Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank Deputies Doherty and Durkan. I will deal first with the issue of corporate tax and the OECD, which Deputy Durkan raised. It is very difficult to make a prediction when it comes to corporate tax reform and the potential cost for Ireland. There are scenarios in which, if pillar 1 is agreed and implemented in 2026, the cost could be greater than we have already provided for. There are certainly scenarios that point to that. We cannot be certain because the negotiations are continuing and significant outstanding items have yet to be negotiated that could have an important impact on Ireland in either direction. The negotiations have not been finalised and that is why we cannot finalise a revised Estimate. I want to be open and honest about the fact that there are scenarios where the cost could be greater; however, there are also upsides. Owing to the uncertainty, we have stuck with the current net cost of €2 billion in 2026. This was first arrived at several years ago, and there are certainly possible scenarios that could result in an increased cost for Ireland.

It is important to recognise that the cost of borrowing at a given time is an important consideration. At present, we can issue ten-year bonds at less than 3%. That is on par with or lower than the figure for core eurozone countries, including France, Belgium, the Netherlands and Finland, and this could be at a point in time when the fund is earning 5%. Even where there is a deficit and the NTMA is borrowing in the market, it could be its view that it still makes commercial sense for the State to borrow at reasonable rates of interest, given the investment environment in which the fund is operating. That is also a consideration, so I do not think we should have a hard and fast rule that, where there is a deficit, the contributions to the fund should stop. There are several factors that would need to be considered at a given time, including the sovereign debt markets. If we have a few full years of experience built up with the future Ireland fund, the run rate in terms of the return would have to be considered. As we know, it can vary, but I have strong faith in the expertise and professionalism of the NTMA such that it will do the very best it can in this scenario.

I suspect we will discuss housing at length later on. We have to look beyond the direct Exchequer capital position, which is what is provided for within the capital ceilings and the SPU. The Irish Strategic Investment Fund is supporting the delivery of 25,000 homes by 2030. As the Deputy knows, we have just executed a directed share buy-back in respect of AIB. We received €1 billion from the transaction, and we will also receive well over €200 million through dividends. For now, that money sits within the Irish Strategic Investment Fund. It will fall to me, as Minister, to make a decision on how these proceeds can be used. They could be used to complement the existing investment ISIF is making in the delivery of housing, for example. That is an important point. Home Building Finance Ireland has already approved funding of about €1.75 billion for development. Deputy Doherty will be very conscious of the need for international capital to play a part in meeting the cost of building homes at the scale needed. I also point to the work of the Land Development Agency, for which very significant capital has been provided. Up to €5 billion in funding has been made available to the agency to deliver social and affordable units.

We do face constraints in terms of planning, zoned sites, the servicing of land, labour and all these issues. We are working on these but I am making the broad point that one cannot measure our commitment or indeed our capacity to respond to the major housing challenge, which I acknowledge exists, by examining only the direct Exchequer capital line within the national development plan or indeed the SPU.