Oireachtas Joint and Select Committees
Wednesday, 4 December 2019
Committee on Budgetary Oversight
Fiscal Assessment Report: Irish Fiscal Advisory Council
I will start with a climate-related question. As previously stated by the Irish Fiscal Advisory Council, there are financial downside risks to our failing to meet our climate targets, including potential fines. There are also spending requirements in terms of what we need to do. Much of what we need to do will be supported by private finance but the public buildings retrofit, which is a huge project, and the social housing retrofit, which is a multibillion euro project, and the ramping up of afforestation, will be State supported. It is possible to transfer the allocation for roads to public transport. There is a proposal to drain some of the bogs and to use PSO levies to part fund that work. The PSO levies are relatively small and the expenditure increases are relatively large. If we do not make that spend, we face the risk of fines yet there is no easy, obvious solution, other than raising taxes in a range of different areas.
Did the Department liaise with the council on the national development plan? Has the council assessed it and, if so, is that envelope fiscally astute in terms of capital spend over the next ten or 12 years? I know that the council has an interest in climate issues but I do not know if it has carried out analyses or research of what other funding mechanisms might arise. We could use the increased corporation tax revenues to increase the budget for the national development plan. I am sure Mr. Coffey's response to that suggestion is that we should not be depending on corporation tax receipts for current expenditure, never mind climate expenditure. If his response is that every tax should be raised, that is not politically easy to do. Cutting current expenditure also is not easy. It is a difficult political question.