Ceisteanna Eile - Other Questions
174. Deputy John Clendennen asked the Tánaiste and Minister for Finance his long-term strategy for ensuring the sustainability of public finances given the demographic pressures outlined in the Department of Finance's Future Forty: Ireland's Demographic Outlook, which projects an increase in the old-age dependency ratio from 23.1% in 2022 to 55.2% by 2065; and if he will make a statement on the matter. [69735/25]
Amharc ar fhreagra184. Deputy Malcolm Byrne asked the Tánaiste and Minister for Finance the implications of aging demographics as set out in the Future Forty report; and the actions his Department will take as a result. [69523/25]
Amharc ar fhreagraI propose to take Questions Nos. 174 and 184 together.
I thank Deputy Clendennen and I know Deputy Byrne has a similar question. Both Future Forty reports, Ireland's Demographic Outlook and A Fiscal and Economic Outlook to 2065, explore the key drivers of Ireland’s economy and public finances over the next 40 years, on a no-policy change basis. We are often accused of short termism in this place. In fairness to the officials in the Department of Finance who worked on this, this is the antidote to short termism, talking about what Ireland might look like, and not predicting it but actually putting a whole variety of different scenarios - about 2,000 of them - out there. It is really the antidote to short termism, saying, here is what Ireland could look like in 2016 on a no-policy change basis.
Developing realistic projections of Ireland’s future population size and demographic profile is a fundamental step in the broader assessment of the long- term drivers of economic growth. The analysis demonstrates how alternative scenarios for future net migration and fertility rates can affect population and demographic projections.
In Future Forty’s central scenario, the old-age dependency ratio is expected to increase - as the Deputy rightly said - from 23% in 2022 to 55% in 2065. These headwinds are unavoidable. However, even in a high migration, high fertility situation, Future Forty finds that the old age dependency rate may increase to 50% by 2065.
While people are thankfully living longer - this is a good thing, by the way - and living more active lives, the ageing population will have significant fiscal impacts for Ireland as age-related spending, including on healthcare and long-term care, increases in line with this change. It will also put downward pressure on our labour force and therefore could suppress economic growth.
The exact path of our future is uncertain; the risks are tilted to the downside.
However, steps can be taken to mitigate these risks and prepare for the challenges ahead. In fact, in the reading of Future Forty, it looks out for 40 years but its basic, simple message is that we have a decade to take the policy decisions that we need to take collectively to future-proof our country.
The Government has already introduced several policies to respond to these challenges. First, the programme of capital investment under the updated national development plan will support productivity growth, including by crowding in private investment. In addition, continued capitalisation of the Future Ireland Fund and the Infrastructure, Climate and Nature Fund will help to offset some of these future pressures. Finally, the rollout of the pension auto-enrolment scheme, which is a very important, transformational measure, will ensure that all eligible workers, for the first time, have supplementary private pension provision, thereby alleviating pressure on the public finances and helping to improve quality of life in retirement.
The key finding from the analysis is that policy development in the coming decade will have a critical bearing on Ireland's long-term living standards. We will all have different views on what those policies could be but Future Forty provides us with an important evidence base and data that will be useful to all of us in our work. This window of opportunity must be used to improve efficiencies, boost our resilience and implement key structural reforms in order to raise productivity. It is only by implementing policy action on all of these fronts that we can ensure long-term economic, fiscal and environmental sustainability.
My Department, alongside the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation and the Department of the Taoiseach, is committed to developing potential enhancements to better integrate long-term strategic planning more systematically into policymaking. Future Forty will be central to this process.
The report is on a “no policy change” basis. Of course, there will always be policy changes. The question for all of us is whether it is informed, intelligent and evidence-based policy. Crucially, the report looks at the advancement of technology, whether it be AI or other developments, and what that will do to productivity. What will it do in terms of being able to improve our access to healthcare as we age, hopefully with dignity, in our country? Future Forty is a very important piece of work that provides, in a way that I have not seen before in these Houses, a treasure trove of information, data and various scenarios that can help all of us - Government and Opposition - in planning for the future of our economy and society.
I agree with the Tánaiste that long-term forecasting models are very welcome. When we look at some of the measures we have introduced already, like the Future Ireland Fund and saving for days of pressing future financial demands, the question is whether we are doing it at a fast enough pace. Regularly, in this Chamber, we hear negative connotations and associations concerning migration. This report is very clear regarding our dependence on growing our labour force and economy, and who is going to play a vital role in ensuring that materialises. When we see a forecasted increase of 2.5 times in the old-age dependency rate in the next 40 years, it is startling to think of what we will have to do in this space in the coming years. I ask the Tánaiste to commit to publishing a clear, multi-annual demographic and fiscal strategy so we can continue to monitor this on an ongoing annual basis.
This is an incredibly important report, as the Tánaiste said. I welcome the fact that he acknowledges the role of AI and technology, and how it may change our lives. It is worthy of a full debate in the House. Given the statistics we are looking at, by 2041, on current projections, there will be 1.4 million people aged 65 and older, and by 2065, there will be 2 million people aged 65 and older, triple the number at present.
This is of particular interest to the Tánaiste, given he is probably the youngest in the Chamber, so he will have to keep working to fund all of our pensions. The pension issue is certainly something we will need to address. We need to look at how we are designing our communities and societies. It is critical that we engage with older people’s representatives around that. I have asked the Tánaiste before about keeping people healthier as they get older, and the commitments within the programme for Government for tax relief for gym membership, which is critical.
I agree with the Minister on the need to look long-term in the projections. When looking so far ahead, there are huge variances but we need to look beyond one year.
I recall that in his first speech as leader of Fine Gael, the Minister promised that a five-year tax strategy would be published by the end of last year. I cannot find that anywhere. Is it on the Fine Gael website, the Department of Finance website or the Department of the Taoiseach website? Will the Minister outline where that five-year tax strategy is? For the life of me, I cannot find it anywhere.
I thank Deputy Doherty for reminding me. Once we publish the medium-term fiscal framework, which will set out the expenditure trajectory to the end of the decade, it will enable me, in my new role, to look at that.
That is not a tax strategy.
What I can tell the Deputy is that the trajectory of the tax bands for the coming years is what is outlined in the programme for Government. I look forward to debating that with the Deputy in the months and, God willing, years ahead.
I thank Deputy Doherty for acknowledging this. The Future Forty document is not my document or the Deputy’s document. It is genuinely something that we should all embrace. It is produced by very able and informed officials and economic experts in the Department of Finance. It is as much for the Opposition as the Government; it is as much for the Oireachtas as the Executive. It will, no doubt, provide us with a useful debating tool, and hopefully inject, from everybody's perspective, a degree of evidence into all of the things that all of us say in these Houses, which the public rightly expect.
Are we doing it at a fast enough pace? That is a very fair question from Deputy Clendennen. An objective answer is probably “No”. More broadly, there are very significant megatrends, as they call them in the document, coming at us. There are huge opportunities within that, and there are also huge challenges. We have taken a number of important steps, such as the establishment of what could effectively be sovereign wealth funds. The Future Ireland Fund and the Infrastructure, Climate and Nature Fund are important steps, and running budgetary surpluses is helpful. The NDP provides clarity and €275.4 billion of funding out to 2035, and that it runs for longer than the lifetime of this Government is good.
I will come back to the issue of gyms. Deputy Byrne is right regarding what we can do to positively age. We are not powerless when we look at this document. We are all going to get older but we can get older and stay healthy. What can we do from a policy, health service and technology point of view to help make that more of a reality? On the issue of taxes for gyms, we look at all matters in the context of the budget. I would also point out that there are lots of ways you can keep fit out in the fresh air too.
One point in relation to funds is that the strength of deposits in Ireland on a domestic and international basis must be noted. The registration of auto-enrolment on 1 January is a big step forward. It is certainly welcome. Given the objective that it is set to achieve, it is going in the right direction. I have one ask. There is an element of apprehension, particularly among small businesses, about affordability and viability in this space. It is something we will have to monitor very closely in order to protect small businesses. I made the point at committee yesterday that there is now a situation where small businesses on high streets and in small villages are competing with multinational corporations. We need to get the balance right with regard to the demands. Nonetheless, it is definitely a worthwhile initiative. We also need to ensure that people who want to work later in life can do that and be rewarded for it, from a financial need or social well-being perspective. Those are initiatives that we need to look at as well.
I agree with Deputy Clendennen on auto-enrolment. It is essential, but it is important that we take on board the concerns of SMEs.
It is very welcome that we now have life expectancy of 83 in this country. It is a huge success that we are at that point. One of the challenges is that we age healthily. In Singapore, as part of the old age package, admission to community gyms and swimming pools is free for those over 65. There is a commitment in the programme for Government to tax relief for gym membership in order to promote strength training. What is critical is that we ensure that those who are in their 40s and 50s, and then in their 60s, 70s, 80s and 90s, can remain healthy.
It is critical to engage with organisations like the National Older People's Council, and I know Kevin Molloy in my own area is regularly raising issues around this. We need to involve older people in the discussions on these issues as well.
I was certainly not being flippant about the programme for Government commitments. I do not want anyone holding off on staying healthy until future budgets. These are issues that we will, of course, consider in the round, as we always do in advance of the budget.
I was in Millstreet in west Cork recently to visit a community gym that is part-funded through Government grants. It was great to see. I was on the same rowing machine that now-President Connolly had been on when she was campaigning. It is the most famous rowing machine in Ireland because the President was on it, and they are very proud of that fact. It is a great community gym. It is an example of communities working together to create healthy communities and help themselves age in a good way.
Deputies Clendennen and Byrne referred to auto-enrolment. I was talking to the Swedish minister in Brussels the other day.
I think this is something they did in Sweden many decades ago. It is a transformational decision. I accept that it is going to be a little difficult for people. We are asking people and employers to put a little aside at a challenging time, knowing it will create provision for them as they age above and beyond the State pension. The communications campaign is important, making sure everybody knows how it works and the obligations on everybody. I have heard good media engagement on that recently. It is important we keep that up. I am conscious of the pressures on small and medium businesses as I know the Deputy is. There will be different views in this House on this. We have taken a number of measures to try to assist with that, including the 9% VAT rate, the new timeline for the living wage and the decision not to expand the statutory sick scheme further beyond five days. I accept there are different views on those decisions in the House, but they were taken in recognition of the reality that when we have a bright idea in here, we do not always have to pay for it; it is the business that does. Auto-enrolment really needs to happen. As it rolls out, we will continue to engage and listen. We will look back long after we are all gone and say this was a really important moment to protect low-income workers in particular as they age. Future Forty suggests there will be many more low-income workers ageing and living longer, healthier lives in the future.
175. Deputy Richard Boyd Barrett asked the Tánaiste and Minister for Finance if he is satisfied that film producer companies in receipt of the section 481 film tax credit or meeting the test for quality employment and fully vindicating the employment and copyright rights of those working in the film industry; and if he will make a statement on the matter. [69915/25]
Amharc ar fhreagraThere is €125 million a year, I think, or probably higher, in section 481 film tax support for the film producers of this country. You can add in another €20 million or €30 million from Screen Ireland. It is a lot of money; billions over several decades. Is the Minister enforcing - I believe he is not - the quality employment and training condition? It is about guaranteeing decent quality employment and training for the people who work in the industry. In truth, actors are not being looked after in terms of their royalties and are being forced to sign buyout contracts, and crew are not having their rights vindicated. The Minister needs to monitor and police this properly.
I thank Deputy Boyd Barrett for raising this issue. I know it is an issue in which he has taken a keen interest since long before I was in this role. The Deputy and I, along with Deputy Ó Snodaigh, had some engagement on this matter during the Report Stage debate on the Finance Bill. Section 481 of the Taxes Consolidation Act 1997 provides a 32% payable credit for eligible expenditure on film production in Ireland. The scheme is intended to act as a stimulus to indigenous film industry in the State, to create quality employment opportunities and to support the expression of Irish culture.
The provision of quality employment forms part of the application process for the relief, as the Deputy said. Applicant companies are required to sign an undertaking of compliance with all relevant employment legislation. Adjudication of adherence to employment legislation is not within my direct remit as Minister for Finance. Monitoring of compliance with employment rights legislation is primarily a matter for the Department of enterprise through the Workplace Relations Commission. If there are any issues to be raised with regard to the application of employment law, they should be brought to that Department.
In relation to copyright, which is also within the remit of the Department of enterprise, my officials have directly engaged with relevant representative bodies to better understand issues relevant to the audiovisual sector. There are complex legal issues involved but processes are under way to address them. The Deputy will be aware that an independent facilitator was retained by Screen Ireland in 2023 to meet key stakeholders wherein copyright concerns were discussed and identified directly with industry. As a result of this process, stakeholders have agreed interim best practice industry guidelines while pursuing a path towards a collective bargaining agreement. This is a positive step. Several collective bargaining agreements have been reached in the industry in recent years including construction crew and shooting crew agreements. These agreements provide for improved rates of pay, for standardised work practices and for an industry pension scheme. This demonstrates the scope for positive engagement in the industry and the genuine willingness to reach compromises beneficial for both parties.
Regarding terms and conditions for film workers, it is not my place as Minister to dictate to creative professionals what their stance on pay and conditions should be. Rather, this is a decision for the workers themselves and for their unions to seek agreement in negotiations with employer representatives. It is not appropriate for legal rights to be linked only to one set of circumstances regarding tax credits. I want everybody's legal rights to be enforced regardless of the tax credit. It is important to recognise that the laws that underpin both copyright and employment rights apply regardless of whether a company applies for section 48.
The Minister's Department gives out section 481. The idea that he is not responsible for policing the quality employment and training condition is ridiculous. We need joined-up thinking. Everybody is playing pass the parcel - the Department of arts, the Department of finance and the Department of enterprise - and nobody is responsible. Therefore, workers are blacklisted, overworked, stressed and not treated properly. Their rights are not vindicated. Actors, screenwriters and so on are forced to sign buyout contracts which essentially force them to sign away their residuals. If anybody kicks up, they are kicked out of the industry. That is the actuality of the industry. Is the Minister or the Department aware that Screen Guilds of Ireland, which is funded by Screen Ireland, did a survey of people in the film industry in the summer but never published the outcome? Initially, very few people knew about it but when they found out, 800 film workers painted a very unflattering picture of conditions in the film industry. I have it in front of me. I will read excerpts if I get a chance. It was never published or given to the union. Stagehands recently won cases in the High Court. Equity will tell the Minister, despite what he is being told, that their fight against buyout contracts is ongoing because producers are not responding seriously.
I accept the Deputy's point that there are some examples in the sector but it is important to remember there are up to 16,000 people directly or indirectly employed in film, television and animation production in this country, including in the Tánaiste's constituency and in mine. For every €1 invested under section 481, the return to the State is estimated at nearly €4. It is a significant part of our economy. Deputy Boyd Barrett is correct that we need to be concerned about some of the residuals particularly with regard to the impact of artificial intelligence. The joint Oireachtas committee will look at the issue of the impact of AI on the creative industries and the long-term future for actors. This is a vibrant sector. While there are problems, I do not want it to be painted as a widespread phenomenon. There are a lot of really good employers creating incredible work that showcases Ireland nationally and internationally.
Deputy Byrne captured the point I would make. This tax credit has been extraordinarily successful. Deputy Boyd Barrett is not suggesting that it has not. It has created lots of employment and investment and an ecosystem. I happen to live in and represent a county, as does Deputy Byrne, which has benefited significantly from that, as have lots of parts of Ireland. We have seen progress in workers' rights and the enforcement of employment law in relation to this. I referenced a number of collective bargaining agreements. We want to see more. My job is to put in place a tax credit. People sign up and commit to adhering to certain things under the tax credit. I am making the point that those are policed or enforced by the Workplace Relations Commission primarily. There are a number of issues, of which I imagine Deputy Boyd Barrett is aware, before the High Court regarding substantive issues that arose from the Labour Court. I am often asked why we will not mandate PACT-Equity contracts, as used in the UK. They have been offered to Irish workers on a number of productions and they turned it down because the Irish contracts offered better terms.
The Minister is getting his information from producers.
It is from my Department.
On the work of crew, this survey was responded to by 800 workers. Has the Minister or Deputy Byrne seen it? No, because Screen Ireland has seen it but they have not published it because it paints a very unflattering picture. The words used by the film workers include, "Producers' reluctance to give the crew their full needs", "night shoots and rest days that aren't paid properly", "tight schedules", "long hours", "being hired as a trainee when there are no leads or assistants", "overly long work day", "budget constraints", "ageism", "professional development and progression not happening", "grade progression", "stress and hours", "continuity of employment", "pay", "stress" - it goes on. It was suppressed, effectively, because the people who did this survey do not want the Minister or anybody else to know about the outcome. Stagehands are in the High Court which found in their favour that their rights under the fixed-term workers Act are not being vindicated because of the DAC structure being abused by film producers in a way that means workers in the industry can never accumulate rights under fixed-term workers legislation. On buyout contracts, Equity made absolutely clear it wants PACT-Equity agreement. It is compliant with EU legislation. It has said this repeatedly. Whoever is telling the Minister they do not want it is not telling the truth.
I would welcome seeing that and I am sure the Deputy will give me what he has about the survey. I will also raise it through my Department with the Department of culture and Screen Ireland. If there is useful information that provides us with an insight into the industry, I would like to see that. It is important to see it and it should not be suppressed. I share that view. On whoever is giving me the information, the information is from my Department, to be clear. I am told there have been times when an Irish production has used PACT-Equity terms but there have also been cases where actors have been offered terms equivalent to UK PACT-Equity terms and have refused them on the basis of previous Irish contracts offering better terms, in particular on lower budget productions.
I am sharing that with the Deputy for the benefit of the discussion. Ultimately, as the Deputy knows, it is a matter for workers' and employers' representatives to reach agreement.
It is blacklisting.
Ultimately, that is what we should all be trying to foster here. However, I take the issue seriously. I know this sector through my own constituency and I know many people who work in it. I am aware that the ecosystem has benefited. It is a really positive part of the Irish economy and the Irish offering. Many countries would love to have what we have. If there are areas in need of improvement, I will be very happy to consider them and engage further on them.
176. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the engagement he has had with other members of the Government in relation to defective concrete block scheme since taking office, including to ensure that all victims of the defective concrete products scandal are treated as equal citizens and are able to access financial products and services on the same basis as everyone else; and if he will make a statement on the matter. [73164/25]
Amharc ar fhreagraSince taking office, what engagement has the Minister had with his Cabinet colleagues and the Central Bank to ensure all victims of the defective blocks scandal are treated as equal citizens and can access financial products and services on the same basis as everyone else? I ask this because the State's response to this crisis continues to be characterised by unfairness. If you live in Donegal, where I acknowledge the Minister has visited, you will know that families have been failed by the Government in such an unbelievable way. What the families face again this Christmas is horrible. What engagement has Deputy Harris, as Minister for Finance, had with his colleagues or the Central Bank?
I thank the Deputy. On an addendum, he raised with me on Report Stage of the Finance Bill a specific issue in relation to rental properties and their availability in Donegal. I undertook to engage with the Minister for housing on that. I sent him the information from our discussion and I will be engaging with him in January. I am happy to talk to the Deputy further about this.
I am aware that this is a very difficult situation for homeowners. I do not need to tell the Deputy, of all people, about the many homes affected. The current and previous Governments have tried to step up and provide support to many households affected by defective concrete blocks, and this is reflected in the increased funding for the scheme in recent years. As the Deputy is aware, the overall Government response to problems associated with defective concrete blocks is led by my colleague, the Minister for housing. His Department is engaging with impacted households and relevant stakeholders and administering financial supports to help affected homeowners. The Department of housing has engaged with Banking and Payments Federation Ireland, BPFI, to emphasise the need for a fair and consistent approach by the banking sector in supporting customers with distressed mortgage payments caused by defective concrete blocks in their homes. I am due to meet BPFI early in the new year and I too will raise this issue with it.
On the issue of access to financial products and services, the existing consumer protection regulatory framework fully applies to all consumers, including those whose homes are affected by defective concrete blocks. Lenders are strongly encouraged to engage constructively with homeowners affected by defective concrete blocks and assist them where possible in accessing the State redress scheme and remediating their homes. In particular, the Central Bank's consumer protection code requires all regulated entities to act with due skill, care and diligence in the best interests of its customers and without prejudice to the pursuit of their legitimate commercial aims. It does not, through its policies, procedures or work practices, prevent access to basic financial services. I will raise this issue at my next monthly engagement with the Governor of the Central Bank. If the Deputy wants to send me on any specific information in advance of that, I will be happy to consider it.
The banking and insurance focus group is doing tremendous work. In fairness to BPFI, it has really engaged with it and included other organisations such as Insurance Ireland, valuers and so on. The Department of housing has refused to engage with them, which is ridiculous, to tell the truth. They should be part of the working group, as should other Departments. These are very serious people who are working through issues like the mortgageability of houses. Houses remediated through the existing scheme are not mortgageable because the authorities will not sign off on them. The group made up of the parties I have referred to has made a submission on the new standards for defective concrete blocks, raising serious concerns. There are other issues also and they are major.
I welcome what the Minister for Finance said about the Minister for housing, but what is really at the core of this is whether the Minister for Finance actually believes there are people in my constituency and elsewhere who, even with whatever support the State has given, have to find up to €80,000 to build the exact same house that has to be demolished because of defective blocks. If so, how does he feel it is fair?
I believe people. I believe them when I meet them. I believed them when I sat in their kitchens in the Deputy’s constituency and county. They have told me about some of the issues they are still experiencing regarding shortfalls, anomalies or issues with banks. They raised some of those issues with me quite truthfully when I was in Donegal, which I believe, from memory, was during the month of August.
We are trying as a Government to continue to respond and evolve the scheme. We are seeing an increased uptake. That is also factually true. I do not like to hear from the Deputy that a Department is not engaging, because we need to continue to engage on this. The distress, worry and fear are real. There are other issues I have been trying to address through a variety of roles, including in respect of preschool facilities in the Deputy's constituency. There is one in Raphoe, as he will know. It is trying and there has to be a way forward in respect of this. I accept that we need to continue to work and engage on this further. I am pleased to hear that BPFI engagement has been good. I will still list this as an agenda item for my meeting with it in January. I am also happy to discuss the role of Central Bank of Ireland when I meet in January.
BPFI has been engaging for nearly two years now and it has done a huge amount. These are very serious people.
The Minister mentioned the childcare facilities that I have raised with him. There are three childcare facilities that are community run. The Minister has been talking about State-run childcare facilities and all the rest but the three community childcare facilities in question – in Letterkenny, Raphoe and Ardara – are in buildings that are falling down. The one in Raphoe is already gone because the children are not safe in the building. With regard to the other two cases, it is just ticking away. There is no scheme to replace those facilities. Kids and parents depend on them. There are 12 schools in Donegal with buildings that are going to fall down. There are cracks and you can put your hand through some of them. There is no scheme at present, although the Department is going to inspect the buildings.
Over 80 council houses in Donegal that should have families in them this Christmas are lying empty because they have defective blocks. There is no scheme to fix them. There are people going through the scheme but these are the people who have had to find €80,000, €90,000 or €100,000, and in some cases more. There are so many others who simply cannot do this. What does the Minister think is going to happen to them? He might know them. People of pension age have only their pensions. They do not have €70,000 or €80,000 to make up the shortfall. No matter what grant the Government provides, they cannot rebuild their homes under this scheme.
The Minister for housing, Deputy Browne, confirmed for me recently that Fingal County Council will be admitted to the defective concrete block scheme, which is very welcome. However, I need to highlight that a small number of very good, prudent homeowners in Skerries, Lusk and The Naul have already remediated their homes and consequently will not now be eligible to be supported under the scheme. I would very much appreciate it if the Minister for Finance worked with the Minister for housing to ensure those people, who were prudent and put themselves through financial hardship to ensure their homes would be safe and remediated, are not unfairly treated and disadvantaged because Fingal County Council is only now being admitted to the scheme?
Let me reflect on what Deputy Doherty said. While some of this is not within my direct remit, I am a leader in government and am not recused from responsibility. My sense from engaging with people in Donegal and other parts of the country is that the scheme is now working for more people than it was but that there are still some who have significant concerns that they cannot access the scheme, and that there are other areas, beyond privately owned homes, where people are still asking how they will resolve the issue. Up until now, the approach has been for the line Department to work its way through this, but we are going to need to give a more considered response as to how we proceed. Let me reflect on it. I will be happy to engage online or offline on this.
I am pleased to hear that Fingal County Council will now be included in the scheme. That is a source of welcome relief for people in Deputy Boland's county and constituency. I will engage with the Minister, Deputy Browne, on those homeowners in Skerries, Lusk and The Naul who have already remediated their homes. I do not want to make any commitments because I am not across the detail but I will certainly talk to the Minister, Deputy Browne, and revert to Deputy Boland.
I welcome the women from Graiguenamanagh Women's Shed to the Visitors Gallery. I hope they have a lovely visit. I had better crack on now before I get cancelled.
Are they the Chair's people? Hello to them.
I will never be asked to chair again.
177. Deputy Cian O'Callaghan asked the Tánaiste and Minister for Finance the research carried out by his Department into the potential fiscal and housing market impacts of the new tax reliefs for property developers announced as part of budget 2026; and if he will make a statement on the matter. [73179/25]
Amharc ar fhreagra364. Deputy Cian O'Callaghan asked the Tánaiste and Minister for Finance the research carried out by his Department into the potential fiscal and housing market impacts of the new tax reliefs for property developers announced as part of budget 2026; and if he will make a statement on the matter. [69732/25]
Amharc ar fhreagraNow we have two grouped questions again – my favourite. Deputy Cian O'Callaghan has two different questions.
I thank the Chair. I have never been grouped with myself before.
Má chaitheann muid ár súil siar, we will recall that huge economic damage was done by property tax reliefs that were not well designed or indeed well researched.
In relation to recently introduced property tax relief measures, what research and analysis was done in advance? Will the Minister publish that research and analysis and share it with us?
I propose to take Questions Nos. 177 and 364 together.
The Deputy was determined to ask this question because it came in as a priority, regular oral and a written question. I am glad it got tabled because it is an important issue in relation to the expenditure of public money and the impact of that on the delivery of housing. A well-functioning housing market, we can all agree, is crucial to supporting labour mobility, improving competitiveness and ensuring that Ireland remains an attractive location for both domestic and foreign investment into the future. It is key for our people first and foremost.
The newly released national housing plan targets the delivery of 300,000 new homes from 2025 to 2030. High-density housing, such as apartments, will form a significant portion of these, in line with changing demographics and in order to achieve national policies on compact growth aimed at creating more sustainable communities.
The direct answer to the Deputy's question is that a number of reports have been published by my Department, most recently one in June 2024 that looked at the availability, composition and flow of finance for residential development. This report found that there is reasonable access to finance for viable residential developments. However, there are certain segments where viability is challenged and there is constrained access to finance, including funding apartment development for the private market. That was the 2024 anchor. I think that report was published.
The Deputy is also familiar with the recently published Society of Chartered Surveyors Ireland report "The Real Costs of New Apartment Delivery 2025", which came out post the budget. It found that State interventions are playing a critical role in closing the financial viability gap while also noting that affordability remains the key challenge. There is also a Department of housing total development cost survey. The direct straight answer to the Deputy's question is that the two principal reports from an official Department point of view are the Department of Finance report in June 2024 on availability, composition and flow of finance for residential development and the Department of housing total development cost survey.
The Society of Chartered Surveyors Ireland report reveals through detailed case studies that State interventions are helping to bridge the financial viability gap. The analysis shows that, without Government initiatives, just two out of six apartment types are viable, whereas with State interventions five out of six become viable.
Even with record levels of State spending allocated for housing, private capital will also be required to meet our housing needs. As such, it is important to create an environment where we can continue to attract private investment, both domestic and international.
For this reason, budget 2026 contained a number of measures to support the housing sector, and in particular the construction of apartment developments. These include the reduction in VAT on apartments, the enhanced corporation tax deduction for certain apartment construction costs and enhancements to the living city initiative, which encourages people to regenerate and live in historic buildings in the centre of Irish cities and now in five large towns under the national planning framework.
Apartment development at scale will play an important role in meeting our housing targets. However, in recent years we have seen a retrenchment of private capital from the funding and development of apartments because these developments are costly, capital intensive and higher risk. Investment in the private rental sector in Dublin is estimated to have fallen from €2 billion in 2019 to €166 million in 2024.
The measures introduced in budget 2026, in tandem with more structural measures related to areas such as planning, apartment design and infrastructure, are all elements of a whole-of-government approach aiming to improve viability, increase supply and help to create a long-term sustainable housing system that reflects our country's needs.
I am aware that there have been reports on housing, viability, financing and so forth and that there has been research in the area; that was not my question. My question was on the tax measures that were introduced by Government and by the Minister's predecessor as Minister for Finance in the budget on property. What research or analysis was done before those tax measures were decided on? The Parliamentary Budget Office, which is independent, has been highly critical of the Government for introducing measures like that and not producing any evidence, analysis or research to back them up, especially given the damage that has been done in the past with similar measures.
In other countries when there are such massive public subsidies put into different types of housing, it is linked specifically to affordability - it makes housing more affordable. The Government decided not to do that. One of the main reports the Minister cited was something that was published post budget. Did the Government carry out research about these tax measures and if so, will the Minister publish it and share it with us?
I am not aware of any research or information that is not already in the public domain but let me double check. I bring the Deputy back to the political decision we made - and it was a political decision - in relation to recognising that viability is a major issue when it comes to apartment construction. Only a month or two after the budget, and I do not want to reach too much into the data, the initial data is somewhat encouraging. The Society Chartered Surveyors in Ireland which has expertise and certainly independence in this pointed out that there are six categories of apartments and only two of them were viable before Government made a number of interventions and it now believes that five out of six are viable which is a good thing.
It is not just a measure that is going to benefit developers in the private sense - by the way there is nothing wrong with private development and we need a lot more of it - but it will also benefit AHBs. It will reduce the cost of apartments for approved housing bodies which is also a good thing. It will also benefit, for example, people building student accommodation which is also a good thing. I am out of time but I agree with the Deputy on the broader point about the importance of measures being targeted and carefully monitored and I hope I will have a chance to come back in.
As the Tánaiste has said, a political decision was made. We know that there was intense lobbying from the sector for that decision to be made. It appears that there was not any actual research or analysis done in advance on these tax measures by the Department. The Tánaiste is not aware of any and none has been published. The SCSI report that he referenced shows only the top 20% of earners can actually afford to rent an apartment. Not doing that analysis, not doing that research and not tying these measures in with affordability is an absolute flaw. We are surrounded by countries where when they make these kinds of investments and measures, they make housing more affordable. The Government is pursuing policies that increase supply but do not increase affordability. That is a major flaw in what it is doing. Not having researched or analysed it in advance is a major flaw and the Parliamentary Budget Office has called it out on that. Why did the Government not do that? When making these kinds of decisions in future, will the Government commit to do the proper analysis in advance and tie the measures in with affordability which is best practice in other European countries?
All the large building companies and AHBs appeared before the housing committee. They all welcomed the changes and improvements made on the viability of apartment building. Is there any timeline on the legal challenge being brought on the changes to apartment sizes which will affect the delivery of tens of thousands of apartments?
I have heard Deputy O'Callaghan make this point before and he holds a legitimate policy viewpoint on linking this to affordability. My predecessor was clear and I am clear too: this is a viability measure. While I do not have it in front of me, we have seen a very small example of where this measure has led to people building apartments to say that it has reduced the costs. However, it has not been introduced primarily as an affordability measures; it has been introduced primarily as a viability measure. There are other things we try to do on the viability side, such as cost rental, renter's tax credits, etc. That is a broader debate. I do not want to say, nor did I say, that no evidence-based research has been done. We have listened to the market, listened to industry and listened to the people who build apartments. That is an important thing to do in recognising there is a viability issue. There was also the June 2024 Department of Finance report which recognised challenges in this area and the Department of housing total development cost report.
I thank Deputy Carrigy for his question on apartments. I also followed that meeting and it was encouraging to hear many people, including the AHBs, saying this measure would help them. The Deputy is right in saying this is just one of a number of measures; there are also the apartment standards. I do not have a timeline on that but I will see if I can get it and revert to him. The apartment standard changes, the viability measures around the VAT and the clarity around rent protections are three key issues in trying to really stimulate apartment construction.
178. Deputy Peter Roche asked the Tánaiste and Minister for Finance whether his Department has assessed the cumulative impact of rising energy, childcare and housing costs on households that do not qualify for means-tested supports; whether targeted tax credit adjustments are under consideration in future budget preparations; and if he will make a statement on the matter. [73232/25]
Amharc ar fhreagraI am asking this question on behalf of my colleague Deputy Pete Roche who has done an awful lot of work in this area for families in his constituency of Galway East. The question is about what assessment the Department of Finance has carried out of the cumulative increase in costs in things like energy, childcare and housing, and the effect that has on hard-pressed working families. Will that assessment result in any particular policy change, for example, more targeted supports in next year's budget or future budgets?
I thank Deputy Ward for taking this question on behalf of our colleague, Deputy Pete Roche. As part of the budget process, my Department annually conducts distributional analysis to examine the impact of proposed tax and welfare measures on a range of households. Given the variety of ways in which means tests are applied it would not be possible to do such analysis specifically on households that do not qualify for means tested supports.
As in previous budgets, distributional analysis was conducted through the decision-making process for budget 2026 and ex post distributional analysis of the final budget measures was then published on budget day. The analysis finds that all households receive an average boost in their net disposable income of 1.1% as a result of budget 2026.
The budget is also progressive, with low-income households gaining more. The bottom two income cohorts gain 4.9% and 3.8%, respectively. The analysis indicates that budget 2026 reduces the at-risk-of-poverty rate for all households by 1.7% on average. That is not something you hear in this House very often.
As the Deputy will appreciate, in the budget the Government had to make difficult choices to get back to an annual rhythm of budgeting and move beyond one-off measures to being able to deliver permanent, sustainable and targeted measures to assist people. The budget was designed to boost our economic resilience and support workers and growth in their income by investing in jobs and the future. However, with the substantial personal income tax packages implemented over the past four years, the previous Government made significant progress in the context of increasing the entry point to income tax for all income earners and increasing the point at which the higher rate of income tax takes effect. These income tax measures are broadly expected to be in line with wage growth.
Budget 2025 has provided a range of support to individuals, families and businesses. In particular, the rent tax credit has proven to be a very meaningful support for renters. The credit is being extended for a further three years. The ceiling of the second USC rate band is being increased. This will ensure that a full-time worker on the minimum wage who benefits from the increase in the hourly minimum wage will remain outside the highest rates of USC. The 9% VAT on gas and electricity bills, which most opposition parties only budgeted to go to the end of the year or April, will now be in place for several years until the 31 December 2030. There is also a variety of other measures.
I acknowledge what has been done in the budget in respect of this area. I acknowledge particularly the difficulty in balancing the importance of supports without creating inflationary pressure in other areas. I recognise that this has been done in the budget to a large extent. However, in certain schemes where supports are being provided, there are different pressures on families depending on where they live. The supports that are provided are across the board. There is no recognition of the fact that, for example, housing is much more expensive in cities. There is no recognition of the fact that if you are running a childcare facility in my constituency of Dún Laoghaire, your rent will be higher as will the rent paid by your staff. I raised with the Minister for children previously the idea that we might have varied rates according to where they are in the country, but I do not know if that is possible. Has the Department of Finance looked at the possibility of having staggered rates around the country?
It is a very interesting point. This week, the Minister, Deputy Foley, took a very important step forward in publishing the first instalment of the action plan on childcare. That has a number of areas on which she is endeavouring to move including on the issue of staffing and pay but also in trying to provide maximum fee caps starting with lower income families. Next year has to be about publishing a comprehensive plan that gets us from here to the destination envisaged in the programme for Government of €200 per month per child. We know how to do that. What we need to know is how we do it. In addition, we need to make sure the system has enough places and staff. The Deputy made the point that one size does not fit all. There is not a one-size-fits-all model in relation to childcare. The parent has to have choice – that is really important – but even in a country as geographically small as Ireland there can be regional and local differences and providing a system that is flexible enough to understand that will be part of the challenge. Good measures have been taken this year, including the funding in capital for state interventions in some of these and 2026 will see the substantive plan.
I wish the Ceann Comhairle a happy Christmas. I want to raise targeted tax credit adjustments. The budget was significant, with an extra €9.4 billion spent. We got a lot of criticism and many questions were asked. It was suggested that, potentially, we had spent too much. There was a real focus on the part of this Government on supporting the most vulnerable, which is exactly what we did. We put a lot of extra spending in social welfare to really look after people in need, and correctly so. There was also significant capital investment. Is there any way we can look at the next part, namely - and as a previous speaker mentioned - the people who get up early in the morning and how to deal with them? How can the budget benefit families?
Sometimes it is like Goldilocks – too hot, too cold or just right. In every debate I do on finance, whether it is here or the media, the first half is spent saying we spent too much money and the second half is a list of things we on which we should have spent more. The job of the Minister for Finance, the Government and the Oireachtas is to try and get the balance right. The first of five budgets had to be about getting back to a regular pattern of budgeting and being very clear to everybody in this country and everybody who looks at investing here that we intend to continue to run budget surpluses and continue to set money aside into the funds and invest at scale in infrastructure and in respect of the infrastructural pinch points that are holding us back. It was the budget of 9% in many ways - 9% for energy, which was reduced until the end of 2030, for jobs in the hospitality sector and also for stimulating apartment building because that is key to our housing challenge. However, I want to assure Deputies, their constituents and the people of Ireland that I want to get back to a regular budgetary rhythm whereby we can advance the tax measures for middle Ireland outlined in the programme for Government. Subject to being able to run the economy well and keeping things on the straight and narrow, that is exactly the path we will take over the next four budgets.
I agree about having a standard measure that is predictable from year to year, particularly in relation to the tax brackets. However, tax credits is one area in respect of which we could potentially address issues relating to working families. These are the families caught between qualifying for certain grants and not earning enough to be okay on their own. Tax credits, reform of tax credits or giving them advantages in terms of what tax they pay is one area.
Means tests are not keeping up with inflation, and that affects families in the middle ground. They might earn more money, fall outside something that is means tested but not have more purchasing power on foot of inflation.
That is absolutely right. We have to keep the means test under review so they do not become mean. That is why we took a number of steps in the budget, particularly around carers, to make sure more people qualify because, ultimately, we want to phase out the means test. The Department of Social Protection, certainly in the previous Dáil, was working on reviewing the means test. I will seek an update for the Deputy on that.
We live in a country where wage growth is outstripping price growth on average. For the first time in a while, we are seeing wages rising faster than prices. That is much-needed potential relief for families in the months and year ahead after what has been a very constrained and pressurised time in relation to the cost of living.
Regarding tax credits, I am learning in this job not to speculate on every potential measure. Lots of good ideas come up in this House. Tax measures are considered in the context of the annual budget. We have the work of the tax strategy group. I will be asking it to look at a range of issues in advance of the next budget. I will be happy to have feedback from Deputy Ward and other Members on that.
180. Deputy Paul Murphy asked the Tánaiste and Minister for Finance whether, in view of higher inflation than his predecessor predicted prior to the budget, he will bring in an emergency supplementary budget before Christmas to reinstate cost-of-living payments; and if he will make a statement on the matter. [69658/25]
Amharc ar fhreagraThe Tánaiste's predecessor, Paschal Donohoe, said that there was no need for cost-of-living payments in the budget because “inflation has now returned to normal rates”. He said that inflation would be around 2% this year. That is clearly not the case. We have over 4% food price inflation and 3.3% energy price inflation. It is going to be a cold hard Christmas for many people. At this very late stage, I am asking the Tánaiste to bring forward emergency cost-of-living payments.
As stated earlier in relation to my Department’s forecast on inflation, an uptick was anticipated. That was down to what it describes as the base effects. The CSO outlined that the increase in inflation since September is largely accounted for by base effects. As a result, the assessment relating to inflation for next year has not materially changed. That is important to say because I understand that the cost-of-living pressures faced by people are real. They see individual items of inflation and individual reports and they wonder what that means for the year ahead. It is not only my Department and the European Commission. The ESRI has downgraded its inflation forecast for next year as recently as in its report this morning. We are now seeing wages growing faster than prices which should now mean the average worker experiencing real wage gains next year. I know that is much needed.
The Deputy and I will have a different perspective on this, but I would argue that we have endeavoured to provide significant support to households and businesses over the past number of years to help them absorb the worst impact of higher prices. These supports were temporary in nature. They balanced the need to provide assistance to the most vulnerable while avoiding a scenario whereby fiscal policy added to inflationary pressures. I say this for people at home: if the Government decides to spend lots more, it can have an inflationary effect and actually offset the benefit of what we are trying to achieve. As a result, we always have to achieve a balance between increasing investment and moderating the growth in day-to-day spending while avoiding doing anything that involves such a cost that it could create other difficulties for us in the time ahead.
We have taken a number of measures in the budget to try to assist people. The issue of the cost of energy is real and specific for people this winter. More people than ever will qualify for fuel allowance. The rate of the allowance will increase.
For the first time, people on the working family payment will get the fuel allowance as well. We also have a disconnection moratorium in place for the winter period, so nobody should feel the cold in their home this winter. We have supports in place to help those experiencing energy poverty.
The truth is we are going to have the highest inflation rates in two years. They are not back to the extremely high rates we saw before that, but they are high. The whole premise upon which the Government justified not continuing with the cost-of-living payments was that inflation had returned to normal rates. There was a logic set out that has been confounded by reality, yet the Government is sticking with its position of no return of one-off payments.
The Minister knows that the impact of the withdrawal of one-off payments was very hard for the poorer sections of society. As a result of getting rid of the one-off payments, the bottom 10% lost 4.4% of their income. The next 10% lost 3.9%, so there were huge cuts in income and then particularly cruel, savage cuts reserved for disabled people of about €1,400 per year.
I very respectfully make the point that we put in place an extraordinary level of support for people over the past four years. Thank God this country was in a position to do that. We did it at a time of very high inflation. Those measures always had to be temporary. It is always difficult to unwind such measures, but I am crystal clear that if we did not get back to a situation of being able to deliver one regular budget each year, the position would not be fiscally sustainable into the future. It also would not necessarily be a good use of public resources.
Deputy Murphy probably does not need an energy credit this year. I do not mean that personally to him, I mean people in the Oireachtas do not need an energy credit this year. There are people who need assistance with their energy bills this year. We are constantly trying to get that balance right. We did say we are going to move to permanent targeted measures at a time when wages are thankfully growing above prices for the first time in a while.
We did of course keep the Christmas bonus measure in place, which is a one-off double payment that is paid to all those on long-term social welfare payments, including pensioners. Objectively, the budget was a progressive one. The permanent measures introduced in budget 2026 benefited those on lower incomes above and beyond those on higher incomes.
I am sorry to inform Deputy Murphy that we are actually out of time. I thank everyone very much for their co-operation.
