Insurance Industry
1. Deputy Pearse Doherty asked the Minister for Finance the steps he will take to deliver on transparency and affordability in the insurance sector in the context of insurance premiums either remaining too high or increasing, and the pressure this places on households, community organisations and small businesses; and if he will make a statement on the matter. [5417/25]
The question before us relates to the ever-increasing insurance costs that motorists, homeowners, small businesses and sports clubs have to pay. One would think all is good with insurance looking at the programme for Government. Does the Minister accept that there is a fundamental problem with insurance in the State? Does he also accept that premiums are too high and are increasing for many? What is he going to do to bring about a reduction in insurance premiums and ensure affordability? In this new Dáil term, will he stop blocking my Bill that would bring accountability and force insurance companies to show whether they are passing on savings that have been made as a result of reforms introduced in these Houses?
I thank the Deputy for raising this question and for his advocacy in this area over many years. We all have a similar objective, which is to ensure that we have fair insurance premiums for the citizens of the country.
I recognise the concerns felt by many households, community organisations and small businesses across the country about the cost and availability of insurance cover. As the Deputy is aware, neither the Minister for Finance nor the Central Bank of Ireland can intervene in insurance pricing or provision under the EU's Solvency II directive. Notwithstanding this, the programme for Government, Securing Ireland's Future, commits to a range of insurance sector reforms. The publication of a new action plan on insurance reform is a programme for Government commitment. Work is already under way to develop an action plan that will enhance affordability, transparency and competition. This will build on the progress made under the 2020 action plan, which delivered key reforms such as rebalancing the duty of care, reforming the Injuries Resolution Board and introducing new personal injury guidelines. These changes have contributed to a more sustainable market, attracting new competitors like OUTsurance Ireland, Revolut and Fastnet Underwriting and the expansion of coverage to new sectors, including hospitality, SMEs, sports and leisure activities.
Since its establishment in 2020, the Office to Promote Competition in the Insurance Market which I will now chair as part of my ministerial duties, has supported the expansion of insurer risk appetite, creating a more competitive insurance sector. In particular, it helped secure insurance availability in challenging areas such as equestrian activities, the hiring of inflatables and childcare by connecting affected groups with relevant stakeholders.
Since taking up my role, I have commenced a process of engagement with key stakeholders, including Insurance Ireland and major insurers, to ensure reform-driven savings lead to lower premiums and broader coverage.
Transparency in the insurance market remains a key policy focus. The Government's reform agenda also commits to facilitating faster data release from the National Claims Information Database for private motor, employers' liability, public liability and commercial property insurance to enhance market transparency. In this regard, officials will engage with the Central Bank of Ireland to see how to achieve this aim.
The Minister of State is new in the brief but I have heard nothing from him that is new. The one factor that is constant in all of this is that people are being ripped off. Motor insurance has increased by 12% since 2022. I am sure the Minister of State knows all about the increases from having to insure his house. A significant number of people are seeing their insurance premium go up, and not only by €300, €400 or €500. What is happening in the insurance industry is ridiculous.
Insurance brokers argue that it is due to the cost of construction, but the latter has not increased to that level. The profits of this industry are at record highs. They are huge, yet the number of claims and the value of the awards that have been paid through the courts and other bodies are decreasing. What is happening here is the profits of the industry are increasing, the premiums are going up and it is punters - ordinary people - who are suffering. They are looking to the Government for action.
I introduced legislation that would force insurance companies to do what happens in the North and in Britain, which is to give an account of whether they are passing on the savings being made. Why is the Government blocking that legislation? Perhaps as a new Minister of State, Deputy Troy will stop blocking that legislation and allow it to pass.
I share the Deputy's frustration. This is an area in which I invested a lot of time during the lifetime of the previous Government. Many reforms have been introduced. It is regrettable that the level of savings we envisaged for consumers has not transpired. If we look at the CSO consumer price index of December 2024, we can see that motor insurance is 35.5% lower than it was at its peak in July 2016. It is still too high in many cases. Many reforms have been delivered. There is a commitment in the programme for Government regarding an action plan on insurance reform. Work has already commenced in this regard in the context of how we can ensure that the reforms that have been delivered will result in further reductions in premiums and to identify the new reforms that can be initiated to ensure that we have the price transparency for which the Deputy is advocating. We have the same objective, that is, to bring down the cost of insurance.
If we have the same objective, then the Government should allow the legislation that I have drafted to proceed. It passed Second Stage here about three years ago. The Government is stopping that legislation from being passed. All of the major insurance companies here are the same ones that operate in Britain, where they have to account for whether the reduced costs that the changes in the legislation there are supposed to have resulted in have been passed on. If the Minister of State is genuinely sincere in what he says, then let us work on this together.
I would like to hear the Minister of State's view on the Government's position. He will be aware that the Judicial Council has submitted its proposal to the Minister for Justice on an almost 17% increase in the value of awards. That is something which would result in awards going up. What are the Government's views in that regard?
There is no doubt that there have been many changes. I advocated for a large number of them, and we supported all of them. However, one thing we said previously is that we need to get agreement from the insurance industry about what this would mean for premiums. Industry representatives came before the finance committee and told us that if we did not see reductions of 20%, we would need to ask serious questions. There have been no reductions of 20%. Motor insurance has gone up by 12% and the cost of household insurance has gone through the roof. Public liability for sports clubs and businesses never decreased.
I thank the Deputy.
I am asking the serious questions. I am asking the Minister of State if he is asking serious questions, and if he will stop blocking my legislation.
I am asking the serious questions. I have already initiated meetings with all the insurance companies. I have met one already and I will be meeting the remainder of them in the coming weeks. I will forcefully impress upon them our expectation that they do need to pass on savings, based on the reforms that have been initiated. We want to see a further reduction in consumer premiums. Premiums remain high in many cases, but the Deputy fails to acknowledge that in some instances people who were not getting insurance previously are now getting premiums. New competition has entered the market. Those operating in areas such as equestrian sports, the inflatables industry and children's play areas who did not get insurance in the past are now getting it. Progress has been made, although I accept that it is not enough. That is the reason for the very strong commitment in the programme for Government to continue to build on the progress to ensure that we can bring down the cost of insurance.
I thank the Minister of State.
I will engage with my officials in the Department and review Deputy Doherty's Bill again. Quite honestly, what I am being told by the officials is that there is duplication and that some of the work involved has already been done. We can most certainly look at it again, however. I am happy to engage with Deputy Doherty to see how we can bring down the cost of insurance because we are all singing from the same hymn sheet in respect of this matter.
Trade Sanctions
2. Deputy Catherine Connolly asked the Minister for Finance the analysis undertaken to establish the impact that proposed US tariffs on the EU would have on Ireland; and if he will make a statement on the matter. [4897/25]
Baineann an cheist le taraifí agus an rud atá beartaithe ag na Stáit Aontaithe don Aontas Eorpach, Éire go háirithe.
My question relates specifically to the tariffs. What analysis has been done on the impact of the proposed tariffs on the EU, given that Ireland, within the Union, is uniquely exposed, and in light of the policies we have adopted and our stance on Gaza. I realise things are changing by the minute regarding tariffs; they are promised and then not promised. What analysis has been done?
My Department, like finance Ministries elsewhere, is assessing the potential impact of tariffs on our economy. The assessment of our economic outlook, which will incorporate the latest developments in the global economy, will be set out in the spring forecast, which will be published in April.
From an economic perspective, the US is our largest bilateral trading and investment partner. In 2023, the latest year for which data are available, Ireland recorded a goods-trade surplus of €50 billion with the US. On the other hand, it ran a services trade deficit of €134 billion with the US across that year. As a result, Ireland recorded an overall trade deficit of €84 billion with the US.
The Government has taken careful note of President Trump's decisions in respect of tariffs in recent days and the agreement to postpone tariffs on Mexico and Canada by 30 days. We regret the imposition of tariffs. Our view is that they create economic disruption and drive up inflation, damaging those on all sides.
Moreover, it is clear that the global economic landscape is changing quickly and the new normal we are about to move into will be very different from what we have had in recent decades. Our economy has benefited enormously from the global economy getting closer. As a major beneficiary from these positive dynamics, the Irish economy is exposed to any potential reversal in global trade. From a policy perspective, the best way to respond to these trends is to focus on those policy decisions that we can control and influence. That is why our competitiveness is so important and why investing in our future remains essential.
The figures on our trade with the US, including our exports there, are something else, not to mention the figures on the services we import, which are even double those figures. The figure I have for exports to the US in 2024 is €103 billion. I am not arguing over figures at all; the enormity of the figures speaks for itself. My question is on the analysis that has been done by the Minister. He is saying it has been undertaken and that the results will be published in the economic outlook in April. I would have thought we would have been considering this more acutely now, given that what we are talking about what happened before – in 2019, I believe – when tariffs were introduced and subsequently suspended by Mr. Biden. What did we learn from that?
I agree with the Minister that our policy has brought enormous benefit to the country. However, we have been warned repeatedly that we are in serious danger of relying on a small few companies bringing in a substantial amount of tax. For a long time, we have been under pressure in respect of developing a different type of policy. Extending our policy might be better.
As I said to the Deputy, the analysis with regard to this is under way. Owing to the uncertain environment we are in, it is appropriate that a number of weeks be taken to do this work. That work will be concluded and published in April.
On the imposition of tariffs under the first President Trump Administration, two learnings emerged. First, the EU did respond. The EU has indicated it will respond again in a firm and proportional way. Second, we did see across the period in question that the trading relationship and the flow of goods and services between the US and the EU continued to be strong and, I believe, to benefit both sides of the Atlantic. It remains to be seen whether that is possible in the future.
On the point the Deputy made about our reliance on corporate tax, our reliance is why I have made the case for running budget surpluses and why we have set aside money in our two reserve funds. Maybe the Deputy might clarify her position on running budget surpluses and putting money into these funds. The question of reliance is why measures such as broadening our tax base through the changes we are making in carbon taxation continue to be essential.
I would be delighted to clarify my views on anything if I had a little more time. Specifically on the question, I am asking the Minister what analysis has been done and he is clarifying he is undertaking it and that it will be published in April. I understand the dilemma because there might be no tariffs tomorrow and it is all changing. We are dealing with a bully here.
I asked about the exposure of Ireland specifically. It is exposed for many reasons. One is that we are utterly reliant on one type of policy and approach. This has brought wealth to the country, but for a long time we have been warned that we must examine that, develop indigenous industry and consider other sources of employment. That is the part I am concerned about in the first instance.
I am also very concerned that our stand on Palestine, which I am proud of and which reflects the Minister’s words, will be used in this. We are setting up a consultative forum and an advisory panel because industry in America will have a major influence on policy. I do not expect the Minister to answer my question in the minute available, but I am anxious that we remain an independent, sovereign State and diversify our employment.
The Deputy put a set of questions to me and I answered them. She wanted to know whether we are particularly exposed to changes happening in global trade, and I said we are and outlined why. She asked if there is an analysis under way to consider risks we face. I confirmed there is, told the Deputy when it would be complete and told her how it would be published. That work is all under way.
On the challenges we face because of potential shocks to global trade and what they could mean to our economy, we do have a very strong pillar in our economy created by foreign direct investment. We also have a thriving domestic economy, a non-traded economy, and a food sector that continues to bring great benefits to our society and economy. We will continue to support those pillars of our economy as well.
We are facing uncertain times, and on that I very much agree with the Deputy, but I do not see the magnitude of the uncertainty posing a threat to our sovereignty, as the Deputy has suggested. However, we will have choices and decisions to make.
Tax Reliefs
3. Deputy Pearse Doherty asked the Minister for Finance if he will deliver on election campaign promises to reduce the VAT rate for the hospitality sector in advance of the budget in October 2026, in recognition of the difficulties faced by many small businesses in the hospitality sector; and if he will make a statement on the matter. [5418/25]
This is about the reduction of the VAT rate for the hospitality sector. The Minister will be well aware that Sinn Féin was the only party to call for the 9% VAT rate for the hospitality sector in the general election. The Minister campaigned for a rate of 11%, and Fianna Fáil wished to keep the higher rate. There is a commitment in the programme for Government to reduce the rate. It has been reported that it will be 9% but the programme for Government is vague on the percentage. Can the Minister confirm the Government’s position? Will the rate be 9%? When will it come into effect? Will it be in effect before the summer, on budget day or 1 January?
As the Deputy will be aware, in making any decisions on VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework.
The programme for Government is clear. It commits us to introducing measures to support SMEs, in particular in the retail and hospitality sectors. It acknowledges the increased cost pressures on these sectors and states that this will entail changes to VAT, PRSI and other measures. The programme makes it clear that these measures will be implemented as part of the normal budget process. This process will consider the timing of any VAT change as well as its scope.
The Government is very conscious of the pressures faced by businesses in the hospitality sector, and that is why we provided for a 9% VAT rate from 1 November 2020 to 31 August 2023, at a cost of over €1.3 billion. It is also why we introduced other measures, such as the increased cost of business grant and the power up grant. I wish to reaffirm, given that it is included in the programme for Government, that any such changes are matters for the budgetary process and will be dealt with on budget day.
Can the Minister offer clarification to the House and, more importantly, to the thousands of businesses across the State and the 130,000 people dependent on jobs in the hospitality sector? That sector is under pressure. We have seen 700 businesses close down since the Government increased the VAT rate to 13.5%. According to CSO employment figures released in June, the hospitality sector saw the largest drop of any sector, namely 0.9%.
Is there a reason the Minister is not committing to a rate of 9%? Everybody believes that the rate will be 9%. Is he not doing that just because it is tradition to do it on budget day or is there a question mark over whether it could still be the 11% he advocated during the general election campaign? Is it still up for debate? That is the first question.
The Minister made a commitment and recognised that there was a need to do this within the first 100 days of the Government being in office. Does he still believe that? We strongly believe that this should be done before the summer. If it does not happen then, when will it happen? Reference to the budget can mean something happening on budget night or on 1 January. What sectors will be included?
I absolutely appreciate the value of the 9% hospitality rate and the help it can offer to the hospitality sector. I understand that 9% is the rate that can have the biggest effect.
The timing of this relates to the fact that it will be a significant move. If a move is made - and my view is that when we decide the scope of that move, it should be concentrated on the food and catering sector - its overall cost in a full year will be €675 million. That is a very big decision to make. Decisions of that scale should be confined to budget day. In recent years we have had to make many significant decisions outside of the normal budgetary process. Doing that is no longer appropriate in the context of where we are now because of all the risks around us.
I understand the value of the 9% rate. My view is that it should be concentrated on those parts of the economy where it can deliver the biggest benefit. Because of the scope and scale, however, it needs to be a decision that is made on budget day.
I am very concerned about what the Minister just said. I say that because I have been in premises and spoken with hoteliers and restaurateurs. They opened up their books to me in some cases. They are expecting a reduction to 9%. They are talking to their accountants and figuring whether they can hang on. They are also talking in some cases to their bank managers. The Government was saying it would be 9%. It is not clear now whether it will be 9%. Is there a reason the Minister is not saying what everybody else said after the programme for Government was agreed? The number is not in the programme for Government. That is why I am asking the Minister the question. Can he give any comfort to people expecting a 9% rate and engaging with their bank managers and accountants on that basis that this will be the rate?
There are others, outside of the accommodation sector, such as the hospitality sector, the events industry, cinemas and so on, who were looking for this. Can the Minister clarify whether this will apply to them or is he of the view that it relates solely to hotels and catering?
I ask the question for the third time: will this take effect on budget night or on 1 January? This is important information for businesses thinking of whether they can hang on.
I understand the value of the 9% VAT rate. It is my intention to be able to deliver such a move, but such a move would entail a significant cost, which is why it needs to be part of the overall budget process. As to what that VAT rate will be applicable to, my view is that it can have the biggest impact on food and catering, as I made clear in my earliest answer to the Deputy. The expansion beyond that would entail additional significant cost, and it is because of all this that we need to make those decisions as part of the normal budgetary process. We cannot be spending hundreds of millions of euro and even more outside of the normal budgetary decisions we make because of the risk and the uncertainties around us. I want to confirm what my intention is as regards the VAT rate but indicate that this decision should be taken on budget day. Because it will be taken on budget day, any effects will be felt in the following year, from 1 January.
Exchequer Returns
4. Deputy Peadar Tóibín asked the Minister for Finance if he will outline Exchequer returns and tax receipts for January 2025; and the reason they have increased since this time last year. [5104/25]
Ireland is the most exposed country in Europe as regards the potential changes in tariffs and corporation taxes with the United States. We are enormously exposed. Our dependence on a bargain-basement corporation tax economy which has been built up by the Government over the past ten years means we are now under significant threat. What actions is the Minister taking to engage with the US Government on the tariff issue and the corporation tax issue?
That is not the question the Deputy put to me. The question he put to me-----
It is related.
No. Let us be clear. The question the Deputy put to me, which is the question I will answer initially - I will go on to clarify - reads: "To ask the Minister for Finance if he will outline Exchequer returns and tax receipts for January 2025 ... " That is the question that was put to me, and I will answer it. I am happy then to elaborate beyond that on the further points the Deputy has made.
The Exchequer returns that were published last week show a broad continuation of trends observed over the course of the past few years, with the public finances - at least in headline terms - in a relatively healthy position. Tax revenues of €8.4 billion were collected in January, 7.2% up on the same month last year. When one-off revenues arising from the Court of Justice of the European Union ruling of 10 September 2024 are included, our tax revenues in January amounted to over €10 billion. Income tax and VAT recorded steady growth in January, signalling the overall strength of our economy.
On the other side of the equation, total gross voted expenditure to the end of January amounted to €9.2 billion, an increase of 22.7% on the same month a year ago. Taking into account other factors such as non-tax revenue and non-voted expenditure, an underlying surplus of €1.8 billion was recorded for January. This rises to €3.6 billion if the Court of Justice of the European Union receipts are included. This is not a source of complacency. Much of the budget surplus at present reflects the strength of corporation tax revenues, which are heavily concentrated among a small number of firms and sectors.
For 2023, income tax was roughly €33 billion, corporation tax was the next largest, at €24 billion, and VAT came in at about €20 billion. Those figures and the figures the Minister has just outlined show that there is a significant exposure for this country. Because of the potential changes with the US Administration, we could be looking at significant job losses, significant corporation tax losses and a significant fall in income taxes in this country, as well as austerity being brought into place because of the lack of taxation within the budgets to be able to pay for the services that have been built up over recent decades. What actions is the Minister taking with the US Administration to make sure that those tax bases do not evaporate over the next while?
The Deputy has been against every attempt to broaden the tax base. He is against all our attempts to do that. He is against carbon tax. He is against local property tax. I ask him not to stand up here and point out to me the dangers of a narrow tax base when he is against any efforts to widen it. He has been against our running budget surpluses, which are in place to deal with the very kinds of risks that could materialise. While we have increased public expenditure in recent years to respond to the many challenges we have faced and the many needs within our society, we, and I in particular, have also made the case for running budget surpluses to give us the flexibility for what the future could bring. The Deputy has been against doing that. I ask him not to stand up here now, newly aware of the risks in the world economy, and point out to me what we should have done in the past when he has been against doing it.
We will engage with the US as members of the European Union in our meeting of finance ministers in Brussels on Monday and Tuesday, when we will consider this issue further.
Foreign direct investment, FDI, is considered a transitional economic policy. It is usually developed from a non-developed economy to try to get into a developed system. When that economy has developed to a good stage, most economies then try to develop indigenous economy because it is usually much stickier and less mobile as regards threats internationally. Obviously, they use strong indigenous economy and a decent FDI input. This country has never moved on from FDI in terms of its economic policy and, therefore, has left itself significantly exposed.
The Minister's Government continues to do that by not ensuring we have a strong indigenous economy. I have argued in this Chamber and committees for years that Fine Gael should want to collect more corporation tax instead of the bargain basement corporation taxes the Minister's party stood for for a long time. What actions is the Government taking now and is it going to completely outsource its actions to the European Union-----
I thank the Deputy and call the Minister to conclude.
-----given Ireland is the most exposed country in Europe?
We got a real insight into the thinking of Deputy Tóibín and Aontú there. He characterised foreign direct investment as transitional investment in jobs. Is he going to tell the people who work for the semiconductor sector here that their jobs are transitional?
They are transitional because the Government has made them transitional.
When he leaves Leinster House later, is he going to go down to the docks on the north side and the south side-----
That is not what I am saying and the Minister knows that.
It is what he is saying.
It is not. The Minister is being facetious now.
A moment ago he described that investment as transitional investment. I invite him to visit our life science sector, which is located across the length and breadth of Ireland-----
The Government has made us dependent upon it-----
-----to go down to the financial services sector------
-----by not progressing it to the next stage and developing it.
-----to go into the manufacturing jobs-----
That is the point I am trying to make-----
-----that are located in his constituency and near it.
-----and the Minister knows that.
He should walk into those workplaces and tell those people that their jobs are transitional.
The Minister is being incredibly cynical.
We got an insight into the thinking of Aontú there. The Deputy went on to say we are outsourcing our sovereignty. That is the thinking of the 1950s and 1960s. It is not the thinking that has enabled this country to grow its prosperity. It is not the approach that will help us navigate our way through the challenges that are there.
International Agreements
5. Deputy Pearse Doherty asked the Minister for Finance to outline the implications for Ireland of the recent decision by the new US Administration to withdraw from the OECD Global Tax Deal, making specific reference to both pillars of the agreement; and if he will make a statement on the matter. [5419/25]
This question is on the OECD pillar 2. Obviously, for those of us who support the OECD process and the outcomes of that the decision by the American Administration to withdraw from it has caused serious questions about the implementation not only of pillar 1, which was stalled, but also the practicality of pillar 2. As this is transposed into domestic legislation it includes the provision of the undertaxed profits rule, UTPR, which could potentially see this State applying top-up tax to American companies. It was really never the intention for a major economic powerhouse to not be part of this, so I am asking where we need to go with this and what are the early considerations from the Department.
I thank the Deputy for his question on this very important topic. At least he has a recognition of the value of organisations like the OECD. As to where we are, as the Deputy outlined Ireland signed up to a global tax deal. We did so in October 2021, as he is aware. That was part of an overall inclusive framework on base erosion and profit shifting as part of the G20 and OECD agreement. Ireland signed up to this as a pragmatic and sensible approach to address global uncertainty and provide the positive conditions and long-term certainty for businesses and investors to prosper and grow.
Pillar 1 is a package comprised of amount A, which will see an allocation of taxing rights to market jurisdictions, and amount B, which will see a simplification of transfer pricing rules. Technical work on pillar 1 is well advanced, but there are a number of outstanding issues on amount B that have led to the emergence of a political impasse on the package as a whole. The implementation of pillar 2 of the agreement is more advanced. That refers to the minimum effective tax rate, which the Deputy is aware of. We have implemented this along with major economies such as Japan, the UK, South Korea, Canada and Australia and many of the other economies within the European Union through the minimum effective tax directive.
I note the decision of the US Administration in relation to the OECD agreement and the presidential memorandum issued on 20 January. This is of course a regrettable decision, but opportunities exist to engage with the new administration to explore a path forward. The Deputy asked how we will do that. The best framework for doing that continues to be inside the OECD. I very much hope President Trump's Administration can see the benefits of an organisation like that which contains so many developed economies across the world. The second, very brief, point is we should continue to strengthen our participation in the OECD through the work of the European Union. These are the kind of issues we will be discussing in Brussels on Tuesday in particular.
I thank the Minister. I am going to park pillar 1 because it never came into effect anyway and we have not transposed it into legislation. If we look at it from a financial point of view it was not in our interests and if we look at it from a global point of view it was good to have an agreement internationally.
Pillar 2 is a serious problem for us because it is now in our domestic law and companies are preparing for the 15% minimum effective tax rate, which I completely and utterly support. Those companies are probably asking whether that tax rate is going to apply and can this deal go ahead without American involvement. I agree with the Minister’s point we need to try to bring America back into the fold and discuss this, but my question is whether he or the Department are looking at that legislation and how it would apply if America stays with its current position. Our legislation means this State will potentially have to collect taxes from American companies that never operated here and never employed anybody here just because they have a subsidiary here. That is a serious problem for this deal. The interest is to get the Americans back in to discuss and negotiate this but if that does not happen what preparations are we making and what is the timeframe we need to deal with?
Our intent very much is to engage with the United States with a view to making the case to it for continued participation in the OECD framework. That is the outcome we will seek to achieve. I fully acknowledge the difficulties that will be there with regard to that given what President Trump and the Department of the Treasury have already indicated. Are we looking at what the consequences of other outcomes could be? We are considering that, but I must be frank with the Deputy that it is very early days in terms of trying to be clear what the United States may well do. Given we are going to be involved in a very important engagement with it, it is important for me to emphasise the value of the US being in this framework. The Deputy is correct that because this is an agreement that is implemented on a per-jurisdiction basis and we have a commitment that is now in our law to implement the 15% rate that will of course have consequences for companies that are inside the framework and indeed for competitiveness as well. I will update the Dáil and answer questions from Members on this issue as it unfolds, but given the uncertainty about it that is the strongest message I can deliver at the moment.
I thank the Minister. I agree it is early days and we will have to see. President Trump has made statements that seem to be a negotiation stance, so we definitely need to have those engagements at a European level and a domestic level to see how this will play out. Obviously pillar 1 and pillar 2 had a net reduction in our corporation tax. The implementation of those reduced the corporation tax the State would bring in and therefore the non-application of it would have the reverse effect, but there could be other consequences.
The United States Administration has also threatened to use section 891, which allows for the executive authority to deal with discriminatory extraterritorial taxes if it believes a jurisdiction is impacting on American multinationals moreso than anywhere else. Given the dependence on American multinationals here and the number of them that will be paying the 15% tax rate compared with others, is there any concern about this measure being used against Ireland? What engagement have we had with the US Administration up to now at a domestic level, as opposed to a European level, which is also important?
Any engagement with the new US Administration has been constrained by the fact that it is only making appointments at the moment. That has been the key issue. The new Secretary of the Treasury had his appointment ratified a number of weeks ago.
Many of the other officeholders within the US Treasury, however, with whom both we and Europe will deal, are in the very early days of coming into office. I expect there will be engagement between ourselves and the US in the weeks and months ahead. There will of course be engagement at an EU-US level, in which we will be involved. The Deputy asked whether there would be consequences for us if America were to take certain actions as a result of the implementation of this agreement. The answer to that question is "Yes." Overall, if America continues to see the merit - and I believe it will - in the value of strong exports on its economy in a stable tax environment in the world, I will make the case to it that it is also in its interest. In the early days of this process, making the case for the OECD and for a stable tax framework is an essential message for governments like ours to deliver.
Gabhaim buíochas leis an Aire. Bogfaidh muid ar aghaidh anois go dtí Ceisteanna Eile.
Departmental Functions
61. Deputy Mairéad Farrell asked the Minister for Public Expenditure, National Development Plan Delivery and Reform his plans to improve the quality of infrastructure in the west of Ireland; and if he will make a statement on the matter. [5052/25]
Tá sé feicthe againn le coicís anois cé chomh dona is atá an buninfreastuchtúr san iarthar agus i leithéidí Chonamara. We have seen the lack of good quality infrastructure across the west, and particularly in Connemara, over the past two weeks. The Minister has responsibility for infrastructure. What are his plans are to improve the quality of infrastructure in the west?
As Minister for public expenditure, I am responsible for setting the overall capital allocations across Departments and for monitoring monthly expenditure at departmental level. Responsibility for the management and delivery of individual investment projects or sectoral policy strategies, within the allocations agreed under the national development plan, NDP, rests with the individual sponsoring Department in each case. Each Minister is also responsible for deciding on the priority programmes and projects, which they can bring to Government. That will be delivered under their remit within the national development plan and for setting out the timelines for delivery. Expenditure is, therefore, allocated and monitored on a departmental basis.
In budget 2025, almost €15 billion was made available from the Exchequer for investment in public capital projects, along with €3 billion in funds from the sale of the State's shareholding in AIB in June 2024. This level of expenditure is pivotal in consolidating the progress already made and in supporting balanced regional development to address key infrastructural bottlenecks more rapidly, and lead to further improvements in living standards and competitiveness.
Additionally, the recently agreed programme for Government sets out that the Government will prioritise an early review of the NDP, which will be completed in July 2025. The review of this will encompass all public capital investment and will utilise State funds to support increased capital investment levels, including in the west which is centrally important to overall infrastructure development.
This review will build on recent actions to improve delivery, including the publication of infrastructure guidance which replaced the public spending code on 1 January 2024. These set the value-for-money guidance for evaluating, planning and managing Exchequer-funded capital projects. It is a significant policy development that allows Departments greater freedom to pursue the delivery of their priority projects. It is also intended to ensure quality delivery can be achieved by agencies without causing undue delays which may impact on projects costs and timelines.
I have information on the north west and the west in terms of overall data on infrastructure to which I can return in my next contribution.
Mar gheall go raibh an tAire ina Aire Stáit le freagracht as an nGaeltacht, tá a fhios agam go dtuigeann sé go maith an easpa infreastruchtúir atá i gConamara. I know, from the Deputy Chambers' time as Minister of State for the Gaeltacht, he travelled around the Gaeltacht areas. He travelled extensively around Connemara. That gives the Minister good insight as to the real issues in terms of that basic infrastructure piece in Connemara.
People have now been almost two weeks without access to telecommunications. They are being told that they do not even have a date as to when their broadband and telephone lines will be restored. That is ridiculous. This is not the first time it has happened. It also happened in November. It happened for two to three weeks in parts of Connemara as well.
What I want to see, and what I hope the Minister will take seriously - I think he will - is investment in buninfreastuchtúr or basic infrastructure, that is, the telephone poles, the masts, etc. Serious investment is needed. It will take a long time. Such investment will give rise to a longer term gain, but we need to have a plan in place. Will the Minister be putting a plan in place for that?
From my previous role as Minister of State for the Gaeltacht, I am aware of the absolute need for infrastructure development to unlock economic development in the Gaeltacht region in the context of jobs, etc. I am aware of the difficulties that have been experienced by many residents as a result of the recent storm and, indeed, other storms during the winter period.
There has been ongoing engagement across Government on the consequences and on how some of the communications networks collapsed or were seriously impacted upon. The Minister, Deputy Calleary, has been engaging on that matter. Separately, we are aware of the need to ensure that there is greater resilience across the infrastructure network from an energy perspective - the Minister, Deputy O'Brien, is co-ordinating in that regard - and our communications networks. Building greater resilience among communications and emergency networks is central for the future, particularly in light of emerging and changing weather patterns. We must also ensure that we have continued investment in the road and public transport networks. This will be the subject of a new ambition and focus on the part of Government in the context of the NDP review and the need to give an uplift to investment for the west and the north west.
I thank the Minister. The review of the NDP is something I will contribute to.
I hear what the Minister is saying. We need investment in roads. We need investment in public transport as well across the areas in question. When I am talking about basic infrastructure, I mean those 38 KV lines and the lines that run directly into people's homes. Everything is crumbling. If the Minister travels across Connemara, he will see poles split in half. From when the original damage happened in November, there are still lines lying across the ground that have not been fixed. There is a massive amount of work that needs to be done, specifically in respect of simple things such as replacing or repairing poles. There are things that we need to look at.
With the weather changing, things will become increasingly difficult. During Storm Darragh, what happened was that some of the poles fell and some of the wires fell also. It was just a little bit of snow. It was not a horrendous amount, but it managed to stop all telecommunications for a two-week period. Can the Minister, who sits at Cabinet, prioritise ensuring that there is an investigation into why the 999 call system was not working and that this does not happen again?
I thank the Deputy. As already stated, the Minister, Deputy Calleary, is engaging directly in respect of communications infrastructure and on the need to ensure greater resilience in our communications networks. That is something that is being pursued. Similarly, when it comes to our energy infrastructure, the Minister, Deputy O'Brien, is directly engaging with the semi-State agencies and the regulators in order that we can build greater resilience into that infrastructure.
I am aware that concerns have been raised with TETRA Ireland. The particular consequences there were most acute in the direct aftermath of the storm. Officials in my Department have been engaging on that. I can send the Deputy a note on that specific matter. How that particular communications infrastructure was affected during the storm is a matter of concern to many people in the west and north west, particularly as certain people were put at risk. I acknowledge that this needs to be corrected for the future.
Departmental Projects
62. Deputy Ged Nash asked the Minister for Public Expenditure, National Development Plan Delivery and Reform how he plans to ensure that the OPW and its structures deliver best value for money outcomes on all projects; the timeline for the completion of any proposed reforms in this area; and if he will make a statement on the matter. [5404/25]
I welcome the Minister of State, Deputy Moran, back to the Dáil and congratulate him on his appointment. I look forward to working with the Minister of State in order to hold him to account but also to ensure progress in his Department in the context of what is an important role.
There is reference in the programme for Government to ensuring that "the Office of Public Works (OPW) and its structures deliver best value for money outcomes on all projects". Will the Minister of State indicate precisely what he means by that and a timeframe for the completion of that project?
I thank the Deputy for his kind words. The OPW has responsibility on behalf of the State for managing and maintaining a substantial and complex estate - comprising approximately 2,500 properties - including office buildings, Garda properties, heritage properties, visitor centres and national monuments. The OPW also has responsibility for the funding and delivery of flood relief projects across the country and works with local authorities on the delivery of these schemes.
The OPW endeavours to ensure best value for money outcomes on all projects under its management. All contracts are subject to approval, monitoring and audit to ensure that value for money is being achieved throughout the procurement and delivery process. The OPW follows public procurement best practice in respect of the large spend under its remit. This includes the use of the Office of Government Procurement framework agreements, as well as establishing its own frameworks to achieve the most economic outcomes for the delivery of cost savings. These are advertised in eTenders.ie, following the public spending code, infrastructure guidelines to ensure the necessary project appraisals are conducted.
In order to address the concerns raised on the delivery of the covered bicycle shelter project in Leinster House, the OPW is finalising guidance for its staff on the approval and oversight of capital projects where the total expected expenditure is anticipated to be less than €500,000. This guidance covers the decision-making processes and the documentation required to inform supporting these decisions. The purpose of this guidance is to support efficient project delivery, within budget, in alignment with OPW’s strategic objectives and in support of programme for Government priorities. This guidance will further enhance effective and timely management, adhering to governance and compliance standards to support the oversight of these projects. The guidance will be regularly reviewed to ensure its relevance and alignment with OPW’s evolving needs. I am advised that the guidance will be finalised and in place within the next four to five weeks.
I thank the Minister of State. We know, and I will not recount, the different overspends around OPW projects that have been interrogated by the media, and indeed in this House, during the last period.
The OPW is a very proud organisation with a long track record of achievement throughout the entirety of the history of the State. I do not want to see the OPW, its staff and the work it does to become a watchword for waste. There has been a fair degree of opportunism about various projects around these Houses, quite frankly. That being said, that is not to say the criticisms were wrong. Accountability is important when it comes to public expenditure.
I note the Minister of State's comments on the introduction of new guidance on expenditure and the roles and responsibilities of officials at certain levels in terms of governance of projects below a certain level. I would rather talk about rules, regulations and accountability rather than guidance, because guidance is missing the point. We do not do accountability properly in this country. That has been shown in stark relief by the way in which issues around overspends and lack of compliance with governance has been handled to date.
When the Deputy states I have introduced guidance, I am quite happy with that given that I am only two weeks in the job. I am quite happy to state that in four to five weeks we will be moving and changing how we do things. I am happy to say we get value for money. I went into government. I could have sat on the Opposition benches. I came into government to make changes. I know what it is to make a euro. I know what it is to spend a euro. I also know accountability is very much to the forefront of Government and for the Taoiseach. Accountability and value for money were very much across all of our negotiations during the programme for Government. It was the same for my colleague, the Minister, Deputy Chambers, last week. I believe in that and I believe in the OPW. I believe in the work it does. I believe in the vast majority of projects that come in on budget and on time. I am happy to say that we will see changes going forward due to the guidance I will put in place during the next four to five weeks.
I look forward to seeing that guidance. I assume it will be published and made available to Members of the House because it is important in respect of accountability and transparency in State organisations, and governance, more generally. This morning, and during the past 24 hours, there was a separate matter to do with the public spending code - the outrageous overspend on an IT project in the Arts Council. It is symptomatic of a wider problem across the system. I do not want to feed into any kind of anti-public sector agenda out there. I would be the last person to do that. By and large, in the Minister of State's own Department, and in the OPW, it manages 2,500 properties. The organisation does a remarkably good job and has consistently done so over the years. However, there are issues in relation to the public spending code, compliance and governance as was highlighted by the outrageous situation in the Arts Council, which was overseen by the Department of arts. They have questions to answer as well.
The Minister of State mentioned in an article in the Mail on Sunday that, in his view, the OPW has a brand issue. What does he mean by that and how does he intend to-----
Sorry?
It has a brand issue, there is an issue with the OPW brand. The Minister of State said in an article in the Mail on Sunday he wants to rebuild the brand. What does he mean by that?
As stated at the outset, I meant quite clearly that the OPW does very good work. I want to continue with that work and I want to promote the brand and what I believe the OPW stands for. When we talk about some of the articles in the newspaper last week about the overrunning projects, when we go to some of these sites - heritage sites or old buildings-----
It is complicated.
----- and take off the roof - it could be a slate, glass or copper roof - the naked eye cannot see what is underneath when it comes to pricing it up. There can be other problems and issues. If I, or my predecessor, had turned around and stopped that project because it was going into an overspend, I would have Deputies in this House asking why there was a delay on this project and what was keeping it from being done. We did what we did in the best interest of getting that project up and running and we will continue to work. I put a huge emphasis on delivering value for money going forward in the guidance I have put in place.
Legislative Measures
63. Deputy Mairéad Farrell asked the Minister for Public Expenditure, National Development Plan Delivery and Reform for an update on his new proposed legislation on super junior Ministers; and if he will make a statement on the matter. [5054/25]
This question follows our discussions last night on the Minister's proposed legislation on super junior Ministers and on increasing their number. Will the Minister give an update on that? The legislation was railroaded through last night and the same thing looks set to be done today in the Seanad.
I thank the Deputy. We had an extensive discussion on this yesterday evening. The purpose of the Ministers and Secretaries and Ministerial, Parliamentary, Judicial and Court Offices (Amendment) Bill 2025 is to give effect to the decision by Government to increase the maximum number of Ministers of State from 20 to 23. This number has remained unchanged for the past 18 years, since 2007, when it increased from 17 to 20. The Bill also reflects the increased numbers of Ministers of State attending Cabinet, which is being extended to four. At the moment, a maximum of three Ministers of State may receive the allowance for attending Cabinet.
The draft of that Bill was published on Thursday, 6 February. A number of proposed amendments were received by Friday, 7 February. As the Deputy will be aware, we discussed the amendments in the Dáil yesterday evening and the Bill is due to be debated in the Seanad at - I think - 12.15 p.m. today. That is the update.
I said last night and will say again that the Bill was railroaded through the Dáil yesterday. It was, again, jobs for the boys, and Mercs and perks. What sickens me is the fact we are always told that things cannot be done overnight but things can be done overnight when it means certain people get more perks, money and all of that. When we see the types of crises we have and the type of waste of public money that the previous Government, and this Government, have engaged in, it is absolutely outrageous.
We were very clear last night we are totally opposed to this Bill. We will make that very clear again today in the Seanad. Out of interest, what legal advice did the Minister get on this? Did he seek independent legal advice on this? We know there are two cases before the High Court at the moment. What legal advice did the Minister get and what did it state?
The Attorney General provides all of the legal advice to the Government and is leading the defence of the specific cases raised by the Deputy. The Government is defending the particular cases so that matter will evolve in the courts.
As I said yesterday, we can consider a number of other jurisdictions, such as Finland, where there are 19 Ministries, with a minister or secretary of state underpinning each, or New Zealand, where there are 20 ministers and ministers of state. Many jurisdictions of similar size and similar population to Ireland have a similar number of Ministers of State. This is to reflect three specific roles and responsibilities that are being prioritised. There is a Minister of State for the marine. We heard from Deputy Pat the Cope Gallagher about the importance of that specific role in fishing communities. It was welcomed by Sinn Féin's spokesperson on finance. Deputy Farrell has not identified what role she would remove in order to introduce that Minister of State. Perhaps she can enlighten the House about what Minister of State she would drop to allow for a Minister of State for the marine, which she has welcomed.
I do not think the Minister answered my question from last night when I asked which super junior Minister would be impacted by the legislation. If only three were being allowed, which super junior Minister was not getting the full whack money if he or she was the fourth super junior Minister? Maybe the Minister can enlighten us on that. He is missing the point here. He is talking about what is happening in other countries. We can agree or disagree on that. We can have that argument. The point here is that if the Minister believes so strongly that this needs to happen, why does he not ask the people? The Constitution is clear about Cabinet confidentiality, the 15 Ministers in Cabinet and all that. If the Minister feels that strongly about it and really believes it, then he should go to the people and ask them. Why is the Government making this decision and railroading it through the Dáil? We have two cases going forward. The prudent thing to do would be to see what comes out of them before bringing this legislation through the Dáil.
The legislation that is currently progressing through the Oireachtas is distinct and different from the specific constitutional questions that are the subject of the two judicial review cases before the High Court. They are being fully defended by the Attorney General. The practice and procedure over many decades has been the attendance at Cabinet of Ministers of State. The constitutionality of that continued practice is being fully defended by the Government and the Attorney General. The legislation that is before us is distinct from that. It relates to additional Ministers of State with new areas of priority and new responsibilities. Sinn Féin's election manifesto reflects the appointment of extra Ministers of State with additional areas of responsibility and priority. It would be interesting to see which Minister of State Sinn Féin would remove in order to allow for the appointment of the Ministers of State it has suggested appointing, because it has not been clear on that and did not refer to any reduction in the number of Ministers of State in its manifesto or which ones it would drop to allow for the those it suggests should be appointed, which it is entitled to do. In that context, it would be interesting to see which Ministers of State Deputy Farrell would remove.
Cost of Living Issues
64. Deputy Sinéad Gibney asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if reported plans (details supplied) to cease cost-of-living supports and payments in budget 2026 will be benchmarked against a reduction in the cost of living; and if he will make a statement on the matter. [5420/25]
I was deeply concerned and dismayed by reports in the media that the Government is planning to completely axe cost-of-living supports without any indication being offered about this being tied to evidence of a reduction in the cost of living. I am seeking clarity on the matter. Will any cessation of cost-of-living supports and payments in the next budget, as reported, be benchmarked against a reduction in the cost of living?
The inflationary shock which started in 2022 was the most significant episode of inflation experienced in Ireland since the mid-1980s. Aware of the challenges that inflation posed for households and businesses, Government provided a series of temporary and permanent cost-of-living packages. The purpose of the supports was to ameliorate the exceptionally high energy bills that were a result of market volatility through one-off energy credits and to offer temporary, targeted financial support to households and businesses while permanent income caught up to higher prices. Government adopted a two-pronged fiscal policy to allow a responsive approach to key economic and social challenges. The policy of separating temporary and permanent spending had three main objectives. First, it ensured the adequate provision of supports for external challenges while continuing investment in core public services. Second, it provided transparency on the costs of responding to external challenges. Third, it allowed funding to be provided for specific, temporary purposes that can be withdrawn when no longer needed.
Since 2022, consumer price inflation has fallen significantly and consistently. Headline inflation has been below the target rate of 2% since August last year. The consumer price index and harmonised index of consumer prices reveal a significant stabilisation in consumer prices, with the growth rate down to 1% and 1.4%, respectively, in December 2024. The Government has not announced or committed to any further temporary cost-of-living packages. While the Exchequer finds itself in a favourable position, recent global developments will bring with them a level of uncertainty that will require a planned and strategic approach to investment to ensure our fiscal position remains sustainable. In addition, requirements under EU fiscal rules will necessitate the development of a five-year medium-term expenditure strategy, with no differentiation between permanent and temporary measures.
I assure the Deputy that in the context of budget 2026, the Government will give full consideration to that wider inflationary outlook and if it changes, and the most appropriate mechanisms to target and support household living standards. In line with the standard procedures, these will be matters discussed as part of the annual Estimates process.
I thank the Minister for his answer. While he detailed many different economic terms, I am not hearing about the real day-to-day experience of people whose cost-of-living challenges are forcing them to choose between heat and food, to make very difficult decisions and to live with the stress of these kinds of announcements that come from Government with very little regard for their existence. I would love to hear if there are any benchmarks against standard-of-living indicators or a well-being index. Will equality budgeting be properly enforced in budget 2026 in order that these measures will not just be measured against an economic outlook but also against the cost of living that households experience day to day? The Minister talked about electricity credits. In the wake of Storm Éowyn, it seems clear that the Government has become aware of a likely increase in electricity costs. Will that be mitigated by cost-of-living measures?
As stated, we will have a planned approach to this in the context of 2026. In every budget, we publish a distributional analysis. There is a consideration of well-being. A whole range of indices are published by the Departments of Finance and public expenditure. We have committed ourselves to progressive budgeting over the next number of years. We are also committing ourselves to returning to a more standard budgetary process, which is done in parallel with a medium-term fiscal plan, which we have to submit to the European Commission to have that anchor of fiscal discipline. There will be broader discussion on that in advance of the summer period, when we have the summer economic statement and the medium-term fiscal plan. In the decisions we took through the inflationary crisis, there was progressivity at the core, including in the double payments for many specific social welfare payments, like foster carer's allowance, the carer's support grant, the disability allowance, the blind pension, the invalidity pension and the domiciliary care allowance. We are cognisant of the need to target supports. A significant social protection package will be developed within the envelope that is available in budget 2026. Much of that will be to support the families and households to which the Deputy referred.
The word "progressive" was used, yet the measures such as electricity credits that we saw in the past few years were not targeted. If that is what the Government believes to be a progressive measure, then it needs to look at it again. We welcome better targeted measures. Those electricity credits, while important, should be better targeted to assist those families who most need them. I would also like clarity, before we finish, on the additional range of payments which might be impacted. It seemed clear from the statement that the cost-of-living supports and payments will not be continued. I would also like to ask about additional payments of child benefit, disability allowance, fuel allowance and tax credits for renters. Are they also on the slate for being cut?
The Deputy is taking a very negative stance on cuts. Thankfully, we are in a position whereby we are running a budgetary surplus. We will be in a position by means of budget 2026, the summer economic statement and the medium-term fiscal plan to provide additional supports, but through a more regular budgetary process. That means an envelope and support when it comes to the social protection budget, for example. The Deputy referred to energy credits. Perhaps the Social Democrats are opposed to electricity credits.
That is fine and that is their position.
No, we support more progressive measures.
The Social Democrats say they are opposed to energy credits, so it is interesting. A lot of the measures we introduced last year were targeted, like the living alone allowance and the qualified child increment lump sum and the working family payment. Some of the progressive measures I introduced with the additional tax credits, for example, were very much targeted at many vulnerable people in our society. That will all be considered in the context of budget 2026. As I have said, progressivity and the distributional analysis will be at the core of how we frame the wider budgetary process. We want to get back to a point where it is done through the normal budget and not through ad hoc changes through the year.
Defective Building Materials
65. Deputy Charles Ward asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the way the OPW ensures that buildings they are responsible for are using blocks that are free from deleterious materials in construction projects in County Donegal; if they have checked existing buildings for the presence of same. [6116/25]
Will the OPW ensure that buildings it is responsible for in construction projects in County Donegal are using blocks that are free from the deleterious materials, and has it checked existing buildings for the presence of these same materials?
The OPW ensures the quality of the concrete blockwork used in all its building projects complies with the European standard for masonry blockwork. This requires that the manufacturer shall supply a certificate with each delivery of concrete blocks stating the date of manufacture and that the blocks comply with all the requirements of the standard. It includes a declaration of performance and a European certificate marking and is in accordance with the technical guidance documents. Where a building shows cracks that may be consistent with the presence of a deleterious material, an inspection is carried out by a suitably qualified engineer. Appropriate sampling and testing may be carried out as required on a case by case basis. There are no buildings under the responsibility of the OPW in Donegal that have been identified to have this issue, to the best of my knowledge.
There are buildings with this in Donegal. I am asking exactly what testing procedures are being carried out. There are buildings affected throughout Donegal. There are leisure centres, creches and public buildings affected with this defective concrete. I ask the Minister of State to look into this and come to the realisation that 40% of creches in Donegal are affected. There are public buildings throughout the county, and it is going into other counties too.
The Deputy asked me about OPW buildings, and I identified not to my knowledge. If the Deputy has knowledge of buildings that are showing signs, he should let me know and we will follow them up. At present, according to what I have in front of me, we do not. However, I assure him that if he comes to me with that, I will take it up.
Does the OPW have a plan in place if a building is identified? What will it do to protect people using these buildings? In Letterkenny, for example, there is a leisure centre that serves thousands of people. If that building is identified, what action will it take to address this?
If a building shows signs, then an engineer is assigned and a safety measure is put in place, but as I said at the outset, to the best of my knowledge we have no buildings in Donegal, and I have nothing in front of me to tell me we have. There is no point in me saying what we are or are not going to do if we do not have buildings with the affected blocks. I ask the Deputy to come back to me.
I will come back to the Minister of State.