Pauline O'Reilly (Green Party)
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I remind Senators that this item of business must conclude at 3.45 p.m., if not previously concluded. Before we commence, I also remind the House that a Senator may speak only once on Report Stage, except for the proposer of a recommendation who may reply to the discussion on the recommendation. On Report Stage, each recommendation must be seconded.

Alice-Mary Higgins (Independent)
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I move recommendation No. 1:

In page 66, between lines 8 and 9, to insert the following: “Report on wealth tax

25. The Minister shall, within six months of the passing of this Act, lay before both Houses of the Oireachtas a report on the potential revenue raised from, and distributional impact of, a wealth tax of 1 per cent on all households with assets of over 15 million euro.”

Marie Sherlock (Labour)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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I was not able to engage in the full Committee Stage debate, but this is one recommendation upon which I had a good exchange with the Minister. In light of that, I will not reiterate all of the arguments made previously. The concern I have is that we continue to look away from what is very much a pooling of wealth towards the top end of society. We know that Ireland has one of the highest levels of income inequality but also that when it comes to wealth inequality, the bottom 10% of the population has €600 or less in wealth. They have far less than one month's rent as a cushion. We also know that lone-parent families are the most likely to have no wealth or safety net, while there are others who have much higher amounts. In fact, those in the top 10% have wealth and assets of about €770,000.

There would have been an argument for setting the bar at €1 million but with this recommendation I am reaching for the very top level. Ireland has a very large number of multimillionaires and billionaires and anybody who is in that position can contribute more to society. That is why I have set the bar extraordinarily high. We should be teasing out this issue and looking at lower levels, however. Given the economic pressures being experienced at the moment, we should consider a specific wealth tax that is separate from property tax, capital gains tax and the other measures that we have in respect of inheritance. I appreciate that those are forms of wealth tax but we are looking at a situation whereby some people have very large amounts of wealth and are in a position to contribute more to society. This is the kind of time when they could be very reasonably asked to do so, especially as the wealth gap has grown during the Covid-19 period. Most small businesses and families really suffered during the pandemic whereas a lot of the very wealthy became even wealthier during that period.

I ask the Minister to consider looking at the potential revenue and distributional impact of a wealth tax on households with assets over €15 million. Having information on the potential revenue to be raised and the distributional impact would really allow us to assess the potential value of such a tax. I certainly believe we should make sure to gather that information. The measures of wealth that we have from the Central Statistics Office, CSO, and others capture a very broad spectrum but do not capture these pockets of super-wealth or the contribution they could be making.

Paul Gavan (Sinn Fein)
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I support this recommendation. The Minister will be aware that Sinn Féin has been on record as supporting a wealth tax for many years. We know that we will face particular challenges in the years ahead and it would be really helpful for all of us to understand the potential of a wealth tax. The report provided for in this recommendation is simply about having a look at that potential and it would be extremely sensible for the Government to do just that. I can understand an ideological objection to a wealth tax, and no doubt there will be one on behalf of Fine Gael, but what I cannot understand is a refusal to investigate what the value of such a tax might be.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Senators for raising this issue through recommendation No. 1. I am not in a position to accept the recommendation because there are many other ways in which the potential for a wealth tax to raise additional revenue for the State can be evaluated over the course of the year. I do not believe it is appropriate, in the context of a Finance Bill, to incorporate a commitment to prepare a report because a Finance Bill is all about how we bring stability and certainty to the tax code in the time ahead. Indicating within legislation that gives effect to a budget that we are considering further changes or looking to obtain information in respect of a potential change is not appropriate. There are better ways in which that can be signalled rather than through legislative change and a commitment to a report in the Finance Bill.

My objection to the principle of a wealth tax is practical more than ideological. I do not believe a wealth tax as proposed here would have the effect that the Senators are contending because we have many other wealth taxes within our economy that provide alternative and effective ways of generating tax from transactions that are associated with the holding of wealth and the different manifestations of wealth within our economy. Indeed, some of these have already been touched on by Senator Higgins in her contribution, whether that be capital gains tax, local property tax or the new taxes the Government is committed to introducing in the time ahead such as a zoned land tax or the measure the Government committed to today regarding a tax that would gain for the State a share of the higher value of a piece of land where the value is conferred on it by rezoning that land. We have many other ways in which we tax wealth within our economy and society and they are effective. In some cases, they are set at a level that is very high relative to other economies that we would compare ourselves against. For example, the level of capital gains tax within our economy is 33%. That is a high level of tax on the gains that can be made in relation to particular transactions.

We have many other effective, tried and tested ways to tax wealth within our economy. I contend that they are a more effective way of taxing those who have a high level of wealth within our economy, as opposed to the measure that is being suggested here this afternoon. In addition to all of this, we have an income tax structure that is exceptionally progressive. The more income a person has, the more tax he or she pays. We already have many different and effective ways in which wealth is taxed and that is why I believe that there is no need for another new tax on wealth beyond those the Government has already committed to introducing.

I have the same objection to all of the other recommendations that we will consider this afternoon. I know there are better ways in which information can be ascertained or a debate can be had on important policy matters apart from a report on foot of the Finance Bill.

Alice-Mary Higgins (Independent)
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On the Minister's general point, he will be aware that we are not in a position to suggest concrete amendments to the Finance Bill because of the potential cost to the State. Therefore, when we make these recommendations, in many ways we are seeking to influence next year's budget. The budgetary process in Ireland tends to focus on the reveal of budget day and the pressures in advance but very strong ideas could be offered, not just from the Opposition benches but from across the House, in terms of areas that merit examination and scrutiny and areas which could be improved. The Minister should view the recommendations made by this House and the amendments proposed in the Lower House as an opportunity to inform and shape the budgetary process, to gather information with a focus not only on changes that might be made during the year but also on problems that might be identified, in order to ensure that the budget next year is responsive and properly informed. These are very constructive proposals and they should be taken as such. This is an important opportunity for those who cannot amend to offer input to this process which is so important, especially as budgets nowadays do not simply have a book-balancing function but also have a number of other obligations they seek to meet, including functions in respect of public duty, equality and human rights, equality budgeting and carbon budgeting, to which I will refer again later.

In terms of the wealth tax, the Minister has spoken about taxes that are already effective.This could be another tax that would be also effective. It would target a very specific and very small cohort that has very substantial wealth.

Regarding the progressivity of our income tax system, the Minister will be aware that in past years I have put forward proposals for a higher level tax. There is a situation where those who are on €60,000 or €50,000 and those on €250,000 or €300,000 are paying the same rate. It is reasonable to have a higher level of income tax at that level, especially when, for example, the cap on bankers' earnings is being removed so they can potentially move beyond €500,000. It is very reasonable that we follow through on the progressivity and look at the prospect of those with the very highest incomes contributing more. That can be done through income tax but another way that it can be picked up is through something like this wealth tax. That is why I am proposing these measures. I am concerned. Ireland is an outlier. For all the progressivity of our tax system, we are moving towards very high wages at that top level while at the bottom level there is stagnation and a pooling of incomes.

Alice-Mary Higgins (Independent)
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I move recommendation No. 2:

In page 66, between lines 8 and 9, to insert the following: “Report on private pension tax reliefs

25.The Minister shall, within six months of the passing of this Act, lay before both Houses of the Oireachtas a report on private pension tax relief, specifically in relation to gender impacts.”.

Paul Gavan (Sinn Fein)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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We have had a lengthy discussion in respect of pension policy and private pension tax relief and whether it is an efficient use of the State's resources. It costs €2.9 billion a year when a universal pension would cost €3 billion. We had that discussion. While I may not agree with him, the Minister responded on a lot of the other aspects of the private pension tax relief. However, the crucial part remains unaddressed, which is an analysis of the gender impacts. Such research as we have shows that 70% of the benefits went to the top cohort, to higher earners who are predominantly men.

When we look at pension policy in the round, one of the acknowledged challenges faced across Europe and in Ireland is the gender pension gap. It is much wider than the gender wage gap. The gender pension gap is substantial. Surely anything we are doing on pension policy should have addressing the gender pension gap and improving it, rather than widening it, as a priority. It would be very timely and appropriate for us to have a specific gender analysis in respect of the private pension tax relief system. I would suggest then using a comparator to see the impact of that in terms of gender and the other potential ways we might spend our Exchequer's moneys, either through revisions of the private pension tax relief scheme, by focusing more on things like auto-enrolment, which also needs to be gender-proofed and has not been, or through our social protection system and things like the universal pension. There are many ways for us to use our money effectively for the presumed social goal, which is to have as much of the population as possible living with financial independence and security into later life and to narrow that gap, which is historic. We must bear in mind that on this particular issue, we are talking about a historic injustice to women and their pensions in this State, lingering with the effects of the marriage bar and systemic inequality over many years. The gender pension gap is a practical priority and I would say it is a principled priority. Can we analyse our private pension tax relief and try to see what it is doing in that regard and how it could be improved? We know it is mainly going to men.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Senator for raising a number of important matters. In our last debate on this general issue, I covered some of the broader matters she has raised so I am going to confine my comments to the very important points she made regarding gender equality with regard to private pension tax relief and access to pensions.

I acknowledge that there are very specific gender-related issues around pensions that cover a wide range of very important matters. These include access to a State pension and the size of private pension savings and retirement income. That is why many of the recent reports that have focused on pension policy have also considered those issues from the perspective of gender. I will give two examples. The first is the interdepartmental pensions reform and taxation group, which was tasked with a number of actions relating to pensions. This included simplifying and harmonising the supplementary pension landscape and an assessment of the cost of State support for pension savings. This report was published in November 2020 and considered the issue of gender. Indeed, it touched on a number of the issues raised by the Senator. The report noted that the key driver of pension coverage and adequacy for women relates to, among other factors, labour market issues. The combination of reduced working hours and breaks in employment due to caring duties has significant implications for the duration of the working life of women and therefore their lifetime earnings. This in turn limits the capacity to maximise the size of the final pension fund for women who contribute to a supplementary pension. The second example is the report of the Commission on Pensions. While the policy issues covered in that report are a matter for the Minister for Social Protection, I note that the report of the commission set out gender and equality considerations very clearly in its recommendations.

I assure Senator Higgins that the issues she is referring to cut to the very heart of the adequacy of pension provision within our economy and our society. I assure her that the issues she has discussed will continue to be considered carefully by the Departments of Finance and Social Protection and I have no doubt that they will be the subject of further action in the future. I do not want to go through the rationale I offered earlier about reports, just as I am sure the Senator does not want to go through the rationale of why she can only table a recommendation, but from a process point of view it is the same reason I cannot accept a report. However, I assure her that the policy issues she raised this afternoon will be central to the work of the Government in the time ahead.

Alice-Mary Higgins (Independent)
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This matter will be discussed further. It will need more examination. With regard to the two reports the Minister mentioned, one of my concerns about the Commission on Pensions, which, sadly, undermined the effectiveness of the proposals, is that its remit explicitly excluded examining the private pension tax relief. That was particularly unfortunate because one of the tasks of the Commission on Pensions was modelling how to pay for things. Some of its decisions include recommendations that I personally believe are very problematic and will have huge gender implications. For example, it suggested moving to a 40-year contributory requirement versus the expected 30 or 20 years. That was recommended almost solely on the basis of affordability and the cost, yet €2.9 billion of public expenditure on pension policy was not on the table to be discussed as to how that might be changed or shifted. That was not subject to that scrutiny. It was a kind of isolated discussion about half of pension policy, with decisions that have potential rights implications made on the basis of cost, while a huge area of Exchequer expenditure was not on the table and not discussed. That is my concern about that.

On the other issues and the knock-on effects, we have income inequality and a gender pay gap and of course that contributes to the gender pension gap. The question for us as a State is not what unfortunate things happen to be there but how to legislate, first to improve the working world, wage equality and those issues, and then when we are spending vast amounts of money, how to target it most effectively.As well as looking at the drivers relating to the fact that more women are on lower incomes and more men are on higher incomes, we also need to ask if we need a tax relief - that €2.9 billion is public money that everyone contributes to - that is mainly targeted at higher earners. That question stands regardless of what other important work we might need to do. Of the drivers of the inequality, the question is how we ameliorate and respond to it.

There is much work still to be done in this area. I thank the Minister. He indicated that he is interested in engaging in that work. We have that obligation in terms of equality budgeting. I hope this is an area, perhaps in the context of next year's Bill, that we will look at in more detail because policies such as this are the tests of equality budgeting.

Pauline O'Reilly (Green Party)
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Recommendations Nos. 3 and 4 are related and may be discussed together by agreement. Is that agreed? Agreed.

Alice-Mary Higgins (Independent)
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I move recommendation No. 3:

In page 103, between lines 30 and 31, to insert the following: "Report on Deferred Tax Assets

44.The Minister shall, within six months of the passing of this Act, lay before both Houses of the Oireachtas a report on the potential for restricting banks from utilising the deferred tax assets scheme.".

Paul Gavan (Sinn Fein)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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This is an issue I have raised in the past. I am merely raising it again. It is the issue of deferred tax assets.

The Minister will be aware that Irish banks, for example, in 2017, one of the years for which I have figures, shaved €400 million from their tax bills by offsetting their losses from the financial crisis period against taxable profits. The shocking aspect of this is that these losses can be carried forward indefinitely in order to shield banks' current profits from tax. Effectively, we are looking at lengthy periods in which banks, which have been very profitable at certain points during those periods, are still not paying tax.

I made suggestions on this matter in the past. I was not specific in that regard, but there are a number of ways in which it could be addressed. There was a proposal in the past to the effect that only 50% of the profits that are made would be capable of being written off against past losses. There is also the idea of a time constriction. The Minister could cap this in terms of time, as in there is a certain period during which one can continue to offset one's profits against one's past losses. I am specifically looking at banking because there is a particular context in terms of banking in light of the significant public contribution made in that area. There is also the potential of capping it in terms of the percentage of profits that this scheme would apply to. These are two practical ways to proceed. The Minister could exempt banks entirely from the scheme or he could curtail or cap it in terms of time or percentage. I am wondering what is being looked at in this regard.

On recommendation No. 4, if you have a bank which says that it has moved on from the crisis, that it is ready to start paying its bankers over €500,000 and that it no longer wants to apply the restriction in terms of pay, this is a signal that said bank is ready to start paying tax again. If banks are willing to be moving to pay more than €500,000 senior staff, that bank cannot be also saying that it is still suffering terrible losses and that it continues to struggle because of the losses it had a decade ago. It is reasonable that any bank which chooses to no longer apply the restriction and the pay cap should no longer be able to avail of the deferred tax assets scheme and should be able, since it can pay these large salaries, to pay its contribution to the State in terms of taxation.

Paul Gavan (Sinn Fein)
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Well said.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank Senator Higgins for the different issues that she has raised. It is important to know the banks we are referring to and the role that they play within our economy. I am as conscious as everybody else in this House of the cost and the considerable harm that was done to our economy and our country some years ago as a result of the behaviour of our banks. However, we need those same banks to provide new lending and investment to Irish small and medium-sized enterprises. This will allow the latter to employ people and to contribute to growth within our economy that will, in turn, pay the taxes that we need for our public services. At a time when we are so aware of the need to build more homes, in addition to the vital role that the State has to play in funding the delivery of those homes, we also need a banking system that is capable of providing new lending and investing in companies that are capable of building homes.

The reason I am against the proposal for the report proposed by Senator Higgins is that what she suggesting that we tax our banks separately and in a different way from how we tax other firms within the economy. These banks employ 20,000 people and hold more than €220 billion in deposits, much of which is deposits from Irish people.

Where I differ from the Senator is that while I am conscious of the considerable harm that the collapse of the banking sector did to our economy 15 years ago, the harm that is still there and the impact it had on people's lives, what kind of signal would it send out if we said that three banks that are registered in Ireland, that have nearly all of their employment located in Ireland, that most of the deposits in which are being managed on behalf of Irish households and businesses, and on which we are nearly entirely reliant for the lending that we will need to build more homes through our private sector, will be taxed differently from any other employer or business? I certainly believe that is not a signal we should send out.

I am also confident that were we to send out such a signal, it would materially affect the value of the State shareholding in AIB and Permanent TSB. That, in turn, would cost us. At a time when I want Irish banks to be stronger - we have already seen the consequences of what happens if banks become weaker in our economy and decide to close branches and even to leave - I believe that kind of weakening of the value of the remaining banks that we have would be injurious to their value, to their ability to grow in the future, and even to their ability to employ and invest in the future.

On the point relating to the change in bank pay that the Government accepted two weeks ago, I make the case again to the Seanad regarding where we stand at present. Let us say you have somebody who is superb at cybersecurity or excellent at meeting the regulatory requirements that the Central Bank places on a bank. Such individuals can earn salaries that are way in excess of the salaries that anybody in this House earns. Those salary levels are determined by the market. They are not determined by the regulator. They are certainly not determined by the Government.

We have many large employers within our economy, including many large international banks and financial service providers that are not subject to that pay policy.If somebody has a particular skill and can do an important role within a bank, would that person not want that bank, which, by and large, holds Irish deposits and is a very big employer within our economy, to be able to offer terms comparable with those offered by the vast majority of banks that are in our economy that are not subjected to a pay cap and which employ far fewer people? Bearing in mind that even if the Senator agrees with my general point, which she probably will not, I have only made that change for a bank in which the State no longer has a single share. The question then becomes whether we believe it is appropriate that the Government sets salaries in a bank in which we no longer have a single share and from which we have regained €2 billion more than we had to invest in it at the time of the global financial crisis. I believe we should not do so. While that was a difficult decision and I appreciate the sensitivity and debate around it, I still believe it was the right one to make.

Alice-Mary Higgins (Independent)
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I do not accept that only those who are paid more than €500,000 can, for example, complete regulatory compliance. If that is the case, we have a much larger problem.

Paschal Donohoe (Dublin Central, Fine Gael)
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I did not say that.

Alice-Mary Higgins (Independent)
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The example given was about wanting to ensure regulatory compliance and so forth. It is good the Minister has clarified that is not the case. There are people who are able to fulfil these functions. The competitive market that was mentioned, involving other banks that do not employ many people in the State but are somehow based here, may relate to a different discussion we need to have in terms of the regulation of the financial sector in Ireland.

The core point is the suggestion that we are asking in these recommendations that banks pay tax in a different way. We are not asking for that. We have many different targeted tax relief and tax expenditure schemes with lots of different conditions around eligibility. They do not all apply to everybody in all circumstances. I am proposing that there be a constraint in respect of the deferred tax assets scheme. To be clear, the proposal is not for a special rate of tax for banks. It is about eligibility for the deferred tax asset scheme and the application of that scheme. It is a scheme that needs overhauling in general but there is a specific concern in this regard.

Many of the arguments the Minister gave about banks giving loans, employing people and all of that are arguments against the banks ever paying tax because, as the Minister says, they do such important work. The fact is banks will always give loans, take deposits and have employees. If we start using that logic as a reason not to pay tax, we are on a slippery slope. In fact, the intention in regard to many of the banks is that they will not pay tax. Permanent TSB estimates it will not pay tax until 2038. AIB predicts it will not do so until 2037. We are looking at a period when they will not pay tax. With absolute respect to the Minister, given many banks have left the market and others have closed branches, there is a concern as to the question of loyalty. If we had been gathering revenue for the State in the recent period, there would have been other opportunities for the State to invest, to employ and, indeed, to look at other parts of our banking system, including things like Postbank and the credit unions, which might merit more support.

There is a blind spot regarding deferred assets. We have talked about signals. Sending a signal to the public that the banks do not pay tax is a very concerning one for us to continue to send.

Paul Gavan (Sinn Fein)
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Well said.

Paschal Donohoe (Dublin Central, Fine Gael)
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I have three points to make. First, the effect of what the Senator is proposing would mean having a different taxation regime for banks from what applies in the rest of the economy. That would be the effect. Second, I did not say the banks that are not subject to a pay cap do not employ people within our economy. I said they employ fewer people than Bank of Ireland, AIB and Permanent TSB. Third, I would never suggest that the fact our banks have to lend within our economy and we rely upon them to invest in funding new infrastructure, business expansion and the delivery of homes is an argument they should not pay tax. Some of the banks the Senator referred to do not pay tax from a corporation tax point of view. The reason for that is they are taxed in the same way other employers and firms in our economy are taxed. That is appropriate and to change it and bring in a different taxation regime for the banking sector from that applying to the rest of the economy would be bad for the economy. Certainly, for banks in which we still have a share, it would decrease their value and the value of the State shareholding in them. Over time, those are consequences that would not be good for investment and employment within our economy.

Alice-Mary Higgins (Independent)
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I thank the Minister for those clarifications. I will press the recommendations.

Alice-Mary Higgins (Independent)
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I move recommendation No. 4:

In page 103, between lines 30 and 31, to insert the following: "Report on Deferred Tax Assets

44.The Minister shall, within 12 months of the passing of this Act, lay a report before both Houses of the Oireachtas outlining the potential for removing the qualification to utilise deferred tax assets from any bank which seeks to act on a removal of restrictions on pay or bonuses.".

Paul Gavan (Sinn Fein)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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I move recommendation No. 5:

In page 108, between lines 29 and 30, to insert the following: "Report on Kerosene Subsidies

52.The Minister shall within 6 months of the passing of this Act publish a report outlining the amount of fossil fuel subsidies provided by the State, through tax relief or revenue

forgone, in respect of jet kerosene."

Paul Gavan (Sinn Fein)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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The Government provided nearly €2.4 million in subsidies to the fossil fuel industry in 2019, which is more than 70% higher than the subsidies given in 2000. The allocation has been growing substantially. I focus in this recommendation on one aspect of fossil fuel subsidies, namely, the excise duty exemption for jet kerosene used in both domestic and international commercial aviation. The revenue forgone from that measure was €634 million in 2019. It dwarves some of the moneys being spent on things like promoting active travel. We are subsidising the use of a fossil fuel, kerosene, for one industry. I welcome the recent comments by the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, that we need to look at aircraft leasing and the use of private jets. There is a very large aircraft leasing business in Ireland and private jets play a specific role in the impact on climate and greenhouse gas emissions.

As I said, the jet kerosene element of our fossil fuel subsidies amounted to €634 million in 2019, which is the most recent year for which I have the data. The figure may be higher or lower this year. Is that excise duty exemption being examined and is it something we might see being rolled back, perhaps next year? It is a real concern, involving huge expenditure on something that is taking us in the wrong direction in respect of our carbon reduction targets.

Paschal Donohoe (Dublin Central, Fine Gael)
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The short answer to the Senator's question is that this issue is currently under debate within the EU. The Commission has proposed a new energy taxation directive and, as part of that, a discussion is under way on whether the tax exemptions for aviation and maritime fuel should be removed. As a participant in this debate, as a representative of the Government of a country with an economy that relies heavily on air and maritime access, I have significant concerns about the impact on access to our island economy if we were to change significantly how fuel for aviation, in particular, is taxed across the EU. That debate is under way and it is a decision for another day. To the Senator's question as to whether the issue is being discussed at the moment, the answer is "Yes".

Alice-Mary Higgins (Independent)
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It is important that the issue be examined in the round, not solely from the business perspective but also from the perspective of our carbon budget targets, which are one part of it, and also the State's general international obligations.There is the additional tax argument but also the idea of the tax exemption by which we are effectively subsidising something. There are strong arguments for additional taxation on kerosene fuel, moving in the opposite direction. It will be important that we do not end up arguing against progress in this area as it is so internationally crucial. Perhaps there will be opportunities through the finance or climate committees - I am lucky to sit on both - to further scrutinise and engage on the position Ireland is taking in those important discussions.

Pauline O'Reilly (Green Party)
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Is the Senator pressing the recommendation?

Alice-Mary Higgins (Independent)
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Yes.

Pauline O'Reilly (Green Party)
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Recommendations Nos. 6 to 9, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.

Marie Sherlock (Labour)
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I move recommendation No. 6:

In page 242, between lines 17 and 18, to insert the following:

“(31) The Minister shall within six months after the passing of this Act lay a report before both Houses of the Oireachtas on the operation of the Temporary Business Energy Support Scheme under this section, including— (a) information about the classes of business that are and are not eligible under the scheme, and

(b) information about the classes of electricity customer that are not eligible under this scheme and to which the Electricity Costs (Domestic Electricity Accounts) Emergency Measures Act 2022 does not apply.”.

The recommendation relates specifically to the temporary business energy support scheme, TBESS. Almost everybody in the House welcomes the introduction of TBESS. It will play an important role in assisting businesses and households with the energy crisis this winter. We might quibble about the lack of conditionality associated with the scheme, particularly for businesses, and I have concerns about changes to the payment of wages and to terms and conditions within workplaces, but nonetheless I support it. However, I have a particular concern about the exclusion of certain organisations from the scheme. I acknowledge what the Minister said about objecting to all the recommendations being brought forward here today but this recommendation relates to the operation of the scheme, which is very necessary this winter. I would like clarity as to why certain organisations are being excluded.

It is important to acknowledge that eligibility for the scheme is carefully set out in the Bill with regard to residential householders, the Schedule B case I businesses and those businesses that are exempt from Schedule D cases I and II, which relates to charities and sporting organisations. In setting out those criteria and then excluding certain financial institutions, credit unions are also excluded. We have just had a discussion about financial institutions. Are we really treating regulated funds and banks in the same vein as credit unions when it comes to exclusion from the scheme? Credit unions are member-led, not-for-profit organisations working within communities. They have operating costs. Why is the State excluding credit unions from the scheme?

The second issue concerns organisations that are not for profit but do not fit into the category of a charity, sporting organisation or residential household. They have to pay significant energy bills. One example is the case of owners' management companies, OMCs. The Minister has received correspondence in his office from an apartment block close to where he and I are located. They are quite distressed that their energy bill has increased from €4,000 to €8,000 over the past 12 months. It is a very necessary energy cost and they cannot curtail or reduce it in any way because it relates to powering security cameras and indoor and outdoor lighting for common areas. This is not relating to use within the apartments themselves but the common areas. The role of director of an OMC is a thankless job. Many apartment blocks have enormous challenges as it stands, particularly in dealing with construction and fire defects. They now feel left out in the cold, so to speak, because they have been excluded from this scheme, notwithstanding that they have significant energy bills to contend with. Why have they been excluded? Is there any possibility of being able to include those organisations that I mentioned? As Senator Higgins indicated, we have no mechanism other than to table recommendations seeking a report. That is why we have drafted these recommendations in the way we have done. We are seeking a report six months after the passing of the Act that includes information about the classes of business that are and are not eligible. We have no other way of bringing this issue to the Bill. I look forward to the Minister's response.

Alice-Mary Higgins (Independent)
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I second Senator Sherlock's recommendation and also have a number of recommendations of my own in this group. When a new scheme is brought in, it is important that it is targeted as effectively as possible. Any new scheme comes with significant cost. Being responsible means that we target it as effectively as possible. I am concerned by those who are included and those who are excluded in respect of this new scheme. When we table these recommendations, it is because this is a new scheme being rolled out right now. The earlier we identify concerns and the earlier the Government responds to them the better.

In recommendation No. 7, I point out my concerns regarding the eligibility of data centres for support under the energy support scheme. The energy consumption of data centres is one of the key concerns we have to address in this State. It is estimated that data centres are using 14% of all energy today. There are projections of them using up to one third of electricity in the years ahead. The energy consumption of data centres and the pressure they are putting on the grid are significant. There is a danger that as well as putting pressure on the grid, they themselves are expressing lack of confidence because they know the grid will be under pressure, largely due to the fact that there has been a 285% increase in the energy demand from data centres. That is in respect of electricity. In Europe, the average for electricity has been a 0% increase. Ireland has had a 9% increase overall in electricity demand. Data centres have contributed to a 285% leap. The idea of us subsidising them under the energy support scheme just seems anomalous and poorly targeted. When they are not putting pressure on the grid, they are talking about stand-alone energy systems such as gas-fired or diesel generators which will affect us meeting our sectoral targets in our carbon budget. When the State is having a discussion with data centres on energy usage, the idea that we are also supplementing such demand with public moneys through an energy support scheme seems anomalous.

If the concern is around targeting a particular kind of business, my second recommendation addresses that. It will capture many of the same actors. It simply provides that the TBESS should not be targeted at companies that have an annual turnover of more than €20 million. This would address many of the same issues. Massive international companies have data centres. If the Government does not want to screen by type, it could screen for those who do not need this State support. Large companies with turnovers of €20 million per annum do not need this targeted State support to the same degree. I am sure there is a case they can make but they do not need it in the same was as our small and medium-sized businesses do. Rather than focus resources on those who are extraordinarily profitable, the Government should redirect towards the kinds of businesses that have been mentioned such as the credit unions.I strongly support the points made by Senator Sherlock in respect of both our credit unions and the community and voluntary sector, which is the subject of my amendment No. 9. The sector is a safety net for society and it engages with real people who are in danger of health consequences, for example, from energy poverty. It is a concern if the community services and the very often vulnerable persons who use them are unable to access adequate heating. The energy subsidy is very much needed in those areas. One example is the drugs and alcohol task forces, which are only now seeing their funding restored to the level it was at back in 2006 but face considerable additional costs that never existed at that time. Widening access to the scheme is needed at the bottom of society for the organisations that do considerable work in reaching individuals and provide places for the community at a time when households are under pressure. A re-examination is also needed of money being wasted by the State at the very top level for those very large companies that, frankly, do not need it.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Senators for the recommendations they have tabled. The data centres are associated with large companies, as Senators said, which are also large employers in Ireland. The retention of data centres within our country is a very important ingredient of how we can keep jobs within our country, especially in the context of changes happening in corporate taxation in the time ahead, when it will be even more important to have other sources of attraction for large employers to associate large amounts of investment within our economy. I am always struck when we get into this debate by how I always hear reference to large profitable companies but never to the fact they are very large employers as well. That is critical in the assessment of data centres. I will not start naming companies associated with data centres, but the vast majority are significant employers as well. Large employment and the location of data centres are not coincidences. They are part of what our economy can offer, which will be even more important in the years ahead.

That being said, Senator Higgins raised an important point about large energy users participating in an energy support scheme running the risk of being disproportionate beneficiaries. This is the very reason we have a monthly cap of €10,000 in place. It will ensure, as more businesses move on to the scheme, we preserve the scheme in such a way that the resources will be available to allow us to maintain it for small- and medium-sized businesses. The exact possibility of large energy users being the largest users of this scheme is the reason a cap of €10,000 is in place per month per trade. Can a data centre be on this scheme? The answer is "Yes". However, the most a data centre will access from it is €10,000 per month which means it is far more likely they will look to access other schemes available throughout the State to support large energy users that, in turn, tend to be large employers as well.

With regard to the point that was raised about credit unions by Senator Sherlock, they are excluded from the TBESS. The reason for that is credit and financial institutions are excluded under the EU temporary crisis framework. Credit unions in Ireland fall under that definition just as other financial institutions in other jurisdictions do. That is the reason credit unions are not included in the scheme.

The Senator made another point about common spaces and lighting within apartment blocks in the context of management companies. Regrettably, they are excluded from the scheme with the rationale being that this is a temporary business energy support scheme. The scheme's criteria are laid out as being case 1 and case 2 categories within our tax code, one of which is trading businesses and the other, professions. They should be tax compliant and there should be a significant increase in their natural gas and electricity schemes. I expect, over time, this will be a broadly used scheme but whenever a scheme such as this is put together, as I know the Senator will appreciate, there are always entities and businesses that will be outside its scope. The purpose of this scheme is to support businesses to support employment and to try to avoid a very large price shock turning in to an employment shock.

With regard to the other thrust of the group of amendments put forward, especially amendment No. 8 from Senator Higgins regarding the need for more information on the operation of the scheme, it has now become a custom that with these large interventions within our economy, other examples of which being the employment wage subsidy scheme, EWSS, the Revenue Commissioners and the Department of Finance will publish information regarding use every month. I am confident the information the House seeks this afternoon will be available an awful lot sooner than in six months. We will aim to publish data on the use and cost of the scheme on a monthly basis through the Revenue Commissioners just as we did with the EWSS and other similar schemes.

With regard to the final point put to me by Senator Higgins on charity and community voluntary organisations that will be excluded from this, if one has a tradeable and taxable income such as a charity shop, one is included in the scheme. If one does not meet the definition, one will be excluded, which means some community and voluntary organisations will be excluded. However, my other colleagues in government have brought forward other schemes that aim to support some community and sporting organisations that are not businesses with the higher cost of energy. As always, even in a scheme this broad and potentially this big, it is regrettable there are entities outside its definition but it is also unavoidable and that is why other Departments are bringing forward schemes looking to provide other forms of help.

Alice-Mary Higgins (Independent)
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I move recommendation No. 7:

In page 242, between lines 36 and 37, to insert the following: "Reports

103.Within three months of the passing of this Act, the Minister shall lay a report before both Houses of the Oireachtas on the potential savings and benefits from excluding data centres from eligibility for the Temporary Business Energy Support Scheme.".

Eileen Flynn (Independent)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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I move recommendation No. 8:

In page 242, between lines 36 and 37, to insert the following: "Reports

103.Within three months of the passing of this Act, the Minister shall lay a report before both Houses of the Oireachtas on options for excluding companies with annual turnover of more than 20 million euro per annum from eligibility for the Temporary Business Energy Support Scheme.".

Eileen Flynn (Independent)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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I move recommendation No. 9:

In page 242, between lines 36 and 37, to insert the following: "Reports

103.Within three months of the passing of this Act, the Minister shall lay a report before both Houses of the Oireachtas on the cost and potential benefit of including charities and community and voluntary organisations in eligibility for the Temporary Business Energy Support Scheme.".

Eileen Flynn (Independent)
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I second the recommendation.

Alice-Mary Higgins (Independent)
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I move recommendation No. 10:

In page 242, between lines 36 and 37, to insert the following: "Report on taxation and expenditure competence

103.The Minister shall, within 12 months of the passing of this Act, lay a report before both Houses of the Oireachtas outlining the potential for the transfer of certain taxation and expenditure competences from the Government to local authorities and the potential implications for such a transfer in respect of the delivery of public services, the

responsiveness of taxation policy to geographic-specific contexts and the potential benefit in respect of strengthening local democracy and community wellbeing.".

Eileen Flynn (Independent)
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I second the recommendation.