Bernard Durkan (Kildare North, Fine Gael)
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The Minister for Finance is an ex officiomember of this committee for the purposes of the consideration of this legislation. The Minister shall be counted for the purposes of determining a quorum. In dealing with the Bill, the Chairman's role is identical to that of the Ceann Comhairle in the Dáil. Tradition prevents the Chair from intervening in favour of or against any particular amendment. Impartiality is required, as we know, and this also applies to a temporary Chair.

Apologies have been received from Deputy Mairéad Farrell. Deputy Ó Murchú will substitute for her. I welcome members and any viewers who may be watching our proceedings on Oireachtas TV to the public session of the Oireachtas Select Committee on Finance, Public Expenditure and Reform, and Taoiseach.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. Parliamentary privilege is considered to apply to the utterances of members participating online in a committee meeting when their participation is from within the parliamentary precincts. For this purpose, the parliamentary precincts are considered to be the accommodation assigned to the member in the Leinster House complex or its vicinity or another location in Leinster House or Leinster House 2000. Please note that members may participate remotely in proceedings held in public only from the locations listed above, as privilege for their utterances only applies when participating from those locations. It is also important to note that, in order to participate in a division of the committee, members must be physically present in the committee room.

On behalf of the select committee, I welcome the Minister for Finance, Deputy Donohoe. To give some idea of our modus operandi, in order to provide for the smooth running of the meeting, any Member acting in substitution for a member of the committee should be formally notified to the clerk now. We already have referred to Deputy Ó Murchú in this regard. Divisions will be taken as they arise. Members attending this meeting in accordance with Standing Order 106(3) should be aware that, pursuant to that Standing Order, they may move their amendments and request a division but cannot participate in the voting on that amendment. That relates to non-members.

Please note that we must finish consideration of the Bill today. There is a grand phrase. It gives us all an enlightened approach to the proceedings ahead of us. I propose we suspend for a break from 1 p.m. to 2 p.m. and later suspend for another break from 5 p.m. to 6 p.m. After that, we will play it by ear. Is that agreed? Agreed.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I will remind the Minister of the amendment I have proposed. It is worth reading into the record. I am looking for "a report on amending the guidelines in relation to section 481 (Film Tax Relief), to clearly define the requirement for producer companies in receipt of the relief to be the legally responsible employer for all those working on film productions funded by the relief as against the DAC which only has a temporary existence; and further to guarantee the full vindication of workers rights under the Protection of Employees (Fixed-Term Work) Act 2003; and further to ensure genuinely equitable remuneration for performers and actors in relation to their intellectual property rights and full compliance with the EU copyright directive."

Last night, I explained as best I could-----

Bernard Durkan (Kildare North, Fine Gael)
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I am sorry about this. I am frantically trying to-----

Paschal Donohoe (Dublin Central, Fine Gael)
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Deputy Boyd Barrett is making an appearance in another format as well.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Is there is a technical problem with sound? I am coming in in stereo.

Bernard Durkan (Kildare North, Fine Gael)
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I ask the Deputy not to say anything for a moment.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is somewhat appropriate given that we are having a discussion on the audiovisual sector.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Indeed. Are we okay now?

Bernard Durkan (Kildare North, Fine Gael)
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We should be okay now.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I tried to explain the reason for this amendment last night. In response, the Minister pretty much said that I was painting a very grim picture of the Irish film industry and that I had not acknowledged that we produce wonderful films. I will respond to that first because it is important. Anybody can look at the transcript of what I said yesterday and will see that I began my contribution by arguing at length that we need to put more money into arts and culture, including film, and that we are undervaluing the extraordinary talent we have in this country and our incredible tradition, unparalleled for a country of our size, of poetry, art, writing, acting, theatre, film, music and so on. I said all of that so it is unfair to suggest for a moment that I do not recognise this. It is quite the contrary. The reason I am putting this forward is because I recognise and greatly value the creative people we have in this country and want to see arts and culture valued more. I want to see more investment in them. I believe there is a lot more potential there. However, critical to that is truly valuing the people who make those films.

The Minister said that I should "come up with a better metaphor" than the one I used, which was that the designated activity companies, DACs, are mushrooms that pop up and then disappear. He suggested that they flower. Whether it is a mushroom or a flower, the issue is the rights of performers and actors over their performances, the contribution they have made to a film, their writings and so on. All sorts of contributions go into making these flowers of cultural endeavour. As it was put to me this morning as I chatted to a member of Irish Equity, the DAC structure separates the performer, the artist or the creative from the benefit of his or her endeavour and creative ability. That is how he described it to me. That is exactly what the DAC structure does.

It ensures that creatives do not benefit from their input into the making of a beautiful, wonderful thing. That is a problem. I hope the Minister recognises this if it is true. As Irish Equity representatives stated at the hearings of the Committee on Budgetary Scrutiny, it is contrary to the EU directive on copyright. The directive implies that buy-out contracts should be the exception, not the rule, and that it is critical and a requirement that the creatives, performers and actors get equitable remuneration for their artistic contribution and intellectual property. They are not getting it. Under contracts in the UK, including Northern Ireland, and other jurisdictions, they do get it. That has to be addressed. Those affected say that the DAC structure facilitates what is happening. When all this is being funded with public money, the Minister should be concerned about ensuring the creatives' rights are vindicated. They are not being vindicated.

The people the Minister is talking to, the screen producers, are happy with this situation because the rights are being signed over to them. The intellectual property rights of the artists, performers and others are being signed over to the producers. Needless to say, Screen Producers Ireland is saying this is great and good for the producers. It is not surprising that Screen Ireland believes it is acceptable. That is because it is largely populated by producers. There is a revolving door involving producers in Screen Ireland who are making movies funded by that organisation under section 481. It is a relatively small group.

A writer who emailed me described what is happening in scathing terms. He stated he has ultimately come to the conclusion that the Irish film industry is effectively a scam, a branch of the public sector that has craftily positioned itself to operate completely by its own rules and without any accountability to the taxpayer. He went on to provide details. I am only getting my head around all this because it is such a complex industry, given the input of writers, actors, performers, crew and so on. The writer's remarks are pretty scathing. He explained how by comparison with other jurisdictions, writers in Ireland are paid an absolute pittance for options on scripts. The scripts are sat on by producers, who do not try to obtain finance. A writer signs over the rights to his or her script to producers who sit on it, do nothing with it and pay next to nothing.

I could elaborate on some of the issues the writer who emailed me mentioned. Some of the headlines concern duplicity, low pay, vested interests, contracts being drawn up for writers by a particular firm of solicitors that I believe has a relationship with some of the key people inside Screen Producers Ireland.

Bernard Durkan (Kildare North, Fine Gael)
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I remind members that we have to finish our consideration of the Bill.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I understand.

Bernard Durkan (Kildare North, Fine Gael)
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We have over 160 amendments, so there is a long way to go. In order to give everybody a chance, I am anxious that we move on as quickly as possible and avoid repetition.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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That is absolutely fine. Once I have got this amendment out of the way, I will be flying through the rest. I will probably not even speak to most of my other amendments. On this one, however, I want to get all the relevant points across.

These are serious charges. They are coming precisely from the people who are the creatives. The whole point is to support the creative industry, which, in this case, is the film industry. Writers, performers and actors are making serious charges. It is incumbent on the Minister to investigate them seriously and not just talk to the people he gives the funding to, who are obviously very happy to keep it. Of course they are. The Minister mentioned Screen Guilds of Ireland yesterday. That body is wholly funded by the State. All its funding comes from Screen Ireland. It has been suggested to me that Screen Guilds of Ireland represents the self-employed contractors who hire and fire people on film productions. That does not really tell us about the people we need to be looking after. Of course, Screen Guilds of Ireland is going to say things are okay.

In order to elaborate on the points on the DAC, intellectual property rights and what happens to the latter, let me refer again to the email I read yesterday. This relates to my metaphor of the flower, which has died but still exists. Importantly, it is when a film is put on a hard drive that it starts to generate revenue. It does not generate revenue when it is being made. It is when it is put on a hard drive, sold, distributed, downloaded and so on that the money starts to come in, but that money never shows up in the DAC. The revenues accruing from the flower, with the production now on the hard drive, do not go back to the people with the creative input or DAC. That should be of concern to the taxpayers as well as the performers because they finance it. Where is the money going? Let me explain why it should be of concern to the taxpayer. In England, where Irish performers sometimes perform and where they get the right deal, the residuals that come in over the years for downloading, distribution and performance go back to the performers, writers or others and they pay tax on it, meaning the state gets something back. In Ireland, however, that does not happen. The artists and performers never get anything back. They have to sign it away. Screen Producers Ireland says it front-loads the remuneration. In other words, it gives the creatives a payment up front, but this payment is nowhere near comparable with what would be obtained if they had access to the revenues that accrue, often for years, from the performance and downloading of the work they have contributed to. Insofar as there is a back-end deal - this is the lingo - it is linked to the profits of the producer, not the sales, distribution and revenues flowing from the intellectual property. That is a big difference. Elsewhere, the revenues from sales and distribution, or the revenues flowing from the intellectual property, are what remunerate the creatives, artists and performers. Here, the remuneration is linked to the profits, but, as I explained, it is unheard of for the producer companies we fund to make a profit.

Here, it is linked to the profits. As I explained, a profit being made by the producer companies that we fund is unheard of; it does not happen. I hope the Minister sees the difference. There is a consequence as well for the taxpayer. Anyway, I will read what he wrote:

It should be noted that when the finished film (the hard drive and the bundle of underlying copyright) is transferred/sold from the DAC to another company its price, and the terms of the assignment of the rights, will be well below the market price to ensure that the DAC accounts register a loss.

With this kind of structure the tax credit can never be reclaimed as the potential for profit has been removed. Any profit that accrues as a result of distribution and sales will be experienced by a different company. If that company is outside Ireland’s tax jurisdiction then the section 481 taxpayer investment never re-enters the Irish tax net and the investment is effectively lost. There is an additional opportunity for Production Companies within the DAC structure.

"Internal pricing" is a common practice between companies with common owners. It is possible, for example, for the Production Company to invoice the DAC for certain services. For example, the Production Company might take on certain management and financial services on behalf of the DAC and invoice the DAC for those services. At this point it is possible to inflate those costs to the benefit of the owners of the Production Company. Or in the case of animation, the Production Company can invoice the DAC for the services of its ... animators at a significantly increased rate that does not reflect the actual cost of the animators. These are common internal pricing practices. Our point is that these practices are possible within the current design of Section 481, and therefore more transparency and regulation is required.

The final point of course is that the DAC structure means that Production Companies employ only a smaller number of full time office staff on anything like a full time basis. The majority of performers and crew are contracted by the [DAC] which, by their nature, have a limited [time] span. It is difficult to take action [i.e. to the Labour Court or the WRC] against such transient entities. Section 481, as it is currently designed is open to ALL of these risks. We know from the recent cost benefit analysis that it has a net cash cost in excess of €70 million.

That is the cost-benefit analysis referred to yesterday. He continued, "It is possible that this could be reduced if not reversed, if these risks inherent in the design, were removed." All of that is quite telling. I will move on to perhaps the last point and elaborate on that in terms of the ability of workers, because that relates to the other part of my amendment.

I was asked to put this question to the Minister. Can he produce a single PAYE worker who has a contract of indefinite duration acknowledged by the production companies to which he gives money to employ people in the film industry? Can he find one? He referred to 3,000 full-time equivalent people last night. That is a new figure, by the way. It should be noted that these figures fluctuate. This is very important because this is what the relief is for – to create employment. Mr. Hickey, who was in here at the budgetary scrutiny committee the other day, claimed back in 2018 there were 17,000 full-time equivalents. When that figure was challenged and the Minister’s Department looked at it, we discovered that the correct figure was 2,000 rather than 17,000. Now we have a figure of 3,000. Those are amazing fluctuations, are they not? There is a big difference. My challenge to the Minister is not whether he can find 2,100, 17,000, or 3,000, but can he find one? Can he produce one PAYE employee on any of the film productions funded either with section 481 or, as I believe it was called, section 35 before that? If one adds up all the public money that has been invested through section 481 or its predecessor since the 1980s, it is probably in the region of €4 billion over all those years. That is going back to the 1980s. Can we find one person who actually has a job as a result of the money we have given to create jobs? My challenge to the Minister is to suggest that he cannot.

This makes a mockery of the declaration that the recipients have to sign where it says that they have to; for example, that they have to comply with the Protection of Employees (Fixed-Term Work) Act and, of course, the EU directives surrounding that, which require that people on fixed-term contracts do not enjoy conditions lesser than those on normal contracts of employment. That is what the directive states. It is precisely to protect people in what you call “project-to-project”. That is purpose of the fixed-term workers directive and the fixed-term workers legislation. It is to protect people who work on project-to-project employment to ensure they acquire these rights by law. If they work for the same producer, as it is in this case, or the same employer successively over a number of years, even if there are gaps or if they work for some other people in between, they acquire these rights. However, those rights are not acknowledged.

While I challenge the Minister to find one PAYE worker who has an acknowledged contract of indefinite duration, I could bring in 30 or 40 people, many living in the Minister’s constituency, who could demonstrate their record as having worked for 20, 30 or 40 years in the film industry, who should have contracts of indefinite duration but have not got them, and who have been put out of the industry because they have asked for such contracts. I refer not to people who say they represent this, that or the other, but the actual people who worked in the film industry. That is a very serious problem because it means the objective of this relief is not being met. The requirements for such state aid under EU law are not being met.

Somebody else I was talking to this morning noted the big question in this regard: who is the employer in the film industry? The Minister mentioned the Screen Producers Ireland, SPI, agreement, which has not been registered, as I understand it, with the Labour Court. Normally these agreements are registered with the Labour Court. Why has it not? I suggest it has not been registered because it cannot be - because an agreement in the Labour Court has to be between an employer and an employee. SPI is not an employer. Therefore, that agreement has not and cannot be registered. The only people SPI could register an agreement for are the people who work for SPI. However, they cannot sign an agreement for employers who do not exist. When I say they do not exist, it is not me saying it - it is the so-called employers – the producers companies - that are saying it. Is that understood? An agreement between employers and employees can only exist if there is an employer. The people the Government gives the money to explicitly said in this committee room that they are not and cannot be the employer. Therefore, how can it make an agreement with employees? Now we have a big problem. There is no employer or employee. That is a big problem when the Government is spending €100 million a year to create quality employment and training.

Finally, I had another phone call this morning with another person who has been working.

This person is not blacklisted, unlike some of those who came in here in 2018 who have not worked since. He has been working and he is saying this stuff is still rampant in film productions.

By the way some people in section 481 work are not even doing the trainee stuff or pretending to do it. There is willy-nilly firing of anybody who says, for example, that the scaffolding is a bit unsafe and something needs to be done about it. In that scenario the person who mentions that is fired. If someone argues with the producer or says people are working unsafe or too long hours they are fired and they will not be employed again. There is nothing to protect people against this stuff. Whether the Minister accepts that those allegations are true or not, I am asking him to do this because I put it to him - and I ask the Minister to respond to these things - that there is no protection against that stuff. It does not exist and it cannot exist because of the DAC structure. I will leave it at that.

Bernard Durkan (Kildare North, Fine Gael)
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I should have mentioned that amendments Nos. 53 and 54 are related and are being discussed together.

Ruairi Ó Murchú (Louth, Sinn Fein)
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This is a reply to the Minister and he is correct on some level in the sense that I did not speak about the huge successes there have been in the Irish film industry. Maybe I should have said that at the outset but the fact is that we want that to continue. We want to ensure that we have what I spoke about earlier, namely, a sustainable industry that provides a good level of employment and training and then ensures enough throughput to maintain it throughout. The Minister accepted that the issues we brought up are ones that have been brought to us by those who work in the industry.

I will go through this quickly. The producer applies for the grant money but the grant money is given to the DAC. Deputy Boyd Barrett dealt with the ins and outs of who is an employer and who is not and the difficulties that are caused by that. There is the particular issue with the intellectual property, IP, and the artist. In years gone by they were able to get better contracts with residuals and the sign-off but that is not the case at this point in time. When we had the producers and Screen Guilds of Ireland, SGI, in the committee for an interaction there was an acceptance on some level - as much as they did not accept everything that we put in front of them - that there was an insufficient amount of collective agreements to deal with the IP and workers' rights issues. The issue is what the number is and what it looks like. People who are working as crew in the film industry are saying that the ratios are not what they were previously and that there was a greater number of experienced staff. They claim - and I know this is refuted on some level - that there is a shortage of experienced staff and that there is a huge number of trainees. This is not from the point of view of training but to a degree, it is a race to the bottom. I have had the same reports that Deputy Boyd Barrett has had on the fact that anybody who complains about anything is shown where the road is.

The big thing is that we are dealing with a huge power differential. We can talk about Screen Producers Ireland, SPI, SGI and Screen Ireland and all the rest of it but crew and others will say that they are not represented on any of these bodies. I accept what the Minister says when he says that the tax code is not the means by which you deal with this but we need a proper review or investigation from the point of view of putting the correct framework in place. That is the thing that is missing. I ask that we get into the ins and outs of what those figures are because it is a question of the ratios of people working on film sets and all the rest of it. My fear is that as much as people are saying they are not necessarily great working conditions, beyond that the whole film industry is at risk if we do not get a handle on it. This might be beyond the remit of what we are dealing with but we have to address this issue by any means possible. Representation of crew and artists is something that is missing from the entire model.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputies for their contributions. The point I was attempting to make yesterday was that I felt there was a lack of balance from the Deputies in the contributions they made in not giving some recognition to the positive role that section 481 has played in the growth of the film and audiovisual sector in Ireland and to a lot of the recent developments that have taken place. I appreciate that the matters both Deputies are raising are important and serious and that they merit discussion in the context of the Finance Bill and further work from the Department of Finance. I would say to them that there are other developments that are under way that are positive and making a difference. However, more work needs to be done.

I acknowledge the positive and important developments that have taken place. I am sure the Deputies are aware of the new construction crew agreement that was reached in July of this year. I understand that this encompasses up to 300 workers in the independent film and television construction sector and includes some of the workers who both Deputies have referenced, including: carpenters; plasterers; painters; riggers; and stage-hands. This is an agreement that provides for: increased hourly pay rates; overtime rates; a guaranteed working week; dispute procedures; and various other industrial relations and employment provisions. Other measures that are included in this are the extension of coverage for pensions, sick leave and other benefits to industry construction workers under the construction workers' pension scheme. This is an agreement that has also led to a new joint monitoring structure to help ensure the agreement is appropriately implemented. This is the second agreement of its kind that has been brokered within the sector we are discussing and follows on from the crew agreement that was introduced in January 2021. That agreement modernised the practices that went before. It also has a monitoring structure to oversee it and within the agreement there is a commitment to develop a work-life balance policy for the film and television industry.

I fully accept that the issues that are being raised with the Deputies by individual members of the sector are being raised by a number of people. We are following the hearings that are happening here and have followed the long-standing interest of both Deputies, particularly Deputy Boyd Barrett, in this matter, over many years. These developments are trying to respond to the issues that are being raised on working standards in the sector and the need for progress to be made on important matters of pay, overtime rates and the kind of issues that really matter. I differ from the analysis that has been offered by the Deputies in the following ways. In particular when I hear Deputy Boyd Barrett talk about the need for contracts of indefinite duration, it is difficult to see how such contracts are consistent with a sector that is fundamentally a project-by-project one and one in which your employer changes from film to film and from cartoon to cartoon. That is a key issue.

We have a sector where, as I understand it, your employer and the project you are on vary a lot. The DAC structure is a reflection of the fact that employment tends to be provided on a project-by-project basis.

It is not clear to me how some of the expectations Deputy Boyd Barrett has can be delivered in the context of a sector in which a person's employer varies a lot because the production varies and changes a lot as well. In any event, it seems that the only way in which we can make progress on issues like this is through making sure the kinds of collective agreements that have already been reached within the sector work, and then broaden them out for more workers within the sector to be able to participate.

I am in possession of a letter that was sent to the Chairperson of the Committee on Budgetary Oversight, Deputy Hourigan, from Screen Producers Ireland, which states:

Irish actors' Equity unilaterally exited from a 2021 agreement in April of 2021. Screen Producers Ireland have endeavoured to engage with Irish actors' Equity with a view to entering into negotiations so that issues which have arisen can be resolved. We have been in contact with the WRC, which has invited Irish Equity to the table but so far, they have declined to engage. Screen Producers Ireland is fully committed to compliance with the EU copyright directive and the Irish regulators implementing them but can only do so through negotiated collective bargaining agreements.

I have no doubt at all that there is another side to the story, which I am sure the Deputy will give to me in a moment. The point I will still stand over, however, is that the issues and matters of the workers raised by the Deputy need to be addressed. The way in which progress can be made on them is through implementing the collective agreements that have been negotiated, broadening them out and putting more in place. These are industrial relations issues that need to be dealt with through industrial relations fora.

I appreciate the point Deputy Ó Murchú made when he recognised the limitations in tax policy in dealing with these issues. I still accept that when we are having a discussion about a tax relief, however, it is entirely legitimate that the kinds of issues raised by both Deputies should be aired here.

Deputy Ó Murchú also made that point that there needs to be an audit and investigation into these matters. My understanding is that the Workplace Relations Commission did an audit of the sector in 2020 and as I mentioned last night, did not recommend a change in the designated activity company, DAC, structure or the section 481 relief that is in place. It recommended the kind of approach to which I am referring here, however, which is the implementation of collective agreements, where they are in place, or the introduction of new collective agreements where they are not in place. I support those recommendations. I hope the recent progress that has been made across 2021 and 2022 can be built upon.

In terms of the further engagement that will happen, my Department recently met with representatives from Screen Guilds of Ireland and SIPTU. We would like to meet Equity and the Irish Film Workers Association, IFWA, again, and we will do so, to continue our engagement on these issues.

Even though we just published a pretty lengthy and thorough evaluation of section 481, I really care about what happens within this sector. The three of us are united in our agreement that what that sector produces is often wonderful. We should all be proud of the people who work in the sector whether they are producers, stagehands or actors. We should want to see everybody involved in the sector have the opportunity to earn a decent living. As I said, however, this sector appears to me to be more project-based and because it is film-based or television series-based, it means that employment within the sector reflects the fact that it is project by project and film by film. The way in which the kinds of issues that flow from that kind of employment can be dealt with is through industrial relations and procedures rather than through the tax code. The tax code is only one part of section 481 from which we have published a survey.

I will conclude with two really specific matters that were raised, the first of which were the allegations to which Deputy Boyd Barrett referred. Let me say to the committee that if the Deputy is raising these allegations, I am confident that he has evidence that he believes merits the claims he is making. Deputy Boyd Barrett shared views regarding people being sacked because they raised concerns about the safety of the work environment. I am sure there are State bodies that should be investigating and getting to the bottom of the claims to which the Deputy referred. I hope the issues to which he referred have been shared with them. Safety in the workplace should be a fundamental duty for those who are involved in the production of these films. I am sure it is and I hope it is. However, the Deputy raised a very serious allegation I have not heard before. I accept his right to raise it. I am sure he raised it based on evidence he accepts. That is a matter that clearly merits investigation by the State bodies that are involved in work safety, however. I hope the issues he raised have been shared with them.

Deputy Ó Murchú made a point about the shortage of experienced staff. It shows the importance of the work I tried to reference last night about training days and what needs to happen to build up the skills and qualifications of those who are involved in the sector. It emphasises to me that this is work that needs to continue in order that we have more and more experienced people involved in delivering work we all agree is of great value to our society and economy.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I genuinely welcome the Minister's response, particularly his commitment to meet all the people to whom he referred. It is critically important that he meets not only the people who think everything is okay but also those who are raising very serious concerns and questions in order that we get a balance.

Indeed, there are other people. We obviously mentioned the Irish Film Workers Association and Equity as groups that had the confidence to come in, if you like. One of those groups would say its members have suffered very dire consequences. That needs to be looked at. The other group represents without question the actors and performers who maybe have the confidence to come in and raise questions. If the Minister is open to it, however, there are other individuals working in the industry who do not have the confidence to go public but would probably welcome private engagements with the Department to be able to give evidence of what they know and see in the industry. I ask that of the Minister. These are people who would have absolutely clear credentials, if you like, as players in the film industry. We need to hear from everybody.

As part of that, I hope this might conclude with the once promised but subsequently abandoned film industry stakeholders forum, which the Government wanted to happen and that was recommended by the then Joint Committee on Culture, Heritage and the Gaeltacht in 2018. Certain elements within the film industry simply vetoed it, however. They said they were not involving themselves and the thing fell apart.

It never happened. No group should have the right to veto a stakeholder forum in an industry that would not exist without public money. It is important that we keep reminding ourselves that it would not exist without public money. That is different from the non-funded arts sector. That is a distinction I only fully got into my head during Covid-19. We discovered there are a great many people in entertainment, music and so forth who are not funded. There should be good employer-employee relations in that situation but there is something different between a sector that is not publicly funded and how it would deal with employee-employer relations and something that is publicly funded, depends on public funding and would not exist without it. I ask members to think about that difference in how we approach this. I believe that makes the sector different. It is also different precisely because the film relief is about quality employment and training and because of the EU directive. That slightly changes the pitch. That is my point. If it was not funded, we might well say to someone who experiences a problem that they can go to the WRC or the Health and Safety Authority because that is what those bodies are for. However, this is slightly different because the funding is all public money, from section 481, Screen Ireland, the Broadcasting Authority of Ireland, RTÉ and so on. Those are other revenue streams that are not even counted in some of the figures I have referred to. There is all this public money going into the sector and even the producers acknowledge that without this money, there would be no industry. It is entirely dependent on public money. Therefore, the Minister, whose response and engagement I genuinely welcome, and the Government need to think about the fact that this is the public's money.

I hope the Minister will discuss this issue with those who are expressing concern, the contrarians. As the Nyberg report produced after the economic crash stated, we need to listen to the contrarians. One of the lessons of the crash in 2008 was that we did not listen enough to the contrarians. It is important that we listen to them so that we have a balanced view. I ask the Minister to note that this project-to-project system does not exist in the animation industry, which is also funded by section 481. It does not exist. There are different animated films that are done project to project, but they are standing companies with employees and a production line. I have no doubt the producers will come in here and say that is different but it is not necessarily different and it was not always different. Once upon a time in the film industry, people were employed by studios. People will say that was the "olden days" and it is different now but they will not say why it is different or better. The people who say it is different now and we cannot go back to the way it was say that because they are doing quite well. I fully understand they would want to say that.

An issue raised with me, which I ask the Minister to look into, is producer fees and how big they are. I have heard of shocking figures of €250,000 each for producers on films that have a total budget of about €8 million. The same productions then skimp on overtime payments and allowances, whereas the producers are getting €250,000 each. These issues need to be looked at because this is public money. It is obvious that those people have little interest in questioning the current model. That is self-evident but it does not mean they are right.

As one person put it to me, a live action film is a production line. It is different in the sense that there is a creative aspect, if we can put it in those terms. That is important. On another level, a film is a production line with trades, builders, transport workers and so on. There is no need for those people to exist in complete precarity and insecurity. One might well argue that on creative grounds the same writer cannot write every time for the producer company, which, by the way, does exist all the time. That is the one area that is not project-to-project. A producer company to which public money is given does not have an episodic existence. It exists all along the line. We can name the companies.

I again welcome what the Minister said. It was suggested to me that one thing we could do is to phone up the ten or 15 major recipients. That number could be narrowed down to six or seven. We should phone them up and ask how many employees they have. Those companies have existed for ten or 15 years so they are not episodic. They also decide the disposal of the intellectual property rights of the performers and so on. That is who they are transferred to and they are then transferred on elsewhere - we do not quite know to whom. Are they transferred on to the big American companies? Are they put into another DAC? I believe that was alleged in a German case where the revenues accruing to a particular film, a co-production with a German company, had been put somewhere else and there was a legal case around it. Where do they go? Who gets those revenues? It is not the State or the artists. I ask the Minister to seriously examine that and question this mantra that because a film is made on a project-to-project basis, nobody can have any security or recognition. It is slightly different, but all industries are slightly different. Does that mean all rights go out the window? Does it mean someone who has been in the industry for ten, 20 or 30 years has no right to have some expectation to be employed on the next film made by the same producer company that made the last film he or she worked on? Can those who made the sets, did the transport work or worked as the stage hand have no legitimate expectation to be on the next production when it is the same producer? The Minister should ask himself those questions because as soon as we ask them, we realise there is a problem there.

In regard to the agreements, again I ask the Minister to look into this and possibly get legal advice from the Attorney General on these agreements. My understanding is that there cannot be an agreement covering an industry if there is not an employer and an employee. That cannot happen and is not legal. That needs to be looked into because it is meaningless. When I say there is no employer it is not a case of me just alleging that. The Minister should listen to what SPI says when it goes in front of the Labour Court or the WRC. The previous CEO of SPI said she would give further evidence before the court that there was no possible basis, having due regard to the realities of the sector, on which a relationship of employment could be said to have existed between the parties. The parties were the film company and the people who worked on a publicly-funded film production. That is who she was referring to. Whatever the specifics of that case, we should listen to what she is saying. That was on the basis of clearly established industry norms and practices governing working arrangements in the sector, including the operation of section 481. There is no possible basis for a relationship of employment because there is no employer and no employee.

There cannot be an agreement with anybody else other than an employer and employee. I am genuinely asking the Minister to get legal advice on this issue because those agreements mean nothing if we do not have the basics of an employer and an employee.

Steven Matthews (Wicklow, Green Party)
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To reiterate what the Minister said, under the Safety, Health and Welfare at Work Act, there is an obligation on all employers to provide a safe system of work and a safe place of work and methods of reporting concerns that would arise in the workplace. That option is open to anybody, even a member of the public, to report. It can be reported online and while people must provide their details, those details remains confidential. If there is anyone listening who is concerned about a workplace situation, there are options available. There is very strong legislation in place to protect workers in the workplace and it is improving all the time.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I will respond in two sentences.

Bernard Durkan (Kildare North, Fine Gael)
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I will put the question in a minute.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Okay, I will be really quick.

Bernard Durkan (Kildare North, Fine Gael)
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We have moved away from the amendment.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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This will be my last word on this, honestly. One of the people I was talking to this morning told me that the UK had just introduced a measure where there will be someone on film sets to address the problem of people being afraid to go to their line producer because of a fear of repercussions or going to the producers. That fear exists over there as well. In the UK, a special independent person is now on each film set to whom crew, performers and workers can go if they have concerns. That is completely independent of any of the operators, stakeholders or anybody else in the film industry. It is a good idea to have somebody that people can go to based on the fear of reprisal. I welcome what Deputy Matthews said but that fear is very serious. We have heard it from multiple people giving evidence. A good, simple way by which we can begin to address that issue is to have someone whom people can go to and say that maybe they are being bullied or told to do things they feel they should not have to do. That person would be completely independent of producers, management and the people who hire and fire.

Paschal Donohoe (Dublin Central, Fine Gael)
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To be completely precise about the expectation I have created, my Department, as opposed to me, will meet other bodies. If I started meeting representative bodies in other sectors for which I do not have direct responsibility, I would never get any work done. I have to allow Departments, such as the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, to take the lead in policy areas. However, my officials will meet the different bodies to which we just referred. We will meet Equity and the IFWA to follow up on these matters and hear their views, just as we have met Screen Guilds of Ireland and SIPTU. I assure the Deputy that will happen. I am less confident that I can give a commitment regarding meeting individuals.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I do not mean loads of people.

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, but I think the Deputy will understand that we have to confine our engagement to representative bodies in sectors. It is unusual enough for the Department to meet representative bodies in a sector for which it does not have direct policy responsibility. We are responsible for section 481 and the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media is responsible for many of the other policy issues with regard to the sector. The Department of Enterprise, Trade and Employment is responsible for many of the industrial relations issues the Deputy raised. However, because of the Department's interest in the film sector and in the different issues the Deputy raised, we will meet the representative bodies but we will confine our engagement to those bodies because that is the appropriate thing to do.

I am not dismissing the issues the Deputy has raised, and I never have dismissed them. As I said in my earlier response, if the Deputy raises an issue with me in the way he has, I accept he has enough evidence that he believes the issue is legitimate. I accept that. Equally, I am aware of the need to listen to those who have different views. That is a partial motivation for my interest in the different issues the Deputy has raised. At the same time, I do not believe that my view of a sector or an overall issue can be exclusively or largely determined by those who have the kind of negative and worrying views to which the Deputy refers. I hear views from other organisations within the sector that are not consistent with what the Deputy said. I hear the views of others who talk about progress being made and do not raise issues of the severity the Deputy does. I have to acknowledge that this morning. That said, it will not stop my Department meeting the organisations that differ from our assessment of how things stand because it is right and proper that should happen.

Returning to the workplace safety issues, Deputies have reminded me that it is the Health and Safety Authority that has responsibility for workplace safety. I referred to State bodies and the Deputies made clear which of them it is. The HSA is independent and I know it carries out and discharge its duties in an impartial manner and independent of the views of employers. It also has to assess whether the issues being raised with it justify further action or a response from the State.

I reiterate the point made by Deputy Matthews that anyone looking in on this meeting and those who are concerned about their safety need to be aware of the work the HSA can do and be confident that they can report issues to the HSA and they will be investigated in an impartial and thorough way. I do not want people working in any workplace funded under section 481 or any other public money to feel their workplace is unsafe. The Deputy is raising a very serious matter. I reiterate the competence and role of the HSA in it.

While we have spent some time on this section, it was appropriate that we did so. It is a significant use of taxpayers' money. We are talking about issues that are important in the sector. I believe progress has been made and that the overall balance in the sector is different from than described by the two Deputies. Equally, however, I accept that the issues they are raising are important and merit further work. That is why my Department will meet the other bodies and organisations that have been raising these issues in recent years and will continue to engage with them. We will monitor the hearings that are under way in the Committee on Budgetary Oversight to see if there are any new matters or further issues being raised that are relevant to the operation of section 481.

Bernard Durkan (Kildare North, Fine Gael)
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I indicated I would put the question but Deputy Ó Murchú wants to make a comment.

Ruairi Ó Murchú (Louth, Sinn Fein)
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I said I would take 30 seconds and I hope I will not make a liar of myself. I welcome the Minister's interaction. There is an acceptance of the need for a greater level of collective agreements across the board. However, the power differential needs to be taken into account. That is the reason some individuals are keeping their heads down. We need to find some means whereby they can make submissions or whatever. This is not us saying this is terrible but we have been shown a number of bad practices that endanger the industry and place people in circumstances that are not good. That needs to be done. I think the Minister agreed with me, based on a nod he gave at the time, that we need a better model or framework in which there is greater representation for crew. I do not know exactly how that should happen but the Government is probably better placed to make that happen than either I am or others are.

Lastly, I accept the answer given to the question on ratios. It was presented to me that a choice was made by certain producers to have less experienced of staff in order to pay them less and thus people were in a more precarious situation. That claim has been denied but many Deputies have heard it from many sources. The issue must form part of the discussion the Government has with some of these stakeholders.

Paschal Donohoe (Dublin Central, Fine Gael)
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On the situation Deputy Ó Murchú mentioned where one has individuals who are afraid to, as he said, put their heads above the parapet, surely that is where organisations like SIPTU come in and surely this is the very valuable role trade unions play. Where workers are very concerned about their future, or are concerned that they are not being treated fairly, they have recourse to a union. We have met SIPTU and listened to what its representatives had to say. Of course, SIPTU has raised issues with us. I am not going to speak for SIPTU at this committee meeting, and I would not dream of doing so, but I will make the following general points. First, the sense that we got from the industry differs from how the Deputies have portrayed it today. Second, the issues the Deputies have raised are still important and we will meet groups that have raised these matters with them. The Department of Finance will do that, and shortly after the Finance Bill has been completed.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I withdraw the amendment on the basis of what the Minister said and I may resubmit on Report Stage.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 54:

In page 85, between lines 2 and 3, to insert the following: “Report on relief for investment in films in the context of employee pay and conditions within the sector

35. The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on section 481 film relief, in the context of the pay, conditions and training of employees within the sector, and options to enhance the scheme with respect to employee pay, conditions and training.”.

On the basis of the earlier conversation I withdraw the amendment and reserve the right to resubmit it on Report Stage.

Bernard Durkan (Kildare North, Fine Gael)
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Amendments Nos. 55 to 58, inclusive, and No. 60 are related. Amendments No. 55 and 56 are physical alternatives. Amendments Nos. 55 to 58, inclusive, and No. 60 are related and may be discussed together. Is that agreed? Agreed.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 55:

In page 86, to delete lines 32 to 35, and in page 87, to deletes lines 1 to 27, and substitute the following:

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputy for tabling his amendment. I am very much aware of the impact the rising cost of petrol, diesel and home heating oil is having on living standards within our country. I am aware of the great concern that many face this winter which has darker nights regarding how they can keep themselves warm and I am aware of the costs of using a car, commuting and going to school, etc. I understand that people have to go about their daily lives in which the use of a car is so fundamental. I also accept and appreciate that for those who live outside of the larger cities and towns that a car is really important, and that the rise in cost of fuel has a further impact upon them.

Deputy Doherty is correct in describing the further flexibility that is available to the Government, if we chose, to further reduce taxes in these areas. Even though that flexibility is there, we still have a need to be able to ensure that we can afford what we are doing and that the measures overall are ones, if we need to renew or continue them, that we are able to do and that we have the ability within our national finances to be able to afford the measures that are in place. Overall, we have brought forward a budget of €11 billion, of which €4 billion is cost-of-living measures that are one-off. Some are targeted, yet aim to make a real difference to the very constituents to which Deputy Doherty referred. We have measures in place yet Deputy Doherty argues that they are insufficient.

The cost of that alone, to the end of next February, is €281 million. It is a huge amount of taxpayers' money being used to reduce the cost of fuel for many who are struggling with that at the moment. While there were some positive trends for a while, in particular with the price of petrol at the pump beginning to come down, that is not carrying through into other fuels at the moment. I know it is happening with diesel and with home heating oil. I make the case to the Deputy and to those who are watching this debate that €280 million of their money is being used to put in place measures that we are going to fund up to the end of next February. That is a huge amount of the country's money being used to respond to issues that really matter and that are affecting the cost of living. The Deputy will say I should always spend more and do more but that cannot be the answer to every issue we face. Looking at the €11 billion of the country's money we are using, and particularly the €4 billion that is being used to deal with the cost of living, which the committee and I are so concerned about, I would make the case that that €4 billion overall, including the €281 million that is being used to bring down the cost of fuel, is an honest and credible attempt from the Government to help with the cost of living in a way that we believe we can afford and that will not create further risks for country down the road.

Pearse Doherty (Donegal, Sinn Fein)
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As I said, we have debated this quite a bit. I just want to pick up on one aspect of the proposal. We are into the third day of this debate. The Minister has argued, and he will have his reasons and rationale for doing so, about how we could raise further taxes. For example, last night we spent quite a bit of time debating why we should not ask institutional investors to pay tax on the large rents they gather. There are ways. There is a reason the Minister does not want to do that and there is a reason I would do that. There is also a reason I would cut the cost of home heating oil. The cost of reducing the cost of a home heating oil fill by €117 to the end of February would be in the region of €40 million, according to the Minister's officials. I do not take away from the size of the budget. I also do not take away from the size of the crisis in individual people's lives.

We all know there are many homes that are very poorly insulated. We had a discussion about housing and the role the Minister and the Government have played in creating and sustaining a housing crisis. As regards where people are at with their homes, insulation and retrofitting over the last decade, what has happened is shocking. The focus has been on the wrong areas. Schemes that are in place now have, on average, a 27-month waiting list. People have to wait 27 months for the better energy warmer homes scheme. The target for this year is 4,800 retrofits and the waiting list is over double that. The number on the waiting list is growing all the time, while the wait time is 27 months. For other schemes, it is well documented that people need a large amount of disposable cash or be able to get a loan in order to benefit from some of those. Those on lower incomes would be looking at the better energy warmer homes scheme. It is not 2023 they could be looking at. It is not even 2024. If they are lucky, they might be able to avail of it in 2025 if they apply for the scheme in the morning. For many people who are in poorly insulated homes, their only way of heating their homes is home heating oil. The Government has done something on home heating oil; it has continued to raise the price. That is what it has done. There has been a reduction of VAT on gas. Some 80% of homes in Dublin are heated by gas but in the west and north west, in the Border counties and right down in the south east, home heating oil is the predominant method of heating homes. That is a serious issue. There is something the Government could do by recognising that there is an issue here. There are hundreds of thousands of people out there who have no other option but to heat their homes through home heating oil. The price of oil has increased by 145% since January 2021. Part of that, albeit a small part in comparison to the overall increase, is the Government's actions in pushing up the price, which it plans to do again. There is a serious issue here that has to be dealt with.

I mentioned the track record of this Government or governments that Fine Gael has been involved in. The number of shallow retrofits has dropped by 85% since Fine Gael took office. From 2011 to 2019, the number of shallow retrofits dropped by 85%. Homes that are not insulated properly lose, on average, 20% to 30% of heat through their roofs and external walls. There has been a reduction of 85% in shallow retrofits. In 2011, 51,000 roofs were insulated. In 2019, only 7,500 were done. When Fine Gael went into government, 51,000 roof insulations were carried out and in the last year we have figures for, which is 2019, that had dropped to 7,500. That is a failure. It is a failure to plan and to deal with the issue. We cannot turn that around overnight. We know that. There is a huge crisis here in terms of skills, delays and in the processing of applications by the Sustainable Energy Authority of Ireland, SEAI. There are huge bottlenecks that will take time to resolve. I would argue that this should not have happened. It should not have built up in this way. Fine Gael has been in government for the guts of 12 years but we have to deal with the here and now.

Temperatures have dropped this week. A lot of people are worried about Christmas. We should also not forget about the serious flooding in parts of the country over recent times. Temperatures have remained high until now. People tell me the grass had been growing. Temperatures have been quite high but they have dropped now. People are really worried about heating their homes, about the amount of home heating oil they have to purchase and the cost of that coming into the winter. This is a measure that I am putting forward around home heating oil that would reduce the price. As the Minister said, there is nothing to stop us doing this at a European level. We can reduce the price of a fill by €117 up until the end of February to get people through the winter. I strongly believe it is something that should be done.

Have the Minister or the Department undertaken any analysis or provided revised estimates of the price trajectory of carbon-based fuels since 2020? Given the anticipation that the trajectory will now be higher over the medium term as a result of higher demand, the green transition and geopolitical factors that have materialised, there is a very strong view that fossil fuels will remain at a high level as we move towards an energy transition and that the price of fossil fuels will continue to rise. Has any analysis been done since 2020 on this matter?

Steven Matthews (Wicklow, Green Party)
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I would agree with Deputy Doherty on the benefits and advantages of deep retrofitting much of our housing stock across the country. He is right. Not enough has been done in the past. However, the energy retrofit scheme that was recently introduced has been cited at European level as one of the better and best designed energy retrofit schemes out there. These things take time. It takes time to build up the skill base. It takes time to advertise and it takes time to encourage people to take up the significant grants that are out there.

There are 100% grants under that scheme. At the moment, 400 homes per month are being retrofitted under that scheme. This is paid for in part by the carbon taxes that are raised, which Sinn Féin continually opposes yet includes in its budgets to spend. We have the 80% series range of benefits and retrofitting options for homes, with a grant of up to 80% for wall cavity insulation for thermostatic valves and other insulation measures in homes. There is also the grant of up to 50% for the full retrofit. It is a very comprehensive package and it is funded. It has signalled to the industry that there is a Government commitment to this industry and that we see the sense in retrofitting homes. Retrofitting homes benefits us in many ways, not just in the cost efficiency that accrues to the owner of that home, but also with a reduction of emissions, with health benefits, and with an increase in the value of the property. There are a number of reasons a retrofit makes a lot of sense. Ultimately, we should be moving to expand renewable energy so we can help people get off very expensive, polluting, and climate impacting fossil fuels such as gas, oil and home heating oil.

The Government has set out the policy that significantly increased our targets for renewable energy. Deputy Doherty should reflect on the Sinn Féin Private Members' Bill introduced last year that effectively would have eliminated onshore wind energy. Sinn Féin withdrew the Bill at the last minute, sensibly, which was the right thing to do. The Deputy should have a look at the facts around how much electricity is generated in Ireland, at the success we have had in renewable energy, at the Government's targets for future renewable energy, both onshore and offshore, and at the significant improvements we have made in grants for solar energy at domestic and utilities scale. That is the direction we should be going.

Paschal Donohoe (Dublin Central, Fine Gael)
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I will deal with the retrofitting critique that Deputy Doherty has just laid out. Last night in the debate on the introduction of an accelerated capital allowance for retrofitting in the rental sector, the Deputy made the point that in his view there are not enough people available to do the work for retrofitting.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister made that point. The Minister made the point about different people being trained. I did not make that point. I said that there were delays.

Paschal Donohoe (Dublin Central, Fine Gael)
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Fair enough.

Bernard Durkan (Kildare North, Fine Gael)
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Hold on just a second. Let us have one speaker. I will bring the Minister back in again.

Paschal Donohoe (Dublin Central, Fine Gael)
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I stand corrected if-----

Pearse Doherty (Donegal, Sinn Fein)
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It was the delays I spoke about.

Bernard Durkan (Kildare North, Fine Gael)
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One speaker at a time.

Paschal Donohoe (Dublin Central, Fine Gael)
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If Deputy Doherty did not acknowledge the lack of skilled people available to do the work, then of course I apologise to the Deputy. I thought he did. If he did not, then I take that point back. The Deputy is aware, however, of the huge challenge we have in getting people to do the work and all of the training efforts that are under way, which I referred to last night, to build up the sector so we can do more retrofitting activity quickly. The money we are using to fund the retrofitting programme is from the carbon taxes Sinn Féin is against. The carbon taxing proposed by Sinn Féin, such as eliminating the carbon tax on home heating oil, is the very tax we are using to co-fund the expansion of the retrofitting programme and to put in place more funding for the retrofitting we know is needed to change homes and to give a better quality of life and better health to the people living in them. On the one hand, Sinn Féin wants the Government to fund more retrofitting, but on the other hand, Sinn Féin is opposed to the tax that pays for it. I put it to Deputy Doherty that these two views are completely inconsistent and contradictory. As I understand it, Sinn Féin has a proposed amendment here today to eliminate the carbon tax on home heating oil. Sinn Féin has been against all of the carbon tax changes that I brought forward in recent years, and yet Sinn Féin wants more of the activity that is co-funded by the carbon tax. I know that the Deputy will propose, as the Deputy said a moment ago, more taxes on REITs such as IRES, and that Sinn Féin would bring forward tax proposals to pay for more spending. The amount of additional spending the Sinn Féin Party commits to, day after day and which the Deputy also does, will not be funded by the level of taxes the party would bring forward without doing more damage to our economy. Specifically, Sinn Féin wants more retrofitting. Carbon taxes are helping to pay for the expansion of our retrofitting programme, but Sinn Féin is against carbon tax. If Sinn Féin wants to see more and more investment in a lower carbon future for our economy, where will Sinn Féin get the money to do that, given it is against the role of carbon taxing?

In answer to the Deputy's question about fossil fuels and the impact that higher pricing could have on the carbon tax trajectory, the last time we analysed this was in 2021. I am sure when we get to do the tax strategy group papers for next year, we will no doubt consider what impact higher pricing will have on the carbon pricing plans we do have. I know that the rising cost of fuel is having a very damaging and tough effect on many households throughout the country. Carbon taxing has played a role in the increase in the price of fuel in recent years but it is contributing a small share of the total price increases that are happening. These price increases are happening due to forces beyond the control of this Government, but the carbon taxes are playing a role in creating the investment to create a better economy and a better society for our country in the years ahead.

The amendment we have here deals primarily with the changes in relation to a mineral oil tax. I go back to what I said in my original response to Deputy Doherty, that there is €280 million between now and the end of February, which will be €4 billion across all once-off measures. I know this is not enough for many but it is a very large amount of money we are using on behalf of the country to make a difference to the cost-of-living pressures we know many are now experiencing.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister knows very well, because we do it every year, but he will try to scaremonger anyway, that there are other ways to raise taxes, routes the Minister will decide not to go down for his own reason. We want to see more retrofits. We do not believe in the Green Party's solution where a person on a middle income must have 50% of the funding to have a deep retrofit in their house. It is unaffordable for people. It is great when Deputy Matthews talks about 100% grants, but a person would have to wait 27 months to get it. That is the problem. I understand the Green Party has only been in Government for the guts of three years, but if a person applies for that grant today it will be 2025 and 2026 before the person can actually get it. I imagine the Green Party would be long out of Government by that stage.

In his reply, the Minister talked about the challenges in building up capacity. One could swear that the Minister had just landed around the Cabinet table last month. He has been there for years. In 2015, there were 30,000 retrofits for roof insulation and 30,000 for wall insulation. In 2020, that has been brought to about 7,000 for each. Some 40,000 fewer of those types of insulations are taking place. That is under the Minister's watch. I am aware we cannot sort out these homes overnight, and obviously we must deal with the mess the Government has done. This is why we argue for a change in terms of the proportion of the funding and increased expenditure for retrofit that comes from other sources and not from increases in carbon tax. There is a core issue. Maybe the Government will come together and say we should just send them blankets this winter. These houses have not had the retrofits they needed over the period the Minister has been in government, and many of these houses are heated with home heating oil.

Under this Government, the price of home heating oil for the houses in question has increased through direct taxation and, even more so, as a result of factors relating to geopolitical issues. We need to respond to that. We will vote in the next few minutes, and the Minister will vote to do nothing about the price of home heating oil. I do not think that is appropriate. There needs to be a one-off, targeted, time-bound intervention in this regard. That would be that sensible solution. We had to engage in a bit of cajoling and pushing in respect of the Minister when, time and again, we raised with him the need to do something about petrol and diesel. He bought into that. As is the case in respect of many issues, it takes a great deal of campaigning to force the Minister to see the light. He has abandoned all of the homes to which I refer, particularly those in rural communities. A third of all homes in the State, including two thirds of homes in the west and north west, will have to be heated using home heating oil this winter. We have the ability to do something about them here, but the Minister has decided not to do anything. That is wrong.

The best way to deal with this is, as Deputy Matthews said, by making sure that we have a fit-for-purpose system that allows for retrofitting, including shallow and deep retrofitting, that is affordable, accessible and available to as many homes as possible. That means ramping up. We are at a fraction of the level we were at in 2011 and 2015. The Government has allowed this to fall to the wayside. The Government sat around the Cabinet table and not one Minister thought that maybe we should think about environmental matters or training people to do deep retrofitting. In 2011, between roof insulation and cavity insulation, 100,000 properties were retrofitted. By 2013, that had dropped to approximately 30,000. Not a single Minister has put a plan in place, which is why people have been waiting for 27 months in respect of applications. We cannot sort that out today. It will take time. The Minister is right about the skills required. Deputy Matthews talked about encouraging people to apply. There are 9,000 people in the warmer homes scheme. They cannot get the work done. There is significant demand in respect of that scheme.

We need to deal with the winter now. There is an option to reduce the cost of home heating oil over the winter months. I have argued strongly that this should happen. I have focused on that point, but there are also arguments about petrol and diesel.

Steven Matthews (Wicklow, Green Party)
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Whatever Deputy Doherty's view is of the future of the Green Party or my future, the Green Party has always been clear about what our policies should be. Those policies have always been about future-proofing this country in the context of energy by improving energy efficiency and making energy affordable for residents and for the people of our country in general. On the previous occasion were in government, we introduced higher standards of energy efficiency in housing. We have seen the benefit of having built that more energy efficiency housing over the last couple of years. We have always been clear that the route we need to take is to invest in renewable energy, including solar and offshore and onshore wind energy. Credit should be given to EirGrid for its magnificent work over the past decade. When the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, previously held office, he set a target of 40% of electricity to be generated from renewables. That target has been met. We have now set a target of 80%, which will be met because we have also improved the target for offshore renewables to 7 GW. We also have to raise onshore wind and solar energy targets to that level.

Sinn Féin has launched its renewable energy policy today. It is great to see that it is a ringing endorsement of everything the Green Party has been saying for years and the Government policies that we are implementing at the moment. Sinn Féin is calling for reform of the planning system. Deputy Doherty might be aware that we are going through a significant reform of the planning system. That is being led by the Attorney General. I am glad to see the Deputy supports that. He also called for a dedicated environmental court. He may have seen the announcements last week that progress has been made on a dedicated planning and environmental court to assist with the complexity of many planning cases and appeals, and to assist and enable people who have the right to seek justice under the terms of the Aarhus Convention. Access to judicial reviews will be dealt with in a timely and speedy manner by a dedicated court.

In its energy policy document, Sinn Féin calls for €2.1 million for environmental NGOs, which is the exact figure that the Minister for the Environment, Climate and Commissions has apportioned to the environmental NGOs. I am glad to see Sinn Féin's endorsement of that. Sinn Féin also calls for the resourcing of EirGrid, the Commission for Regulation of Utilities, CRU, and An Bord Pleanála. I understand that 67 people have recently been appointed to positions in the CRU. There are extra positions in An Bord Pleanála, especially for maritime planning. Extra resources have been allocated to the Maritime Area Regulatory Authority, which will be critical to the delivery of offshore renewables.

Sinn Féin is seeking to expand renewable energy. I totally agree with it on that, so I thank Deputy Doherty.

Steven Matthews (Wicklow, Green Party)
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It is an endorsement. It is good to get that endorsement. I commend Sinn Féin. I am able to say that it is doing the right thing. I do not often say it but I welcome this policy. I also welcome that Sinn Féin has dropped its Tory-influenced energy price cap. It was a ridiculous idea that Sinn Féin jumped up to call for a couple of months ago while the Minister for the Environment, Climate and Communications took the route of negotiating at European level for marginal price capping. The latter would be more equitable.

Pearse Doherty (Donegal, Sinn Fein)
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It was actually posted last year.

Steven Matthews (Wicklow, Green Party)
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There will be long-term benefits.

Bernard Durkan (Kildare North, Fine Gael)
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One speaker at a time.

Steven Matthews (Wicklow, Green Party)
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That is the difference between Sinn Féin and the Green Party. We think about the future. We are honest and direct in our policies. We know exactly what needs to be done and we are delivering on that. Sinn Féin's energy policy announcement today is an endorsement of that.

Bernard Durkan (Kildare North, Fine Gael)
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I call Deputy Doherty. We cannot go on forever without repeating ourselves.

Steven Matthews (Wicklow, Green Party)
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That was to the Minister.

Bernard Durkan (Kildare North, Fine Gael)
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The Minister might like to reply beforehand.

Paschal Donohoe (Dublin Central, Fine Gael)
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The change to mineral oil and home heating oil tax will not come in until May 2023. We are already recognising that winter is a difficult period for so many. That is why we have phased increases to come in after the harsh weather of this time has hopefully faded. Going back to what I said earlier, on the one hand, Deputy Doherty wants more retrofitting programmes, but he is against the carbon tax that helps to pay for them, on the other. I have looked at his budget day statement and at Sinn Féin's alternative budget now that it is available again for me to look at. It states that it would deliver a modest surplus for this year that would allow for a dynamic and flexible response to the cost-of-living crisis in the time ahead. Is the reality not that he has made the case for spending the corporate tax receipts when we are not entirely confident that they will increase in the future as they have in the past? If we were to implement the approach that he has been advocating, we would be exiting Covid with the need to borrow more money and we would be facing into a big change in the global economy having already spent the money that we need for the future.

Deputy Matthews makes an excellent point. It is interesting that Deputy Doherty has spent most of his time addressing this amendment by talking about retrofitting. The amendment is about taxation. We are dealing with the Finance Bill, so that is what the amendment should be about. The Deputy spent much time talking about retrofitting, but I cannot find any reference to the price cap in Sinn Féin's flagship energy policy in any amendment that the party has tabled. There are amendments about everything else, but the policy that the Deputy pushed so hard a number of weeks ago has disappeared from the debate.

How did the Deputy feel at his party's recent Ard-Fheis when his party leader was hitting out at the UK Government for its economic track record, given that the policy the Deputy advocated is associated with much of the risk and harm that the UK Government is now having to grapple with? On one hand his party leader was attacking the UK Government for measures that have had an impact on its economy, but on the other hand he has advocated the same measure. How did it feel for his party and himself to be associated with the very measure the British Government is now saying it wants to bring to an end and knows it needs to replace? Maybe the Deputy will say in a moment that he will bring this amendment forward on Report Stage - that he will bring forward a proposal at that point to ask the Government to consider implementing the policies he was advocating so strongly up to a few weeks ago - but I am not going to hold my breath.

Pearse Doherty (Donegal, Sinn Fein)
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There is a lot to go back on there. I will begin by responding to Deputy Matthews through the Chair. When Sinn Féin members were arguing over a year ago for the restructuring of the wholesale energy market at European level, who championed the opposition to that in Europe on behalf of Ireland? It was the Green Party leader - the Minister, Deputy Eamon Ryan - who clubbed together with a number of other Ministers to reject efforts which would have been of benefit to individuals right across the State. I am glad the Deputy has taken an interest in our measures. I hope he will look at some of the measures the Government is not introducing, such as the provision of Exchequer funding to do far more in terms of energy. It needs to do more. By way of example, was it Sinn Féin that brought forward legislation regarding green hydrogen, on which the Government still does not have a strategy? It has been delayed over and over again. We need changes to the retrofit scheme so that those on middle incomes can actually benefit from it.

The Minister likes to accurate all the time but he tends to change the debate. Last night, his argument was that Sinn Féin is going to have deficits left, right and centre. Now he is saying that our policy creates a modest surplus. It cannot be both. He cannot flip-flop overnight. When he is confronted by the truth, the spin drops aside. I encourage him to not go down the route of his party leader, one of whose first actions after being elected as Taoiseach was to set up a spin unit which we were successful in having dismantled.

Let us be clear on a number of things. The Minister has acknowledged that we argued for a surplus. That was based on the summer economic statement. He knows that the Budgetary Oversight Committee asked him on a number of occasions to bring forward the white paper. We said that it was likely to contain different numbers from those in the summer economic statement and would have a larger surplus. He did not do so. He announced it on the Friday night at midnight and, therefore, the Opposition could not use those numbers. We were governed by the summer economic statement even though we knew the surplus would be far more than a modest one. We could not make that claim because we did not have the numbers which the Minister would then publish at the weekend. The point is that there was a surplus. Therefore, the accusation, the spin and the fearmongering we heard from the Minister last night is inaccurate. The previous alternative budget we brought forward last year actually had the same net expenditure as what the Government had planned. I say all of this to lay bare the lies, the spin, the accusations and the fear-mongering that his party is involved in regarding Sinn Féin. If he wants to go down that road, that is fine but it is up to him.

I want to make it clear to Deputy Mathews and the Minister that I stand 100% over the fact that we should have an energy price cap. Just last week, I raised the fact that Germany has now introduced an energy price cap. Is it not the case that Germany has introduced an energy price cap? Like many counties across Europe, Germany is bringing certainty to its citizens that energy prices will not go up over the winter period. The Minister is refusing to do that. Instead, he is trying to scaremonger and suggest that the reason his party's sister party, the Tory Party in Britain, got into so much of an economic mess was because it introduced Sinn Féin policy. I will make two things clear here. The Tory Party in Britain introduced a price cap for electricity and gas for a two-year period. Sinn Féin has argued for a price cap for five months and the Labour Party in Britain argued for a price cap for six months. We argued that the cap should only be on electricity; in Britain it was introduced on electricity and gas. As the Minister knows, the introduction of this cap was not the issue that impacted the markets because they did not announce that in the budget but announced it two weeks beforehand. If he is honest with this committee, the Minister will admit that he knows all too well what happened with the chaos in the markets in Britain. The British Government's finance spokesperson announced a budget which involved unfunded tax cuts for the rich. That was the issue. What have the Brits done now? They have abandoned those tax cuts, they have adopted the Labour Party policy of a price cap for six months, which is further than we would go, and they have introduced this for electricity and gas; which again goes further than we would. Our policy is not the Tory Party policy which got the UK into trouble. Indeed, the cause of the issues there was the proposed cuts to benefit the most wealthy. The Minister's party policies, rather than those of Sinn Féin, are probably more akin to such an approach. If he wants to be truthful and honest, the Minister will say that he knows the reaction in the markets happened as a result of the budget measures brought in by the Tories, which mainly involved tax cuts for elites. The price cap was announced two weeks previously and did not provoke the same reaction. As I have said, I would not agree with that type of price cap. I am not arguing that we should have a price cap for two years or that we should have a price cap for gas. What I am arguing for is a price cap on electricity for five months over the winter period. This is similar to what the Labour Party in Britain advocated, although it went further, and is what the Brits, in terms of the Tory Government, have now had to come back to.

Does the Minister think Germany is reckless for introducing a price cap for its citizens? What about the other European countries, representatives of which he sits around with in the Eurogroup? Will he look their finance ministers in the face and tell them they are being reckless in what they are doing? The measures we are proposing do not even go as far as Germany or many other countries throughout the European Union. I remind the Minister that he shares his time at the Eurogroup, which he chairs, with the finance ministers of those countries. The Minister can carry on with his scaremongering but he should at least try to be accurate. The point I am making is that it does not wash.

The reason I focused on and raised the issue of retrofits was to try to convey a point. One third of people across the State heat their homes with home heating oil and two thirds of them are in rural communities, such as those in the north west and along the Border. I could go on at length about this. When one examines the statistics for deprivation and disposable income, one finds that many Border communities are at the lower end of the scale. As these are poorer households, they have less energy efficiency, as shown in the statistics, in their homes. They do not have the ability to have their homes retrofitted in a timely manner. That is the point I am making. I am never going to stop pointing out to the Minister, who is a former Minister for Public Expenditure and Reform and a former Minister for Transport, Tourism and Sport and has sat around the Cabinet table for the guts of a decade, that he has allowed for deep and shallow retrofitting in those homes to decline by a massive scale. He failed to plan in terms of workforce and in terms of resources to make sure those houses would be up to standard. That is his legacy in this regard. It might be uncomfortable for him to hear that as he exits the door of the Department of Finance, but I am going to lay that out for him because it is the lived experience and reality of people in my constituency. The amendment I have before this committee today seeks to do something positive for those individuals over the winter months - to reduce the price of heating their homes by bringing about a decrease of €117 in the price of a fill of home heating oil. That is what we could do here today. We cannot go back to when the Minister started in government. We cannot sort out all the inadequacies in his approach, such as his failure to plan for this, but we can do something positive today to reduce the impact on these people. That is why I will be pressing this amendment.

I want to bring matters to a conclusion shortly. I acknowledge ideology and debate are important, but not all the points being made have related to the amendments.

Steven Matthews (Wicklow, Green Party)
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On the retrofitting budget, I understand there is an €8 billion State investment. It should have been done a long time ago but the truth of the matter is it is there now and, over the next ten, 20 and 30 years, every house, building and structure will have to be energy-retrofitted. We are scaling up to that at the moment and there is investment in it. Many jobs are being created in retrofitting. I know many people who are starting electrical apprenticeships in fitting solar panels and they have a future ahead of them of 30 or 40 years of good, clean, well-paid work.

On the Deputy’s reference to the hydrogen strategy, he is correct. We have not yet completed our hydrogen strategy, but work is ongoing on that. As I recall, his party’s Private Members' Bill relating to hydrogen took a simplistic view of just saying hydrogen is great and asking why nobody is doing something about it. In fact, we are doing something about it on the ground and, as he will or at least should know, the additional 2 GW of offshore renewable we discussed is intended to feed into hydrogen gas and we can have benefits from that as a country, either in the exporting of that hydrogen gas or the use of it in industry or transport. We have seen the investment in the Foynes railway line, which is going to be a key part of the Shannon Estuary and is probably going to be the centre of our hydrogen industry over the next decade. Hydrogen is developing and we are putting that infrastructure in place on the ground and investing in our ports, in Rosslare, Cork and at Shannon, in order that we will be ready for that renewable industry. We are taking action on the ground, and while it may not be noticeable to the Deputy, it is significant action that is going to deliver over the next ten and 20 years. That has always been our Green Party policy. It is not about immediate popularity and soundbites; we leave that to other parties. We plan for the future, and that is exactly what we are doing.

Paschal Donohoe (Dublin Central, Fine Gael)
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What the German finance minister does is a matter for him. It is not up to me to be critical of any measure that country brings forward. It will assess what is correct for its economy but-----

Pearse Doherty (Donegal, Sinn Fein)
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Why does the Minister not link my measure to the German finance minister's measure?

Bernard Durkan (Kildare North, Fine Gael)
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Can we have one speaker at a time? Otherwise, we should agree to have everybody speak together.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is refreshing to hear Deputy Doherty recommit to his energy cap proposal because I have not heard anybody in Sinn Féin talk about it for weeks.

Pearse Doherty (Donegal, Sinn Fein)
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That is not true.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am saying I have not heard-----

Pearse Doherty (Donegal, Sinn Fein)
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It may be the case that the Minister has not heard anyone but-----

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, I have not heard anyone. I do not want to breach committee protocol by asking Deputy Matthews a question because I am sure Standing Orders do not allow that, but I think he stated a moment ago that he had not seen any reference to the cap in Sinn Féin's energy document that was published today, where it appears to be missing in action-----

Pearse Doherty (Donegal, Sinn Fein)
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If the Minister had read the energy document, he might know what it was about.

Bernard Durkan (Kildare North, Fine Gael)
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Please, Deputy Doherty. You know you are not supposed to interrupt. You were allowed to speak without interruption. Please let that happen for other contributors.

Pearse Doherty (Donegal, Sinn Fein)
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In fairness, perhaps the Minister will tell us how he is going to warm people in those houses this winter.

Bernard Durkan (Kildare North, Fine Gael)
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No, I will decide that. The Minister, to conclude.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am well used to this. Deputy Doherty's interruptions only fuel me to make the point even more strongly.

Bernard Durkan (Kildare North, Fine Gael)
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We should have a new regime whereby everybody speaks at the same time. Is that the case?

Paschal Donohoe (Dublin Central, Fine Gael)
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If that is what we need to do, that is what we need to do. Not only does the policy the Deputy recommitted to appear to be missing in the document his party published today, it is not mentioned in any of his amendments. He has not brought it forward at any point in any amendment that is due to be debated in respect of the Bill. I think the reason it is not referenced relates to the fact that, in his heart of hearts, he knows that this policy would ultimately be unaffordable for the country and would tie up our national finances to the price of something we cannot predict. If he does not know that, I put it to him that he should recognise it as a risk.

I return to the point I made earlier, which is not scaremongering or trying to put fear into people. The Deputy wants more of something in retrofitting, but he is against the tax that is helping fund it, namely, carbon tax. He wants more homes to be retrofitted and he wants more investment in a lower carbon future, but he is against the tax that is helping to co-fund that investment. He voted against it on the four occasions on which I have brought it forward or increased it and, as I understand it, he is against further increases in it, although he might elaborate on that if the Chair allows. I made the point regarding the impact the Deputy’s policies would have on our economy and the need for it to borrow.

I referred a moment ago to the fact he made reference to a modest surplus in his budget document, but just because he wishes something so does not make it so. Just because he wants there to be a modest surplus in place next year does not mean there will be. I can see what his party's Deputies and Councillors throughout the country are doing at the moment, with all the groups they meet and the speeches they make in the Dáil that promise more and more spending. The reality is that money has to come from somewhere, and the taxes he proposes to pay for it will either be insufficient to pay for that increased spending or will harm our economy, damage jobs within it and reduce the ability of our economy to grow and pay for the spending he wants. That is not scaremongering; it is a legitimate political debate for the two of us to engage in, and the Deputy's interruptions will only increase my enthusiasm for making those points to him.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister.

Pearse Doherty (Donegal, Sinn Fein)
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Chair, I might make one final remark, as the proposer of the amendment.

Bernard Durkan (Kildare North, Fine Gael)
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Okay, but please do not lead on to a whole new debate.

Pearse Doherty (Donegal, Sinn Fein)
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To cut through some of the - what is the parliamentary word for this? - bluff and bluster from the Minister, this is the Finance Bill. I would not bring forward amendments relating to expenditure or how we deal with expenditure. I have to hand a copy of the list of amendments to the Finance Bill that I have tabled and I can read them out. Every one of them is tax related. Will the Minister accept that point or does he want to keep on with his spin? They relate to the foreign earnings deduction, the local property tax, the renter's tax credit, tax reliefs and subsidies for pensions, refundable tax credits, tax treatment of international investors, banks and tax, capital gains tax, section 481 relief, tax on home heating oil, tax on petrol and diesel, zero rate on VAT on safety products and school uniforms, stamp duty, again local property tax and the defective concrete products levy. That is what my amendments to the Bill relate to.

The Minister again makes his accusations and hopes they will land somewhere, and he says he would not criticise the finance minister of Germany or wherever. The Brits crashed their economy because the Minister's party’s sister party, which shares the same party at the European Union, the European People’s Party, EPP, tried to introduce tax cuts for the wealthy. Our policy is about certainty over the winter months, a very specific period, and only in respect of one form of energy. That is what Germany and other countries in Europe have done.

I think approximately eight or nine of them have brought in a form of certainty on the caps. However, it suits the Minister's narrative of scaremongering with regard to the big, bad wolf of Sinn Féin. Many people out there say Sinn Féin could not be much worse than what they have. I know we would be far better. The Minister said last night that it was about who cares the most. That is not what it is about. It is about ideology. That is why, as we had in the debate last night, the Minister does not believe we should tax institutional investors who pay no rents. It is why the Minister argues the banking levy was cut last year by €70 million and, yet, he will argue later on that we should put up the price of housing at a time when housing is at a sky-high level.

The amendment is about trying to help people over the winter months especially with regard to home heating oil. It is about trying to make sure they can stay warm and safe during those winter months. If Germany, France, Denmark, Austria and many other countries throughout Europe can introduce it, we should be able to do the same and, indeed, what they have done is far more expansive than what we are arguing for. We are arguing for it up until the end of February.

Bernard Durkan (Kildare North, Fine Gael)
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I appeal to Members to stick to the amendments and replies thereto in order that we get to the end of them. It will give everybody a fair crack of the whip.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I made the point on budget day that we would vote against this. We understand smoking is not a good thing for public health. However, we do not think it is fair to simply financially penalise people who are cigarette-addicted. The better way to address public health issues around smoking is through education, rather than financially penalising people who are victims of an addiction. That is the reason I am opposing the section.

Gerald Nash (Louth, Labour)
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I move amendment No. 59:

In page 91, to delete lines 5 to 7, inclusive, and substitute the following:

“44. (1) Section 46 of the Principal Act is amended, in subsection (1)(caa), by the substitution of “28 February 2023” for “31 October 2022”.

(2) The Minister shall, before 14 February 2023, cause a report to be laid before Dáil Éireann on the revenue foregone as a result of the operation of subsection (1)(caaa), and the impact on domestic households of not further extending the period provided for by the subsection.”.

At the end of February, the flat rate on gas and electricity bills will go back up to 13.5% from 9%, which is the current rate. On budget night, a resolution was passed to further extend the VAT rate cut to the end of February. We are proposing to extend the VAT rate cut on electricity and gas bills out to the end of 2023. The approximate costing I received from the Minister, given the varying interpretations, is around €150 million to €160 million to extend that to the end of 2023. We know the €200 credit is expiring next April and whatever about gas bills, electricity bills will still be an issue with the ever-rising cost of electricity. We are asking the Minister to consider further extending the VAT rate cut from 13.5% to 9% out to the end of 2023. That would remain in existence to assist hard-pressed families throughout the remainder of 2023.

Paschal Donohoe (Dublin Central, Fine Gael)
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In asking for this measure to be extended, the Deputy explicitly acknowledges that it is a measure that helps and, as he said, that measure will be in place up to 28 February next year. By continuing it from 1 November to 28 February, the measure is aimed to provide support at what we know is the coldest time of the year. I would make the case to the Deputy that the appropriate thing to do is to review where we stand at the end of February before deciding if the extension of a measure like this is merited. If the Government decides that we are going to extend the lower VAT rate for gas and electricity, the Deputy would understandably ask me why we do not extend all of the other measures we have in place, for example, with regard to excise on fuel, beyond their current end date at the end of February as well. I believe that what we should do is assess where we are with the price of fuel at that point and decide if an extension is merited. I hope it will not be and that we will see an improvement in the cost of living by then. In any event, I think the right time to answer that question is then, rather than now. While I can completely understand the logic behind the case the Deputy is making, and I can understand the assurance it would offer, given the scale of money that is involved in the extension, I believe the Government would be safer with the country's money by deciding this early next year.

Gerald Nash (Louth, Labour)
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I thank the Minister for his response and there is some logic to what he is saying.

The suggestion is that many measures, and the position more generally, will be examined in the spring because it is inevitable that this will have to be the case. When the once-off measures wear off at the end of this year and we strip them away, we will see that budget 2023 proper will not have the kind of impact that some might suggest. There have been efforts to amalgamate the welcome once-off measures that are in place and those that will come into place towards the end of the year with the budget measures in 2023 to suggest the budget is more equitable and progressive than it is.

I hope the Minister will review this in the spring. As I said, I believe it is inevitable. The cost-of-living crisis will not go away for those on lower or middle incomes. For many it is a permanent cost-of-living problem. The committee debated this yesterday and we had a debate on it in the Dáil and other fora in the weeks since the budget. Those who are earning between €25,000 and €35,000 will benefit to the tune of just under €200 as a result of the tax changes that have been made, while somebody who is earning much more, for example, someone earning €100,000, will benefit to the tune of over €800 as a consequence of these changes. Once the once-off measures are taken out, next year will be a difficult one for those on lower and middle incomes. Every tool available to the Government must be used. I am satisfied that the Minister has committed to reassessing the situation next spring. It is inevitable that it must happen and I would prefer it to happen now. The introduction of an extension to the VAT reduction would give some reassurance and certainty. I await developments over the next number of weeks to see how that evolves.

Pearse Doherty (Donegal, Sinn Fein)
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This amendment deals with the VAT reduction on electricity and gas. I have a specific question. We discussed home heating oil earlier. The Minister has reduced the VAT rate on gas until the end of February in this Finance Bill and will review the position in spring. Does he have any concerns about the fairness of the Bill given that it does not provide any measures to directly support the hundreds of thousands of homes that use home heating oil rather than gas? There is a measure in the Bill for people who happen to live in Dublin, Cork or elsewhere and heat their homes with gas, but the Minister has decided not to do anything on home heating oil. Does he have any concern about the fairness of that because it does not seem to be very equitable?

Paschal Donohoe (Dublin Central, Fine Gael)
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As I said to Deputy Nash, this is a matter that will have to be reassessed when we get to the early part of 2023. While I hope the situation will improve by then, we cannot be certain of that by any means. The decision will be made at that point regarding whether this measure should be extended or, as we hope, moderated or even phased out if the living standard circumstances allow us to do that.

On home heating oil, the VAT reduction does not cover home heating oil as this is provided for by way of a historical derogation. It is, therefore, not legally possible to reduce these items to 9%. Under the derogation, the lowest level that solid fuels can be reduced to is 12%. If we were to reduce VAT on kerosene to 12%, the saving would be small, although I know that every saving does make a difference. It would amount to approximately €20 per 1,000 litres but there would be considerable additional costs to the Exchequer. This is because Ireland would also have to reduce the rate for all the other areas that are also subject to the 13.5% VAT rate at the same time, as we are only allowed to have two reduced VAT rates under EU law.

Pearse Doherty (Donegal, Sinn Fein)
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While the Minister could not reduce VAT, or if he did he would have to introduce a basket of other measures, he could reduce excise. My question, therefore, stands. Does the Minister not believe there is an issue of fairness here when he is taking measures to reduce the cost for some households to heat their homes this winter and not taking the measure open to him in respect of excise duty on home heating oil? There will, therefore, be no support for hundreds of thousands of other households.

Paschal Donohoe (Dublin Central, Fine Gael)
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The case I have made to the Deputy is that I would ask those households to view the budget in the round. The reason the change in the carbon tax on home heating oil will not take effect until May is in recognition of the circumstances of those homes that are dependent on home heating oil. I have tried to give recognition to that by phasing in the increase in carbon taxes, so at least the situation does not get worse. The reason we have €4 billion of measures overall is to try to help those families in other ways.

Pearse Doherty (Donegal, Sinn Fein)
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While things will not get worse for those who heat their homes through gas, the Minister will ensure, through the measures that were taken last year and extended this year, that things will be better for them in respect of a reduced cost. The Minister could do the same for home heating oil but he has decided not to do so. There is an issue of fairness here as there are over 500,000 households who heat their homes using home heating oil and the Minister has decided not to address this. The Minister's answer is that he is not going to make their situation worse until May. He is not making it any better and it is open to him to do so.

Paschal Donohoe (Dublin Central, Fine Gael)
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That would only be the case if I were to include home heating oil in this particular measure.

Pearse Doherty (Donegal, Sinn Fein)
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No, I am talking about excise.

Paschal Donohoe (Dublin Central, Fine Gael)
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On excise, I go back to our earlier discussion. In the round, I have to be confident that we are able to afford everything that we do. The parts of excise that still apply to home heating oil are mostly related to carbon tax and we have had this discussion before on carbon tax. Our carbon tax revenue is playing a very important part in investing into a lower carbon and better future for our country. I accept the flexibility that is there-----

Pearse Doherty (Donegal, Sinn Fein)
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That revenue is not hypothecated.

Bernard Durkan (Kildare North, Fine Gael)
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Please allow one speaker to finish before the other starts.

Paschal Donohoe (Dublin Central, Fine Gael)
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I accept the flexibility that is there and I have acknowledged the wish that we do more throughout this debate. I have tried to help those homes through the introduction of other measures.

Gerald Nash (Louth, Labour)
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I will withdraw my amendment but I may reintroduce it on Report Stage.

Pearse Doherty (Donegal, Sinn Fein)
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This section deals with section 110 companies. The Commission on Taxation and Welfare recommended a review of the tax treatment of section 110 companies and the Minister committed to that in his budget speech. Such a review is long overdue and Sinn Féin has been calling for one year after year, most recently in June 2021. These calls have been repeatedly ignored by the Minister and his Government. There is a sound reason for the tax review. As I said, just as the Minister is exiting the door of the Department of Finance, perhaps he is seeing the light with respect to some of the mistakes that have been made.

There is good reason there needs to be a review of section 110 companies and their tax treatment. We have seen some of the media commentary in recent times. Mark Paul in The Irish Timeslast year reported that three vulture funds connected with Goldman Sachs paid no corporation tax in 2019, despite the fact that they collected €390 million from their portfolios in the same year. The Minister knows that for years he and his party, Fine Gael, have allowed vulture funds to buy up distressed mortgages, to engage in aggressive tax avoidance and to reduce their tax liabilities to zero, despite making huge profits. That has resulted in a huge loss of revenue to the State.

In 2016 I presented a detailed submission to the then Minister for Finance, Michael Noonan, on the changes we needed to see in respect of section 110 companies and tax avoidance practices. I acknowledge that in 2019 some changes were made. Those changes took effect only in 2020. We now need to evaluate their impact in restricting the ability of these funds to write off income against certain interest payments. We need to see how effective they have been in tackling aggressive tax avoidance. There are serious gaps in that regard. Over 2018 and 2019, for example, a subsidiary of vulture fund Cerberus called Promontoria (Oyster) Designated Activity Company was able to reduce its tax liability by €27 million by writing off its income against asset management fees, despite the fact that those fees were paid to a company affiliate in the Netherlands. One arm was paying the other arm, in a way, to reduce the company's tax liability.

We know that the tax code continues to allow these funds to use complex tax and company arrangements to reduce their tax liability against the interests of the Irish taxpayer. I welcome the fact that the Minister is finally committing to review this. The action we should see will be left to his successor, if he is to have a successor in the Department of Finance following the changeover in the Government at the end of the year.

May I ask the Minister about the section itself? It deals with a change in respect of the activities on which VAT is charged and the deduction of VAT incurred on a management charge. Does it deal with management fees and the writing off of section 110 income against management fees or does it apply just to VAT?

Paschal Donohoe (Dublin Central, Fine Gael)
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It deals only with VAT issues.

Pearse Doherty (Donegal, Sinn Fein)
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That is the clarification-----

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes. To give the committee a fuller answer, the section amends paragraph 6(2)(e) of Schedule 1 to the principal Act. The purpose of the amendment is to bring Irish VAT legislation into line with rulings of the Court of Justice of the European Union. The amendment removes the VAT exemption in respect of the management of certain section 110 companies that do not meet the conditions to qualify as a special investment fund for the purposes of the exemption. The amendment, therefore, deals only with VAT.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I have a question going back a long way. Like Deputy Doherty, we have questioned section 110 and how it allows some of these companies to reduce their tax liability. Are there figures available for the amount of tax forgone in respect of section 110?

Paschal Donohoe (Dublin Central, Fine Gael)
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I do not have that information with me, nor do my officials, but if it is available and the work is done, I will ensure that the information is shared with the Deputy.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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If the Minister could, I would be grateful.

Pearse Doherty (Donegal, Sinn Fein)
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I have tabled amendments relating to VAT rates of 0%. I will be brief on this. This section deals with the zero-rating of items in respect of the media industry and certain medical and sanitary products. I support the section, particularly in respect of medical and sanitary products. I say that because I will focus on the media part of the section if that is okay.

We know that on budget day the Minister announced the application of a VAT rate of 0% on newspapers and news periodicals. News periodicals are gone, so The Phoenixmagazine, for example, will no longer be subject to a 0% rate. I want to hear clarification on the reason for that. Why have news periodicals been dropped from the Minister's budget speech? Why does the commitment he gave on budget day no longer appear within the Finance Bill? Will he outline the news periodicals that will now be impacted? He may refer to Magilland The Phoenix, but how far are we talking about, and where is the motivation of him and his party or his Government coming from for this? I would like to come back in when I get that clarification.

Steven Matthews (Wicklow, Green Party)
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I have a similar question. On budget day the Minister did seem to include periodicals. Many magazines are very informative and very educational and bring opportunities for journalists as well, so I would also like clarification as to why the reference to periodicals was dropped and what the implications would have been of including-----

Paschal Donohoe (Dublin Central, Fine Gael)
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In my budget day speech I said "newspapers". If I were to reduce the VAT on news periodicals from 9% to 0%, I would have to reduce the VAT on all periodicals to zero. The cost of doing that would be €15 million. I gave a commitment in respect of newspapers, which we are honouring in this Finance Bill. If, however, we were to do that to periodicals as well, it would be for all periodicals. The cost of that would be €15 million. I do not believe that would be a good use of our money in the context of the fact that news periodicals are a small share of the overall periodicals sector. It is worth saying the VAT on them is still 9%, which is a reduction from 13.5% previously.

Pearse Doherty (Donegal, Sinn Fein)
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Will the Minister clarify the following for me? Is it not the case that he announced on budget day that he would zero-rate newspapers as well as news periodicals?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am just asking my officials to check. I am being told that my budget day speech referred to newspapers. Then, when we went to check this, because the issue was raised with us afterwards, we found that I would not be able to split out news periodicals from other periodicals. That would mean having to reduce the VAT on all periodicals to zero.

I will need to triple-check the exact detail of my budget day speech, but based on what my officials here have informed me, I am pretty sure we said newspapers.

Pearse Doherty (Donegal, Sinn Fein)
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Obviously, the Minister's speech does not encompass all the tax changes, but did the tax changes document published as part of the budget day package include newspapers and news periodicals or did it just include newspapers?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have been told the budget day documents included news periodicals, but when we went to see if we could reduce the rate for news periodicals on their own, we found we would have to reduce the rate for all periodicals. I believe that €15 million would be a big cost to pay to do that.

Pearse Doherty (Donegal, Sinn Fein)
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However, that was not checked before the budget documents were published where the Minister committed to reducing the VAT on news periodicals. I have it here in front of me. Was it that he did not get that checked out beforehand?

Paschal Donohoe (Dublin Central, Fine Gael)
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My budget day speech was clear but I accept the budget day documentation made reference to periodicals. When we double-checked if this was possible, we found it would have meant moving all periodicals to a zero rate of VAT.

Pearse Doherty (Donegal, Sinn Fein)
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How much will it cost to move newspapers and their online editions to a zero rate of VAT?

Paschal Donohoe (Dublin Central, Fine Gael)
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It will cost €33 million.

Pearse Doherty (Donegal, Sinn Fein)
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Is that in a full year or in the first year?

Paschal Donohoe (Dublin Central, Fine Gael)
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It is in a full year.

Pearse Doherty (Donegal, Sinn Fein)
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The budget day documents gave a figure of €39 million for newspapers and news periodicals and digital editions.

Paschal Donohoe (Dublin Central, Fine Gael)
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My officials have now informed me that the figure is €33 million.

Pearse Doherty (Donegal, Sinn Fein)
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That is for the two that will be done now, but for the-----

Bernard Durkan (Kildare North, Fine Gael)
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Just one second-----

Pearse Doherty (Donegal, Sinn Fein)
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I am just trying to be helpful.

Bernard Durkan (Kildare North, Fine Gael)
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I know. The Deputy should wait for the answer. I am trying to be helpful myself.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am told the full year cost is €33 million.

Pearse Doherty (Donegal, Sinn Fein)
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The full year of the measure the Minister is introducing in the Finance Bill is €33 million, but the full-year cost of the measure announced in budget day documents, which included newspapers, news periodicals and digital editions, was €39 million. Is that okay?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes.

Pearse Doherty (Donegal, Sinn Fein)
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Where did the Department get the €6 million reduction for news periodicals?

Paschal Donohoe (Dublin Central, Fine Gael)
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It was because that figure at the time included news periodicals because at the time we thought we could separate them out.

Pearse Doherty (Donegal, Sinn Fein)
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Therefore, €6 million would be the additional cost for news periodicals. Is that correct?

Paschal Donohoe (Dublin Central, Fine Gael)
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At that point, that is what we believed it would be. It has since been clarified to me that we can only change news periodicals if we move all periodicals at the same time. That cost would be €9 million to €15 million more.

Pearse Doherty (Donegal, Sinn Fein)
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Fine. In terms of their online editions, the Bill proposes to provide for zero-rate VAT for newspapers, including digital editions. How will Sunday newspapers work in this regard? What is the difference between a weekly published newspaper and a weekly news periodical? Is it the paper it is printed on? What is the definition in VAT law? Let us consider, for example, Phoenixmagazine and the Sunday Independent. How is one deemed a periodical and one deemed a newspaper? Is it the material it is printed on?

Paschal Donohoe (Dublin Central, Fine Gael)
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The term "newspaper" is not defined in Irish or European VAT legislation. It is given an ordinary meaning, which is widely understood, as a publication that is published periodically to report on local, national and international news and current affairs.

I think the Deputy asked me about e-newspapers. That is not defined in Irish or European VAT legislation, but it is understood as a newspaper published in digital format. There is no requirement in the amendment that an e-newspaper must have a printed equivalent to benefit from the zero rate of VAT.

Pearse Doherty (Donegal, Sinn Fein)
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I support the measure but I am trying to understand it. I am using brand names and it is no reflection on any of the brand names I am using, including the Phoenixand the Sunday Independent, which I have already mentioned. Let us consider just e-publications. The Currencyis just an online publication. Will that now fall within the zero-rate VAT directive?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am reluctant to give an evaluation in respect of a particular publication like that. I am accompanied by an official from Revenue who is not indicating to me that I should. I will need to come back to the Deputy on that or perhaps to the company itself.

Pearse Doherty (Donegal, Sinn Fein)
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I appreciate that. It might have been unfair for me to ask a question about a specific company. I am not trying to talk about the actual online publication, but rather about the types thereof. A weekly Sunday newspaper - I do not want to give a brand name - which has a digital edition only will qualify for zero rate VAT in future.

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes.

Pearse Doherty (Donegal, Sinn Fein)
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If a weekly current affairs magazine like Phoenixwas only in digital form, would it qualify for zero-rate VAT?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am reluctant to have a debate about a particular publication. I am advised that Phoenixis not seen as a newspaper. Therefore, if it were in electronic format, it would not benefit from this.

Pearse Doherty (Donegal, Sinn Fein)
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That is okay.

Paschal Donohoe (Dublin Central, Fine Gael)
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I believe there is a difference between a Sunday version of a publication that appears throughout the week and a publication that appears once a week-----

Pearse Doherty (Donegal, Sinn Fein)
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Yes.

Paschal Donohoe (Dublin Central, Fine Gael)
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-----even though I am reluctant to be talking about individual publications, as the Deputy also is.

Pearse Doherty (Donegal, Sinn Fein)
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I go back to the original intention the Minister announced on budget day, which was that news periodicals would qualify for zero-rate VAT. A 9% rate of VAT will apply to those news periodicals. What is the distinction between a weekly online newspaper - because it must be deemed to be a newspaper - and a news periodical? How can I tell the difference between them? What are the distinguishing criteria between a news periodical that is online and a newspaper that is solely online? As there are no written criteria, how do we distinguish between them?

Paschal Donohoe (Dublin Central, Fine Gael)
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The Revenue will need to make an interpretation of the law. What is a periodical and what is a newspaper is not defined in VAT legislation. I have attempted to explain the difference. It may refer to the regularity of publication. It may refer to whether it is seen to be a newspaper or a magazine. I accept there is a change between this and what was contained in the budget day documentation. However, when we investigated whether it was possible to take out news periodicals and periodicals, I was informed it was not.

Pearse Doherty (Donegal, Sinn Fein)
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That is fine, but the problem is we are now dealing with a section that costs €33 million and the Minister is saying we do not know who is in and who is out at this time. It is crucial for us, as members of the committee who will be voting on this issue, to get clarity, even if that requires us going into private session. It is important for us to know what is in and what is out. I do not know how we will define a news periodical that is published only online once a week and compare that with a newspaper which is published only online once a week. What criteria will we use to distinguish between them? One could argue Horse & Houndis giving news information to its readers on an equine centre. That is not what we are talking about here. We are talking about current affairs.

Given the change that has taken place, it is important we get a bit of clarity from Revenue on this.

Paschal Donohoe (Dublin Central, Fine Gael)
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That is a reasonable request. If the Deputy wants, we could go into private session.

Pearse Doherty (Donegal, Sinn Fein)
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Can we go into private session for a few minutes?

Paschal Donohoe (Dublin Central, Fine Gael)
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Deputy Doherty has made a reasonable request, which we are happy to meet.

Bernard Durkan (Kildare North, Fine Gael)
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Yes, we can do that. What do the members wish to do?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Will we suspend the sitting now or later?

Pearse Doherty (Donegal, Sinn Fein)
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Can we dispose of this issue now?

Bernard Durkan (Kildare North, Fine Gael)
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Yes. We will dispose of it very quickly.

Steven Matthews (Wicklow, Green Party)
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We resume on section 56, amendment No. 60, which is in the names of Deputies Mattie McGrath, Nolan, O'Donoghue, Michael Healy-Rae,

Michael Collins and Danny Healy-Rae. Is there anybody present to move the amendment? As there is not, the amendment falls.

Steven Matthews (Wicklow, Green Party)
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Amendments Nos. 61 and 62 are related and may be be discussed together by agreement. Is that agreed? Agreed.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 61:

In page 97, between lines 23 and 24, to insert the following: “Report on applying on the application of a zero rate of VAT on children’s car safety seats

56.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the application of a zero rate of VAT on children’s car safety seats, including baby seats, child seats, booster seats or booster cushions.”.

This amendment seeks to prepare a report on the application of a zero rate of VAT on children's car safety seats including baby seats, child seats, booster seats and booster cushions. I will also speak to amendment No. 62, which looks at options in terms of the application of a zero or reduced rate of VAT on school uniforms.

Under the VAT directive, children's car safety seats now have a zero rate of VAT applied but are currently charged at the reduced rate. As the Minister knows, it is the law for children to use car seats when they travel. That is a tax that disproportionately impacts on those on lower incomes and those with multiple children. Indeed, the cost of the safety equipment can put some of the children at risk through no fault of their own because people simply cannot afford the more expensive or safer types of seats. Therefore, given that the directive now allows for us to zero rate this essential safety equipment, it would be appropriate for this to be examined in terms of VAT, for which the amendment calls.

It is a legal requirement that up to when a child reaches a certain age, height and weight, he or she must be in a certain type of seat moving from baby seats, which will have different levels of safety depending on how much is spent on them or the types of seats, up to booster seats, which are relatively cheap in the context of the earlier types of seats. These are for older children to ensure the safety belt does not choke them in a scenario where the brakes are pressed suddenly.

Amendment No. 62 looks at the zero rate of VAT applied to children's clothing and footwear, which already exists under law, for those aged under 11 years. We know that school costs are significant and that they disproportionately hit lower income families. Really, we are asking whether there is any scope at all to reduce the rate of VAT on school uniforms and whether that is permissible under the EU legislation. I am not sure if it is myself. The report would look at a way around this. Those are the two amendments I propose.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputy. The VAT rating of goods and services is subject to the requirements of EU VAT law with which our law must comply. Following an agreement finalised earlier this year, the VAT directive now permits each member state to apply a zero rate to seven categories within annex III. These are categories one to six as well as category 10(c). These categories for a zero rate do not apply to car seats, however. Therefore, it is not possible under the EU directive to make the change being sought here.

On the issue of school uniforms, it should be noted that up until the annex III change, Ireland had a derogation that provided for children’s clothing and footwear to be subject to the zero rate for children up to and including 11 years. The zero rating applied according to the following criteria: all children's clothing of sizes up to and including 32 inch chest or 26 inch waist, and children's footwear up to and including size 5.5, which is a 38 continental or equivalent size. What the annex III change has done from a zero VAT rate perspective with regard to children’s clothing and footwear is allow us to maintain the existing derogation going forward. It does not, however, permit us to expand its scope to all school uniforms that do not meet the above criteria.

For these reasons, I am not able to accept the Deputy’s amendments. Obviously, if the Deputy would like me to send him on a note between now and Report Stage making clear why these items are out of the categories to which I referred, I will be very happy to do so if it would be of help to him.

Pearse Doherty (Donegal, Sinn Fein)
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Yes, that would be helpful. As I mentioned in my opening remarks, the issue of school uniforms will be challenging given the directive. A note in terms of the safety of car seats would be beneficial between now and Report Stage. On that basis, I withdraw both of my amendments.

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 62:

In page 97, between lines 23 and 24, to insert the following:

“Report on applying on the application of a zero rate of VAT on school uniforms

56.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on options for the application of a zero or reduced rate of VAT on school uniforms.”.

:

Question proposed: "That section 57 stand part of the Bill."

Pearse Doherty (Donegal, Sinn Fein)
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On section 57, will the Minister clarify an issue? In a case of a parent of a group of companies where two of its subsidiaries bought partial interest of say 50% each in 18 residential homes, they would be caught under this measure because it would apply to the parent, would it not? You cannot define, okay.

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

Pearse Doherty (Donegal, Sinn Fein)
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In regard to the issue of home reversions, has there been evidence of this taking place on a larger scale? Were the Revenue Commissioners applying the 10% rate up until this proposed change to the Finance Bill to home reversion?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, they would have been applying it up to this point but it has only happened in a limited number of cases.

Pearse Doherty (Donegal, Sinn Fein)
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Section 59 concerns the repayment of stamp duty. I have a specific question in this regard. Yesterday we spoke of institutional investors and their practice of forward-purchasing apartment blocks in particular. We know the 10% stamp duty does not apply to apartment blocks. However it is our understanding that a number of institutional investors have now started forward-funding the construction of homes. That means they are not just entering into agreement to purchase them but they are actually putting up the money upfront and forward-funding the purchase and therefore no conveyance is taking place. This means they are exempt from the 10% stamp duty. Have either the Department or the Revenue Commissioners any information or evidence to suggest there is a change in regard to the practice which means there is no conveyance and therefore this stamp duty does not apply?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have not been notified of that but I have checked with my colleagues and we are not aware of this as a behaviour. Obviously if Deputy Doherty has a concern about it and has an example, we will be happy to have a look at it.

Pearse Doherty (Donegal, Sinn Fein)
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Just to clarify this, in a forward-funding arrangement by an institutional investor with a developer who is going to build say, 40 houses and an institutional investor goes into a forward-funding arrangement with him - as opposed to a forward-purchase arrangement as under forward-purchasing they would have to pay the stamp duty - but under a forward-funding arrangement, would the stamp duty apply?

Paschal Donohoe (Dublin Central, Fine Gael)
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The Revenue Commissioners inform me that in their opinion it would apply in a forward-funding arrangement.

Pearse Doherty (Donegal, Sinn Fein)
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Is it because there would still be a transfer? Is that what is suggested? Did they ask for it to be transferred?

Paschal Donohoe (Dublin Central, Fine Gael)
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According to what my colleague is telling me, the agreement would be treated as conveyance but I will share a note with Deputy Doherty on the matter because while I have no doubt that the answer I am getting here is correct, it is quite technical and I do not wish to mislead the Deputy.

Pearse Doherty (Donegal, Sinn Fein)
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That would be much appreciated.

Paschal Donohoe (Dublin Central, Fine Gael)
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I will send a note on it before Report Stage.

Steven Matthews (Wicklow, Green Party)
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Can the note be sent to all committee members?

Paschal Donohoe (Dublin Central, Fine Gael)
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Of course.

Pearse Doherty (Donegal, Sinn Fein)
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I have a couple of questions. What is the reason for a specific exemption to the transfer of American depository receipts for the transfers going through that?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised that Irish companies would not be able to access American capital markets if we were to apply stamp duty in these circumstances.

Pearse Doherty (Donegal, Sinn Fein)
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Are they the only shares that will be exempt from it? Will all the others be captured through this amendment? Is that correct?

Paschal Donohoe (Dublin Central, Fine Gael)
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This is not going to make a material change in shares that are captured. If Deputy Doherty wants a list of what share transactions will still be captured as a result of this, I am happy to send it on to him. The purpose of this section is to make two technical changes in regard to the operation of the CREST system and there are more substantive amendments included in regard to electronic transfers of securities or interests in securities.

Pearse Doherty (Donegal, Sinn Fein)
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In regard to the concerns raised that electronic transfers of Irish shares that are not currently treated as stampable by the Revenue Commissioners, that is, those held in other settlements outside of the Euroclear system or Euroclear Bank Belgium and the CREST system, will they not be subject to stamp duty even after these changes?

Paschal Donohoe (Dublin Central, Fine Gael)
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The Revenue Commissioners inform me that this issue does not affect the matter the Deputy is raising. They also inform me that it is difficult to pursue the stamp duty in regard to transactions of that sort because there are issues in regard to the collection of that revenue. Again, given that this is a detailed matter, I am happy to give Deputy Doherty more information in regard to it between now and Report Stage.

Pearse Doherty (Donegal, Sinn Fein)
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I thank the Minister.

Pearse Doherty (Donegal, Sinn Fein)
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I have been critical in regard to the decision in terms of the reduction in the banking levy. We know how the banking levy was introduced and how it is calculated in terms of reference points in regard to the amount of DIRT that is paid. However it was calculated in such a way that it would accrue €150 million. Two banks are now withdrawing from the Irish market. That is an unfortunate situation. I heard today that one of the banks is preparing to lay off hundreds of employees. The number of people I heard mentioned was 500. Our concerns and thoughts are with them. However the key thing here from a bank’s point of view is that while deposit accounts have been closed in those banks, and we can see from the beginning of this year until the end of October 2022, some 222,000 household deposit accounts have closed either in Ulster Bank or KBC with a similar amount, 212,000 opened with the remaining financial institutions.

The point I am making here is that the banks are withdrawing. They are leaving the State but their assets, in terms of loans, are going to other financial institutions. The deposits are going into other financial institutions. These banks will increase their profitability because they are now larger in scale and have a larger proportion of the market. Therefore, there is a strong argument that the banking levy should remain at least at €150 million. It is my view that it is probably the most appropriate, if we are talking about levies, to assist in terms of the defects caused by mica and pyrrhotite.

The banks will have many of their assets restored on their balance sheets. They have mortgages out against homes, in my county and elsewhere, that are valueless today. Those homes are really sites. Given the demolition of what is on them, they do not really have a value but, through the scheme through taxpayers' investment, the banks will have those assets restored on their balance sheets. Therefore, it would be appropriate to restore the banking levy to the level it was. That would be an appropriate mechanism to help part-finance the remediation works that have to take place over a sustained period of time in terms of defects.

Paschal Donohoe (Dublin Central, Fine Gael)
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Likewise, I acknowledge that today is a difficult day for former employees of Ulster Bank. This is a bank that had been present in Ireland for many decades. I am sure many of the staff who are now, unfortunately, losing their jobs never thought they would be in a position where a bank that they had worked for for so long would be departing. I acknowledge the difficult nature of today for many of them.

In terms of the bank levy and the future of it, the Deputy makes a fair point that the assets and liabilities of the exiting banks will be transferred over to the remaining three banks. That will impact on their scale and profitability. I believe we are at a point where we need to review the operation of the bank levy in advance of budget 2024. I have asked my officials to do that to assess what should be the design of the levy and what should be the level of revenue that we are aiming to receive from it in light of the changes that are taking place.

The Deputy and I differ in relation to this. I believe that the decision to exclude Ulster Bank and KBC from the levy in light of them winding up here in our country was the appropriate decision but I believe it is equally appropriate now to assess the operation of the level in advance of next year's budget.

Pearse Doherty (Donegal, Sinn Fein)
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I welcome that. I assume, although one can never assume anything, the Minister is looking at the fact that he has reduced the levy from €150 million to, as far as I understand it, €87 million and that this may be a signal that we could be looking at a larger take from the levy given that the profits and assets, and, indeed, liabilities and deposits, have remained within the Irish banking system. If that is the intention of the review, it is to be welcomed.

I reiterate the point that this is one of the areas which can contribute towards the high cost of dealing with the mess of an era during the greed of the Celtic tiger where Governments allowed for a sustained period of no or light-touch regulation in the building sector. There are so many victims as a result, unfortunately, in my home county and elsewhere.

Paschal Donohoe (Dublin Central, Fine Gael)
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I move amendment No. 63:

In page 114, between lines 29 and 30, to insert the following: "Extension of farming reliefs

64.(1)The Principal Act is amended—

(a)in section 81AA—

(i)in subsection (7A), by the deletion of “as provided for by Article 18 of the EU Regulation”, and

(ii)in subsection (16), by the substitution of “30 June 2023” for “31 December 2022”,

and

(b)in section 81C—

(i)in subsection (1), in the definition of “relevant period”, by the substitution of “30 June 2023” for “31 December 2022”, and

(ii)in subsection (12), by the substitution of “30 June 2023” for “31 December 2022”.

(2)Subsection (1)shall come into operation on such day or days as the Minister for Finance may appoint by order.".

Pearse Doherty (Donegal, Sinn Fein)
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I move amendment No. 64:

In page 114, between lines 29 and 30, to insert the following: "Report on the application of stamp duty on the buy-back of shares

64.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the application of stamp duty on the purchase by companies of their own shares where that purchase is not affected by means of a stock transfer form.".

This is in relation to a report that is required on the application of stamp duty on the purchase by companies of their own shares where that purchase is not affected by means of a stock transfer form. We discussed this in the Dáil Chamber as recently as last week. At that time, I stated:

A stamp duty ... of 1% normally applies to the purchase of shares. Under certain circumstances, however, when a company buys its own shares, this charge does not apply. [That] stamp duty only applies when a share buyback takes place by means of a stock transfer form. In the other two cases, when they are purchased through a direct contract or through security settlement systems, no charge applies.

One of the Minister's own officials made it clear in one of the documents that were obtained through freedom of information where the official stated that if there is a transfer of the beneficial ownership of the share from one person to another in exchange of valuable consideration, there is clearly a conveyance or transfer on sale of the shares and, therefore, a charge of stamp duty of 1%. However, we know that is not being applied. It is not being applied in the Finance Bill.

It has become popular for companies to use this mechanism to drive up their share price. It also has the benefit of enriching corporate executives and, indeed, shareholders. It is suggested that Irish publicly-listed companies are on course to spend more than €1.9 billion buying back their own shares this year. The companies involved include retail banks and large developers.

However, share buybacks, as I said, can come at the expense of the company and, indeed, the broader economy. When one is spending money on the share buyback to benefit the share price, corporate executives and shareholders, it is money that is not spent on, for example, reducing prices to consumers, increasing employees' wages or, indeed, investing in the company in the future. That is the reason, as I stated previously, that the Biden Administration is looking at introducing excise tax to share buybacks.

In practice, few, and only small, private companies perform share buybacks through a stock transfer form. I believe the gap should be closed. The Minister stated previously to me in reply to a parliamentary question that the cost to the Exchequer of this is between €5 million and €20 million in each calendar year based on the prior year's transaction. Revenue is not able to gather comprehensive data on share buybacks that occur that are not subject to stamp duty as there is no obligation to report this information. If they are not subject to stamp duty, they do not need to report it. Obviously, there is a wide variation in the estimated annual yield forgone. That is because the share buyback programmes are implemented on a regular basis and usually by a limited number of companies, some of which are quite large.

I believe that, moving forward, share buybacks require further and greater regulation. It is appropriate that we deal with this and that is what the amendment is about. For example, as I said, there is no requirement on a company to report information on share buybacks. In my view, companies should be required to do so, and that would allow for a greater analysis of share buybacks. It is one change that could be made to see what is happening out there, in terms of how many shares and the cost, and the tax forgone, as a result of share buybacks that do not fall under the stamp duty charge of 1%.

Paschal Donohoe (Dublin Central, Fine Gael)
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A sale of shares is normally chargeable to stamp duty at a rate of 1%, as Deputy Doherty concluded, and is payable by the purchaser. I am advised by Revenue that where a company purchases its own shares, the stamp duty treatment depends on the form in which the shares are held and the method by which the purchases are effected.

For shares held in paper form, the shares may be bought back in two ways. The first is by means of a standard stock transfer form. The second is where the shareholder and the company enter into a contract or share purchase agreement for the sale of the shares, following which the shareholder hands over the share certificates to the company.

Where a company purchases its own shares by means of a stock transfer form, a stamp duty charge arises. Where a company enters into a contract or share purchase agreement, Revenue accepts that there is no stamp duty chargeable on the transaction by virtue of section 31(1)(b) of the Stamp Duties Consolidation Act 1999. This section provides for stamp duty to be charged in respect of any contract or agreement for the sale of any estate or interest in any property as if it were an actual conveyance on sale of the estate, interest or property.

However, it specifically excludes from its scope the sale of certain property, including shares. Accordingly, where a company purchases its own shares by means of a contract or agreement, no charge to stamp duty arises.

For shares held in uncertificated, or dematerialised, form, the shares may be bought back via a securities settlement system. Euroclear operates the securities settlement system for trading in Irish shares. Where a company purchases its own shares via a securities settlement system, it has been a long-standing Revenue practice to confirm that stamp duty is not chargeable.

In advance of budget 2023, officials in my Department carried out a preliminary examination of issues relating to the stamp duty treatment of share buybacks, as was flagged in the tax strategy group papers. On the conclusion of that preliminary examination, departmental officials recommended to me that no changes should be introduced in the Finance Bill 2022 and that the Department should carry out a more in-depth analysis of this issue in the year ahead. In this context, I can confirm for the Deputy that the matter of the stamp duty treatment of share buybacks will be considered in greater detail in 2023.

On reporting of information in relation to share buyback, companies are required to report to the Central Bank on share buyback activities under Article 5 of the market abuse regulation. However, the Central Bank looks at these reports on a case-by-case basis and does not keep a database from which this information can be extracted.

Pearse Doherty (Donegal, Sinn Fein)
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It is good to hear that the Department or Revenue officials, I am not sure which, will look at this in greater detail and make recommendations to a future Finance Minister. Given there is no reporting requirement, other than to the Central Bank, which is of no benefit to us while we are trying to grapple with this, it would have been opportune to have a reporting requirement in this year's Finance Bill that could feed into the assessment and review by the Minister's officials. That said, I think I have made my point both at this committee and in the Chamber and previously on this issue. I think the gap needs to be closed.

Pearse Doherty (Donegal, Sinn Fein)
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I think this seems straightforward enough but I seek clarification. This allows for a person to elect which parent they choose to benefit from capital acquisitions tax, CAT, whether it be their birth parents or their social parents but it does not allow for a change in that election at any time or to benefit from both. That is my understanding. Is that correct?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will read out the note on this while I ponder the answer to the question. The Birth Information and Tracing Act 2022, which was signed into law in June, amended the Succession Act 1965 to make provision for persons who have been the subject of incorrect birth registrations.

The amendments provide that a person affected by an incorrect birth registration, who is referred to in the legislation as an “affected person”, will, in addition to his or her existing right of succession in relation to his or her birth parents, have succession rights in relation to his or her “social” parents, that is, the people he or she grew up understanding to be his or her parents.

That means that while you cannot change who your birth parents are, you can make a decision to select "social parents" and they will benefit from the terms of the Succession Act.

Pearse Doherty (Donegal, Sinn Fein)
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Does the individual benefit from both? He or she has the succession right as his or her birth parent. That exists in law already. Therefore he or she is granted that right in order that he or she can select to also benefit his or her social parents.

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes.

Pearse Doherty (Donegal, Sinn Fein)
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Is it the case then that such individuals can benefit from the exemptions of whatever it is, €335,000 tax-free, from both sets of parents or must they select?

Paschal Donohoe (Dublin Central, Fine Gael)
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They can select both but it is up to a maximum of €335,000.

Pearse Doherty (Donegal, Sinn Fein)
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It is combined.

Paschal Donohoe (Dublin Central, Fine Gael)
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The value is to a combined total value of €335,000. It is not per group of parents or parent.

Pearse Doherty (Donegal, Sinn Fein)
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I understand.

Paschal Donohoe (Dublin Central, Fine Gael)
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I want to make sure that I get the terminology right out of deference to the sensitivity of this matter. If a person has his or her birth parents and he or she also makes a decision on granting rights to the social parent, the maximum value of the rights has to be €335,000. The value is not given to both parents.

Pearse Doherty (Donegal, Sinn Fein)
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So if a birth parent provided €100,000 to the individual, the amount that would be tax free for the social parent would be €235,000.

Paschal Donohoe (Dublin Central, Fine Gael)
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For the social parent, yes.

Pearse Doherty (Donegal, Sinn Fein)
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I thank the Minister for that clarification. How would that then play out to the children of those individuals because we would now be into a different category? Does the same apply to the children? That would be the gift from a birth grandparent and a gift from what would be a social grandparent, if you want to call them that.

Paschal Donohoe (Dublin Central, Fine Gael)
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The amendment to the Act provides that the relationships between a person affected by an illegal birth registration and his or her parents and the relationship between this person and his or her parents will be deduced "in accordance with section 4B(1) of the Succession Act" and all other relationships will be determined accordingly. When these provisions are applied, the social parents of an affected person will be the grandparents of the affected person's child.

Pearse Doherty (Donegal, Sinn Fein)
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Along with the birth parents. So both benefit.

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes.

Pearse Doherty (Donegal, Sinn Fein)
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Same rules apply to the child as with the grandchild with the same combined cap. It is not a doubling of the threshold.

Paschal Donohoe (Dublin Central, Fine Gael)
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No. The structures are the same but up to an unchanged cap.

Pearse Doherty (Donegal, Sinn Fein)
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Yes. Thank you.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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For clarification, this is only in relation to where there was an illegal or incorrect registration. All of the stuff that Deputy Doherty has been asking about is already the case for biological and social parents. That is correct, is it not? It is already the case and all those things already apply in the case of adoptees. There is a threshold exemption up to €365,000 combined.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is €335,000.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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And then after that they are subject to capital acquisition tax. This is extending it to those who were illegally adopted.

Paschal Donohoe (Dublin Central, Fine Gael)
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It applies to adoptees and we are now extending the structures only to persons who have been affected by an incorrect birth registration.

Paschal Donohoe (Dublin Central, Fine Gael)
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I move amendment No. 65:

In page 137, between lines 27 and 28, to insert the following new section: “Implementation of Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation

73.(1) Part 33 of the Principal Act is amended—

(a) in section 817RA(1), by the substitution of the following definition for the definition of “Directive”:

“ ‘Directive’ means Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, as amended by Council Directive 2014/107/EU of 9 December 2014, Council Directive (EU) 2015/2376 of 8 December 2015, Council Directive (EU) 2016/881 of 25 May 2016, Council Directive (EU) 2016/2258 of 6 December 2016, Council Directive (EU) 2018/822 of 25 May 2018, Council Directive (EU) 2020/876 of 24 June 2020 and Council Directive (EU) 2021/514 of 22 March 2021;”,

and

(b) in section 817REA—

(i) in subsection (3), by the insertion of “, 32a” after “31”, in both places where it occurs,

(ii) in subsection (4)(a), by the substitution of “, the Central Register of 30 [SECTION 64] Beneficial Ownership of Trusts and the Central Mechanism of Ownership of Bank and Payment Accounts and Safe-Deposit Boxes, and”, for “and the Central Register of Beneficial Ownership of Trusts, and”, and

(iii) in subsection (8), by the substitution of “, the Registrar of Beneficial Ownership of Trusts or, in the case of the Central Mechanism of Ownership of Bank and Payment Accounts and Safe-Deposit Boxes, the Central Bank of Ireland, and” for “or the Registrar of Beneficial Ownership of Trusts, and”.

(2) Part 38 of the Principal Act is amended—

(a) in section 891GA(2), by the substitution of the following definition for the definition of “Directive”:

“ ‘Directive’ means Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, as amended by Council Directive 2014/107/EU of 9 December 2014, Council Directive (EU) 2015/2376 of 8 December 2015, Council Directive (EU) 2016/881 of 25 May 2016, Council Directive (EU) 2016/2258 of 6 December 2016, Council Directive (EU) 2018/822 of 25 May 2018, Council Directive (EU) 2020/876 of 24 June 2020 and Council Directive (EU) 2021/514 of 22 March 2021;”,

and

(b) by the insertion of the following section after section 891J (inserted by section 72):

“Implementation of Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative cooperation in the field of taxation in relation to presence requests

891K.(1) For the purpose of this section—

‘administrative enquiry’ means any control, check or other action carried out by an authorised officer by virtue of Regulation 14 of the Regulations of 2012;

‘authorised officer’ means a person appointed as an authorised officer under Regulation 12 of the Regulations of 2012;

‘books, records or other documents’ has the same meaning as in section 900(1);

‘competent authority’ means the authority designated as such by a Member State for the purposes of the Directive and, in relation to the State, means the Revenue Commissioners;

‘Directive’ means Council Directive 2011/16/EU of 15 February 2011 as amended by Council Directive 2014/107/EU of 9 December 2014, Council Directive (EU) 2015/2376 of 8 December 2015, Council Directive (EU) 2016/881 of 25 May 2016, Council Directive (EU) 2016/2258 of 6 December 2016, Council Directive (EU) 2018/822 of 31 [SECTION 64] 25 May 2018, Council Directive (EU) 2020/876 of 24 June 2020 and Council Directive (EU) 2021/514 of 22 March 2021;

‘foreign tax official’ means an official who is—

(a) authorised by the requesting authority pursuant to Article 11.1 of the Directive to act in the capacity of a competent authority on behalf of the Member State concerned, or

(b) authorised by the requesting authority under the Directive to assist or represent the official referred to in paragraph (a) in the performance of his or her functions;

‘nominated officer’ means a foreign tax official to whom a written authorisation has been given to perform the functions conferred by virtue of this section;

‘requested authority’ means the Revenue Commissioners;

‘Regulations of 2012’ means the European Union (Administrative Cooperation in the Field of Taxation) Regulations 2012 (S.I. No. 549 of 2012);

‘written authorisation’ has the meaning given to it by subsection (2).

(2) For the purposes of the performance of the functions conferred by virtue of this section on a foreign tax official, the Revenue Commissioners may issue an authorisation in writing (in this section referred to as a ‘written authorisation’) to such foreign tax official which shall contain—

(a) the name of the foreign tax official and a statement that he or she is a nominated officer,

(b) a photograph and signature of that official,

(c) particulars of that official’s authorisation under this section,

(d) the duration of the written authorisation,

(e) the name of the person who is the subject of the administrative enquiry concerned,

(f) a hologram showing the logo of the Office of the Revenue Commissioners, and

(g) the facsimile signature of a Revenue Commissioner.

(3) Subject to subsections (4) and (5), a foreign tax official may, by agreement between the requested authority and the requesting authority and in accordance with the arrangements laid down by the requested authority, with a view to exchanging information for the purposes of the Directive—

(a) be present in the offices where the requested authority performs its functions,

(b) be present during administrative enquiries carried out by the requested authority, and

(c) participate, by electronic means where appropriate, in the administrative enquiries carried out by the requested authority.

(4) A foreign tax official may only be present or participate in administrative enquiries, pursuant to subsection (3), where such foreign tax official is a nominated officer.

(5) In respect of a nominated officer being present or participating in administrative enquiries pursuant to subsection (3), that presence or participation in such enquiries means—

(a) reviewing books, records or other documents to which the competent authority has access for the purposes of the enquiry concerned, and

(b) requesting, from any person present during the course of the enquiry concerned, reasonable assistance, including providing information and explanations required by the nominated officer, where such assistance, information and explanations would be available to the competent authority for the purposes of the enquiry concerned,

to the extent that—

(i) such presence or participation by the nominated officer relates solely to the requested information, and

(ii) any information sought by the nominated officer relates solely to the requested information.

(6) Nothing in this section shall be construed as permitting a nominated officer to carry out any enquiries other than when participating in administrative enquiries commenced and carried out by the competent authority.

(7) A nominated officer performing the functions conferred on him or her by virtue of this section shall, on request, produce—

(a) his or her written authorisation, and

(b) his or her authorisation from the requesting authority stating his or her identity and official capacity.

(8) Where, in the performance of any functions under this section in relation to him or her, a nominated officer is requested to produce or show his or her authorisation for the purposes of this section, the production by the nominated officer of his or her written authorisation—

(a) shall be taken as evidence of authorisation under this section, and

(b) shall satisfy an obligation under this section which requires the nominated officer to produce such authorisation on request.

(9) A word or expression which is used in this section and which is also used in the Directive has, unless the context otherwise requires, the same meaning in this section as it has in the Directive.”.

(3) Subsections (1)and (2)shall come into operation on 1 January 2023.”.

Section 73 transposes a number of aspects relating to the EU directive on administrative co-operation, commonly knows as DAC 7, in reference to it being the seventh iteration of the directive. In addition to the main features of DAC 7 that relate to digital platform operators, DAC 7 also introduced amendments to provide for increased sharing of information between EU member states to provide further clarity to existing provisions and their operation, and updated provisions with respect to data protection and the uses to which the exchanged information can be put.

The main features are access to the central mechanism of ownership of bank and payment accounts in safety deposit boxes to ensure that obliged entities under money laundering legislation are compliant with DAC and provisions to allow for the presence and participation of foreign tax officials in inquiries conducted by Revenue. Many of these provisions were already contained in a statutory instrument, but DAC 7 extended these to include electronic presence and participation. These provisions will now be contained in the Taxes Consolidation Act and include powers to allow for presence and participation during these inquiries.

These updates will increase the effectiveness and efficiency of the exchange of information between member states to provide valuable information that helps protect Ireland's tax base and ensure that DAC 7 is transposed in line with the 31 December 2022 deadline, with a final transposition relating to joint audits being adopted next year.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am going to bring forward a technical amendment to section 71 on Report Stage to indicate that a commencement provision will no longer be required. The removal of that commencement date will enable the provisions of this section to commence on the date the Finance Bill is enacted.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Will the Minister elaborate somewhat on exactly what change is proposed with this section? I understand it relates to double taxation agreements and assessments on taxpayers in situations where, I presume, double taxation agreements are relevant or apply, and where claims are being made for loss relief, group relief or similar reliefs. Will the Minister explain, in layman's terms, what exactly we are doing here?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will begin by explaining to the Deputy what a mutual agreement procedure is because it is relevant to explaining the role of the Revenue officer referenced in this section. A mutual agreement procedure, MAP, is a dispute resolution mechanism that allows the competent authorities or countries concerned, in our case, Revenue, and its equivalent in other jurisdictions, to resolve international tax disputes. Such disputes are related to double taxation and taxation that is not in accordance with a double taxation treaty.

Section 959AA(2A), which was introduced in the Finance Act 2018, allowed a Revenue officer to make or amend an assessment, at any time, to give effect to a MAP reached between Revenue and another competent authority, and to make any additional tax due or refund of tax due payable or repayable. For example, a claim for group relief, loss relief or similar relief, must be made by a taxpayer within two years from the end of the accounting period to which the claim relates. A transfer pricing audit and the subsequent MAP case can take a number of years to conclude resulting in the expiration of the domestic time limits for claiming these reliefs.

As noted, the Taxes Consolidation Act allows a Revenue officer to make or amend an assessment to give effect to a MAP. This provision specifically states that this will be the case, notwithstanding the four-year time limit on the making of assessments or repayments. However, the section does not specifically provide that, on foot of a MAP settlement, a Revenue officer is to allow claims for a group relief, loss relief, or other similar reliefs that are made outside the time limits that would otherwise apply to the claiming of these reliefs. This section of the Bill amends the Taxes Consolidation Act to specifically give the Revenue officer the power to make or amend an assessment to give effect to a MAP, notwithstanding any time limits that may be in place for taxpayers for making claims for loss relief, group relief or a similar relief. This is just about ensuring that the Revenue officer has the power to make decisions regardless of time that has passed since the MAP was conducted.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Did the Minister say the reason reliefs might be delayed is because, for example, there might be some examination of transfer pricing? Is that right? Once the examination is completed, it might delay the relief being provided to somebody because the claim was being looked at in the context of transfer pricing. Is that it?

Paschal Donohoe (Dublin Central, Fine Gael)
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It could take longer than four years for that work to be done.

Pearse Doherty (Donegal, Sinn Fein)
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I will table an amendment on Report Stage in respect of mortgage interest relief, which obviously applies here.

Landlords are able to reclaim 100% mortgage interest relief but residents are not. Section 81 relates to rents payable to non-residents. What has changed from the point of view of rents paid to non-resident landlords?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will refer to the two changes included in the section. Section 81 amends the Taxes Consolidation Act 1997 to oblige a person making payments to the non-resident landlord to give certain information, as required by Revenue, concerning the landlord and the rental income on which tax is being withheld. The second part of the amendment relates to collection agents, that is, resident persons acting on behalf of the non-Irish resident persons who are chargeable and assessable for the income of the non-Irish resident person. The amendment also relieves collection agents of the obligation of being chargeable and assessable for the income of a non-resident landlord if the collection agent deducts withholding tax from rental payments, remits that tax to Revenue and gives Revenue certain information related to the payments. Those are the changes proposed.

Pearse Doherty (Donegal, Sinn Fein)
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Does the Minister or Revenue have any detail on the breakdown of the number of non-resident landlords, the number of tenancies that are deducting 20% and the number being paid through agents?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the amount of rental income on residential and commercial properties, as declared on Form 11 tax returns by non-resident tax persons, is as follows. For the most recent year for which I have available information, the number of commercial properties was 3,570 and the number of residential properties was 40,270. The commercial rental income was €65 million and the residential rental income was €328 million.

Pearse Doherty (Donegal, Sinn Fein)
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There are 40,270 residential properties whose landlords are non-resident. Is that information correct?

Paschal Donohoe (Dublin Central, Fine Gael)
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It is correct.

Pearse Doherty (Donegal, Sinn Fein)
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There is €328 million in rental income. Is there a breakdown of how the tax is being applied? In what proportion of the 40,000 units is the tenant deducting the 20%? I presume that number is very low but I do not know. I have never seen the figures. Is there a breakdown showing that proportion?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am informed that the information is available on the statistics on income tax and duties and income tax distribution section of the Revenue website. Even though I am informed it is available, I do not have the information. I will get it for the Deputy. My apologies. The answer I have just given the Deputy refers to income tax liability. I ask him to put his question again, if he does not mind. I misunderstood it.

Pearse Doherty (Donegal, Sinn Fein)
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There are 40,270 residential homes - houses or apartments - where the landlord is non-resident. Tax is applied to those tenancies in two ways, of which one is through a collection agent and the other through the tenant deducting 20% and paying directly to Revenue. Do we have any sense of how that is happening? Are there figures on the split or proportions?

Paschal Donohoe (Dublin Central, Fine Gael)
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My colleagues are not aware if that information is available but we will double check. If it is available, we will share it with the Deputy, but it is likely that it is not available.

Pearse Doherty (Donegal, Sinn Fein)
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I would say it is. I do not want to dispute this with the Minister's officials but if people are paying directly to Revenue, I am sure-----

Paschal Donohoe (Dublin Central, Fine Gael)
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We do not have the information with us now. That is what I meant.

Pearse Doherty (Donegal, Sinn Fein)
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Of course.

Paschal Donohoe (Dublin Central, Fine Gael)
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We will endeavour to get it for the Deputy.

Pearse Doherty (Donegal, Sinn Fein)
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The other piece of information may be available in a document but I have not seen it. What has been the trend with regard to non-residential landlords? We know there are 40,000 units at present but what is the trend? Are institutional investors captured under the heading of non-residential landlords?

Paschal Donohoe (Dublin Central, Fine Gael)
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No. IRES and REITs were not captured in the information I have just given the Deputy.

Pearse Doherty (Donegal, Sinn Fein)
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We know they do not pay any tax anyway.

Paschal Donohoe (Dublin Central, Fine Gael)
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We know where the tax is paid. It is paid when it is returned to the investor. I have trends for both broken down in tabular form. It looks as though, from a commercial property point of view, there has been a decline in the number of commercial properties in which non-residential landlords who are not tax resident have a share. The figure has gone from 5,070 in 2016 to 3,570 in 2019. The trend with regard to residential properties has been uneven. In 2016, the figure was 44,620 and it now stands at 40,270. The trend has gone up and down with regard to residential properties. I will give the Deputy the information.

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

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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This adds to the list of territories with which we have double taxation agreements Guernsey and the Isle of Man, both of which have something of a reputation as tax havens. What safeguards are in place to prevent agreements such as these with places that have reputations as tax havens being exploited for tax avoidance by corporations?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will explain what we are doing here. This is the final ratification procedure for amending protocols. The amending protocols seek to make the existing double taxation agreements we have with Guernsey and the Isle of Man and consistent with the relevant OECD base erosion and profit shifting, BEPS, provisions. We are putting in place the best practice to deal with some of the tax behaviour that we have acknowledged needs to change. We are bringing that best practice and those standards into protocols that already exist. This should be a deterrent or at least allow us to reduce some of the behaviours we have said are not acceptable.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I thank the Minister for that clarification.

Paschal Donohoe (Dublin Central, Fine Gael)
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I move amendment No. 66:

In page 151, between lines 1 and 2, to insert the following:

“Trained farmer qualifications

84.(1) The Principal Act is amended—

(a) by the insertion of the following section after section 654:

“Trained farmer qualifications

654A.(1) In this section—

‘relevant provisions’ means—

(a) sections 667B and 667C,

(b) section 89 of the Capital Acquisitions Tax Consolidation Act 2003,

and

(c) sections 81AA and 81D of, and Schedule 1 to, the Stamp Duties Consolidation Act 1999;

‘specified list’ has the meaning given to it by subsection (3);

‘Table’ has the meaning given to it by subsection (2);

‘Teagasc’ means Teagasc – the Agriculture and Food Development

Authority;

‘trained farmer qualification’ has the meaning given to it by subsection (2).

(2) For the purposes of the relevant provisions, a reference in those provisions to a ‘trained farmer qualification’ means—

(a) a qualification set out in the Table to this section (in this section referred to as the ‘Table’), or

(b) any other qualification that Teagasc certifies—

(i) as corresponding to a qualification set out in the Table, and

(ii) as being deemed by the Qualifications and Quality Assurance Authority of Ireland to be at least at a level equivalent to that of the qualification set out in the Table.

(3) For the purposes of this section, Teagasc shall—

(a) establish and maintain a list of trained farmer qualifications (in this section referred to as the ‘specified list’),

(b) publish the specified list on a website maintained by or on behalf of Teagasc and by such other means as Teagasc considers appropriate,

(c) amend the specified list as necessary and appropriate to ensure it is up to date by—

(i) adding thereto any other qualification certified under subsection (2)(b), and

(ii) where subsection (4) applies, deleting therefrom,

and

(d) publish the specified list as amended under paragraph (c) on a website maintained by or on behalf of Teagasc and by such other means as Teagasc considers appropriate.

(4) This subsection shall apply in relation to a trained farmer qualification certified under paragraph (b) of subsection (2) which ceases to satisfy the requirements set out in subparagraphs (i) and (ii) of that paragraph.

TABLE

1. Qualifications awarded by the Qualifications and Quality Assurance Authority of Ireland:

(a) Level 6 Advanced Certificate in Farming;

(b) Level 6 Advanced Certificate in Agriculture;

(c) Level 6 Advanced Certificate in Dairy Herd Management;

(d) Level 6 Advanced Certificate in Drystock Management;

(e) Level 6 Advanced Certificate in Agricultural Mechanisation;

(f) Level 6 Advanced Certificate in Farm Management;

(g) Level 6 Advanced Certificate in Machinery and Crop Management;

(h) Level 6 Advanced Certificate in Horticulture;

(i) Level 6 Advanced Certificate in Forestry;

(j) Level 6 Advanced Certificate in Stud Management;

(k) Level 6 Advanced Certificate in Horsemanship;

(l) Level 6 Specific Purpose Certificate in Farm Administration;

(m) Higher Certificate in Agriculture

(n) Bachelor of Science in Agriculture;

(o) Higher Certificate in Agricultural Science;

(p) Bachelor of Science in Agricultural Science;

(q) Bachelor of Science (Honours) in Land Management, Agriculture;

(r) Bachelor of Science (Honours) in Land Management, Horticulture;

(s) Bachelor of Science (Honours) in Land Management, Forestry;

(t) Higher Certificate in Engineering in Agricultural Mechanisation;

(u) Bachelor of Science in Rural Enterprise and Agri-Business;

(v) Bachelor of Business in Rural Enterprise and Agri-Business;

(w) Bachelor of Science in Agriculture and Environmental Management;

(x) Bachelor of Science in Horticulture;

(y) Bachelor of Arts (Honours) in Horticultural Management;

(z) Bachelor of Science in Forestry;

(aa) Higher Certificate in Business in Equine Studies;

(ab) Bachelor of Science in Equine Studies;

(ac) Bachelor of Business in Equine Studies;

(ad) Higher Certificate in Science Applied Agriculture;

(ae) Bachelor of Science (Honours) in Sustainable Agriculture;

(af) Bachelor of Science (Honours) in Agriculture.

2. Other qualifications:

(a) Bachelor of Agricultural Science - Animal Crop Production awarded by University College Dublin;

(b) Bachelor of Agricultural Science - Agri-Environmental Science awarded by University College Dublin;

(c) Bachelor of Agricultural Science - Animal Science awarded by University College Dublin;

(d) Bachelor of Agricultural Science - Animal Science Equine awarded by University College Dublin;

(e) Bachelor of Agricultural Science - Dairy Business awarded by University College Dublin;

(f) Bachelor of Agricultural Science - Food and Agribusiness Management awarded by University College Dublin;

(g) Bachelor of Agricultural Science - Forestry awarded by University College Dublin;

(h) Bachelor of Agricultural Science - Horticulture, Landscape and Sportsturf Management awarded by University College Dublin;

(i) Bachelor of Veterinary Medicine awarded by University College Dublin;

(j) Bachelor of Science in Equine Science awarded by the University of Limerick;

(k) Diploma in Equine Science awarded by the University of Limerick;

(l) Bachelor of Science (Honours) in Agriculture awarded by the Dundalk Institute of Technology.

(m) Bachelor of Agricultural Science - Agricultural Systems Technology awarded by University College Dublin;

(n) Bachelor of Science in Agricultural Science awarded by Munster Technological University;

(o) Bachelor of Science in Sustainable Farm Management and Agribusiness awarded by South East Technological University;

(p) Bachelor of Science (Honours) in Sustainable Farm Management and Agribusiness awarded by South East Technological University;

(q) Bachelor of Science in Agriculture awarded by Atlantic Technological University;

(r) Higher Certificate in Science in Agriculture awarded by Atlantic Technological University;

(s) Quality and Qualifications Ireland Level 6 Specific Purpose Certificate in Farming;

(t) Bachelor of Science (Honours) in Agricultural Science awarded by South East Technological University.”,

(b) in section 667B—

(i) by the substitution of the following subsection for subsection (2):

“(2) The conditions required by this subsection are that the individual referred to in the definition of ‘qualifying farmer’ in subsection (1) is the holder of a trained farmer qualification (within the meaning given by section 654A).”,

(ii) by the deletion of subsection (4), and

(iii) by the deletion of the Table to that section,

and

(c) in section 667C—

(i) in subsection (1A)(b)(v)(II), by the substitution of the following subclause for subclause (A):

“(A) is the holder of a trained farmer qualification (within the meaning given by section 654A), and”,

and

(ii) in subsection (4A)(a), by the deletion of subparagraph (vi).

(2) The Capital Acquisitions Tax Consolidation Act 2003 is amended, in section 89(1), in the definition of “farmer”, by the substitution of “Schedule 2 or 2A to the Stamp Duties Consolidation Act 1999 or a trained farmer qualification (within the meaning given by section 654A of the Taxes Consolidation Act 1997)” for “Schedule 2, 2A or 2B to the Stamp Duties Consolidation Act 1999”.

(3) The Stamp Duties Consolidation Act 1999 is amended— (a) in section 81AA—

(i) in subsection (1)

(I) by the substitution of “In this section” for “In this section and Schedule 2B”, and

(II) by the deletion of the definition of “Schedule 2B qualification”,

(ii) in subsection (2), by the substitution of “a trained farmer qualification (within the meaning given by section 654A of the Taxes Consolidation Act 1997)” for “a Schedule 2B qualification”,

(iii) by the deletion of subsection (6),

(iv) in subsection (11), by the substitution of the following paragraph for

paragraph (a):

“(a) For the purposes of this subsection, a person ‘achieves the standard’ at any time where at that time the person satisfies the conditions set out in subsection (2), (3), (4) or (5) and whether a person has or has not achieved the standard shall be construed accordingly.”,

(v) in subsection (14)(b), by the substitution of “to be the holder of a qualification corresponding to that set out in subparagraph (b) of paragraph 1 of the Table to section 654A of the Taxes Consolidation Act 1997” for “to be the holder of a qualification corresponding to that set out in subparagraph (b) of paragraph 1 of Schedule 2B”, and

(vi) in subsection (15), by the substitution of “to be the holder of a qualification corresponding to that set out in subparagraph (b) of paragraph 1 of the Table to section 654A of the Taxes Consolidation Act 1997” for “to be the holder of a qualification corresponding to that set out in subparagraph (b) of paragraph 1 of Schedule 2B”,

(b) in section 81D(4)(a), by the substitution of “a qualification set out in Schedule 2 or 2A to the Act or a trained farmer qualification (within the meaning given by section 654A of the Taxes Consolidation Act 1997)” for “a qualification set out in Schedule 2, 2A or 2B to the Act”,

(c) in Schedule 1, under the heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance”—

(i) in paragraph (5)(aa)(ii)(I), by the substitution of “Schedule 2 or 2A to the Act or a trained farmer qualification (within the meaning given by section 654A of the Taxes Consolidation Act 1997)” for “Schedule 2, 2A or 2B to the Act”,

and

(ii) in paragraph (5)(ab)(i), by the substitution of “Schedule 2 or 2A to the Act or a trained farmer qualification (within the meaning given by section 654A of the Taxes Consolidation Act 1997)” for “Schedule 2, 2A or 2B to the Act”,

and

(d) by the deletion of Schedule 2B. (4) Subsections (1), (2)and (3)shall come into operation on 1 January 2023.”.

Steven Matthews (Wicklow, Green Party)
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Amendment No. 67 has been ruled out of order.

Steven Matthews (Wicklow, Green Party)
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Amendment No. 68 is in my name and I understand I have to vacate the Chair to speak to an amendment. Deputy Boyd Barrett's amendments are included in this, as is Deputy Doherty's amendment. I propose that Deputy Doherty take the Chair/

Pearse Doherty (Donegal, Sinn Fein)
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Can I chair from where I am sitting?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I second the proposal that Deputy Doherty take the Chair.

Pearse Doherty (Donegal, Sinn Fein)
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Amendments Nos. 68, 71 to 73, inclusive, and 79 are related and are to be discussed together.

Steven Matthews (Wicklow, Green Party)
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I move amendment No. 68:

In page 153, line 17, after "commences," to insert the following: "except where properties have been deemed not liable for local property tax due to being unsuitable for use as a dwelling. In all cases where properties are residential properties and deemed unsuitable for use as a dwelling, such properties shall be registered as derelict by the local authority and shall be subject to the Derelict Sites Act 1990, including the derelict sites levy,".

This is in reference to the vacant homes tax. I am glad a vacant homes tax has been introduced as a measure to activate the vacant properties we know exist around the country. There has been a lot of speculation on the figure. The true figure lies between the 60,000 odd, as referred to in the local property tax returns, and 166,000. As I understand it, if a dwelling is uninhabitable, it does not qualify for the local property tax. Where somebody submits that a vacant dwelling is uninhabitable so as not to be liable to the local property tax or vacant property tax, such properties should be automatically registered on the derelict sites register. That is the substance of my amendment.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy is correct that if a property is uninhabitable, it is not subject to the tax. The property has to be habitable because I am levying the tax via an additional charge through the local property tax regime, which assumes it is habitable. For a property to be placed on the derelict sites register, having been deemed derelict, I understand the criteria are that it must be in a dangerous or ruinous condition, it must be in a neglected or unsightly condition, and there must be litter, waste or debris present on the site. If a property meets these criteria, it is regarded as derelict and therefore not subject to the tax.

Steven Matthews (Wicklow, Green Party)
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Regarding properties that would meet the criteria for being deemed derelict, by being damaged, uninhabitable and unsightly, is the Minister saying it is not within his remit under the tax Bill to request that such properties be put on the derelict sites register? Could he advise whether it is a matter for the Minister for Housing, Local Government and Heritage to address?

Paschal Donohoe (Dublin Central, Fine Gael)
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It is a matter for the Minister for Housing, Local Government and Heritage. That Minister, Deputy Darragh O'Brien, and I have consulted on this matter. He has initiated a review of the operation of derelict sites legislation and I understand he will have it completed by the end of the year. It is apparent to me, having done the work on the vacant property tax, that the best way to deal with the issue unused properties, be they homes or derelict, is through the introduction of a vacant property tax and the strengthening of the operation of the derelict sites legislation.

Steven Matthews (Wicklow, Green Party)
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A person has to make a return to the Revenue Commissioners indicating a property he or she owns is uninhabitable and therefore not subject to the vacant property tax. Is there a mechanism whereby the Revenue Commissioners can inform the Department of Housing, Local Government and Heritage that such a dwelling has been declared uninhabitable, after which the property would be automatically put on the derelict sites register, possibly through the local authorities?

Paschal Donohoe (Dublin Central, Fine Gael)
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I do not think that chain of contact would feature. Since the vacant property tax is based on self-assessment, I believe those putting forward their homes for it will contact only the Revenue Commissioners. The latter would have no need or reason to contact the local authority.

Steven Matthews (Wicklow, Green Party)
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In other words, the Revenue Commissioners would not be aware there is an uninhabitable property because it would not have been declared liable for the tax.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is more fundamental than that; it is the not role of the Revenue Commissioners. They do not play a role regarding derelict properties. For that reason, they would not be aware of them. They would not have a need to be notified regarding the properties.

Steven Matthews (Wicklow, Green Party)
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Nobody would be aware of the status of a property of the kind in question because the owner would not have declared its liability for the vacant homes tax to the Revenue Commissioners. Since it would be unknown to the Revenue Commissioners, it could not pass on the information to the Department of Housing, Local Government and Heritage, or the information would not be available for the latter to seek. There is a gap concerning property that should be captured under either a derelict sites levy or vacant property tax. We need to strengthen the arrangements. I understand the aim of the tax is not to generate revenue, although the revenue can be used for housing, but to activate as many properties as possible, whether they are vacant, derelict, semi-derelict or uninhabitable.

Paschal Donohoe (Dublin Central, Fine Gael)
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I acknowledge that, for properties that are regarded as derelict because they are not subject to the vacant property tax, the question stands as to what can be done to activate them for residential use. However, that is now a matter that the Minister for Housing, Local Government and Heritage is aiming to bring to a conclusion. The reason the Revenue Commissioners are not notified is that they do not have a standing in regard to the matter. I would assume, however, based on my constituency experience, that the Revenue Commissioners are not informed of properties that are derelict but that Dublin City Council either is or should be. It is clear to me from watching how the derelict sites legislation is being operated that it is working in some cases, but we need to find ways to improve how it is operating. This is the work the Minister for Housing, Local Government and Heritage is doing.

Steven Matthews (Wicklow, Green Party)
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I seek clarification on one more matter. What is the definition of "uninhabitable" under the local property tax Act?

Pearse Doherty (Donegal, Sinn Fein)
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Could I add something? Since the tax is self-assessed, and given the Revenue Commissioners' function regarding not only the local property tax but also its predecessor, they will have limited information on houses people claim are uninhabitable, having regard to the household charge. I do not know whether they retain such information or, indeed, information on houses that were subject to the levy, that were subject to a charge that arose in a subsequent year and that became uninhabitable.

Steven Matthews (Wicklow, Green Party)
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Is the definition of "uninhabitable" as contained in-----

Paschal Donohoe (Dublin Central, Fine Gael)
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So we will be all clear on what “habitable” is, “habitable” is a property that is fit for dwelling. I am not trying to be at all smart with the Deputy for a moment, but “uninhabitable” then, as Revenue would define it, is a house that is not fit for dwelling. My officials will tell me as the debate goes on if there is further rigor that lies behind that. However, given that it is a self-assessed tax with a very high level of compliance behind us, it appears to be an approach that is working well.

Steven Matthews (Wicklow, Green Party)
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Okay, but-----

Paschal Donohoe (Dublin Central, Fine Gael)
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I wish to say one more thing on it. There are clearly properties that are not fit for dwelling but may also not be derelict. This is clearly an issue that needs further work. As they are not fit for dwelling, they are not a home, and because they are not a home, they do not come under the vacant property tax. Therefore, one of the issues we need to consider is the definition of “dereliction” and whether it needs to be reviewed. I think it probably does, but the place for that will be the Derelict Sites Act rather than the Finance Bill. I think I understand the Deputy is raising and he will correct me if I am wrong. It is the properties that fall in between both definitions.

Steven Matthews (Wicklow, Green Party)
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Exactly. This appears to create properties that might fall into it. For example, if the front is missing from a house, would it be considered uninhabitable and therefore not liable under the local property tax and therefore not liable under the vacant home tax? We do not have a definition of what “uninhabitable” is. How do we prevent houses being made uninhabitable in order to avoid the tax?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am not aware that there is much evidence. Perhaps the Deputy might have-----

Steven Matthews (Wicklow, Green Party)
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Neither am I, but I just-----

Paschal Donohoe (Dublin Central, Fine Gael)
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-----knowledge of it. If I look at the operation of the local property tax at the moment, there is not much evidence of properties being made uninhabitable to avoid the tax. I hope I am not being naïve in assuming the same practice will continue in relation to the vacant property tax. I would argue, but it will be a matter for Revenue, that if a front door is removed from a house, it is still habitable. Clearly, if we see evidence of activity taking place that undermines compliance with this tax, which we have not seen when it comes to the local property tax, that would be something that would need to be reviewed in the future.

Steven Matthews (Wicklow, Green Party)
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On that basis, I withdraw this amendment while maintaining the right to introduce something further on Report Stage.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Amendments Nos. 69 and 70 have been ruled out of order.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Amendment No. 70 is out of order.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Yes. Amendment No. 71 was already discussed with amendment No. 68.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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No. It was not already discussed.

Pearse Doherty (Donegal, Sinn Fein)
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We have not finished the discussion on this group.

Steven Matthews (Wicklow, Green Party)
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We only just covered amendment No. 68.

Pearse Doherty (Donegal, Sinn Fein)
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The discussion on the-----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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One Deputy has spoken.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I know. However, Deputy Boyd Barrett's amendment No. 71----

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It was not discussed.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Deputy withdrew amendment No. 68. Therefore, we will move on to amendment No. 71, which is Deputy Boyd Barrett's amendment.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I move amendment No. 71:

In page 153, line 39, after “Act).” to insert the following:

“653AQ.Within 3 months of the passing of this Act, the Minister shall lay a report before the Dáil into the implementation of the Vacant Homes Tax.”.

My other amendments were ruled out of order, presumably because they involved a charge on the Exchequer. This amendment is looking for a report on the implementation of the vacant homes tax. It allows me to ask certain questions about how this will operate and whether it will be adequate. It might bring vacant homes back into use, which is what the purpose of it obviously is and should be. To get a portion of the 160,000 houses identified in the census back into use could be useful to help to house people and deal with the dire housing crisis we are facing.

On the last conversation and Deputy Matthews’s questions, I never accused the Minister of being naïve. I mentioned a multi-unit apartment complex across the road from my office where at least 15 but up to 17 units have been sitting empty now for about two and a half years. The vulture fund that bought it is busy trying to drive the tenants out and has succeeded in driving most of them out, which is why those properties are empty. One thing that is going on there is that throughout all that period, there were very slow refurbishment works going on. These refurbishment works have been going on for as long as those places have been empty - since they drove the tenants out with threats of evictions and so on that just eventually led the tenants to give up and go. Some of the tenants stayed and resisted. Hopefully, their resistance will bear fruit in that the long campaign has meant the local authority and an approved housing body are now trying to purchase the block. I hope that goes through and we end this awful situation and the scandal of those empty apartments. Meanwhile, those places have been vacant. Everybody who is left living in that block knows that they have been perfectly well refurbished for quite some time. However, they maintain to pretend that there was work still being done to them.

To be honest, I do not know whether they are being charged anything or whether they are identified as vacant properties or would be. However, the point is there is an exemption in the vacant homes tax if substantial works are being done, is there not? Therefore, I would be worried that that exemption can be exploited and one would get precisely that. There is this case, but I can see this situation being repeated in Tathony House, where there is a massive eviction threat, and in other places where they want to get the tenants out. In this case, I think they just wanted to make them empty long enough that then the rent pressure zone rules that limited rent increases would expire and no longer apply and they could then jack up the rent or just increase the value of the property by getting vacant possession, but kind of justifying all that on the grounds that they are doing substantial refurbishments to the place. I would like the Minister to address that concern. I could see that being done and in the case I am referring to it looks as if something like that was going on. It would not take long for the unscrupulous to figure out whether there are things they could do to benefit from exemptions or loopholes in the tax and manage to evade it.

In addition, three times the property tax is just not enough to put any serious pressure on those sorts of people who do that kind of thing. Does the Minister know what I mean? I refer to the kind of people who are happy to sit on a property and watch its value appreciate and are ruthless enough to throw people out and intimidate and bully them out of a place because they want to maximise the value of their investment. In fact, I went with the poor tenants who were being threatened with eviction to the RTB. I remember so well the high-powered barrister representing that particular vulture fund who said that this is not pleasant - it is ugly - but their client has to maximise the value of their investment.

It was as cold and as ruthless as that. They knew what they were doing was not nice but they had to maximise the value of their client's investment. There are people like that out there. People as calculating, profit-hungry and ruthless as that will do the calculations. They will work out that, even if they have to pay three times the property tax, they would make a hell of a lot more by letting a place sit empty and therefore maximise the value. We need a much more punitive vacant homes tax than the Minister is suggesting to make it really work, so it becomes painful for people to sit on empty property in that way. We would like to see the tax kick in if a place is empty for six months or more. The Minister is suggesting a lot longer. If I understand him correctly, somewhere could potentially be empty for a year before the tax would kick in. I ask the Minister to clarify that. That is my understanding.

Paschal Donohoe (Dublin Central, Fine Gael)
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I will deal first with the refurbishment issue Deputy Boyd Barrett has referred to. It is an issue I gave considerable thought to in designing the Bill. For that reason, a clear definition of "substantial repairs" is contained within the new vacant property tax. As the Deputy said, if substantial repairs or a substantial refurbishment is carried out in a chargeable period, an exemption from the vacant homes tax, VHT, might apply. However, for this exemption to apply, the works must have been carried out without undue delay, must have taken a period of not less than six months and one of the following two conditions must be satisfied: a registered professional must certify that the property could not have been occupied while the works were ongoing as this would have posed an actual risk to the health and safety of any occupant, and the planning permission required must have been obtained prior to the work starting; or the cost of the works exceeds one fifth of the market value of the property before works commenced. We have a definition in place of what constitutes substantial repairs or substantial refurbishment. Anything less than that would mean the property was still subject to the vacant property tax. The duration under which the charge would apply would be for properties that are vacant for less than 30 days in a 12-month period. If a property is vacant for less than that, the tax has to be paid.

Regarding the point Deputy made about the level of the local property tax, LPT, I accept that this matter will be open to debate. The Deputy is making the case that it is not enough and that it could be more. I have made the case back that if a property has a normal local property charge on it of €225, the new charge on top of that would be €675. I would certainly judge that to be a significant increase in the bill somebody will have to pay. If a property is valued at €500,000, the charge under the vacant home tax would be €1,485. We will have to assess over time the operation of the tax to see if it is leading to the behavioural change we want, which is a reduction in the number of homes that are vacant.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I will consider what the Minister said. I welcome the fact he is considering those concerns and has considered them in the drafting of the legislation. Regarding the rate, is it not fairly self-evident that properties are appreciating to a degree that is multiples of what the Minister is talking about? If average property taxes are a few hundred euro and the tax is three times that, say €1,000 or €1,500, based on the appreciation of property prices at the moment, it would still be very profitable for someone to pay that because by the end of the year the property they have been sitting on will be worth 10% more than at the beginning of the year. That might be €30,000, €40,000 of additional value in that property. That €1,000 or €1,500 is nothing compared with the benefit they may perceive to have gained from to sitting on it empty.

Paschal Donohoe (Dublin Central, Fine Gael)
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In theory, what the Deputy is saying is correct. The gain somebody might get from the increased value of the home, from a capital point of view, might be bigger than the vacant property tax they will pay. For a levy or tax like this to be equivalent to the capital gain a property may experience, there would have to be a huge increase in the vacant homes tax rate. The Deputy may indeed want that. We will have to consider this as the tax is implemented. However, there may be less wealthy individuals who have chosen to keep their home vacant for prolonged periods of time for whom these charges are going to be very considerable. If we were to deliver an increase in the scale of the vacant property tax that would need to be equivalent to the gain in capital value of some properties, other taxpayers may argue that the tax they are facing is disproportionate, that it is a significant increase in their tax liability and that they are not in a position to afford it. There is a balance we are trying to get right here. There may be people out there who have modest means, who are on a middle income, and who have a home vacant for a prolonged period of time, whatever their reason may be. They do not qualify for an exemption. I would wish that home had a tenant, a citizen or a family in it but those people may deem they are not going to do that and pay the tax. They could be of modest income and modest means. If we were to design a tax that was equivalent to the capital gain in a property, those people would end up facing a huge increase in their tax liability, which could have equity risks as well. What we are trying to do is pitch the tax at a level that will be a significant increase in the tax liability people face. It is a big increase but I feel it is one that is also fair and justified. As I said to the Deputy from the beginning, this is the kind of issue we have to keep under review to see if it is leading to the behavioural change we want.

Steven Matthews (Wicklow, Green Party)
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Amendment No. 73 is about the retention of records and the fine that would accrue to somebody who failed to comply with the rules on the retention of records with regard to declaring that a house is not vacant because it has been occupied for more than 30 days. I think that is what is set out in the legislation. This amendment is similar in nature to the one that Deputy Boyd Barrett spoke on earlier about the overall rate of the tax. I tabled an amendment which was ruled out of order because it would place a charge on the State. I take the Minister's point that we are introducing a new tax and its objective is to activate vacant properties and bring them into use. He suggested that if the rate were too high, it may have implications for people who cannot afford to pay the tax as well as other implications. We are trying to activate them to move on that house. I often hear the argument that a building is derelict or vacant because the person cannot afford to do something with it. On the other hand, there are often people who have no financial challenges whatsoever, and if they are doing nothing with the building, it is an indication they have too much wealth since they are prepared to let it sit there and rot rather than sell it, refurbish it or move it on.

I was glad to hear the Minister say the property tax will be reviewed. We can look at the rate. The model which was introduced in Vancouver many years ago was quite successful. It brought slightly more than a quarter of the vacant properties in Vancouver back into use, which is what we are trying to do here. That was introduced at a rate of about 1.5%. That is on a sliding scale which increases with time. That is regarded internationally as a successful vacant property tax measure. My suggestion was to pitch this at about ten times the local property tax because it equates to approximately 1%, depending on what band the property falls into. Ten times the local property tax would be approximately 1% of the value of the home. That is where we should have gone. I take the Minister's point that he will review it but I would like it to be higher to stimulate bringing more houses back into use.

Amendment No. 73 provides a fine of €3,000 for non-compliance or non-retention of records. I suggested that we increase the fine to €10,000. It has to be punitive. While I understand the vacant homes tax is set at a level which the Minister thinks is fair when trying to achieve its objective, I think withholding or not supplying correct information to Revenue that is required should incur a higher charge than €3,000.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Deputy Matthews made the bulk of the point. I was curious when he said there might be people on lower or middle incomes who had a vacant property who, for whatever reason, have decided to leave the property vacant. I am struggling to imagine a person on a low to middle income who can afford to leave a property vacant. I just cannot envisage many such cases. I am not saying the odd such case might not exist. One could qualify the tax with some provisions which would state that if there is a good or exceptional reason, it can be appealed if a rationale can be provided, such as a personal or family-related reason. I cannot really think of one. That does not seem a terribly credible argument for not addressing the far big danger that it will continue to be profitable, from a capital gains point of view, for people to sit on empty property. The level of the tax will be a fraction of the capital gains they are likely to achieve based on the recent appreciation in property values.

I have cited one example. I could cite more. It is a significant grievance of people in my area, as it is in many, to see places that could be used sitting empty year after year. Everybody knows the people who are sitting on those properties are wealthy. They are happy to sit on a vacant property because it is a valuable asset which is appreciating in value and nothing is being done about it. The penalty has to be made punitive. There is a much bigger danger if it is ineffective.

The Minister and I may differ on this point. I think the stakes are really high because the housing crisis is so bad. The Minister's caution and statement that we should be careful and review this as we go might be a reasonable position to take if we were not facing the current dire situation. When we are faced with the sort of human misery, suffering, hardship and trauma that so many families and children are now facing, there is no time to work out whether this will work. We have to make sure it works. We have to drive those vacant properties back into use as a matter of urgency. Whatever about debates on whether Housing for All is adequate, I think we all accept that we are a long way from where we need to be. We need to get to where we want to go with regard to addressing this housing crisis as quickly as possible.

I ask the Minister to seriously consider this. Deputy Matthews made the point himself so it is not just the lefties who are saying this.

Steven Matthews (Wicklow, Green Party)
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Sorry, I tuned out for a moment.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Do not worry, Deputy Matthews. I will say no more.

Paschal Donohoe (Dublin Central, Fine Gael)
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I emphasise to the committee that I will keep this under review. I believe this tax will make a difference. Its operation will be continually reviewed by me and the Revenue Commissioners.

Pearse Doherty (Donegal, Sinn Fein)
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I have a number of issues to raise on this group of amendments. Deputy Matthews talked about the rate it applies at. My amendment No. 79 will deal with this issue. The rate is currently 0.3% of the value of the house, which is well below what we see in other vacant property taxes. In the example Deputy Matthews gave, it was 1.5%, which then increases. There is an argument that vacant property taxes should exist to encourage properties to come into available stock and so on and that it is not just about a housing crisis. If we look at the environmental impact of building new homes as opposed to using vacant stock, then the answers are clear. In the mouth of a significant housing crisis, starting at a very low base is seriously questionable. Sinn Féin has argued, and I am sure Deputy Boyd Barrett and People Before Profit have argued, for years with regard to the vacant property tax. It is frustrating it has taken so long to convince the Government of the merits of something and the need to do something. We finally have it. This could have had an impact if the Government had listened a number of years ago and introduced this. It would have been hoped it would have resulted in the behavioural change that vacant property taxes are about.

Such a tax is not about collecting revenue; it is about trying to ensure that vacant properties come back into the housing stock and are either sold on to people who want them as homes or rented out to those who want to rent them for a short or long period.

I have a serious issue with the rate. In some cases, the rate of the vacant property tax will be €270. That will be fine for some people. They will just write the cheque. It is not a deterrent to company or an individual that does not want to bring a property back into use. Admittedly, that is the lowest point but part of the amendments I put forward is there should be a minimum rate. It makes sense for this because the LPT is based on the value of a person's house and so forth, but the vacant property tax is about getting properties back into use. The house is likely to be second-hand and therefore less valuable. It may also be in a particular area, or be smaller. A rate of €270 is far too low. It would be easy for the Minister to bring forward an amendment on Report Stage amendment to the effect that the formula for the LPT is A = B x C, or €500, and a person is liable for whichever sum is the greater. I am just using €500 as an example. We are bringing this in. I hope it will have the desired effect and that it will have a quick effect because that is what we want. However, we must acknowledge that in some places, in some parts and for certain properties, likely older ones, we are talking about a lower value and therefore it might be €90 x 3, giving €270. That is too low. I strongly urge the Minister to look at that.

The second part of our amendment is about what Deputy Boyd Barrett raised, namely, the gains here. Is it just increasing the value of the property? We are seeing that. People are saying they will just write the cheque and as prices go up they will make the cost of the tax back in a couple of years' time. That is also an issue. I hear what the Minister is saying about how if we deal with the gains the rate could be very high and if the Government was doing that it would capture everybody. I do not have that view, but there are other people who need access to finance to do the renovations to bring a property into a rental situation. The way to deal with that is this rate should increase every year. Ultimately, the Government does not want the money here. That is not the purpose. We want the stock to come into use, so if somebody is just cutting a cheque every year then this has failed dramatically. A sign of the failure of this section will be the Revenue benefiting in income terms. We hope that will happen in the first year but, equally, we hope the income decreases after that. The Minister should be increasing this. I am aware it can be reviewed next year and so on and so forth. I have no doubt that, as we have seen with many things, the rate will be increased. It makes sense the rate should increase. It does not need to do so dramatically but it should increase year on year. If somebody is in their third year of leaving one property or half a dozen properties vacant, then in no way should it be the same amount. It should be punitive. The rate should increase by a multiple of what the first year cost each year.

The third part of this is that dereliction, which is the elephant in the room, is excluded. I made the point earlier that Revenue will have some data on uninhabitable premises from administering the household charge and the LPT. The fact that the latter is self-assessed notwithstanding, people have made valid and genuine claims that a house is uninhabitable and it is not just a case of it not having electricity, a kitchen or a toilet. We may have situations where somebody had been paying the LPT for years and then they are struck by a situation where the house burns down or partially does, and becomes an uninhabitable house as a result. That information would be provided. That does not really get to the crux of the issue though, because a property being uninhabitable and a property being derelict are two separate things. The elephant in the room is the 160,000 vacant properties, many of which will probably be outside the scope of this because they will fall into the scenario where they are uninhabitable. and that is a problem. I hear what the Minister is saying. Again, it is late in the day. It is just so frustrating that we must wait another year for the Government to come up with a derelict sites levy. It has never worked. Some 19 local authorities did not collect a red cent through the levy. On average, 32% of the amount is being collected by local authorities. It is not working. As I have said, if this was a normal scenario we could say that is okay or that it might take a bit of time to work through but the Minister's party leader calls this an emergency, and rightly so. However, that means there needs to be an emergency response and this is not that. This section is easy as you go. It is not even going to apply until 1 January 2024, I believe.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is 1 January 2024.

Pearse Doherty (Donegal, Sinn Fein)
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Yes. I am deeply frustrated at the slow pace of that.

There are three things we need to do. The first is that there should be a minimum amount to recognise that in some cases the property's valuation will incur a low local property tax. Three times a low value can result in €270 and over the period between 2024 and 2027 the owner will pay less than €900. Imagine that scenario. It is not good enough. The second aspect is that the tax should be punitive and should increase year on year as somebody takes a conscious decision to leave the property vacant and just write the cheque. The third aspect is that dereliction needs to come into this. Dereliction is a serious issue. The rate is, as I have said, not as high as people suggest. The Minister talked about the definition of substantial refurbishment during the chargeable period. Will he also tell us about the definition of a property "being actively marketed" for sale or rent? What happens to the fellow who goes and puts his property for rent for €3,500 because that is the rent he wants, despite the market rent in the area being a fraction of that? This fellow has the property up on daft.ieand is willing to pay the fees. What is the procedure there? Again, what if a property is ostensibly being marketed for sale but is not really. The owner is refusing offers or the price may be such that it is not going to get significant offers. What are the powers of Revenue in that regard?

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputies for their questions. I am struck by a contradiction I feel is there. On the one hand, both Sinn Féin and People Before Profit are against the local property tax, LPT, because they believe the level of the LPT is unaffordable for many people. Yet, when I bring forward a measure that triples a tax they feel is currently unaffordable, then it is not high enough. If their starting point is that the LPT is already a lot for people to pay and then we multiply the local property tax to make that the additional top charge for a home being vacant, then surely that is a credible change to make. I find it to be a contradiction where, on the one hand, they say the property tax is unaffordable and should be abolished, and then they say a measure that triples the local property tax is too low.

I accept it has taken time for me and my officials to design this tax and to be confident it can be implemented, but I do not want to bring in a tax that would go the way the derelict site levy has gone, with its non-implementation in different parts of our country. I want this to work. I want it to make a difference. I want there to be exemptions in place for vacancy reasons that we judge to be legitimate and acceptable. It did take some time to get that right and to bring this measure forward. We are in the grips of a terrible difficulty that is an emergency for families, for tenants, and for renters in relation to their housing needs. From an overall tax perspective, the measures we are now doing, such as the new zoned land tax combined with the vacant property tax, are really significant efforts by tax policy to play a role in changing the use of lands and homes.

The Deputies raised the issue as to whether this will have an effect. We are fortunate that, in having done the work through data collection and through the last local property tax return, we have some form of benchmark against which we can evaluate the impact of the performance of tax, which we will do. I have little doubt at all that when the tax is due to be paid, there will be some who complain and make the case they have legitimate reasons for the property being vacant, that this is not recognised by the exemptions in place, and that what we are asking them to pay is too much. I know this will be raised as an issue because it frequently is in the context of taxes that relate to property. I do not accept this is a case of business-as-you-go in relation to tax policy and the substantial difficulties we have with housing. Bringing forward this measure in the way we are, I believe it will make a difference. We will continually evaluate its performance to see if change is merited.

On the operation of the measure, it is correct to say that the payment in respect of the approaching chargeable period is 1 January 2024, but the first chargeable period for vacant home tax has already begun. It began on 1 November and will end on 31 October. This tax will be quickly rolled out once the Finance Bill is enacted. I have a different view from the members of the committee regarding the level of the tax. I accept that more work needs to be done on the dereliction aspect. Because local property tax, which is the basis for the introduction of vacant homes tax, is done on the basis of self-assessment, it is difficult to see how dereliction can be handled by anybody but the local authorities. The Minister, Deputy O'Brien, is doing work on this at the moment to understand how we can do more in the conversion of derelict properties into habitable homes.

Deputy Doherty asked what happens if a property is vacant because it is for sale. An exemption from the vacant homes tax will apply if a property is actively marketed for sale in a chargeable period and the following criteria will need to be met: the price for the property does not exceed the market value of the property, and there are no conditions attached to the sale designed to impede or disrupt the agreement of the sale. Those criteria are put in place to try to minimise attempted sale activity being used as a reason for this tax not to be levied to a vacant home.

Pearse Doherty (Donegal, Sinn Fein)
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Will the Minister clarify that he does not believe there needs to be a minimum amount of tax applied to a vacant property, as I put forward? I do not believe the Minister has addressed that issue. Does he believe that the minimum amount, which is €270, is sufficient?

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy clarified in his question, there is a minimum amount. This minimum amount is €270, which is three times €90. I believe this is an effective minimum level for the tax.

Pearse Doherty (Donegal, Sinn Fein)
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Okay. When we are dealing with Estimates we always ask that not just the measures are looked at but also the outcomes of the measures. What measure of success will the Minister use? What proportion of vacant properties does the Minister wish to see reduced in year two year three, and year four to actually measure this is a successful taxation measure?

Paschal Donohoe (Dublin Central, Fine Gael)
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We have not yet set the reduction of vacancy over a multi-year period. The Department and I will turn our minds to this as we evaluate the performance of the tax. I will look at the reduction of vacancy we have seen with the implementation of the vacant property tax in other jurisdictions. I will see what reduction has happened there. We can compare that with the reduction in vacancy I believe the tax will deliver. There is another aspect we can look at. As the Deputy may be aware, there is a measure in place regarding the normal level of vacancy that should operate in a well-functioning and normally functioning housing market. We will look at whether our level of vacancy converges on that equilibrium level of vacancy within a housing market. We have not set those targets and we certainly have not yet set them over a multi-year period.

Pearse Doherty (Donegal, Sinn Fein)
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For a fella who has taken the guts of half a decade to bring forward a tax that will not apply for another year and a bit, the Minister has not even got a sense in his own head of what the objectives of this are with regard to any measurement. The argument was put forward that the Minister has done nothing about this for years - until the last year really - because he wants to get it right and all the rest, but the Minister does not have a measurement for what he actually wants to achieve. This is the problem here. The Minister is introducing a tax that, in my view, is not set at the right levels and does not increase year on year. Therefore, there is no way to measure the Government's success on this. What are the targets?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have just outlined to the Deputy two different methodologies by which it can be measured.

Pearse Doherty (Donegal, Sinn Fein)
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I know the methodologies. Everybody knows that. What are the Minister's targets?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have just outlined what they are and how it can be done. Have we set a target for it yet? No, we have not, but we will be able to do that work shortly after the Finance Bill. We will then review progress on those targets as part of the normal evaluation we do on tax policy.

Pearse Doherty (Donegal, Sinn Fein)
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If the level of vacancy does not decrease by at least 10% two years after the tax is liable, does the Minister think that would mean it is a failure or a success?

Paschal Donohoe (Dublin Central, Fine Gael)
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I would expect and want the level of vacancy to decrease by more than 10%.

Pearse Doherty (Donegal, Sinn Fein)
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If that does not happen, has the scheme failed in its objective?

Paschal Donohoe (Dublin Central, Fine Gael)
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Given that I have just said that I would want the level of vacancy to decrease by more than 10%, if it has not the scheme should be reviewed at that point. Have I set targets for what the reductions should be over a multi-year period? No, not yet.

Pearse Doherty (Donegal, Sinn Fein)
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Will the Minister set targets?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes.

Pearse Doherty (Donegal, Sinn Fein)
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Will he publish the targets?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have some time left to complete the Finance Bill. Given that its implementation will take place across next year, I will do so if I am still the Minister for Finance and if I am not, I hope the next person will.

Pearse Doherty (Donegal, Sinn Fein)
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There is no reason for the Minister not to have done so before. He has been dealing with this matter for years and we have been calling for him to introduce this measure for years. He has introduced a taxation measure and neither he nor his Department has set targets for want they want to achieve with this measure. This is not a tax-raising measure but one that seeks change. What excuse does the Minister have for not deciding on any measure in relation to this for the past five years?

Paschal Donohoe (Dublin Central, Fine Gael)
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Earlier, the Deputy made the point that his amendments are focused on tax. When I bring forward measures in a Finance Bill and the budget, they focus on revenue and how much revenue we expect them to raise. We have brought forward a revenue target for the vacant property tax, albeit one set a low level. Revenue yield is the standard measurement for whether a tax has delivered against a target. It is, therefore, acceptable to say that we have a target for revenue, which we do, and now that we are on the verge of gaining agreement to implement the tax, my Department, in conjunction with the Department of Housing, Local Government and Heritage, will set a target regarding a reduction in vacancy. I think it is perfectly acceptable to make that argument.

Pearse Doherty (Donegal, Sinn Fein)
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I would say it is absolutely not acceptable. In the teeth of a housing crisis that reply just shows that the Minister has got it all wrong. The reference period has already started but before the legislation has passed, the Minister has come up with a figure for how must tax the measure will raise but he has no idea what outcomes he wants, which is why we in Sinn Féin and others on the left have been begging him and the Government to introduce a vacant property tax. If the Minister and the Government had listened to us back in the day and applied such a tax, maybe we would not have as many people experiencing a housing crisis today. Some of the homes that are vacant in this city and elsewhere, including in my home county, would have come back into the housing stock if the tax had been applied at a proper rate.

Paschal Donohoe (Dublin Central, Fine Gael)
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I completely disagree with the Deputy. When bringing forward a tax, the appropriate measure for the early phase of a tax is how much money it will raise and that is contained in the budget day documentation. Shortly after the Finance Bill is implemented, we will be able to work out, with the Department of Housing, Local Government and Heritage, what is the appropriate measure for a reduction in vacancy and we will do that.

Pearse Doherty (Donegal, Sinn Fein)
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It will not be done before the Minister leaves his position, as he told us earlier on, so it will not be done before 17 December.

Paschal Donohoe (Dublin Central, Fine Gael)
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If I have the opportunity to do it, I will certainly do so. The tax only became chargeable from 1 November and only a number of weeks have elapsed since the budget was done. The opportunity is there. We will certainly do it but I imagine it will require some consultation and work with the Minister for Housing, Local Government and Heritage. I and my Department will do that. I reiterate that the appropriate first target for a tax is how much revenue it will yield and that is contained in the budget day documentation. The work on what kind of measurement there should be for a reduction in vacancy will be done.

Pearse Doherty (Donegal, Sinn Fein)
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Let me make this point because I do not think the penny has dropped with the Minister during his period as Minister for Finance. We have been in an emergency for years and, as a result, we expect emergency measures. Today, on 16 November, the Minister has said he will be the Minister for Finance for another month and a day but he might not get around to setting targets or having the consultation he described with his colleagues in the Department of Housing, Local Government and Heritage because there are other pressing things. Housing is the most pressing issue. This issue did not fall from the sky tonight. The Minister has been dealing with it for ages. We submitted freedom of information requests and we have seen, for example, how the Minister and his officials encouraged the change in the language contained in Housing for All, that he sat on the fence and was lukewarm on this issue in the first instance. In my view, the Minister has stalled this measure for very many years, has not listened to the Opposition and now, at a time of almighty crisis, a measure is being introduced that will only kick in, in terms of people cutting cheques, on 1 January 2024. Other than the amount of money he wants to raise, the Minister does not have a target in his head or written down as to what he wants to achieve with this measure in terms of vacancy and tackling the housing crisis. He has told this committee that despite the fact that he will be the Minister for Finance for the next month, he is unlikely to do this work within the next month. That is not acceptable behaviour to me and it is even less acceptable to the victims of the housing crisis that the Minister, his party and his Governments have facilitated and created.

Paschal Donohoe (Dublin Central, Fine Gael)
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For those people who have been affected by the huge difficulties we have with the supply of housing, and with its affordability for the rent that they are paying, I would point to all the other measures in the budget that will make a difference. I would point to the fact that during my time as Minister for Finance, our investment in housing has multiplied and is up to €4 billion for this year. I would point to the fact that we have other significant measures in this Finance Bill and last year's Bill on the use and taxation of land. These are really attempts and efforts to change the taxation regime with regard to the use of property.

I think it is very acceptable to say that we have a revenue target for a tax that we are now implementing. It is equally acceptable to say that we will spend a bit of time developing, with the Department of Housing, Local Government and Heritage, what the targets are in relation to vacancy.

As the Minister for Finance, I am responsible for tax yield. I have been clear from day one what we expect this measure to raise. I do not want a tax that Revenue is implementing and that I am responsible for to encounter the difficulties the derelict site levy has encountered. That is why we have designed this measure carefully and it will work. The Deputy and I have a differing view on the matter. As I said, what we will do in the time ahead, in the teeth of the difficulty that we are in, is review the impact the measure has and if further change is needed, I am sure it will be made.

Pearse Doherty (Donegal, Sinn Fein)
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I do not know how the Minister can say this measure will work because the only measurement he has set is the amount of tax it will bring in. He and his Cabinet colleagues have no measurement or any other way to measure whether it will work or none that he is willing to offer or write down on a piece of paper during his time as Minister for Finance. I understand why that is the case, and it is because the impact will not be at the level we need at this point in time. On the amount of tax this will raise, the Minister has done that piece of work. How much money does he expect to raise from this in 2024? To how many properties does he expect that to relate?

Paschal Donohoe (Dublin Central, Fine Gael)
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We expect that this measure will raise up to €3 million to €4 million in year one. I will get the information during this meeting on how many properties will pay it.

Pearse Doherty (Donegal, Sinn Fein)
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It will raise €3 million to €4 million.

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, up to €3 million to €4 million.

Pearse Doherty (Donegal, Sinn Fein)
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What is the average charge?

Paschal Donohoe (Dublin Central, Fine Gael)
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I ask the Deputy to bear with me. The information is available.

Pearse Doherty (Donegal, Sinn Fein)
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There are 166,000 vacant premises. The Minister estimates that approximately 6,000, if not fewer, will be registered?

Paschal Donohoe (Dublin Central, Fine Gael)
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We estimate that around 15% of the total properties that are vacant will be liable for this tax. We estimate on the basis of the survey that we have done that the total number of vacant properties is 57,000.

Of those properties, we estimate that 15% will be liable to the tax. That is approximately 6,000 to 7,000 properties.

Pearse Doherty (Donegal, Sinn Fein)
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We have different numbers regarding all of this. The Central Statistics Office, CSO, has talked about 166,000 vacant properties as per the preliminary results of its census. The Minister expects to get 6,000 of the 166,000 properties the CSO identified. Is that right?

Paschal Donohoe (Dublin Central, Fine Gael)
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We expect that up to 6,000 or 7,000 will be paying this. As the Deputy knows, there is a difference between census information and information on vacancy from local property tax, LPT, returns. The reason for that is that the CSO used different methodologies and a different definition of vacancy when conducting its census.

Pearse Doherty (Donegal, Sinn Fein)
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Is there any concern that when the Minister for Finance asked people to tell him how many vacant properties they had so that he could charge them tax, they might have under-represented their properties in their self-assessed forms?

Paschal Donohoe (Dublin Central, Fine Gael)
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That is a fair concern but I am confident in the power of the Revenue Commissioners to deal with any hesitancy in declaring whether tax is due on a property.

Pearse Doherty (Donegal, Sinn Fein)
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The Minister is targeting 6,200 properties. Is that what he said? He believes-----

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, 6,200 properties.

Pearse Doherty (Donegal, Sinn Fein)
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That leaves 51,000 properties declared vacant on local property tax returns on which the Minister believes tax will not be paid. Is that correct?

Paschal Donohoe (Dublin Central, Fine Gael)
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If the tax is not paid, it is because of the different criteria we have laid out. We believe there are acceptable and legitimate reasons for a property to lie vacant. The exemptions apply where the owner-occupier of a property has recently died, where the property is actively being marketed for sale or rent, where the occupation or sale of a property is restricted by court order, where the property has undergone structural works, where the property is vacant as a result of the owner's long-term illness and where the property is owned by a North-South implementation body. There are a number of exemptions that will lead to the majority of homes identified in our LPT survey not being liable to this tax. However, we believe those reasons for vacancy are understandable.

Pearse Doherty (Donegal, Sinn Fein)
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Did the local property tax survey or any further survey try to ascertain the reason for vacancy?

Paschal Donohoe (Dublin Central, Fine Gael)
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Yes, it did. We asked in our survey. We should bear in mind that we are talking about a local property tax that already has a very high rate of compliance. There is a 93% compliance rate from a return point of view and a 97% compliance rate in respect of payment. I understand the point the Deputy is making that there could be reasons people might declare their properties not subject to the vacant property tax but, given how successful Revenue has been in making the LPT, which is also based on self-assessment, work, I believe there will be effective compliance with this new tax. We asked why given properties were vacant. The reasons were in line with the criteria I mentioned to the Deputy a moment ago. Some 23% of properties were vacant because they were undergoing refurbishment, 18% because they were up for sale and 20% because they were a holiday home. Legal disputes, probate applications and long-term care formed other reasons for vacancy.

Pearse Doherty (Donegal, Sinn Fein)
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I expect that many of the holiday homes in the State will actually fall under the vacant property tax given the 30-days provision. Does the Minister not agree?

Paschal Donohoe (Dublin Central, Fine Gael)
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If a property is not occupied in the way we suggest, it will fit and the vacant property tax will have to be paid.

Pearse Doherty (Donegal, Sinn Fein)
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Most people with holiday homes may come to it for a week or two weeks in the summer. They might also spend a weekend in it here and there. Even four weeks will not satisfy this provision so such properties will come under this tax.

Paschal Donohoe (Dublin Central, Fine Gael)
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With regard to holiday homes, the vacant homes tax aims to address vacancy by imposing a tax on habitable residential properties that are not in use. For the purposes of the tax, it is irrelevant whether a property is considered to be a holiday home. If a holiday home is in use as a dwelling for a period of 30 days over the course of a year, there will be no liability to the vacant homes tax, VHT. Where a holiday home does not meet this 30-day occupancy threshold, a charge of the tax will arise.

Pearse Doherty (Donegal, Sinn Fein)
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That is my point. I am saying that the tax will arise in respect of a large number of holiday homes because they are not used as frequently as that. Some people are down in their holiday homes every weekend but others will not be used as much.

Paschal Donohoe (Dublin Central, Fine Gael)
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It is certainly possible but we are not designing this tax with a view to holiday homes. We are designing it with regard to a certain level of use. If the level of use is more than 30 days, there will be no liability to the tax in respect of a holiday home. However, as I have said, if it is used for fewer than 30 days, there will be a liability.

Pearse Doherty (Donegal, Sinn Fein)
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I will ask the Minister about some of the detail of the section. Deputy Matthews talked about uninhabitable properties earlier. There are different pieces of legislation regarding the household charge going back to 2011 and the local property tax. However, the definition here is "in use as a dwelling" as opposed to "habitable". The dwelling must be in use for 30 days. I am curious about the language used in this section.

Paschal Donohoe (Dublin Central, Fine Gael)
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The phrase "in use as a dwelling" is not defined in the legislation so I will address its ordinary meaning. It will simply mean that, on a given day, with each day comprising the 24-hour period ending at midnight, a person uses the property as his or her home or main residence. Such use does not need to be on a permanent basis. This would mean that a person attends to matters such as meal preparation, personal hygiene, relaxing and sleeping for the period in this property and not in another property. That is what the phrase "in use as a dwelling" is taken to mean.

Pearse Doherty (Donegal, Sinn Fein)
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I have a couple of other questions. What penalty is applied to people who fail to declare that their property is vacant and therefore do not pay what they are liable to on 1 January 2024? Does that penalty increase each year? If we take somebody whose liability was €500 who did not self-declare in the first year, that person would have an accumulated liability of €1,000 in the second year. What is the penalty if such a person only declares in the second or third year? What additional charge applies?

Paschal Donohoe (Dublin Central, Fine Gael)
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In addition to interest charged at 8% if a chargeable person pays VHT late and a late filing surcharge of either 5% or 10%, depending on how late the filing is, the legislation also provides for the application of penalties for failures to file returns or for filing incorrect returns. A penalty of €3,000 or €5,000 would be levied, depending on the circumstances of the case. Where a relevant person fails to provide the information in the form and manner requested and within the time limit specified by Revenue, a daily penalty of €100 will be applied, subject to a maximum penalty of €3,000.

Pearse Doherty (Donegal, Sinn Fein)
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How will the €100 apply? Will the Minister explain that to me again?

Paschal Donohoe (Dublin Central, Fine Gael)
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If Revenue requests information from a property owner and that property owner does not supply it, a penalty of €100 per day will be levied, up to a maximum of €3,000.

Pearse Doherty (Donegal, Sinn Fein)
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Can the Minister compare the 8% interest charge in respect of somebody who does not declare and pay his or her liability in respect of a vacant house to the non-principal private residence charge, which was on a monthly basis, or the household charge? I think the household charge was set at 8% but I know that when it went over to Revenue it increased.

Paschal Donohoe (Dublin Central, Fine Gael)
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Sorry. Would the Deputy be good enough to repeat his question to me? I got distracted there. Pardon.

Pearse Doherty (Donegal, Sinn Fein)
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How does the late payment fee compare with the household charge? The late payment fee in respect of the household charge is quite significant, given the length of time that people should have paid it. The late payment fee in respect of the non-principal private residence charge was, I think, charged on the basis of a month.

Paschal Donohoe (Dublin Central, Fine Gael)
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We will get an answer to that question for the Deputy. I do not think we have it at the moment.

I have just been asked to clarify an answer I gave the Deputy a moment ago. The €100 I referred to refers to a relevant person, and the definition of a relevant person is set out in the local property tax legislation. I just wanted to make that clear.

As for the Deputy's information on the 8% charge and how it compares with the other taxes, we will get the information on that for him.

Pearse Doherty (Donegal, Sinn Fein)
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I am looking here at what I imagine is inaccurate information, but the late payment fee for the household charge was 1% per month. I presume that that is more punitive than what the Minister proposes here.

Paschal Donohoe (Dublin Central, Fine Gael)
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As I said, we will have to get that information for the Deputy. I cannot answer the question off the top of my head.

Pearse Doherty (Donegal, Sinn Fein)
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Maybe I will phrase my question like this. A number of charges are already applied but these are applied to people who live in their homes. They are actually their homes, as opposed to vacant houses they are just leaving empty. In drafting this legislation, and given the Minister's consideration of this matter and the lengthy time that has passed since he has been thinking about it, did he look at the late payment fees that apply in existing legislation to people who reside in their own homes in respect of the household charge, for example? How did the Minister come up with the 8%?

Paschal Donohoe (Dublin Central, Fine Gael)
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I came up with the 8% on the advice of my officials as to what would be an appropriate interest charge to have for the late filing of a vacant homes tax return.

Pearse Doherty (Donegal, Sinn Fein)
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The point I am trying to get at is that the Minister is targeting 6,000 homes out of 57,000 homes, according to the self-assessed survey the Department did. That is 6,000 homes out of the 160,000 lying vacant, according to the CSO. If there is no punitive penalty for not declaring, that is an issue. There is a question in respect of this legislation: is the 8% an appropriate penalty for not making this declaration?

Paschal Donohoe (Dublin Central, Fine Gael)
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I am happy to come back to the Deputy with a comparison of that charge. I will get that information for him. I go back, however, to the answer I gave a few moments ago. Looking at the total number of homes that were surveyed in the self-assessed vacant property tax project we did, there are many legitimate reasons a home could be vacant, reasons for which I believe it is appropriate not to tax such homes. I laid out what those reasons were in my earlier answer to the Deputy. He will agree that 6,000 homes is an awful lot of homes. If we were successful over time in getting more and more of them available and getting families and renters into them, that would show the value of this tax.

Pearse Doherty (Donegal, Sinn Fein)
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It would be helpful if the Minister could provide us with information on somebody with a household charge of €500 or whatever - it was not €500 but €200 at the time - and the penalties that would apply in such a case, and somebody with a charge of €200 for vacancy and how the penalties will apply there.

May I ask the Minister about the reach in respect of individuals outside of the State? We had a discussion earlier about non-resident landlords, which have over 40,000 properties for rent in the State. It is good they are in the rental market, are active and so on in that there are tenancies there and they are not vacant homes. What is the reach of this measure in respect of people who have vacant properties but who reside outside the State?

Paschal Donohoe (Dublin Central, Fine Gael)
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If they are liable to pay local property tax, they will have to pay the vacant property tax. A homeowner here in Ireland will be liable to this tax.

Pearse Doherty (Donegal, Sinn Fein)
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What is the reach in respect of the Revenue's ability to charge somebody in Spain, France, Boston, Berlin or wherever else?

Paschal Donohoe (Dublin Central, Fine Gael)
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Revenue is able to do that with the application of the local property tax. If any agency is capable of ensuring that somebody living in Boston who is liable to pay this tax does so, it is Revenue. I am absolutely confident in its ability to have the reach needed to collect tax from people who should pay this tax but who might not live in Ireland.

Pearse Doherty (Donegal, Sinn Fein)
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I am coming to an end on this. The Minister will be familiar with the sight, as he walks through the streets of Dublin, of commercial properties with dwellings, or what once were dwellings, above them lying vacant. In some cases they are a scar on the landscape. Some of them are derelict - not painted, windows boarded up, widows smashed and so on. In a scenario in which there is a commercial operation at ground level of such a building and what were residential properties above, and if the residential portion is not ratable by the local authority because it is not being used for business purposes - that is, if by definition it is unratable - will it be deemed a vacant property?

Paschal Donohoe (Dublin Central, Fine Gael)
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I expect that in those circumstances it would not be liable for vacant property tax, VPT because those kinds of properties - in my experience in Dublin Central, for example - tend not to have their own individual entrance or there tends to be difficulties with their compliance with fire safety legislation which mean they are not habitable. That is why the initiative the Minister, Deputy Darragh O'Brien, announced only this morning to make the Croí Cónaithe fund available within some towns and cities could, I think, be very helpful. I heard the Minister refer this morning specifically to spaces above commercial properties that could be converted for residential use. I imagine that that money and that fund would be used to make properties compliant with fire safety legislation or to put in separate entrances residents could use. However, in situations in which spaces such as those to which Deputy Doherty referred do not comply with fire safety legislation or do not have their own entrance, they are not habitable and would not be subject to this tax.

Pearse Doherty (Donegal, Sinn Fein)
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Finally on this, we know that the date of liability is 1 January 2024. When can we expect the first data from the Minister's Department or from Revenue on the number of individuals who have self-assessed for this?

Paschal Donohoe (Dublin Central, Fine Gael)
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I ask the Deputy to bear with me. I am just getting the dates again. Payment in respect of the chargeable period is due on 1 January 2024. The self-assessment return is due on 7 November, but the chargeable period has already begun. The chargeable period, as the Deputy will know, is separate from when the payment is due.

I am sorry; the Deputy asked me a final question on that that I missed.

Pearse Doherty (Donegal, Sinn Fein)
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The payment is due on 1 January. When will we have our first piece of data on the number of people who have registered or declared that they are liable for this tax? When are we likely to see some information in that regard?

Paschal Donohoe (Dublin Central, Fine Gael)
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We will have it by 7 November 2023 at the latest because that is when owners will be required to provide self-assessment to Revenue. Given it is possible some self-assessment is likely to happen and returns may come in October 2023, it may be some time after that before we get the full picture. I imagine the window from November 2023 to early 2024 will be the period in which the full performance of the tax will become clear in terms of registration.

Pearse Doherty (Donegal, Sinn Fein)
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From that point, we can look at reports from Revenue. As for the details that will be made available to the Houses of the Oireachtas, will we get not the just numbers and values on the tax that has been collected, but a geographic breakdown as we have had with other taxes? Will that be by county boundaries, or will it include urban and rural settings, for example, where there is more of an acute issue in terms of housing, such as the Dundalk as opposed to Louth village scenario?

Paschal Donohoe (Dublin Central, Fine Gael)
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Local property tax information is available on a county basis. I will check with my colleagues to see if it is available on a more granular level. I am informed it should be possible, on an anonymised basis, to get the information on a more granular level than just by county. I have little doubt, given international experience indicates this tends to be concentrated in particular cities, Revenue will make every effort to provide that information to the Oireachtas.

Pearse Doherty (Donegal, Sinn Fein)
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Have resources for Revenue increased to deal with this issue or is it using the existing resources it has been allocated?

Paschal Donohoe (Dublin Central, Fine Gael)
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The amount of resources we make available to the Revenue Commissioners increases nearly every year. I am always delighted to provide this increase in resources and to meet as much of Revenues budgetary needs as I can that it asks of the Department of Finance. Revenue will have the resources that are needed to implement this. I do not have a breakdown of the additional resources needed to implement this tax.

Pearse Doherty (Donegal, Sinn Fein)
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That is okay. The practice has been that when the Revenue Commissioners requests additional resources for personnel, it has been granted. Am I being assured that this year's ask was also fulfilled in full?

Paschal Donohoe (Dublin Central, Fine Gael)
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That matter is normally dealt with by the Secretary General of my Department, in dealing with the chairman of the board of the Revenue Commissioners. However, I engage regularly with the chairman and I have little doubt, if he were short of resources to do all this, he would tell me directly. I expect, and am confident, that we have met the resourcing needs for this tax, and any other taxes, we are asking Revenue to collect.