Gerald Nash (Louth, Labour)
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201. To ask the Minister for Finance his plans for a national recovery fund; if he plans to use windfall gains as identified in the programme for Government to reduce borrowing requirements; his views on whether such windfall gains would be more appropriately utilised as part of a national recovery fund; and if he will make a statement on the matter. [14597/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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It is intended that, beginning in 2020, the Recovery Fund will be available for three years and will consist of three primary elements:

- Infrastructure development - focussing on areas such as housing, retrofitting and transport to maintain employment and lay the foundation for future employment.

- Reskilling and retraining - for those who have lost their jobs as a result of the pandemic and are unable to return to their previous employment, so that they can receive the skills they need to attain new opportunities.

- Support investment - measures to help Irish companies access credit and capital to support the retention and creation of jobs.

Measures such as these will have a significant fiscal cost and will be additional to the cost of the wide range of measures introduced to-date. As a consequence of this support, as well as the fall-off in taxation receipts, the general government deficit is expected to be in the region of €23-€30 billion this year. As I have said previously, it is entirely appropriate that Government runs a deficit and increases borrowing to support the economy in these unprecedented circumstances. However, borrowing at this scale cannot go on indefinitely and once circumstances allow, we must return the public finances to a sustainable path.

a As the Programme for Government sets out, windfall gains - such as they may arise - will be used to reduce the overall level of borrowing. For example, the first tranche of the NAMA surplus, some €2 billion, was returned to the Exchequer last month. The NAMA transfer means that we will borrow €2 billion less this year than would otherwise be the case. Similar transfers, such as the proceeds from the liquidation of the Irish Banking Resolution Corporation or the sale of the state shareholdings in the banks, will also be used to reduce our borrowing requirements. Given the likelihood of continued fiscal deficits over the medium-term, and the level of our existing stock of debt, such an approach is the most effective strategy for use of such receipts.

Gerald Nash (Louth, Labour)
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203. To ask the Minister for Finance his plans to focus tax rises on behavioural taxes with negative externalities such as carbon tax, sugar tax and plastics as outlined in the programme for Government; his views on whether the cited behavioural taxes are not a sustainable source of revenue in view of the fact the stated objective of the tax is to reduce consumption of the good producing the negative externality; his further views on whether these taxation measures match the broader aim to achieve a sustainable tax environment as outlined in the programme for Government; and if he will make a statement on the matter. [14599/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Programme for Government sets out the Government’s intention to utilise taxation measures, as well as expenditure measures, to close the deficit and fund public services, if required. It is further stated in the Programme that governmental policy will aim to focus any tax rises on those taxes which tax behaviours with negative externalities, such as carbon tax, sugar tax, and plastics.

Excise taxes seek to reflect the negative externalities caused by the consumption of an excisable commodity. These externalities are the costs to society that without the tax would not otherwise be reflected in the price of the excisable commodity and for which the consumer would not otherwise have to pay. The carbon tax and sugar tax are taxes are reviewed on an ongoing basis throughout the year and analysis of yields and trends forms part of the examination of budgetary options.

The impact of COVID-19 domestically and internationally will have a bearing on any budgetary policy decision and we will have greater clarity on this prior to Budget 2021 when, as outlined in the Programme for Government, we will set out a medium-term roadmap detailing how Ireland will reduce the deficit and return to a broadly balanced budget.