Thursday, 22 September 2022
Ceisteanna Eile - Other Questions
99. To ask the Minister for Finance if he will indicate the relaxed European Union rules that are now available to member states' taxation and public finance ministers in order to assist in confronting the present crisis and if he will indicate the possibilities they open up. [46332/22]
If anyone could be in any doubt about the depth and length of the crisis we are now facing, such doubts were dispelled when war crimes were discovered in areas that President Putin had been forced to abandon. He is now proposing referendums in those occupied territories and is making nuclear threats. In that context, what changes in response are possible in state aid, tax relief, new credit guarantees, new approaches to warehousing bills or taxes under EU rules?
There has not yet been any further change in the budgetary framework that is available to countries. The general escape clause that keeps the EU fiscal rules in place but gives countries more flexibility in their levels of borrowing was activated again for this year and next year. That gives countries the flexibility they need to be able to borrow in response to the very pressing and serious global issues that the Deputy referred to and continue to come to light.
The country-specific recommendation to Ireland under the European semester process was for us to continue to adopt a neutral fiscal stance, which is a way of describing the need for us to help households and businesses but not do things that make the inflationary challenges faced by Ireland deeper and bigger. The Minister, Deputy Michael McGrath, and I aim to get that balance right and we are working to that end. A reviewed state aid framework is in place to allow countries to continue to put measures in place, particularly to support employers.
This has been of assistance to the Department of Enterprise, Trade and Employment in its plans to look at credit and how we could support businesses that are viable but are facing another really serious shock.
I concur entirely with the Deputy that we are seeing such evidence of further crimes against our fellow Europeans. I am sure the UN will have listened carefully to the words of President Zelenskyy and the call for further action that he has made.
I think the Minister. Anyone who listened to me will know I am calling for a national energy resilience campaign. I see potential state-aid obstacles standing in the way of such a scheme. In many businesses there are no supports for solar energy. The SME test which is to try to proof small businesses against some changes is not in place in Ireland. I see the potential for tax relief for retrofitting, for example, as a way of nudging people to do things now. I see smart meters which we have put in at enormous expense constrained by GDPR rules from being used to deliver savings to people. The Minister should look not at the macro but at the micro. Can we make changes that are now permissible which would nudge people to do things in the midst of this crisis? That would be very good in the long run as well as saving money in the short term.
I take the Deputy's point that we need to look at how we can provide guidance - probably stronger than nudging - to help to deepen the resilience he is referring to. The Minister, Deputy Eamon Ryan, is looking at different ways in which this could be done. I know that the challenges we are facing at the moment with the price and availability of energy are very serious. As the Deputy knows, really important changes happened in the years after the last great energy shock of the 1970s which opened up new sources of energy and changed the price of that energy. Likewise, from the Irish point of view, we need to intensify two things that we are doing. First, we need to take the kinds of steps the Deputy mentioned and which the Minister, Deputy Eamon Ryan, is working on to make better use of the energy that is available to us. Second, we need to go all out to make our country an exporter of clean energy to Europe and the world because we have the resources to do that.
I urge that consideration be given to short-period tax concessions with limited life to look at things like downsizing, adaptation of homes and vacancy. These two are structural high use of energy. We are not good at occupying effectively. Short-term tax concessions could help people who want to make changes to make those changes. It makes a lot of sense not only because we face housing difficulties but also because of the energy difficulties at the moment.
Deputy Bruton is a veteran of these kinds of policy debates and is well versed in the Dáil. He will know as well as I do that it is difficult to bring in tax reliefs and concessions that are short term in nature which can be quickly modified. That said, I know the House will be aware of two other ways in which we are trying to do this. I concur entirely with the Deputy that making use of existing buildings that are in place is not only necessary for responding to our housing needs but is also the most energy-efficient thing to do. The changes that the Minister, Deputy, Darragh O'Brien, has now announced on the fund to provide additional grants to taxpayers to make use of buildings that are currently unused and to broaden the application of that show how the Government is trying to respond to the need that the Deputy has identified. My commitment to introduce a vacant property tax to change the incentives regarding unused property is the other way in which we are aiming to do it. I thank the Deputy for raising these serious matters here today.