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Written Answers Nos. 139-154Departmental Projects 139. Deputy Jack Chambers Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): The Government has approved Heads of Mission appointments for the first phase comprising six new missions to be opened in 2018 and early 2019. These are for Embassies and Consulates in Bogotá, Santiago, Amman, Wellington, Mumbai, and Vancouver. These missions will be further supported by posted officer(s) from Headquarters, as well as by locally recruited staff. Additional staff will also be assigned shortly to a number of existing missions overseas including Embassies and Consulates in the United States, Europe, the Middle East/Gulf region and Asia. Preparations for augmenting the key units in headquarters needed to support the expansion are underway and five additional staff were assigned recently to Corporate Services Division. This is to reinforce specialist knowledge, including in architectural and project management areas as well as bolster human resources skills to facilitate expanded recruitment and a strong focus on staff development. A scoping of broader staffing needs across operational and policy areas is underway to identify additional new requirements relating to the “Global Ireland” expansion. The Department is currently undertaking a workforce planning exercise which will inform plans for recruitment of new officers both in Ireland and abroad as well as plans for the training, development and up-skilling of officers currently assigned to the Department to meet the objectives of the Global Ireland initiative in 2019 and beyond. With regard to advertising costs for the Global Ireland Initiative, no costs have been incurred by my Department to date. Brexit Supports 140. Deputy Lisa Chambers Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): My colleague, the Minister for Business, Enterprise and Innovation, is also working actively, with the support of other relevant Departments, with the European Commission to scope and design schemes to support enterprises impacted by Brexit in line with State Aid rules. The EU Commission has approved a ‘rescue and restructuring’ scheme, which provides support to SMEs experiencing acute liquidity needs as a result of Brexit. The Government is also working intensively to safeguard the significant financial support there has been for the border region of Ireland and for Northern Ireland, with almost €2.4 billion of EU funding having been provided for successive PEACE and INTERREG programmes. The current programmes have a combined value of over €550 million over the period 2014-2020, of which 85% is funded through the European Regional Development Fund. I welcome the Commission’s most recent proposal for a special new PEACE PLUS programme as part of the next MFF which will build on and continue the work of successive PEACE and INTERREG programmes.. Brexit Staff 141. Deputy Lisa Chambers Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Brexit Negotiations 142. Deputy Lisa Chambers Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): This position is recognised in the draft Protocol on Ireland/Northern Ireland that is part of the draft Withdrawal Agreement, published by the European Commission on 18 February. Discussions on the rights of individuals are ongoing as part of the Phase 2 negotiations on issues related to Ireland and Northern Ireland. Further engagement is needed on which EU rights, opportunities or benefits can be exercised by the people of Northern Ireland who are Irish and therefore EU citizens, when they are resident in Northern Ireland, which will be outside the territory of the European Union after the UK departure. As the UK leaves the European Union, there is an onus on its Government to ensure that it provides as necessary for the recognition in the Joint Report that the people of Northern Ireland who choose to identify as Irish, and therefore as citizens of the EU, can continue to enjoy the rights, opportunities and benefits of EU citizenship, including where they reside in Northern Ireland. At the same time, there is an obligation on the UK Government under the Good Friday Agreement to uphold the birthright of all the people of Northern Ireland to identify themselves and be accepted as Irish or British, or both, as they may so choose. The means by which both of these obligations can be upheld by the UK requires further discussion between the EU and the UK. As in all other areas of the Article 50 negotiations, the operation of EU law will also need to be respected. The Government will continue to engage intensively on these issues in order to ensure the protection of the Good Friday Agreement in all its parts, including the citizenship provisions. General Data Protection Regulation Data 143. Deputy Catherine Murphy Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Departmental Staff Data 144. Deputy Catherine Murphy Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): General Data Protection Regulation 145. Deputy Catherine Murphy Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Passport Applications Data 146. Deputy Catherine Murphy Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): The requirement to produce a Public Services Card has been an important step in protecting against fraud and identify theft and in upholding the integrity of the Irish passport. A copy of the applicant’s Public Service Card is required for applications that fall under the above three categories to be successfully processed in all instances and alternative forms of identification cannot be accepted. Data Sharing Arrangements 147. Deputy Catherine Murphy Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Stability and Growth Pact 148. Deputy Jonathan O'Brien Minister for Finance (Deputy Paschal Donohoe): National Economic Dialogue 149. Deputy Richard Boyd Barrett Minister for Finance (Deputy Paschal Donohoe): The aim is to foster discussion on how to best sustain and strengthen the recovery while taking account of the many competing economic and social priorities within the limited available resources. As with previous years, this year's Dialogue had representatives from a wide variety of stakeholders, including from community, voluntary and environmental groups, businesses, unions, the academic community, as well as the diaspora. In addition a number of members of the Select Committee on Budgetary Oversight also contributed to the event. My closing remarks at the dialogue are available at budget.gov.ie along with the papers presented at the NED. When the Chair's report is finalised it and the reports of the seven rapporteurs will also be made available on that website. I believe the National Economic Dialogue is a very constructive exercise. The dialogues of previous years have had a material effect on the choices made in the budget. I intend to reflect on this year’s discussion when formulating Budget 2019. Revenue Commissioners Reports 150. Deputy Joan Burton Minister for Finance (Deputy Paschal Donohoe): I recognise that Corporation Tax in Ireland is concentrated, with a high proportion of receipts, approximately 80%, coming from the multinational sector. The share of net corporation tax receipts provided by the “Top 10” tax paying companies in 2017 was 39 per cent, up slightly from the 37 per cent paid in 2016 but still below the 41 per cent in 2015, which is suggestive of widening profitability in other companies. The report also provides information on receipts in each of the years 2013 to 2017 from the top ten payers in each given year, illustrating the change in composition of the top 10 payers over time. Overall, while there are variations from year to year, this level of concentration is relatively stable over recent years. Furthermore, the evidence from this report indicates that Corporation Tax receipts have not become significantly more concentrated as a percentage of overall tax receipts in recent years. In 2013, the Top 10 taxpayers accounted for 36% of Corporation Tax receipts, while in 2017 the Top 10 taxpayers accounted for 39% of Corporation Tax Receipts. The report also notes that the number of net payers of corporation tax increased by nearly 6,300 (14%), with over 50,000 companies paying net corporation tax in 2017, and shows trading profits increasing in the majority of sectors. Both these factors point to a general, broad-based improvement in profitability in the corporate sector. As a country which has been consistently successful in attracting leading multi-nationals to locate here, and given Ireland’s level of integration with the global economy, it is not surprising that our corporation tax base is quite concentrated. Nonetheless, I am not complacent to the risks associated with the concentration of corporation tax receipts and will continue to monitor the situation closely. Deputies will be aware that the Government has committed to the establishment of a Rainy Day Fund to enhance the resilience of the public finances. The objective of the Fund is to build up our fiscal reserves in times of strong Exchequer revenue performance so that we have room for manoeuvre in the event of a shock to the economy in the future. Employment Investment Incentive Scheme 151. Deputy Joan Burton Minister for Finance (Deputy Paschal Donohoe): State Assets 152. Deputy Joan Burton Minister for Finance (Deputy Paschal Donohoe): Economic Policy 153. Deputy Bernard J. Durkan 157. Deputy Bernard J. Durkan 159. Deputy Bernard J. Durkan 162. Deputy Bernard J. Durkan Minister for Finance (Deputy Paschal Donohoe): Recent economic indicators have generally been positive, indicating that the recovery is continuing in a sustainable manner. Preliminary real GDP growth of 7.8 per cent was recorded for 2017, but this is heavily distorted by activity in the multinational sector. Modified domestic demand, which adjusts for distortions in the data, is up 4.0 per cent in 2017. The strength of domestic demand is evident in the labour market. Employment growth remains strong with an annual rate of 2.9 per cent recorded in 2017, representing over 61,000 additional jobs. The momentum in the labour market has continued into 2018 with data for the first quarter again showing employment growth of 2.9 per cent. As a result, employment levels now exceed the pre-crisis peak. Other recent data confirm that momentum in the economy has continued into 2018: - Core retail sales, i.e., excluding car sales, are up 4.5 per cent in the first 5 months of the year compared to the same period in 2017. - Export growth has been very strong with the volume of exports increasing by 18.7 per cent on an annual basis in the first four months of the year. - The monthly unemployment rate for June was 5.1 per cent, down from its peak of 16 per cent in early-2012. As part of the 2018 Stability Programme Update, my Department forecast real GDP growth of 5.6 per cent this year and 4 per cent next year. Over the medium-term, GDP is projected to grow by around 3 per cent per annum with positive contributions from both domestic demand and net exports. These projections assumed that a transition period will be agreed that extends or replicates existing frameworks until end-2020 i.e. the UK is assumed to remain in the single market and customs union during this period. From 2021 onwards, the baseline forecasts assume that the EU and UK conclude a free trade agreement; there is, of course, considerable uncertainty in relation to the post-exit nature of trading arrangement between the EU and the UK. While the economic situation is relatively healthy at present, there are a number of significant risks facing the Irish economy. First and foremost is the potential fallout from a more adverse-than-excepted outcome of the Brexit discussions currently under way. Secondly, given the importance of the traded sector in the Irish economy, any disruption to world trade and in particular a tit-for-tat trade war would have a disproportionate impact on Irish growth prospects. In addition, a faster-than-expected normalisation of monetary policy, rising geopolitical uncertainty and changes in other jurisdictions that affect the competitiveness of Ireland’s corporate tax regime all have the potential to derail the recovery. While US tax reform has the potential to adversely impact Ireland, our access to the European market is, and will remain, a key factor in attracting FDI from the US and elsewhere. Global business, from the US or elsewhere, will always want to have operations in the EU, and Ireland will remain attractive as an EU location to invest in and do business from. There are also domestic challenges such as housing supply and overheating pressures and the related challenge of maintaining competitiveness. Significant progress has been made in recent years in improving Ireland's competitiveness. The latest figures from the Central Bank of Ireland show that Ireland's real harmonised competitiveness indicator, a widely used measure of competitiveness in Europe, has improved by approximately 19 per cent between its peak in 2008 and February 2018. The restoration of Irish competitiveness since 2008 has been hard-won through productivity improvements and wage and price moderation. It is important that this competitiveness is preserved and continues to facilitate growth. In this regard, the most recent National Competitiveness Council bulletin, which highlights our decline in the 2018 IMD Competitiveness rankings, though remaining the 3rd most competitive economy in the euro area, serves as a reminder that we cannot afford to be complacent. This is all the more important given the significant economic risks we face including Brexit which has already negatively impacted on our competitiveness through sterling depreciation. As the depreciation in sterling most likely reflects a structural change in the UK economy, it is essential that the policy response is also structural in nature and in line with EU State Aid rules. Continued market diversification must be part of the policy response, so that dependence on and exposure to the UK market is reduced. As part of the Government’s trade strategy, Ireland Connected, a number of measures have been set out to specifically address Brexit related issues, including diversification of markets for indigenous exporters. Greater market diversification must be part of the policy response, so that dependence and exposure to the UK market is reduced. In summary, I am satisfied that the economy is in good shape at the moment. However, there are a number of risks. The best way to mitigate such risks is to improve the resilience of the economy. The Government will play its part by continuing to implement competitiveness-oriented policies – including those that address emerging bottlenecks – and ensuring that the public finances continue to be managed in a prudent fashion. House Prices 154. Deputy Bernard J. Durkan Minister for Finance (Deputy Paschal Donohoe): The Government’s primary response to mitigating house price inflation is to increase supply. ‘Rebuilding Ireland: An Action Plan for Housing and Homelessness’ sets out a comprehensive package of actionable measures designed to address the ongoing structural constraints within the construction sector and restore the housing market to a sustainable equilibrium. The implementation of these actions is monitored on an ongoing basis and reported publicly through quarterly progress reports. |
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