Micheál Martin (Cork South Central, Fianna Fail)
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227. To ask the Minister for Finance if he or his Department have considered the comments of the President of the European Central Bank, Mr. Mario Draghi about being wary of quantitative easing having a negative impact on the distribution of wealth and, in some cases, causing more inequality; the action his Department is taking to prevent this from happening; and if he will make a statement on the matter. [20238/15]

Michael Noonan (Limerick City, Fine Gael)
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The President of the ECB, in a recent speech, discussed the evolution of monetary policy since the crisis and the challenges and benefits associated with the decisions made to date. This included a reference to the distributional consequences of monetary policy by penalising savers to the benefit of debtors and through asset price increases which may disproportionately favour the wealthy and increase inequality.

Let me firstly point out that Mr Draghi also highlighted the distributional effects from monetary policy inaction as well as action.

The Expanded Asset Purchase Programme (EAPP), launched on 9 March 2015, is aimed at fulfilling the ECB's price stability mandate. Asset purchases provide monetary stimulus to the economy in a context where key ECB interest rates are effectively at the lower bound. They should further ease monetary and financial conditions. They should also help to support investment and consumption, and ultimately contribute to a return of inflation rates which are close to 2 per cent.

Ireland should benefit from quantitative easing in a number of ways:

- Through improved financing conditions for households and firms; 

- By raising demand in the euro area, Ireland's single largest export destination; 

- Through the depreciation of the currency which improves the competitiveness of Irish exports outside the euro area;

- Through the restoration of price stability which will help reduce the real debt burden. 

While quantitative easing will likely be beneficial for the Irish economy, there is nevertheless the possibility of side effects such as increased asset prices which will benefit the owners of these assets.

In this regard, I would point out that Capital Gains Tax applies on any chargeable gain from the disposal of many assets, including non-principal private residences and to equity gains. Stamp Duty also applies to the purchase of assets such as property and shares.  Therefore, in the event of increases in asset values, there would be a proportionate increase in the tax paid. 

Finally, I would point out that all tax rates and regimes are held under continuous review by my Department and that any changes are made in the context of the annual budgetary cycle, including the Finance Bill.