Oireachtas Joint and Select Committees

Wednesday, 3 July 2019

Committee on Budgetary Oversight

Summer Economic Statement: Minister for Finance

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

If the Chairman allows, I will ask all three questions together. On tax, in a reply to a parliamentary question the Minister stated that he received the report last year on merging PRSI and the universal social charge, USC. The USC brings in €3.9 billion of tax revenues per annum which, if it is merged with PRSI, would be locked in to the insurance fund and could only be used for those purposes. It does not appear anywhere in the Minister's projections in terms of this report because that would leave a gap. Is that still on the table? Why is it taking so long to produce a map?

The second question on tax is to seek clarification. We are well used to budget day surprises such as close to €1 billion being found from somewhere. As mentioned earlier, the Taoiseach said there will be a €600 million tax package in this year's budget and that he will still have €3 billion to spend. I do not know where he will get the other €800 million from? Is he picking these numbers out of the sky or does he know something the rest of us do not know?

On Brexit, the impact of a disorderly Brexit, which all of us want to avoid, over a five-year period will be €28.5 billion to the Irish economy yet in option B, all the Minister outlines is that we will borrow to deal with the deficit of close to €5 billion, which obviously we would have to do. However, in terms of the stimulus, the mitigation and the support mechanisms, all he is outlining is that the €700 million that is available, and questions arise as to whether all of it will be available, would be used to help support areas. Obviously, that is not enough and there is no plan or indication in respect of what is being outlined.

The third question relates to the first question I asked earlier about unallocated resources in terms of the increase in expenditure headline numbers allocated for 2021 and beyond. It can be confusing sometimes to read through the documents and sometimes the documents may contain minor errors but page 29 of the stability programme update 2019, under general Government expenditure, tells me the resources that are unallocated. For example, for 2020, it tells me there is €605 million unallocated. In the summer economic statement, the figure is €700 million, so that is closely aligned. In April's statement, the figure was €1.3 billion but in this document the figure is €1.9 billion, which indicates an increase. However, in the subsequent years the summer economic statement shows a significant decrease in unallocated resources. I am trying to figure out how that could be the case given that the Minister said he has increased the amount of expenditure in the summer economic statement. The Minister might provide the committee with the figures which correspond with the draft stability programme update in respect of the magnitude of the expenditure increase to reach the 3.25% expenditure level outlined in the summer economic statement.

On the question of whether I have factored the effect of a merger of USC and PRSI into my tax take for the medium term, I have not. A consequence of a merger, if we were to fold USC into PRSI, is that there would be an expectation that the tax flow from the USC would then move into the Social Insurance Fund. That would create a deficit in tax revenue so that is not factored into the figures the Deputy has.

On the Deputy's second question-----