Paschal Donohoe (Dublin Central, Fine Gael)
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The Minister of State, Deputy O'Donovan, and I are pleased to be with the committee to present the 2019 Estimates for my Department’s group of Votes. The group comprises a significant number of Votes, namely, the Votes for the Department of Public Expenditure and Reform and for the Office of Government Procurement; the Votes for a number of offices under the aegis of my Department, namely, the State Laboratory, the Public Appointments Service, the National Shared Services Office and the Office of the Ombudsman; and the Votes for superannuation and retired allowances, which covers Civil Service pensions, and the Secret Service. The Vote for the remaining element of the Public Expenditure and Reform group, that for the Office of Public Works, is handled separately by this committee.

I note that the committee has been supplied with a very detailed briefing by my Department’s officials on the various Votes in the Public Expenditure and Reform group, including those organisations under the aegis of the Department. Further detailed material is also contained in the Revised Estimates for Public Services 2019 which were prepared by my Department and published in December 2018.

In an overall context, it is worth noting that the total net allocation for 2019 for the Public Expenditure and Reform group, comprising eight Votes, shows a modest increase of 3.2% on the 2018 allocation. The 2019 overall net figure is €537.7 million compared with €520.9 million in 2018. The structure of the Public Expenditure and Reform Vote remains unchanged, with two strategic programmes focused on public expenditure and sectoral policy and on public service management and reform. The requested resources for each programme, in terms of staffing and funding, are set out in Part III of the Estimate. In total, we are seeking a 5% increase in net spend on this Vote. The increase is required on the first programme, namely, public expenditure and sectoral policy, due to an increase in administrative pay to cover the cost of posts created in 2018 but yet to be filled, the pay increases under the Public Service Stability Agreement 2018-20, and €800,000 due to a decrease in expected income from EU programmes and a reduction in income from the additional superannuation contribution that has replaced the pension related deduction since 1 January. In 2018, the Department consumed 96% of its gross expenditure, when capital carryover is included. The 2018 gross saving of €2.6 million, or 4% on the provisional outturn, was the lowest since my Department’s establishment in 2011.

On programme B of the Public Expenditure and Reform Vote, dealing with public service management and reform, reform of our public service has consistently been a key priority for this Government, and a comprehensive series of reforms have been implemented since we published the first public service reform plan in November 2011. I launched the current iteration of public service reform, Our Public Service 2020, at the end of 2017 and the framework became operational during 2018. This builds on the work and achievements of the previous reforms while setting out a path up to 2020. The three pillars are delivering for our public, innovating for our future and developing people and organisations. One of the key considerations of the OECD in its assessment of Ireland’s second public reform plan 2014–16 was that the next phase of development for the Irish public service must focus on innovation. To this end, Our Public Service 2020 contains a number of firm commitments to champion a culture of innovation across the public service.

Some €500,000 has been included in my Department’s reform agenda fund on a pilot basis. This money has been set aside as a resource to incentivise public service bodies to fund or co-fund innovative projects. My Department will be seeking applications that encourage the use of new technologies, create opportunities for new partnerships, and strengthen our ability to innovate and develop solutions across different Departments.

These are generally for small projects but we want to see what we can learn.

As Minister for Public Service and Reform, I recently introduced the first public service data strategy on how we can store and manage large amounts of data. In parallel, the Data Sharing and Governance Bill, which the Minister of State, Deputy O’Donovan, dealt with in the House last night, aims to create the legal basis for the governed sharing of non-sensitive data between entitled public service bodies. Ireland achieved first place in the European Commission’s open data maturity assessment for the second year in a row. Ireland’s open data portal contains over 8,000 datasets that cover a range of areas including housing, water quality, statistical and geographic data.

Access to official, open format non-personal data supports more effective decision-making. It is essential that the public service continues to develop digital services that meet the needs and expectations of people. An important element of how we do this is the acceleration of the digital delivery of services which is covered in Our Public Services 2020. Key to progress in the provision of digital public services is having people with the right skills in the right roles to develop these services. We have been working with Civil Service HR departments to progress a range of initiatives relating to ICT professionalisation in the service. We recently introduced the first ever ICT specialist programme.

In addition to progress in public service reform, we continue to pursue a number of wide-ranging reforms that are covered in the opening statement circulated to members. I will, therefore, only touch briefly on where we stand in respect of the Data Sharing and Governance Bill and on improving the use of data. I already dealt with the open data strategy.

Work continues to develop equality budgeting, an area which continues to be important to me. I am working with the Minister for Children and Youth Affairs, Deputy Zappone, on this in the context of identifying how we can develop and generate more data on the impact of equality budgeting on more Government services. As announced in my budget 2019 speech, equality budgeting is to be expanded to further develop the gender budgeting elements. The 2019 Revised Estimates Volume looks at particular spending streams to see how we can develop new objectives and indicators. I am very serious about seeing how we might make more progress in this area.

This is the third and final year of the current spending review process. Over 50 analytical papers have been published. I am pleased to hear that many of these papers are being used in public debate on Government spending. We are moving into our third year and looking at how we can develop a more robust database regarding the effects of Government spending.

I will conclude by commenting on Brexit. Clearly, the latter is the key challenge we need to manage in the coming weeks. The Tánaiste will publish the omnibus Bill - which deals with 15 different areas across nine Departments - on Friday. The Department of Public Expenditure and Reform does not have a legislative section in the Bill. That section is the responsibility of the Department of Finance. I will be appearing before different committees to brief members on the respective sections of the Bill. All of the engagement I will have with this committee will relate to the finance aspect.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I thank the Minister. To be helpful, does he wish to make his second opening statement now or would he prefer to wait?

Paschal Donohoe (Dublin Central, Fine Gael)
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Is the Chairman referring to that relating to the public expenditure section?

Michael McGrath (Cork South Central, Fianna Fail)
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Finance. I realise that there is a separate set of officials involved but if we could take the whole lot in one round, it would be more efficient.

Paschal Donohoe (Dublin Central, Fine Gael)
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If we are going to do that, I might touch on some key elements rather than going through the entire statement, which was distributed to members yesterday and which, I am sure, they have read.

Members will be aware that the Department of Finance is divided into two broad areas, namely, the economic and fiscal directorate and the finance and banking directorate. The opening statement gives an explanatory note of the work done by both, so I will not speak to that. However, I wish to highlight the appointment of Brexit co-ordinators at principal officer level across all divisions of the Department.

I will refer to the key figures in the Finance group of Votes for 2019. There is an increase of €23 million or 5.7%. The primary driver of this increase is the provision of a €21.7 million increase for the Office of the Revenue Commissioners relating to increasing staff numbers and other costs relating to staff, almost all of which is to deal with the coming challenge of Brexit.

The gross allocation sought for the Department of Finance Vote in 2019 is €41.1 million, of which some €10.5 million is provided for a fuel grant scheme for disabled drivers.

The allocation for Vote 8, the Office of the Comptroller and Auditor General, is applied towards a single programme. The Office of the Comptroller and Auditor General is completely independent of the Department. Its Vote in 2019 is €8.657 million to allow it to deal with the 290 sets of accounts produced by public bodies.

I will speak in more detail on the Office of the Revenue Commissioners. Its work is always instrumental. In 2018, Revenue collected a record €54.6 billion for the Exchequer. Its audit and compliance section yielded €573 million, which in turn yielded 17 different criminal convictions and led to the publication of 754 cases published on the tax defaulters list. For 2019, Revenue requested a budget allocation of €378.58 million, an increase of 6% on the 2018 net Estimate. Nearly three quarters of the budget relates to payroll for an increased employment ceiling of 6,384 staff. It is worth putting in context a figure about which the committee has asked me on many occasions. We are hiring an additional 600 staff, which is nearly a 10% increase on the total number of people working for Revenue. This is driven by their needs in dealing with Brexit. Additional funds are required to develop Revenue’s ICT systems. This will be done by the deadline to which I referred.

Finally, Vote 10 relates to the Tax Appeals Commission, TAC. It will receive an increase of €1.582 million, or 97.3% on the 2018 estimate. The committee will be familiar with the reasons behind that. The TAC is recruiting 33 more staff in order to allow it to deal with the number of cases with which it must deal. On Tuesday morning, the Government agreed to significant legislative change in relation to appointing a chairman of that body and other necessary data and processing changes which I will bring before the committee very soon.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister, the Minister of State and their officials for attending.

I will start my with Brexit. The Minister wrote to me during the week regarding an issue I raised during Question Time in the Dáil recently regarding the number of customs officials that Revenue has recruited so far. As of 11 February, 230 additional staff had been appointed. Revenue has confirmed that in a no-deal scenario, it will need 600 additional staff. When Niall Cody, chairman of the Revenue Commissioners, was before the committee recently, he stated that under the central-case scenario, the requirement would be 600 additional staff from January 2021 but that, in the event of a hard, no-deal Brexit, this would have to be brought forward in order to have the staff in place as quickly as possible in 2019.

The reality is that we now have 230 and we may need 600 in five weeks' time. Will the Minister update the committee about where we are with that? It is a concern with regard to our state of preparedness as 230 is only about 40% of the required number in a no-deal Brexit scenario, which we hope does not happen, though it may.

Paschal Donohoe (Dublin Central, Fine Gael)
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The rest of my letter which I issued went on to highlight that, in the context of a no-deal scenario, we said that we would need 600 this year and we would deliver 400 by the end of March, with the other 200 to be delivered across the rest of the year. We would obviously look to deliver it early in the year. I confirm to the committee that the deadlines and timings of those figures will be delivered. The letter that I sent to Deputy Michael McGrath was open in answering the question which he put to me in the Dáil regarding how many are in place. The letter goes on to state that we will have in place the 400 we said we would have in place by the end of March. If further resources or commitments are needed from me for those deadlines to be met by the Revenue Commissioners, I will supply them.

Michael McGrath (Cork South Central, Fianna Fail)
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Does the Minister accept that the Revenue requirement in the event of a no-deal Brexit is 600 staff, not 400?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have always said that, in the context of a no-deal scenario, it will need 600 staff for this year. We have identified the phasing of that as being 400 by the end of March with a further 200 to follow. We will deliver that.

Michael McGrath (Cork South Central, Fianna Fail)
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How quickly will the 200 follow in the event of a no-deal?

Paschal Donohoe (Dublin Central, Fine Gael)
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As soon as is needed. What is very different to what I indicated to members last year is that there is a very high level of demand and interest in doing this work. Off the top of my head, I think over 3,000 people applied for these jobs who would then be available when needed. The Revenue Commissioners have decided that there is clearly training and work that needs to be done to get the 400 in place by the end of March. If the Chairman of the Revenue Commissioners comes back to me and says that we need to appoint a further 200 in the following weeks, we will do that. I will ensure that all the resources are in place to do that. We have made a significant number of changes to make sure that land is purchased and available to the State at the two key ports in which the Revenue Commissioners will need to do their work.

Michael McGrath (Cork South Central, Fianna Fail)
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Does the Minister have an estimate of the total expenditure committed to Brexit preparation for this year and next year, including both current and capital, across all different Votes and Departments?

Paschal Donohoe (Dublin Central, Fine Gael)
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I cannot give an exact figure for all Departments for additional current expenditure for this year but I will come back to the Deputy about it. It will be a highly significant figure, given the amount of additional funding that has gone into agencies and the recruitment of additional staff, especially in the Department of Agriculture, Food and the Marine. With regard to my own Vote, the majority of additional expenditure has been in the Department of Finance, to ensure that we have staff in place within the Revenue Commissioners. That figure for this year for the Revenue Commissioners is an additional €13.5 million.

Michael McGrath (Cork South Central, Fianna Fail)
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I am asking the Minister's Department to collate the overall costs anticipated for this year and next year, across all Votes, current and capital, for Brexit preparedness. In other words, that is the money which has been spent or is planned to be spent on Brexit this year and next year, which would not have been spent if Brexit did not exist. I am looking for those data. I do not expect them now. I know it requires pulling together many Votes.

Paschal Donohoe (Dublin Central, Fine Gael)
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As I have been responding to the Deputy's question, my team has provided information on some of the building blocks. Across a number of Departments, €25 million will be required for current expenditure on additional staffing. The Department of Agriculture, Food and the Marine, Teagasc and Bord Bia will require €71 million. The Department of Business, Enterprise and Innovation will require an additional €14 million. The Department of Foreign Affairs and Trade will require €5 million. That is just in budget 2019. As the Deputy knows, budget 2018 and budget 2017 also included additional current expenditure. The other big block of funding is the funding that has been put in place for the future growth loan scheme. I will come back to the Deputy with the figure for capital expenditure in the coming days.

Michael McGrath (Cork South Central, Fianna Fail)
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Brexit-related current expenditure across Departments is €115 million, if I am doing my sums correctly. The Minister said there would have been previous expenditure in 2017 and 2018. Do we have any estimates of that?

Paschal Donohoe (Dublin Central, Fine Gael)
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I do not have that in front of me. To be more specific, I am saying that the increases in current expenditure that build on other increases in Government expenditure that we would not have made for 2019 are at least €115 million. I have given the Deputy the example of the Revenue Commissioners. If further needs develop and I need to make further resources available, I will do that. I am very conscious that at the end of March, in a no-deal scenario, due to the uniqueness of this event and despite all the preparation to be ready for it, developments and changes will happen that are very difficult to forecast at this point. As we move through the coming weeks, if my key agencies, especially the Revenue Commissioners, come to me and state that they now need to do things differently because new issues have emerged, I will respond quickly to the issues identified.

Michael McGrath (Cork South Central, Fianna Fail)
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The Minister will revert to the committee on the overall picture of current and capital expenditure. I had suggested this year and next year. If the Minister could also report on what has been spent in 2017 and 2018, that would be very helpful. With regard to resources, the Minister spoke about the Tax Appeals Commission. He has provided it with significant extra resources. I know he has a report with a series of recommendations. Does he believe that those recommendations, if implemented, will deal with the unacceptable backlog? It is taking many years for individual cases to be dealt with, which is not acceptable. The Financial Services and Pensions Ombudsman has a significant backlog. It is taking between 12 and 18 months to deal with cases that go for full adjudication and investigation. I understand that that office has made a request for sanction for some additional resources, which do not require Exchequer expenditure because it is funded by a levy on the industry. Sanction is required nonetheless. Will the Minister look at that issue?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will see if we have information with regard to the Financial Services and Pensions Ombudsman. I am confident that this will make a big difference to the list of appeals to the Tax Appeals Commission. I accept that the list is too large and needs to change. I believe it will make a difference because the additional current resources I am making available here are to hire more case managers. More people will be available to manage cases and, in turn, by managing the cases, this will reduce the number of appeals. I know the Deputy is familiar with this matter but a good chunk of the issues with which the Tax Appeals Commission is dealing are legacy issues that it received when its work was transferred from the Revenue Commissioners. I would not put in place such a significant percentage increase in this organisation if I did not know that it was needed. I have met the commissioners about this matter. We are also looking to put in place some other office facilities to in turn allow these case managers to do the work.

I will have to come back to the Deputy on the question about the Financial Services and Pensions Ombudsman.

Michael McGrath (Cork South Central, Fianna Fail)
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On the question of insurance costs, while we have some oversight in respect of motor insurance premiums by virtue of data from the Central Statistics Office, CSO, we have no such data for employer liability and public liability insurance. We rely on anecdotal evidence and feedback from individual businesses, community groups, sporting bodies, festival organisers and representative bodies.

It seems there is a serious problem in this space. Some businesses with a significant public footfall, such as pubs, nightclubs, businesses in the leisure industry and play centres, are being put out of business. Cost is a significant factor in the closure of some businesses. Many more are saying they too will be in jeopardy if the trend associated with insurance costs continues. We have a working group on the cost of insurance and the report of the Personal Injuries Commission. Second Stage of the Judicial Council Bill was concluded in the Seanad some time ago and the Bill is awaiting Committee Stage. We need to deal with the issue of award levels. Can the Minister give a commitment that the Government will prioritise the passage of that legislation in order that we can have guidelines issued to the Judiciary in respect of what constitutes appropriate awards?

On the question of the Garda insurance fraud unit, I understand the Minister's colleague, the Minister of State, Deputy D'Arcy, met the Garda Commissioner some weeks ago and the Commissioner confirmed he did not want the unit to be funded by the insurance industry. I can understand and accept that. It needs to be set up and funded, however. Could the Minister comment on that?

My final question relates to VAT on food supplements. Could the Minister update the committee on his discussions with the Revenue Commissioners on this issue as time is ticking? Today is 21 February and on 1 March, a significant change is due to be made with a standard rate of 23% to be applied. This would have a detrimental impact on many of the businesses and the consumers they serve. The position of the Revenue Commissioners on the concession applied to minerals, vitamins and fish oils has been stated many times. I have seen multiple Revenue Commissioners determinations - including screen grabs from their website, although they have been taken down since - that other food supplements were zero rated also. Therefore, there has been a real lack of consistency on this issue. The bottom line, however, is that the change on 1 March should not go ahead. I ask the Minister to give us an update on that.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputy. On his four points, he has already acknowledged the planned legislative change that is under way. Key to this is the fact that the Central Bank (National Claims Information Database) Act was enacted last year. It will make a contribution to dealing with our understanding of this issue, which in turn will help in dealing with the issue with premiums. I will give the Deputy a commitment to working with the Oireachtas to ensure that the various Bills referred to will be passed. I met the Minister of State, Deputy Michael D'Arcy, as recently as last night on this issue. I met him after we dealt with the Estimates in the Dáil to review our position on this issue and determine how we can make legislative progress more quickly than we might be able to at present.

On the point on the role of An Garda Síochána and its organisation and funding of a unit to deal with this issue, I agree with the Garda Commissioner that it would be utterly inappropriate for any industry to make a contribution to the funding of a part of An Garda Síochána. That is paid for by general taxation, and that is not going to change no matter what the need is. That is the only way we should pay for resources for the Garda. Commissioner Harris has indicated to the Minister of State, Deputy D'Arcy, that he will consider how this issue is being dealt with and determine whether there are any changes he needs to make, but that is a decision for him and one I will accept.

With regard to VAT on food supplements, I am well aware of the issue. A number of advertising campaigns are now being run on this issue, including campaigns with me featuring prominently. I have been contacted frequently on the matter. I must restate, however, that this is an issue the Revenue Commissioners are taking very seriously. Their view is that the law as it stands is not being implemented in the way it should be. They believe, and have said to me, this is causing issues in regard to the integrity of VAT law. I am aware, however, of the business concerns that this is causing and some of the consumer and health concerns that are now being raised. The Revenue Commissioners and I are working with one another on this. I will accept whatever decision the Revenue Commissioners make on this matter because I will not go down the path of creating the impression that I can issue directions to the Revenue Commissioners on how they implement the law. That is not the case. We will be working on this issue on that basis in the coming days.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I remind the Minister that, on the last occasion he was here, he mentioned he was going to consider the position. As stated by Deputy Michael McGrath this morning, the point was made that the change is being implemented on 1 March and that there is very serious concern in small businesses all over the country. It was asked whether it would be possible to at least put the date back and enter into discussions with all the stakeholders. I am aware that the Minister said at the last meeting that this has happened but there is now a lot of evidence to suggest smaller businesses have not been consulted at all. It is only now that they are beginning to write to Oireachtas Members and the Minister. On that front, I ask him to put the date back and perhaps give a chance to the businesses concerned to enter into some sort of consultation with him or the Revenue Commissioners to arrive at a position that is commercially sensible.

Paschal Donohoe (Dublin Central, Fine Gael)
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As I said when I gave the commitment to assess the matter, decisions on how and when the Revenue Commissioners implement the law are decisions for them. I said this at the time in question and later in the Dáil. Consultation takes place on the development of policy but the Office of the Revenue Commissioners is the only body charged with implementing it. As I said to the Chairman, I am aware of all the issues now being raised here but there is a decision that is only for the Revenue Commissioners to make. They are aware that this debate is taking place today. They have received a lot of contact on the issue. In the remaining period, we will see whether there is a way in which this issue can be dealt with.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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On the figures the Minister gave Deputy Michael McGrath on extra costs in each Department related to Brexit, to what does the first figure, of €25 million, pertain? The other Departments are the Departments of Agriculture, Food and the Marine, Business, Enterprise and Innovation and Foreign Affairs and Trade.

Paschal Donohoe (Dublin Central, Fine Gael)
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I would imagine these are the Departments that were not listed in the other figures I gave. I listed the Departments of Agriculture, Food and the Marine, Business, Enterprise and Innovation and Foreign Affairs and Trade. I have already given members the figures from my two Departments. I would imagine the information pertains to the rest of the Departments.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is it a matter of staff or other costs?

Paschal Donohoe (Dublin Central, Fine Gael)
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That would primarily be staff and any ICT costs.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The technology costs are included in those figures.

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, but the majority of the technology costs sit in the Department of Agriculture, Food and the Marine and the Revenue Commissioners. I would anticipate that the IT component of the other figures will be very low in comparison.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The committee is doing work on insurance costs on the back of the report we already produced because there is significant evidence being brought to us that those in the taxi and haulage businesses and individuals seeking car insurance are not receiving the reductions being flagged in the various newspaper reports. At some stage, we will be sending this information to the Minister's Department for comment but we are continuing our work on the subject.

Pearse Doherty (Donegal, Sinn Fein)
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I welcome the Minister and all his officials. We were running out of chairs for a minute. I appreciate that we have taken both Estimates together. That is why we have both Departments.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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If officials need to change places they can do so as is necessary, but the Minister is doing okay on his own. He has the Minister of State as well.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Chairman, he is very kind. The officials will rotate as needed.

Pearse Doherty (Donegal, Sinn Fein)
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I appreciate the Minister and the officials' facilitation in taking both together. I will be brief with my questions. I want to pick up on some of the issues that have been raised by Deputy Michael McGrath and by the Chairperson. We raised the issue of food supplements on Report Stage and Committee Stage of the Finance Bill. Is it still the Government's intention to look at policy in this area as part of the tax strategy group papers?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes.

Pearse Doherty (Donegal, Sinn Fein)
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In the Minister's view would it be helpful, while recognising the independence of the Revenue Commissioners, to defer the date of implementation of the new rate until that review is completed?

Paschal Donohoe (Dublin Central, Fine Gael)
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How could answering that question be consistent with the independence of the Revenue Commissioners, which the Deputy has just recognised? It was a great question.

Pearse Doherty (Donegal, Sinn Fein)
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I appreciate that.

Paschal Donohoe (Dublin Central, Fine Gael)
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It was really great. It was short and loaded. On one hand the Deputy agreed with me that Revenue is independent and, on the other hand, he asked me to agree that it would be helpful for it to defer the date of implementation. How does he think such a statement would go down in Dublin Castle?

Pearse Doherty (Donegal, Sinn Fein)
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I recognise the independence of the Revenue Commissioners. As I have said before, I really respect the Revenue Commissioners. They have done an excellent job. They are one of the few institutions that came through the crash in whose actions, particularly in recent years, we are able to have pride. The Minister is 100% right. They interpret policy. It is our job to set policy. Has work begun on the policy regarding VAT on food supplements?

Paschal Donohoe (Dublin Central, Fine Gael)
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We are in the early phases of such work. As the Deputy knows, the target date for the tax strategy group papers is the summer. We have begun the early work on that area.

Pearse Doherty (Donegal, Sinn Fein)
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I will make one point and then jump to a similar issue. In the Minister's view, would it be appropriate to cut the issue of food supplements out of the tax strategy group review and have it as a standalone paper? That would allow the issue to be accelerated and could assist the Revenue Commissioners in their determination of when the decision with regard to the 23% VAT rate will be implemented. Is that possible?

Paschal Donohoe (Dublin Central, Fine Gael)
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The short answer to the Deputy's question is yes, it could help. The challenge we have, however, is that this is a very complex area. The Deputy knows this. There can be a world of difference between the VAT rate on an ingredient and the rate on a processed product which includes the ingredient. We are seeing if there are ways in which we can do this work even more quickly than we had originally planned, but we had been aiming to have completed this work by July as part of the tax strategy group papers anyway. That is pretty soon. If we can do anything to aid with some of the difficulties around this issue, we will do so if doing so respects the independence of Revenue.

Pearse Doherty (Donegal, Sinn Fein)
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I recognise that issues around VAT are deeply complex, but it would be helpful, and something I would support, if that analysis could be brought forward. It might result in the Revenue Commissioners looking at the timeframe if they thought, for example, there was a piece of paper from the Department relating to future policy on this issue. The Minister hears very clearly from across the political divide, as he did during debate on the Finance Bill, that there is an issue and that we would like it to be resolved, although we do understand the complexities.

The second issue is similar and has the same type of solution. I refer to the issue of betting duty, which the Minister has agreed to review as part of the tax strategy group papers. The Minister and his officials will be familiar with the fact that, since the budget, a number of independent bookmakers across the State have closed, which has resulted in a number of job losses. The first payment in respect of the excess duty is due in April. As we have discussed, and I will not rehearse it again, we were told that this measure would put some companies to the wall. An agreed industry proposal is now being examined. I genuinely believe this issue needs to be carved out from the tax strategy group papers because July is too late for that industry. Many of these bookmakers are trading at a loss. Their banks are breathing down their necks and telling them that they cannot continue to make these losses month after month. All they can indicate at the minute is that Government is reviewing this issue as part of the tax strategy group papers. Unless they can indicate at an early stage that there is serious potential for change in legislation in this area, some of them will close. Certainty needs to be brought to this. If there is any way to deal with this issue prior to the tax strategy group papers, which I believe is possible, it should be done. If this could be dealt with in April or May, it would give certainty to some of those bookmakers. While they would still have to incur those losses over 2019, at least they would know that a different scenario might arise in 2020. I encourage the Minister to look at that option.

Paschal Donohoe (Dublin Central, Fine Gael)
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We are now evaluating the further proposal which was put to us by the industry. In particular we are evaluating whether it is consistent with EU VAT directives. We have received a proposal and it is being looked at as we speak. Only this week my officials in this area met a company that has been one of the lead voices on the issue. Work in this area is further advanced in terms of the tax strategy group process. That is in line with the commitments I gave to this committee. As to whether I would be able to make a statement in advance of the tax strategy group papers, it will depend on the work we do and on whether we can establish if there is a different way to deal with this issue. I am aware of further closures that took place in January, but I have not established whether there is a link between the closure of those businesses, which is of course regrettable, and the introduction of this levy given the fact that across all of last year, and in previous years, we have the seen the closure of many independent bookmakers. I have to establish if there is a link. We are further advanced on this issue than on other matters in the tax strategy group world. Will I make a statement on it in advance of the tax strategy group papers? It depends on whether the work we are doing at the moment yields a scenario we believe can work.

I will not be flippant in dealing with this matter because we are talking about people's livelihoods and family businesses, but I want to briefly make a point which I made to the Deputy during debate on the Finance Bill. Every time I go to consider a tax change, I am warned that it will have very negative consequences for every sector it affects. If I was to listen to all of those warnings all of the time, I would never be able to make a tax change. I am not being flippant, because I appreciate that these are independent small businesses. That is why we are doing work in this area more quickly than in any other area of the tax code.

Pearse Doherty (Donegal, Sinn Fein)
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I appreciate the Minister's response and that he has to make the connection. There is a history of independent bookmakers closing down. I understand that certain books and audited accounts have been made available to the Minister, or at least to his officials, with which he can verify the connection between firms that were already struggling and which could not survive even under the old regime, never mind with the new additional 1% levy. That connection should be easy enough to establish. I hear what the Minister is saying. The issue of State aid obviously needs to be teased out. I believe the issue can be resolved because there was no levy on online gambling until we passed legislation a couple of years ago and there is a different regime for track-side betting. If that issue can be resolved there is no reason why clarification could not be brought to this matter at an early stage. I encourage the Minister and his officials, who I know are working with industry to ascertain its views and to scrutinise its proposal. Certainty could save jobs in this area. Timing is important to that.

I welcome the Minister's statement on the fraud squad and private industry resourcing part of An Garda Síochána. I raised the issue on the day the Minister, Deputy Eoghan Murphy, announced his report. It was an ill-thought-out suggestion to be included. We have wasted much time on the discussion of whether it should happen and on Insurance Ireland examining its feasibility. We have moved on, thankfully, but we still do not have a fraud squad. Similar to the Revenue Commissioners, the Garda is independent in the exercise of its duties. It will be up to the Garda Commissioner to decide if he believes it is appropriate to establish such a squad. I believe it is, but it is up to Mr. Harris to determine that. Will the Minister make it clear, to this committee and to An Garda Síochána, that if there is a view within the force that an insurance fraud squad is needed, then the requisite resources will be made available by the Department? Individuals will need to be employed in positions within the squad. That is one of the key issues.

Paschal Donohoe (Dublin Central, Fine Gael)
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That will depend on all the other issues raised with me at that point. We will have an Estimates process later in the year. If a case is made for this to be one of the top priorities for An Garda, then I am sure we will find a way of responding positively. When I sit down, before and after the summer, with representatives from the Department of Justice and Equality, however, I am sure there will be a host of different issues they will want to raise with me. I cannot give a commitment now as to how I am going to respond. I do not know what the figures are going to be nor what else will be raised at the same time.

Pearse Doherty (Donegal, Sinn Fein)
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That is a disappointing response. We understand the Garda will have different priorities. It deals with white-collar crime, gangland crime and everything else, so this may not be the issue at the top of its agenda. From the perspective of this committee, however, in dealing with community groups regarding issues such as play areas, marts and people trying to run festivals or motor insurance, we understand the impact this issue is having on insurance premiums. I encourage the Minister to point out to his Government colleagues that this squad should be a priority as part of a solution. It should also be made clear to the Garda that it is not being asked to compete for resources in combating insurance as opposed to securing additional resources for areas such as white-collar crime or gangland crime.

It should be stated that it is understood there is a need for additional action on insurance fraud and that money will be carved out for An Garda Síochána. It will, of course, be understood to be a reasonable amount and that 500 people are not going to be employed to staff this unit. The Garda should be made aware that these resources will be made available as a ring-fenced budget and not cut from other budgets. That is where the Minister's response is disappointing. It is stated repeatedly that this is a priority. The Minister, Deputy Eoghan Murphy, tells us all of the time that this is one of the big issues.

Paschal Donohoe (Dublin Central, Fine Gael)
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As I said, I will respond positively to whatever recommendations come from the Garda, on this and other matters. When I sit down with the Minister for Justice and Equality, Deputy Flanagan, however, he will have many priorities he wants to see funded. If An Garda Síochána states this is a key area it wants to work on and if the Department of Justice and Equality supports that, I am sure we will make progress.

Pearse Doherty (Donegal, Sinn Fein)
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We are 36 days away from Brexit. There is a 6% increase in the budget of the Revenue Commissioners. Does the Minister believe that is an appropriate increase in the context of a no-deal Brexit? There has been no agreement on how the Border will be dealt with in a no-deal scenario. The only statements from the Government refer to the need for difficult conversations with the EU. We do not know what the outcome of those difficult conversations will be. We keep hearing from the EU that the integrity of the Single Market will need to be maintained and the Border will be an EU frontier. Does the Minister believe this increase is appropriate to deal with all scenarios, including the outcome of those discussions with the EU after a no-deal scenario, which we all hope will not materialise?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, I do. If the Revenue informs me, however, that additional issues are developing, further work needs to be done and more resources are needed, I will respond to that request quickly. We are going to be in a completely new territory in a no-deal scenario. I expect things will happen, particularly in our supply chains in what will be an utterly unprecedented period, that may mean the Revenue needs further support. If that is the case, I will supply that. I will then come in front of the Oireachtas and explain why.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister outlined to the committee additional Brexit contingency support of €115 million. Additional supports will be needed in certain sectors in a no-deal scenario. Has the Government, or the Minister, examined the issue of the regions in a no-deal scenario? We hear from all of the experts that some regions in the State will be especially affected. The south east and the north west, including Donegal, have been mentioned. Is the Government, and the Minister's Department, considering additional support for the regions to counterbalance the impact of a no-deal scenario?

Paschal Donohoe (Dublin Central, Fine Gael)
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We have already taken account of the regional dimension of a no-deal Brexit in capital decisions already happening. For example, I gave a higher priority to the opening of work on the N4, which is happening tomorrow, because of what Brexit could mean for the north west. That is the best and biggest example of how we have made changes in our capital plan to try to deal with the effect a no-deal Brexit will create for different parts of the country. On current expenditure, we have again examined this issue, and that is why the Minster for Business, Enterprise and Innovation, Deputy Humphreys, is launching the regional enterprise plans. On Monday, we will be launching the regional enterprise plans for those parts of the country that may be particularly affected by Brexit. We have already done that. The key feature of Budget 2019 is that we are increasing capital expenditure by between 22% and 24%. That will make more sense as we move through the year. If there is ever a year where we need to do that, it is this year.

Pearse Doherty (Donegal, Sinn Fein)
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I have to go to the Dáil unfortunately, but one of the Department's outputs for 2018 was the agreement with Apple on its transfer of funds into an escrow account. What is the total amount in that escrow fund now?

Paschal Donohoe (Dublin Central, Fine Gael)
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It is just over €14 billion.

Pearse Doherty (Donegal, Sinn Fein)
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Does that include the interest?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, it does.

Pearse Doherty (Donegal, Sinn Fein)
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Is there satisfaction on the way that account has been designed and will accrue interest in the future? It will build over time. If the case were to be lost in the European courts, and those moneys had to be transferred back to Apple, is the Minister satisfied there would be no cost to the Exchequer?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, I am. The reason this account took so long to design and set up had much to do with minimising any future loss we might face. We will continue to work with Apple on how that will happen.

Pearse Doherty (Donegal, Sinn Fein)
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It is not guaranteed that there will be no loss.

Paschal Donohoe (Dublin Central, Fine Gael)
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We are fully protected, but I am taking account of the fact we are talking about €14 billion. At the risk of stating the obvious, that is a gigantic sum of money. Any changes in returns from it or the interest rate environment can generate a very large amount of risk.

Pearse Doherty (Donegal, Sinn Fein)
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If we are fully protected, then that risk is not ours.

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, that is the case.

Pearse Doherty (Donegal, Sinn Fein)
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Have we had any indication from the courts as to when the case is likely to be heard?

Paschal Donohoe (Dublin Central, Fine Gael)
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I believe the hearing could be imminent. The timing I have given to this committee before is that this would happen in the second quarter of this year. I believe that is the case.

While it is a matter for the court, it is very likely that the hearing will take place before the summer.

Pearse Doherty (Donegal, Sinn Fein)
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Is it the view of the Department that the case will conclude within a short period? What is its view on the length of the case and the likely timeframe for a judgment?

Paschal Donohoe (Dublin Central, Fine Gael)
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Our view is that the hearing could be conducted quickly because it is very different from court hearings as we understand them here. It is primarily about the exchange of texts and arguments. We believe the hearing could be quite quick. On the ruling the court may make, I cannot give the Deputy an indication of the timing.

Pearse Doherty (Donegal, Sinn Fein)
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Does the Minister have any plans for the €14 billion the State will have if it loses the case?

Paschal Donohoe (Dublin Central, Fine Gael)
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I believe we will win the case. In the unlikely event that we will lose it, we will face the immediate vista of multiple jurisdictions across the world believing they have access to the fund. I do not believe, in any circumstance I can envisage, the State will be facing a huge amount of additional money that might be available to it.

Pearse Doherty (Donegal, Sinn Fein)
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Has any European Finance Minister made the point to the Minister that if the State loses the case, his or her country will make a claim for some of the €14 billion the European Commission believes should have been paid to the State for many years?

Paschal Donohoe (Dublin Central, Fine Gael)
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They have not said it directly to me, but it is not the kind of issue about which other finance Ministers come up to me. They do not come up to me and say that if I lose a case I am expecting to win, they will be lodging an appeal in order to get some of the money. I have no doubt at all, given the statement the Commission made about the matter, that in the event that we lose the case we will face multiple claims in regard to how the money should be spent.

Pearse Doherty (Donegal, Sinn Fein)
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But the Minister does not agree with the statement the Commission made. It also told us that it was our money and that it should have been paid to us. We are taking it to court over it.

Paschal Donohoe (Dublin Central, Fine Gael)
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I have outlined directly to the Commission that even though we completely disagree with its ruling, we abide by the rules of the European Union. Both Ireland and Apple are challenging the Commission on its ruling.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I remind the Minister that I gave him the diagram showing the various companies associated with the PTSB sale. I refer to Glenbeigh and so on. I asked the Department to give us an analysis indicating where the revenue was collected from in each of the entities.

Paschal Donohoe (Dublin Central, Fine Gael)
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That is being done.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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May we have a comprehensive note on it?

Paschal Donohoe (Dublin Central, Fine Gael)
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We are doing it and have been engaging with the Revenue Commissioners on the issue.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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How is the Minister of State, Deputy O'Donovan, getting on?

Patrick O'Donovan (Limerick County, Fine Gael)
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I am fine. How is the Chairman?

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I am fine, too. Has the Minister of State nearly completed his apprenticeship?

Patrick O'Donovan (Limerick County, Fine Gael)
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I am harking back to my days as a member of the Committee of Public Accounts.

Paschal Donohoe (Dublin Central, Fine Gael)
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I would be lost without the Ministers of State, Deputies O'Donovan and D'Arcy.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I thank the Minister and his officials.