Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank all the Deputies. I will deal with the different points that have been put to me. As regards the first question put to me by Deputy Doherty, this is an advance trading credit. In that sense, it is not a grant. It is administered by the Revenue Commissioners. It is worth noting two things. First, there are other grant schemes that continue to run and I anticipate that they will continue to run in the future. Even since this scheme was launched there has been a continued roll-out of grants to parts of our economy that need them. Second, from a tax treatment point of view, these payments are treated in the same way as grants. That leads me to the second question. If these payments are used to reduce the cost, which is their intention, can the same cost be then used to defray tax liabilities? The answer to that question is "No" because in those circumstances we would be allowing businesses to reduce the cost with the CRSS, on one hand, and then claim the cost through their general tax affairs.

This is not allowed through grants and the use of grants. Similarly, when people use the CRSS cash payment to reduce a cost they cannot claim that reduced cost against their tax liabilities again.

To deal with the question regarding what that could mean for profit in the future, for example whether it could it mean companies pay more tax next year, it could do so, for example, if they carry fewer losses into next year because they will have reduced their losses by participating in the CRSS this year. I believe many of the businesses we are speaking about are hanging on for dear life at the moment, which is why we are bringing in the CRSS in the first place. Companies are in a position, for example, that the losses they are bringing forward for next year are lower or, for example, the profit they are making for next year is higher. This is all driven by the fact the company will still be in existence next year. The whole purpose of the scheme is to help businesses that are currently closed or have a very low level of trading to be in a position where they can reopen next year and where they use the advanced trading credit to reduce their costs in 2020.

I am afraid I did not follow the third question Deputy Doherty put to me so I will ask him to restate it in a moment so I can do my best to answer it. The final point he made, which is the substantive point that has been touched on by a number of other Deputies, is on whether, for example, the services sector or, in particular, services supplying goods into businesses that are closed, can participate in the scheme. The answer to this question is that they cannot participate in this scheme but I would expect that many of those businesses will, for example, be participating in the employment wage subsidy scheme and they will receive support through that policy.

The whole purpose of this scheme is to bring support to those businesses that need it the most, and the businesses that need it the most in our economy at present are those that are either closed completely or have a very low level of trade due to a public health guidance restriction on the use of their premises. They are the businesses that are at the top of the hierarchy for additional needs at present because their ability to trade is so impaired at the moment.

The further challenge we faced in designing the scheme is if we were to design it in such a way that it was also meant to benefit other sectors of the economy that are supporting closed sectors of our economy or sectors of our economy that have a very low level of trade, it would pose significant challenges for us, for example, with regard to the non-essential retail sector. The non-essential retail sector at present is closed. If we were to say we would allow onto the CRSS companies that sell goods or services into non-essential retail, it would mean the level of additional costs and claim for the CRSS would be massive. We are aiming to support those companies that sell into closed businesses in different ways through, for example, the employment wage subsidy scheme.

The answer to the question Deputy Doherty put to me, which Deputy Boyd Barrett picked up on as well, on the premises criteria, is that the business does have to have a premises and that premises has to be either closed or have an exceptionally low level of trading. The need for this is best understood in two different ways. The first is clarity about whether or not people can get on the scheme, and public health guidance allows us to ask whether the business is closed or whether there a real reduction in the number of customers who can come into the business.

Given the amount of money involved in the scheme, clarity of access and knowing who can and cannot come onto the scheme is just essential. We can clearly relate the operation of a premises to the public health guidance.

I will now deal with the second point. Earlier in the year, many Deputies called on me to introduce programmes that could be region or county specific. Let us say we are in a situation where level 5 is lifted for most of the country but parts of our country are still at level 5 or level 4. In this case, this scheme will still be available to those parts of our country that are still at level 4 or level 5. The reason we can be confident in saying this is because it is premises specific. If it were not premises specific it would be far more difficult to design a scheme that could support particular parts of our country if they needed to be on a higher level of public health guidance in future or, indeed, if they were on a higher level of public health guidance before all of Ireland moved to level 5. If we want a scheme that has the potential to be geographically specific, I could not find any better way of doing it apart from relating it to premises. This, in turn, does have consequences but it does mean we are flowing the most amount of money to those businesses that will need it the most, in the parts of our country that may need it the most.

For other sectors, such as those Deputy Boyd Barrett raised with me, let us say the arts sector, if a theatre or music venue that pays tax as a commercial premises is closed it then comes onto the scheme. These parts of the artistic sector are on it. The Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media, Deputy Catherine Martin, has launched a scheme whereby she is looking to make significant amounts of additional money available to artists in return for activities or performances taking place. I know there is a huge push on at present to make this happen before Christmas. This scheme will be on top of supports we have available, such as the employment wage subsidy scheme.

In relation to the points put to me by Deputy Barry on conditionality which, again, a number of Deputies have touched on and Deputy Nash raised this with me also, it is the case that all of the conditionality about this is about whether a business is closed, whether it has a very low level of trading and whether it is planning to be able to reopen again. This is because it is the work of the Revenue Commissioners and the Department of Finance to put big schemes in place that can help as many companies as possible to reopen. The other issues he referred to are ones that are best dealt with by the Workplace Relations Commission or the Labour Court.

With regard to describing the scheme as a welfare scheme of some kind or a transfer of wealth, I would expect that when I am clear on the nature of companies on the scheme Deputy Barry will see the vast majority of the cash payments that are being operated under CRSS flow to small and medium-sized companies. The vast majority of the value of the CRSS payments go to small and medium-sized companies. The reason for this is it is premises-based and we have a cap of €5,000. Again, when we have figures available to us I would expect to see it is the very tourism businesses, such as the hotels, cafes and restaurants that all of the Deputies have been discussing, that will be the companies that will have benefitted by being on the scheme because we are helping them to reduce their costs when they are closed.

A substantive difference between this scheme and the issues raised by the Deputies is that I do not believe it should be the role of a scheme such as this to deal with the industrial relations and employee matters referred to.

To look at it a different way, there will be a need to make progress on matters like that. Is it the right time to make progress on those matters when some of these businesses are closed and we are trying to get them to reopen and rehire people? I expect most of the businesses that come on to the scheme will have let people go, unfortunately, because they are not in a position to trade, or if they are trading, it is at a low level. We are trying to get them open so they can employ people again which is the purpose of the scheme. I differ with the Deputy in that I believe these matters are best dealt with through other organs of the State.

I will deal with the other issues raised by Deputy Nash on whether suppliers are in the scheme. They are not in the scheme for the reasons I mentioned related to closed premises. I ask the Deputy to consider the issue we face in that regard. If this scheme is extended, perhaps to become geographically or sectorally specific, I must have a hook available by which we can absolutely define if a company is in it or not. That is why we identify the issue of the closure of premises or their significant impairment. A range of other supports will be available to the sectors to which the Deputy refers, for example, the employee wage subsidy scheme.

Deputy Mairéad Farrell made a point about suppliers. I have done my best to deal with that in response to other Deputies. I made the point again about grants and whether the scheme is more complex. I anticipate grants-based programmes will continue to be available. I hope we have less need for them in the future if we are successful in safely reopening more parts of the economy in 2021. The feedback I have received does not suggest this is a complex scheme. I have received much positive feedback on the operation of the scheme. It has been positively recognised by representative bodies. From tomorrow, companies will have to indicate to the Revenue Commissioners the period during which their business was closed. We have asked them to supply their Eircode, relevant tax information and confirmation that their business has been closed or impaired. This is basic information and I have not received feedback to date that this scheme is complex. I anticipate when companies file their tax returns later in the year, particularly smaller companies, we will see even greater use of that scheme when they get their tax affairs in order.

To respond to Deputy O'Callaghan, section 484(1)(a)(ii) makes reference to a Brexit without a trade deal because I wanted to give myself flexibility with regard to the scheme and its use. I anticipate, however, that the majority, if not all, of this scheme will be deployed against the business consequences of being closed to due Covid-19. The access criteria for this are closed premises or premises that have their level of customer access significantly impaired. I anticipate, notwithstanding the Deputy's point, that if this scheme continues to be in operation beyond the early part of next year and throughout 2021, its application, in the vast majority of cases, will relate to dealing with Covid-19 as opposed to a no trade deal Brexit.

On whether criteria are in place regarding whether a company can pay a dividend, there is no such provision in place in the primary legislation for the setting up of the EWSS.

The Deputy may already be aware of the compliance activity the Revenue Commissioners are carrying out to ensure that companies which accessed the scheme really needed to do so. There have been some media reports regarding the magnitude of activity that the Revenue Commissioners have under way. If the Revenue Commissioners indicate to me that they needs any further power in order to be satisfied that companies are on the scheme because they need to be, I will make that power available to them via this Bill or by means of future legislation. I have received enough contact now about the work the Revenue Commissioners are doing to deal with compliance to be satisfied they has the right level of power to deal with the issue of whether companies need to be on this scheme.

I will conclude on this point. If we find in the future that inappropriate use was made of this scheme, it will be seen by me, the Revenue Commissioners and, I am sure, the Government as a serious issue for a company or a sector. From the amount of contact I now get from companies which deal with the Revenue Commissioners, I believe that they are using their powers proportionately in order to ensure that companies on the scheme need to be on it.