department of Public Expenditure, NDP Delivery and Reform Circular: Protocols for the Transfer and Sharing of State Property Assets. (DPENDPR Circular 11/15) the OPW sought alternative State use by offering the property to all relevant State Bodies.
Dún Laoghaire-Rathdown County Council evaluated the properties for their potential to convert into residential accommodation but determined that the cost of refurbishment for this purpose, given the protective nature, would be prohibitive.
The Department of Children, Equality, Disability, Integration and Youth considered the properties under the Department of Housing, Local Government and Heritage funded Refurbishment Programme, managed by the Local Government Management Agency. However, due to the protective nature and cost of refurbishment, funding was not approved.
As no alternative State use has been identified, the OPW is proceeding to dispose of the former Garda station properties.
The former Garda station properties at Tubbermore Road and Sorrento Road, Dalkey are scheduled to be advertised for sale nationally within the next two weeks and will be presented for auction in the last two weeks of June.
