Noel McCarthy (Cork East, Fine Gael)
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6. To ask the Minister for Finance further to Parliamentary Question No. 270 of 18 February 2025, to provide an update on his Department’s consideration of the Funds Sector 2030 report recommendations; and if he will make a statement on the matter. [28158/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank Deputy McCarthy. The parliamentary question he refers to deals with the funds review and recommendations on the taxation of funds and policies. My predecessor, the Minister, Deputy Chambers, published the Funds Sector 2030 review, which was an important and wide-ranging piece of work. The programme for Government committed to progressing and publishing an implementation plan for consideration in budget 2026 because what we now know is that new technologies, the use of phones in particular, is offering retail investors easier access to investments at lower cost.

I have heard the feedback about the need for modernisation of the existing taxation regime, and I acknowledge the complexities in the current regime for an average investor. There is a possibility that, due to the changes happening in technology, younger citizens of our country will find it easier to make investment decisions about their own futures, which will help with their own economic futures. We need to take a step back and assess whether we have the right taxation regime in place and whether the regulatory environment around it and, in particular, the way we implement that regime, are clear enough.

We are going to consider all of this. It is likely that because there are so many recommendations within the Funds Review 30 report that the delivery may have to take place over many different Finance Bills and budgets. I recognise the growing importance of the funds sector as an employer within our economy and I recognise that the products it has available are being considered by more and more citizens. We need to look at how we support that.

Noel McCarthy (Cork East, Fine Gael)
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I thank the Minister for his response. I believe the funds sector review to be an important contribution to the continued success of the asset management and investment fund sector in Ireland. According to the Central Bank, approximately €162 billion was held in deposit at the end of March 2025, earning relatively little for the Irish taxpayer. Recent reports have highlighted that Irish investors are increasingly turning to foreign banks in search of higher returns and more favourable tax treatment. At the same time, there is a wide range of Irish-based funds available, but the current tax regime is reportedly discouraging investment. In this context, I am given to understand there are potential economic implications for the domestic funds sector. Will the Minister provide a clear timeframe for the implementation of the recommendations set out in the Funds Sector 2030 report?

Paschal Donohoe (Dublin Central, Fine Gael)
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My aim is that we will be able to do this over multiple budgets and try to make progress on these matters. As the Deputy stated, this is a part of our economy that is growing. There is a case for it growing faster within the EU overall. The sector raised multiple issues over a few years that we considered in a more careful and systemic way in the Funds Review 2030, which the Deputy just acknowledged. There are 42 recommendations within the review and some of them could be quite costly. Few of them are simple. We need to look at how, over a number of budgets, we can make progress on them.

It is very encouraging to hear Deputies raise the sector today, as it is now employing people in many constituencies across the country. This is a considerable change and one of the reasons I will consider the points raised by the Deputy.

Noel McCarthy (Cork East, Fine Gael)
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I compliment the Minister and his Department on the work they have done so far. I understand it is a complex case and will take multiple budgets to iron out.

Paschal Donohoe (Dublin Central, Fine Gael)
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I do not have too much more to add what the Deputy said. There is a European background to this. There is so much in savings in Ireland and Europe more widely and we need to look at how we can use those savings in a way that helps to invest in our future and fund the big changes we need. The funds sector has a role to play in that. For so long, the way in which many of us saved was to put our money in a bank account or post office account or, as Deputy Gogarty referenced a few moments ago, we used it to buy a home or other property. These were understandable decisions. However, if we compare the way we save and invest to other parts of Europe, we can see that they make investment decisions. They invest in equities, stocks and companies, all of which helps companies to grow and employ more people. That link is something we need to do better on in Ireland and Europe.