Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

109. To ask the Minister for Finance the way that he intends to use the billions in additional revenue now available to him as a result of the surge in corporate tax receipts expected this year; the way that these may be used to combat the ever-worsening housing crisis; and if he will make a statement on the matter. [46268/22]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Since 2015, we have seen a significant step up in corporation tax receipts, reaching €15.3 billion last year. While my Department will produce more definitive fiscal forecasts next week as part of the publication of Budget 2023, preliminary indications suggest corporation tax receipts of over €20 billion can be expected this year. This would mean corporation tax receipts would be approximately €13 billion higher than the levels seen in 2015 and will be effectively twice the pre-pandemic levels seen in 2019.

A level-shift of this magnitude, occurring over such a short timeframe, naturally raises questions regarding the sustainability of this revenue steam. In addition, the concentration of these receipts within a small number of firms raises further concerns about their sustainability.

A recent publication by my Department, entitled De-risking the Public Finances – Assessing Corporation Tax Receipts, suggests the quantum of last year’s CT receipts that are potentially windfall in nature could be in the region of €4 to €6 billion. As a result, while the headline fiscal position may look very positive, it can mask very real vulnerabilities in our public finances.

Our recent history provides a stark reminder of the dangers attached to building permanent expenditure commitments on volatile revenue sources. During the Global Financial Crisis, the collapse of our property-related tax receipts meant that very painful public expenditure measures were necessary to return the public finances to a stable position. One of the areas to suffer the most severe cuts was public investment, with long-lasting implications for both growth potential and the provision of public services. The Government is determined to ensure that history is not repeated in this regard.

In relation to housing, the Government has significantly increased investment in this area in recent years. The capital budget allocated for this year was €2.6 billion, with over €6 billion allocated in capital funding towards housing in the past three years. This Government’s housing plan, Housing for All, is backed by the largest ever housing budget in the history of the State.

Further details on the Government's spending plans will be announced next week but the Deputy will appreciate, it would not be appropriate to speculate on specific policy decisions in advance of Budget Day.