Wednesday, 10 October 2018
Ceisteanna ó Cheannairí - Leaders' Questions
The national broadband plan, NBP, was announced as far back as 2011 or 2012. Various promises were made before various general elections including 85% coverage, 100% coverage and so on but there has been a complete failure of delivery. Tendering started in 2015 and two bidders subsequently left - SIRO in September 2017 and Eir in January 2018. It must be said that the remaining consortium bears no resemblance to the original bidding consortium led by Enet.
The Minister for Communications, Climate Action and Environment, Deputy Naughten, met the head of the remaining consortium, Mr. David McCourt, in July and discussed the tendering process with him. Relevant officials from the Department handling the bid were not present, which is very significant. An official who deals with climate change was there but no official dealing with the bid was in attendance. The minutes are clear that four issues relating to the bid and consortium were discussed. Decision makers such as the Minister, Deputy Naughten, are properly and normally insulated from lobbying and any attempt to influence them during a tendering process. It is clear that Mr. McCourt was trying to convince the Minister that he had addressed the concerns of departmental officials, that they were sorted and that the consortium was good to go. He was canvassing and lobbying and canvassing disqualifies. It must be remembered that at this stage, a decision still had to be taken by the Minister on whether to accept the remaining bid. The Minister should be completely at arms' length from the tendering process.
I find it extraordinary that I am even in here, asking these questions and putting these points to the Taoiseach. Remember, this is a massive contract which could be worth up to half a billion euro or more of State funds or taxpayers' money. It is quite extraordinary. I put it to the Taoiseach that the Minister should not have met Mr. McCourt. Does the Taoiseach accept that? Has the tendering process been contaminated by the Minister's actions? Outsiders looking in might be forgiven for thinking that the key to getting a lucrative contract in Ireland is face time with the Minister. We have had tribunals about this kind of thing in the past. It is extraordinary that this has occurred. In my view, the Minister has contaminated the process. The Taoiseach and the Government must reflect on that before any further action is taken.
Once approved, it will be one of the biggest investments in rural Ireland that has ever taken place, providing high-speed broadband to over 500,000 homes, farms and businesses across rural Ireland This huge investment in rural Ireland will allow people to access more services online. It will also allow business in rural areas to flourish and to embrace the online and digital economy. Since this Government came to office, the percentage of premises with access to high-speed broadband has increased to over 75%. It was only 52% when we took office, is at 75% now and may reach 80% in the new year. We plan to move on to the NBP after that. This is all part of our vision of investing in rural Ireland and connecting it to modern public services and the modern economy.
In terms of the role of the Minister in the context of the NBP and the procurement process, the Department is responsible for the governance and evaluation of the tender and the Minister has no role in this. The Minister's overall responsibility is to ensure the Government's objectives under the NBP on State-led intervention are met. He is also responsible for timelines associated with the Government's rolling out of high-speed broadband to non-commercial areas as soon as possible and to meet targets set out under Europe's digital agenda. The Department is also required to keep the Minister and Government informed of the progress, timelines and likely cost of the State intervention. The Minister is briefed by departmental officials on progress and any key developments the Department believes may impact on timelines or the cost to the State of the intervention planned.
The lead equity bidder in this consortium is a Granahan McCourt entity and the Department has advised in statements to the media that this has been the case since the procurement process commenced in December 2015.
Regarding the dinner to which Deputy Martin refers, while visiting New York in mid-July to speak at the UN on Ireland's progress towards achieving the UN sustainable development goals, the Irish delegation, including the Minister, Deputy Naughten and his officials, were invited to attend a dinner hosted by the McCourt family. It is worth nothing that Mr. McCourt has been a significant investor in this country for many years, employing hundreds of people. The exchange was of a ten-minute duration, as the minutes show and the Minister did not enter into any detailed discussions on matters with Mr. McCourt. Mr. McCourt has also publicly confirmed this fact-----
-----and the tender was not discussed. The minutes show that no official from the national broadband division was in attendance, which is an important fact and that it was not a meeting arranged to discuss the NBP. The engagement in question took place in a social setting and the engagement on the NBP lasted no more than ten minutes, with Mr. McCourt directing his comments to the officials from the Department. The procurement team has confirmed that in no way whatsoever has the procurement process been compromised by the Minister and his officials meeting Mr. McCourt in New York, as has been alleged by some members of the Opposition. The short discussion was of an administrative nature-----
There is a single bidder so competition is not a factor here. Furthermore, the meeting took place on 16 July, when the evaluation stage had not yet commenced. The evaluation stage commenced on 18 September 2018 when the final tender document was submitted to the Department. The minutes of this meeting have been published.
That is not credible. I asked the Taoiseach if he believes the Minister should have met Mr. McCourt and whether he thinks he was wrong to do so. I ask for a straight answer on that. The minutes are clear that four key items that the Department had raised were discussed. Mr. McCourt underlined his ongoing commitment to the process and addressed the four issues which he understood had previously been raised by the Department for clarification.
The issues raised include the need for a permanent Irish-based leadership position, the need for streamlined decision-making processes within the consortium, the importance of the 15 August 2018 deadline and the need for the necessary financing to be in place. That is not discussion of an administrative nature. The need for any changes in the make-up of the consortium to be avoided or, where such are necessary, kept to a minimum was also raised. The importance of this issue is understood by the consortium. This is the goddamn meat of the bid. This is Mr. McCourt saying he has answered the case.
Does the Taoiseach not find it extraordinary that we are even discussing this? An admission that the Minister and an official were at the lunch but that a Chinese wall was erected such that the Minister heard nothing of the conversation regarding the national broadband plan is not credible. It is beyond question that the bid has been contaminated. The Department should stand back and stop giving us that mumbo jumbo about Chinese walls, discussion of an administrative nature and such nonsense. A Minister should not have met a key bidder in the context of a massive project and a State contract with hundreds of millions of euro at stake. That is a basic point. Ministers and decision makers should be insulated from such lobbying and canvassing.
If the Taoiseach cannot understand that, then we have a problem. The guidelines are very clear. Section 13(9) of the project information memorandum contains a series of paragraphs outlining the prohibition on canvassing. Surely, the Minister was advised by his officials not to meet any bidder. Does the Taoiseach stand over the Minister meeting Mr. McCourt in the context of this tender?
The Deputy has a history in this Dáil of making allegations against Ministers and claiming that things are not credible. He said the same about the Minister for Health, Deputy Harris, and about me in regard to CervicalCheck, yet the Scally report proves that what Deputy Martin believed incredible was credible. He made allegations regarding the former Minister for Justice and Equality, Deputy Fitzgerald and we will see what the findings are in that regard. He has a history of making allegations against Ministers, stating their assertions are not credible, and then refusing to retract his claims when they are disproven by an inquiry. It is an unfortunate pattern of behaviour by the Deputy.
It is acceptable for the Minister, Deputy Naughten, to have met Mr. McCourt-----
-----provided it conferred no advantage on Mr. McCourt. Deputy Naughten is the Minister for Communications, Climate Action and Environment. Are we really saying that over a two or three-year period as Minister, it would not be acceptable for him to meet the CEOs of Eir, SSE Airtricity, SIRO-----
Does the Deputy propose that over a two or three-year period the Minister would not have any engagement with anyone involved in the sector? Perhaps he should not meet the chairman of RTÉ or TG4 when decisions are made about the funding of those bodies. Perhaps he should not meet any CEO in the entire industry.
I wish to note the loss of Ms Emma Mhic Mhathúna, who will be laid to rest today. I am sure all Members send solidarity to her family and to all those caught up in the CervicalCheck debacle.
Yesterday, we were told for the third year on the trot that the budget was a housing budget. It would more properly be described as a budget for landlords. In spite of the scale of the current crisis for renters, with rents going up and up with no end in sight, the Government chose to leave them out in the cold. The budget contains no measures on rent control, tax relief for renters or security of tenure.
In our alternative budget, Sinn Féin proposed that a three-year rent freeze for all existing and new tenancies be introduced with immediate effect and demonstrated how that could be achieved. However, the Government and its partners in Fianna Fáil chose to ignore that proposal. It is probably true that I should not have expected much more from the Government, given its record on housing, but last week Fianna Fáil Members voted in favour of a cross-party motion calling for the introduction of security of tenure and rent certainty. They were happy to vote for the motion but yesterday they lauded the budget and proudly proclaimed that their stamp was on it. I know a week is a long time in politics but an about-turn of that order requires some brass neck and an absolute cheek.
Sinn Féin proposed the introduction of an emergency temporary tax relief, which would give back the equivalent of one month’s rent annually to each renter and put money back into the pockets of hard-pressed renters but the Government and its partner in government, Fianna Fáil, chose not to do that. The budget contains no measures to ensure rent certainty and no tax relief for renters. It contains tax breaks for landlords but not for struggling tenants, which sums up the Government's approach. Renters have again been failed by Fianna Fáil and Fine Gael but landlords get a dig out. The wrong choices and priorities again, while rents go up and up.
On today's “Morning Ireland” radio programme, Deputy Micheál Martin, the leader of Fianna Fáil, told the nation that there is more to come. He stated that the Taoiseach has agreed that the finance Bill will contain more tax relief for landlords. It will have nothing for renters but lots for landlords. I ask the Taoiseach to specify what additional reliefs for landlords he has agreed with Fianna Fáil.
I join in offering condolences to the family and friends of Ms Emma Mhic Mhathúna, particularly her five children Natasha, James, Mario, Oisin and Donnacha who, obviously, are foremost in our minds today. Like all Members, I am filled with sorrow that she has passed on at such a young age. I did not know her but, like many people, feel as though I did. She fought like a lioness to protect and provide for her children. She was witty and had a wonderful way with words. Those words forced us to act. In recent months, she was very understanding of the efforts we were making to put things right. I hope that something good will come of this tragedy. I hope that we can, to the greatest extent possible, eliminate cervical cancer in Ireland by extending the HPV vaccine to boys and improving our screening system while also building a health service which is more open, honest and respectful of patients. That is the type of legacy we should try to achieve in respect of her death. Our condolences go to all of her family.
As always, the budget is about many things, one of which is housing. Overall, it is prudent and responsible and balances the books for the first time in ten years, something Sinn Féin is opposed to doing. The Government has ensured that the budget is Brexit proof and has provided a rainy day fund which Sinn Féin also opposes. It will put money back in the pockets of the entire population through mechanisms such as reductions in tax and USC, increases in welfare, pay and pensions and measures to reduce the cost of living. There was a major increase in investment in health, housing and education, with it being the biggest budget ever for each of those Departments.
In making budget decisions, we decided it appropriate to put money back in everyone’s pocket, which is why we reduced USC and income tax for well over 1 million people. Sinn Féin proposed income tax relief only for those who are renting. I understand why the party wants to do that. People are struggling to pay rent but people are also struggling to pay mortgages or other bills or to put together a deposit to buy a house and the Sinn Féin plan provided nothing for any such people; it only wanted to give income tax relief to renters. The Government decided to do things more broadly and I very much stand over that decision.
The budget provides the biggest provision ever for housing, allocating €2.3 billion, a 26% increase on last year.
It delivers enough money to take 5,000 adults and their children out of homelessness next year.
It provides for the addition of 10,000 houses to the social housing stock. It provides for an affordability scheme comprising 6,000 homes over three years, provided under shared equity. It provides for an expansion of the family hub programme in order that fewer families must spend time in hotels and bed and breakfast accommodation. For renters, it increases resources for the Residential Tenancies Board, RTB, which is important in ensuring that the rent caps are enforced and that rogue landlords, where they exist, are pursued. The tenants' Bill, which of course is not a budgetary measure but is coming, will provide for a rent register providing transparency on rents in order that people will know what other people living the same area as them are paying and can, therefore, ensure they are not overcharged. That is what is in the budget for renters.
It is neither prudent nor responsible to leave people struggling with runaway rents and to simply say to them, "Well, the good news, folks, is that this budget provides extra resources for the RTB." That is not what people need. It is not what people wanted to hear from the Government. There is a legitimate expectation on the part of those in the rental market and those trying to access it that they will have a stable roof over their heads at an affordable rent. We are in a housing emergency. The Taoiseach himself has conceded that point. He has conceded the fact that a huge amount of the new homelessness is coming from the private rented sector. He concedes, surely, that rents are at the highest level ever in the history of the State. On budget day, however, he sat on his hands. That is neither prudent nor responsible; it is negligent. In the selfsame budget the Government allows for mortgage interest relief for landlords. Deputy Micheál Martin, the Taoiseach's partner in government, said this morning on RTÉ radio that there is more to come, that there is another measure favourable to landlords-----
-----because many people are struggling to pay the rent. There are, however, also people struggling to pay the mortgage, struggling to pay for childcare and struggling to raise a deposit to buy a home. Sinn Féin-----
-----was being divisive as always and only wanted to provide relief for renters and did not want to provide relief for people who are paying down mortgages, paying childcare or raising money for a deposit.
I want to raise something important. Sinn Féin likes to talk a lot about housing, but let us look at its record.
-----comprising 400 social homes for people on the housing list in Tallaght, Clondalkin and Lucan and 700 homes for young people who want to buy and who are currently paying more in rent than they would pay on a mortgage. Sinn Féin voted against this. It required Fianna Fáil, Fine Gael and the Labour Party to vote it through.
-----to stop voting down housing for ideological reasons and holding up housing for political reasons. To answer Deputy McDonald's question, there is no agreement on amendments to the finance Bill in respect of that issue.
I wish to begin by expressing my own condolences and those of my party to the family and friends of the late Emma Mhic Mhathúna on this, the day of her funeral.
Yesterday the Minister for Finance and Minister for Public Expenditure and Reform formally advanced the proposed rainy day fund. There are still many unanswered questions about the fund, and not for want of asking. The Government has simply failed to provide the answers. Let us recap. The Government wants to take €1.5 billion from the Ireland Strategic Investment Fund, which is essentially our national reserve fund. It wishes to put this money into a new national reserve fund to be called, as a gesture of prudence, the rainy day fund. Is this not just relabelling? What is wrong, in the Taoiseach's opinion, with the existing strategic fund? What would the difference be between this new rainy day fund and the strategic reserve fund we have? The Government wants to place a further €500 million from tax revenues in this new rainy day fund. Why is the Government really setting this up? Is it to be a new fund to bail out the banks in the case of another banking collapse? What is the fund intended to do? This is a specific question. Is it to be a reserve fund to be deployed if we have another collapse in, say, tax income - for example, if the corporate tax base collapses? If that is its objective, how does this fit in with the fiscal rules, which, as the Taoiseach knows, are procyclical and do not allow for countercyclical funding? I have read with some care the design of the rainy day fund as published, the working paper. Its conclusion is quite simple, that is, that the fiscal rules need to be changed in order to do that much. What is the intention of the fund then? Where will the money be invested? Will it be invested in the same ways as the strategic investment fund? Why can the Government not just leave the €2 billion, if it so wishes, in the strategic investment fund? If not, who will manage it? What is the cost of managing a separate fund? Does the Government intend to invest it overseas or in the domestic economy? This money should be allocated to build affordable housing that could actually generate income back to the State over 20 or 30 years. This would allow us to invest in a great deal of houses. The rainy day is now for so many people seeking affordable housing. The notion that we have money to set aside idly when 10,000 people are homeless is simply bad policy. I ask the Taoiseach to set out in very clear terms straightforward answers to these questions.
Primary legislation is required to establish this rainy fund, and I believe that will be the opportunity for the House to engage in detail on how it will operate. I am not in a position to answer all the questions the Deputy asked today, at least not until such time as-----
-----we have the legislation. Obviously, the legislation will have to be put in place before we put any money into the fund, so the Deputy will have ample opportunity to examine it when we have the primary legislation. The concept, though, I can explain. It is to take €1.5 billion currently in ISIF, use it to establish the rainy day fund and add €500 million to it from tax revenues every year. We are identifying corporate tax revenues, corporate profit tax, in particular as the source of that €500 million. We have a concern that corporate tax revenues are unusually buoyant and may not be there next year or the year after, and we do not want to repeat the mistakes of the past. Ten, 12, or 13 years ago, the country was run on stamp duty and VAT receipts from a booming property sector. When that sector collapsed, there was a massive hole in our budget, as a result of which we had years of austerity. What I want to do is set up the country in order that that never happens again. We will therefore have a rainy day fund-----
-----of €1.5 billion from ISIF, with €500 million added every year from corporate tax revenue. If we run into economic problems, whether as a consequence of Brexit next year, changes to international taxation, trade wars or anything else that could tip our country into a downturn, a recession, I want to have a fund available that we can use to stimulate the economy. I do not agree with the Deputy's interpretation of the fiscal rules-----
-----in this regard, by the way. I want us to break out once and for all of this boom-and-bust cycle that we have in Ireland. What we should be able to do in times when the economy is growing well, tax receipts are buoyant and we have full employment is balance the books and put money aside that we can then use to stimulate the economy if there is another downturn, if there is a slowdown or if we run into problems with Brexit. This is what we are doing.
That is what we could not do ten years ago. As a result of bad economic management and bad planning, we ended up with years of austerity. I want to make sure that in the next downturn, whenever it comes, because it is inevitable, we will not have to cut pay, raise taxes or reduce welfare because we will have a fund we can dip into to use as a stimulus for the economy.
The Taoiseach has admitted it is a con. He will set up a strategic rainy day fund. We already have a strategic reserve fund; the ISIF has €20 billion in it. The Taoiseach has not explained the difference between that and the new fund. This is about taking money from our strategic reserve fund, relabelling it and pretending it is a new fund. He says he will deploy it in case the corporation tax base collapses or some other shock happens. He should ask the experts if he can get over the fiscal rules which, as I have explained, do not allow for countercyclical spending in exactly the way the Taoiseach has explained. They state that "a clear template of how a countercyclical fund [exactly as the Taoiseach has explained] might operate has not emerged". They go onto say that they need to change the rules and "To address this, we propose two relatively modest adjustments to how RDFs are treated by the fiscal rules", which would need an amendment to the Maastricht treaty. Does the Taoiseach propose to embark on a negotiation for a reassessment of the fiscal rules, fundamentally to create a con job whereby the Government will create a new fund when it has €20 billion in directed and undirected funds in the ISIF which it can deploy if it wants to? We urge that the Government deploys at least €5 billion of that fund to address the housing crisis right now.
To answer the Deputy's question, ISIF is different from the rainy day fund. ISIF is tied up in certain types of investments, sometimes land, long-term bonds or businesses. We wanted the rainy day fund to have something more liquid which can be deployed more quickly if we need to do so.
I refer to yesterday's Budget Statement and the absence of a carbon tax. The Minister for Finance stated: "It is my intention to put in place a long-term trajectory for carbon tax increases out to 2030". He went on to say: "The publication of a special report from the UN's IPCC, underscores the need for resolute action [across all areas of public policy] to meet our commitments under the Paris Agreement." Yet in the budget yesterday there was no reference to carbon tax or even a modest increase in carbon tax. The UN panel is clear. A future of mass migration, mass extinction, famine, flood, catastrophic storm and end of life as we know it is staring us in the face and we must act now. We are only 12 years away from a global warming of 1.5° Celsius above pre-industrialised levels. Debra Roberts, a co-chair of the IPCC working group, stated:
It's a line in the sand and what it says to our species is that this is the moment and we must act now ... This is the largest clarion bell from the science community and I hope it mobilises people and dents the mood of complacency.
Christiana Figueres, the former UN climate chief, stated:
There is nothing opaque about this new data. The illustrations of mounting impacts, the fast-approaching and irreversible tipping points are visceral versions of a future that no policy-maker could wish to usher in or be responsible for.
Carbon pollution needs to be reduced by 45% by 2030. The scientific evidence is available. The reality of climate change is here. What is missing is the political will and the courage to act. In yesterday's budget, there was no reference to a carbon tax. Jim Skea, a co-author of the report from the UN panel, stated:
We show it can be done within laws of physics and chemistry. Then the final tick box is political will.
Does the Taoiseach have the political will to introduce carbon taxes? It appears from the budget yesterday he does not. The true cost of carbon, if accounting for warming impact, is likely to be between €150 and €200 per tonne. It is currently taxed at 10% of that. The result is a significant IOU for future generations. What is the Government's response to introducing carbon tax and controlling our emissions? When will the Government bring forward proposals to the House for a climate budget incorporating an effective carbon tax and a programme for critical infrastructure and market system change to avoid going above the 1.5° Celsius target of global warming?
I support carbon taxes as a concept. In fact I support them as more than a concept. I was a member of the Government in 2013 that introduced and legislated for carbon taxes in Ireland, something which, interestingly enough, was opposed by people who are now calling for it. We took a decision as a Government, for a particular reason, not to increase the carbon tax in this budget. It is important to bear in mind what carbon tax means. It means increasing the prices of diesel, petrol, home heating oil, solid fuel such as a bag of coal, electricity and natural gas. What we have seen in particular over the past couple of months is rising energy prices as a result of international factors. The price of a barrel of oil has gone up. As anyone will say, the cost of energy, the cost of filling one's tank with home heating oil and the cost of paying one's electric bill have gone up anyway in the past couple of months. We project it will continue to rise over the next couple of months, even without a carbon tax. I am also conscious that this has been a bad year for farmers and, therefore, a difficult year in rural Ireland, including places such as Clare. I am also conscious that Brexit is coming and that it could have an impact on our haulage industry. Having a carbon tax with carve-outs for agriculture and haulage makes a nonsense of a carbon tax because agriculture and haulage are responsible for so much of the emissions. We decided on this occasion to pursue other green taxes. For example, we have increased VRT on diesel vehicles because we want to discourage people from buying them. A big error was made in green taxation by a previous Government, which thought that encouraging people to buy diesel cars would be good for the environment and for health. It was not. We now know that diesel cars in cities do as much damage to the environment and produce as much CO2 as petrol cars. We know that diesel cars damage people's health because of SOx and NOx emissions. That is what happens when a Government gets green taxes wrong. A previous Government did that. We took a decision to do something to reverse that in this budget by making it more expensive to buy new diesel cars. I have explained the reasons why we did not think it was appropriate on this occasion to increase the carbon tax because the prices of all of those things have already risen dramatically in the past two months and are likely to rise in the next few months even without a carbon tax.
What I wanted to find out from the Taoiseach was what his intention is in the future. The Minister for Finance said it was his intention to put in place a long-term trajectory for carbon tax increases out to 2030. I understand carbon tax is not the answer to global warming but it gives an expression of intent. How are we supposed to reach our commitments under the Paris Agreement if we are not going to take action on carbon emissions? Ireland should be a leader on the issue of climate change; it should not shirk its responsibilities. We are behind in reaching our 2020 targets. I understand substantial fines will be imposed on Ireland if we do not reach our targets. The cost may have to be taken up in a different manner in respect of fines rather than in addressing the issue. The issue revolves around transport, agriculture and home heating. We must bend the curve.
We must try to make the effort. What is the Taoiseach's intention to address this matter in the future?
We would like to agree on an all-party basis, through the Joint Committee on Climate Action, a target price for carbon for 2030 which would probably be €80 per tonne, but I do not want to set it here, and the trajectory by which we will get to that point. I would very much like that to be agreed on an all-party basis. It is not dissimilar to introducing water charges. When people see what this will mean it will require a political consensus to make it happen and a real campaign for the public to understand it. At the moment the carbon tax is €20 per tonne. If we go to €80 per tonne we will bring about very significant and permanent increases in the cost of living for the majority of people. It will be much more expensive to run a car, heat a house and to use electricity. That will have impacts, particularly on older people and on rural communities. It will be much more expensive to run a business. There will be real issues for farmers and for haulage. We have seen in Australia, for example, how governments failed to do what we would like to do because of the politics surrounding it. The best way to make this happen is to agree on an all-party basis that we are going to do this and for every party to sign up to how we phase it in between now and 2030 so that we can stand together in explaining to the public why this is the right thing to do.
InThe Irish Timesyesterday there was a story by Kitty Holland to the effect that the largest direct provision centre in Dublin is to close at the beginning of December because the company that manages it has given notice of its intention to cease that contract. This is the third direct provision centre in Dublin to close this year. A total of 357 people have been staying in this accommodation. These are asylum seekers with families and young children who, in the case in Clondalkin, are in school in the community, in Deputy Curran's constituency. They have all taken great risks to get to safety here in Ireland. Now they are left with no information or idea about their accommodation. This is causing great anxiety to the children and their families and the wider community that these families are part of. Eighty of the people affected in Clondalkin already have refugee status and they will seek rental accommodation in the private sector. Given their limited means, however, they will have very little hope of securing that kind of accommodation over the course of two months.
The way this is being managed is appalling. Surely sensitivity and notice could have been extended to these families. Alternative accommodation could have been made available, or sought, prior to the public announcement of this, and prior to the communication to the families. When was the Department of Justice and Equality informed that the contract was to be discontinued? What plans are in place for the asylum seekers and their children, particularly those children in schools in the community? According to the report, the Department of Justice and Equality will meet the management of the centre this week. Why has it taken so long to meet the management and can the Taoiseach confirm that alternative accommodation will be put in place?
I thank the Deputy for raising this important issue, which is an ongoing one. The State offers accommodation to those who present in Ireland applying for international protection as asylum seekers. One of the centres in the State, the Clondalkin Towers Hotel, wrote recently to the Reception and Integration Agency, RIA, an agency of the Department of Justice and Equality, advising it that it would not seek to renew the contract in Clondalkin Towers. The contract is due to expire on 3 December. Senior management in the RIA engaged with the contractors on Tuesday, 9 October, yesterday, to discuss the matter. The welfare of residents will be kept at the centre of its approach. In the coming days the agency will be in touch with each of the residents to bring them up to speed with developments and to advise them of the next steps. It would not be appropriate to speculate on the outcome of those discussions at this stage.
In the wider scheme, the Department has placed an advertisement in the national media seeking additional accommodation fully compliant with the recommendations of the McMahon report to meet current and future demand. Separate to this is an open competitive process to establish a framework of accommodation centres from which it can draw down accommodation as and when needed over the coming years. The agency has contracted over 5,900 beds with an occupancy rate of 90%. This includes some 600 people in accommodation who have been granted permission to remain in Ireland and are, therefore, technically ineligible for accommodation in these centres but are still accommodated understanding the difficulty in finding accommodation at present. Some have received a decision while others received decisions several months, and indeed a couple of years, ago.
The Taoiseach said the hotel recently advised the Department but that the Department met it only yesterday. In the meantime the residents and their families are in limbo regarding their future in two months' time, 3 December. They need certainty. They have already made a difficult journey on a difficult path and now find their future here is in somebody else's hands and they have no information.
I accept the Taoiseach's commitment that the Department and the RIA will interact with the residents this week but given that this is the third centre to close in Dublin this year, is the Department aware of any further centres that will close over the coming months? What lessons were learnt from the previous two that obviously have not been put into action here, given that these families and their children are being left in abeyance without any idea of where they will be living when Christmas comes?
I do not have answers to all those questions but the Minister of State at the Department of Justice and Equality, Deputy Stanton, is here and I imagine he will be able to provide more detailed answers later.
Every effort is being made to ensure that accommodation is secured for the people affected. I do not think anybody would like to see so many people losing their accommodation so close to Christmas. Through the RIA we are working to find solutions, whether an extension of the existing contract or alternative accommodation for the people living there.
On behalf of my Independent colleagues and myself, I extend our deepest condolences to the family of Emma Mhic Mhathúna and salute her great courage and dignity.
Yesterday's budget was, I think, the 12th delivered by Fine Gael and Fianna Fáil, going back to 2009, and the third of this de facto coalition. One of the constant themes of all those and of the earlier budgets was the widespread use of total Government revenue forgone under the joint policy of tax expenditures, as for example the extra tax relief given yesterday for the Government's landlord friends. The 2014 Department of Finance report defines tax expenditures as "reducing tax obligations with respect to a benchmark tax rather than by direct expenditure" and "provisions that reduce or postpone revenue for a comparatively narrow population of taxpayers relative to the tax base", and such expenditures include exemptions, allowances, credits, deferral rules, etc.
These expenditures are very significant, as outlined in briefing paper 13 of 2018 by our excellent Parliamentary Budget Office, PBO. Even excluding benchmark taxes, income taxes, the PBO estimates a basic tax expenditure cost at over €5 billion in 2016, rising from €4.7 billion in 2014. These estimates are based only on 2016 data and data for some of the largest tax expenditures up to 2016 are still not available. In 2016, tax expenditures even on available figures comprised nearly 11% of total tax revenue or 9% of total voted expenditure.
Just before I left my office to come to the Dáil, I heard that the 2017 report was finally published but why is it not produced as part of the budget book? Many of us looked for it yesterday in the expenditures report but it was not there. What is the cost of the 2017 tax expenditure and the projected costs for 2018 and 2019?
Unlike 14 other EU states, there is no legislative requirement here for regular parliamentary debates and scrutiny of tax expenditures. There is also the added difficulty that we get the figures for the Revenue Commissioners and the Department of Finance and the Department's reports, which I have studied closely and which are very incomplete even going back to 2014.
The scale of these expenditures is indeed vast. For example, the research and development tax credit cost €670 million in 2016; capital acquisitions tax, CAT, agricultural relief cost €141 million in 2017; film relief cost €87.6 million in 2015; a range of reliefs supporting business cost nearly €560 million in 2015 and share-based remuneration relief cost €74 million in 2016. I think that is in today's report. Many of these expenditures have never been reviewed or assessed and the majority of taxpayers, our people, are still paying out for several pre-crash tax relief and avoidance schemes. The PBO rightly asserts that tax expenditures "represent a departure from the equity principle of taxation" giving rise to rent-seeking behaviour by favoured taxpayers.
The PBO also comments on the "fiscal illusory effect" of tax expenditures when they are perceived as a tax cut when they are actually spending increases. Will the Taoiseach accept the key recommendations of our PBO for systematic ex antereviews of all tax expenditures, a definitive list of all Irish benchmark relief measures and all tax expenditures, enhanced costing methods and much improved access, availability and transparency of data on these expenditures? Will he legislate, perhaps in the Finance Bill, to place this responsibility with the PBO and with the Committee on Budgetary Oversight, chaired by his colleague, Deputy Colm Brophy?
The Deputy is a little fuzzy in his recollection in talking about this being the twelfth budget. It is the third of this Government involving Fine Gael and Independents under the confidence and supply agreement. The previous five budgets before those were introduced by Fine Gael and Labour. The Deputy was in that coalition briefly but I am not sure if he ever managed to vote for a budget. I certainly do not think that he ever will.
I am sure he will spend many years in this House but he will never have to vote for a budget. For the people who like that sort of politics, that is the sort of politics that they like.
Tax expenditures are there for a reason. Sometimes they are a good idea and sometimes they are a bad idea and they have to be regularly reviewed. They have to be justifiable. One of the most expensive tax expenditures we have is mortgage interest relief. We allow people to offset some of their income tax against the cost of their mortgage. That was introduced to promote home ownership and to help people pay their mortgages. Hundreds of thousands of people around the country have benefitted from that over the years. Not taxing child benefit is also a tax expenditure. We took a decision as a Government that we would not tax child benefit as income and that was designed to help parents out with the cost of looking after their children.
If a carer or a nurse is hired to look after an elderly relative in one's home, that can, again, be offset against income tax. That is also a tax expenditure. We have some for business as well. The employment and investment incentive, EII, scheme, which replaced the business expansion scheme, BES, is designed to encourage people to invest in business and, thus, create jobs. There is one for film as well which has been hugely successful in bringing films to Ireland and creating jobs all over the country. There is also one for workers' expenses. If a person working in a particular job needs certain uniforms and equipment, he or she can offset that cost against income tax. There used to be one for trade union subscriptions. I imagine the Deputy would like to bring that back. Some people want to bring one in for rent again. The research and development tax relief is intended to produce research and development. There is also a very expensive relief where we do not require people to pay capital gains tax if they sell their family home. That recognises that the family home is something very particular in Ireland. If a family home is sold, there is no capital gains tax on that; it is not treated as an investment property. When tax expenditures are spoken of, they need to be talked about in the round and it must be understood they are all there for a reason. It must, of course, be a good reason and they must be regularly reviewed and amended.
Returning to the Taoiseach's earlier remarks, I hope, and it is still my ambition, to be a Member of a left-led Irish Government. I will take whatever decisions have to be taken then. I believe that will happen. I am fully aware of the socio-economic reasons for many tax expenditures. The issues I am raising relate to definitions, costings, transparency, above all, and systematic evaluation, including sunset clauses. I refer to yesterday's presentation. We did not get it in the budget book. That is unacceptable and the Taoiseach will agree with that. We have got to have the full picture and the full statistics for our constituents.
The EU Commission, a few years ago, examined tax expenditures throughout the Union and stated they amount to a non-negligible share of GDP in almost every EU member state. It ranged from small percentages of GDP such as 1% or 2% in France and Germany, to between 9% and 11% in Ireland, Italy and the UK. We seem to be one of the highest outliers. Does the Taoiseach or his Government ever intend to have a target cap on expenditures and, if so, within what range? The Taoiseach did not answer me in respect of the figures for 2017 because he does not know them. Nobody in this House knows them because the costings have not been done. Can we set up a system of accountability and perhaps insert it in the finance Bill? The Committee on Budgetary Oversight and the PBO have been among the great successes of this Dáil in respect of ex ante evaluation and working closely with all the agencies.
I do not have any plans to legislate on this but I imagine that the Department of Finance is able to provide that information to the Deputy by means of a parliamentary question. I assume the Department of Finance has-----
That can be done in respect of sunset clauses. When we reduced VAT for the tourism and hospitality sector, we indicated that it would only last for three years, although that was not written into the law. When there is a sunset clause, however, we always come under pressure to extend it anyway. I am not sure how effective they are. I would not have a sunset clause when it comes to exempting child benefit from income tax or exempting the sale of a family home from capital gains tax.