Michael McGrath (Cork South Central, Fianna Fail)
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I am pleased to have the opportunity to appear before the committee today to discuss the 2023 Supplementary Estimates. As Minister for Finance, I will be discussing two of the four Votes within the finance group of Votes, namely, Vote 9 - Office of the Revenue Commissioners and Vote 7 - Office of the Minister for Finance. I look forward to a fruitful and positive exchange.

On Vote 9, the Office of the Revenue Commissioners plays a vital role in our economy by collecting taxes and duties due to the State. In 2022, Revenue collected a record €83.1 billion in gross receipts against total administration costs of €491.7 million.

The UK’s departure from the European Union has had a major impact on Irish businesses and has necessitated a shift in trade patterns, supply chains and the system of customs and other controls. The Revenue Commissioners and other State agencies are required by law to comply with customs controls, sanitary and phytosanitary checks and other regulations in respect of goods moving between the United Kingdom and Ireland. The advent of such checks has necessitated investment in our ports. The request for a Supplementary Estimate for the Revenue Commissioners relates specifically to Rosslare Europort and the need to replace temporary facilities with permanent infrastructure. The infrastructure in Rosslare is being developed by the Office of Public Works, OPW, on behalf of Revenue and other Departments and agencies. The permanent infrastructure project consists of the construction of terminal 7, enabling works and a new border control post. The works will consist of various phases of construction that will deliver new and improved facilities, entry and exit access and significant upgrading of the infrastructure in several areas. The total cost for the Rosslare project is €236 million, inclusive of VAT. Costs are being apportioned across the relevant Departments and agencies. The apportionment ratio in respect of the Revenue Commissioners is 34.4%, with Revenue’s total portion over the lifetime of the project expected to cost €81.3 million.

In order to meet these costs, as well as some related expenditures at Dublin and Rosslare ports, a Supplementary Estimate of just under €53 million is required by the Office of the Revenue Commissioners. It is envisaged that much of these costs will be met from the Brexit adjustment reserve. As Deputies will know, the fund was set up in 2021 to help countries, regions and sectors worst affected by the UK’s withdrawal. The Brexit adjustment reserve will work on a retrospective basis with expenditures from 2020 to the end of 2023 included in Ireland’s claim. I am happy to confirm that a significant amount of the infrastructure improvements at Rosslare Europort will qualify for funding under the fund.

Turning to the Department of Finance, Vote 7, the Department requires a technical Supplementary Estimate for 2023 in relation to an overspend of approximately €400,000 in subhead A3, committees and commissions. The excess on the subhead will be funded through savings on subhead A1, administration pay. The overspend is the result of costs linked to an agreement on backdated pay costs with the National Rehabilitation Hospital, NRH. The agreement was made in order to get the Disabled Drivers Medical Board of Appeal up and running again. In February 2023, the NRH withdrew from the hosting arrangement it had provided to the appeals board. The agreement had been in place for the previous 20 years. Under the agreement, the Department of Finance paid the consultant’s salary when the consultant on the board acted as chair. Following the resignation of the board in November 2021, the Department stopped paying the salary of the consultant as no work was being carried out on the board. The NRH argued, however, that there was a 2005 agreement whereby the Department of Health would fund the consultant’s salary once the consultant was no longer required full time on the board of appeal. Consequently, in order to address this issue and to enable continued hosting arrangements for the appeals board within the NRH, the Department of Finance agreed to provide funding for the consultant post in question for the period November 2021 to December 2022, and for 2023.

Accordingly, the Department of Finance transferred just under €517,000 to the Department of Health to cover the consultant post’s costs. This transfer has given rise to the technical Supplementary Estimate now required on the Vote. In summary, my objective in relation to the appeals board has always been for the board to commence hearings as soon as possible. This expenditure will allow that to happen and it is now expected that the appeals board will recommence hearings in the first half of next month, with the first four meetings scheduled for 5, 7, 12 and 14 December.

I thank members for their attention and commend the 2023 Supplementary and technical Supplementary Estimates for the Revenue Commissioners and the Department of Finance to the committee. I look forward to our discussions.