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 Header Item Written Answers Nos. 139-154
 Header Item Departmental Projects
 Header Item Brexit Supports
 Header Item Brexit Staff
 Header Item Brexit Negotiations
 Header Item General Data Protection Regulation Data
 Header Item Departmental Staff Data
 Header Item General Data Protection Regulation
 Header Item Passport Applications Data
 Header Item Data Sharing Arrangements
 Header Item Stability and Growth Pact
 Header Item National Economic Dialogue
 Header Item Revenue Commissioners Reports
 Header Item Employment Investment Incentive Scheme
 Header Item State Assets
 Header Item Economic Policy
 Header Item House Prices

Wednesday, 11 July 2018

Dáil Éireann Debate
Vol. 971 No. 6

First Page Previous Page Page of 111 Next Page Last Page

Written Answers Nos. 139-154

Departmental Projects

 139. Deputy Jack Chambers Information on Jack Chambers Zoom on Jack Chambers asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney the number of staff assigned to the Global Ireland Initiative; the number of print and online adverts purchased as part of the initiative; the details and purpose of each advert; the cost per advert; and if he will make a statement on the matter. [31350/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney Work has begun on the initial phase of the expansion of Ireland’s diplomatic network following the launch of “Global Ireland” on 11 June. The locations for new missions agreed by Government were identified on the basis of maximising impact in promoting Ireland’s economic and political interests; expanding our influence in terms of values and in delivering clear benefits for the State. In addition to the opening of new diplomatic and consular missions, my Department is taking steps to deepen the existing network, including to address the impact of the UK’s withdrawal from the European Union. The decisions already made to augment staff in missions in Europe as a more direct response to Brexit also contribute to the objectives of the “Global Ireland” initiative. A project team in headquarters is undertaking extensive planning to ensure that my Department’s human and financial resources are used efficiently to deliver on the expansion and deepening of the network in a timely and cost-effective way.

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 Information on Lisa Chambers Zoom on Lisa Chambers asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney if he has formally raised the issue at EU level of an EU reform or structural fund being established to help industries and regions most exposed to Brexit; and if he will make a statement on the matter. [31416/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney There is already a very strong awareness and understanding at EU level of the significant and unique impacts of Brexit on Ireland and an openness to exploring ways in which the EU can play a helpful and supportive role. This was a particular focus of my meeting with EU Commissioner, Gunther Oettinger, during his visit to Dublin in March, and in subsequent follow on contacts. Commissioner Oettinger also met with the Taoiseach, Minister Donohoe and Minister of State D’Arcy during his visit, which was focused on the negotiations for the EU’s post-2020 Multiannual Financial Framework, which represent a key challenge and priority for the Government. The scope for support for Ireland, if needed, in the 2021-27 MFF is being pursued and the Commission’s recent MFF proposals include a basis for further work to be taken ahead during the MFF negotiations. The Government’s efforts have already yielded results and it is clear that there is a firm understanding at EU level of the unique and disproportionate impact that Brexit will have on Ireland. This has already been reflected in a number of concrete measures and commitments to date, such as the European Investment Bank’s support for the Government’s Brexit Loan Scheme.

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 Information on Lisa Chambers Zoom on Lisa Chambers asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney if there are Brexit-related vacancies across Ireland's diplomatic missions; if so, the location of each vacancy job title and position in tabular form; and if he will make a statement on the matter. [31417/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney In general terms, all of our diplomatic Missions across the EU and further afield are working on the issue of the UK’s decision to exit from the EU. Additional posts have been filled for our Embassies in London, Berlin, and Paris and the Permanent Representation of Ireland to the European Union in Brussels. As part of Global Ireland 2025, we will set up new consulates in Frankfurt and Cardiff. Additionally, we will shortly recruit staff locally in six EU missions: The Hague; Helsinki; Madrid; Rome; Vilnius; and Warsaw, to help with future of Europe-related communications and promote Ireland’s visibility in these EU countries post-Brexit. These measures remain under review. The Department will allocate additional staff resources as deemed necessary to further augment the level of support across Government and across the diplomatic mission network.

Brexit Negotiations

 142. Deputy Lisa Chambers Information on Lisa Chambers Zoom on Lisa Chambers asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney if he will seek in the Brexit withdrawal agreement that the rights of the citizens of Northern Ireland to EU citizenship is explicitly stated; and if he will make a statement on the matter. [31419/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney In the context of the UK withdrawal from the EU, the Government is determined to ensure that the Good Friday Agreement in all its parts is fully protected, including the provisions relating to citizenship. The Government appreciates the solidarity and support which has been shown by all of our EU partners in respect of Ireland’s unique issues and concerns, including the protection of the Good Friday Agreement in all its parts. On 8 December last, a Joint Report between the EU and UK negotiators was agreed, and this included important commitments in respect of protecting the Good Friday Agreement in all its parts. In Paragraph 52, the EU and the UK acknowledge that the Good Friday Agreement recognises the birthright of all the people of Northern Ireland to choose to be Irish or British or both and be accepted as such. The Joint Report also confirms that the people of Northern Ireland who are Irish citizens will continue to enjoy rights as EU citizens, including where they reside in Northern Ireland. Both parties agreed that the Withdrawal Agreement should respect and be without prejudice to the rights, opportunities and identity that come with European Union citizenship for such people, and that the next phase of negotiations would examine arrangements required to give effect to the ongoing exercise of, and access to, their EU rights, opportunities and benefits.

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 Information on Catherine Murphy Zoom on Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney the changes he has made to allow access by persons to their own data held by his Department and bodies under its aegis following the introduction of GDPR; and if he will make a statement on the matter. [31472/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney My Department has under the previous legislative framework facilitated access to personal data being processed. Following the introduction of GDPR these requests have been centralised and registered by the data protection team who clarify any issues of identity or of scope of a particular request and determine the date for response. Individual business units that process the data prepare the responses with the support of the data protection team to ensure compliance with the new legislation and a timely response. Information on how to make a subject access request is provided on the Department’s website as part of our Privacy Policy at; https://www.dfa.ie/about-us/our-commitments/privacy-policy/.

Departmental Staff Data

 144. Deputy Catherine Murphy Information on Catherine Murphy Zoom on Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney the staffing complement and resources of his Department's data protection officer; and if he will make a statement on the matter. [31496/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney The resources for the data protection team in my Department are as follows:

  1 Principal – Data Protection Officer, part time

  1 Higher Executive Officer – newly appointed

  1 Executive Officer - part time

  1 Clerical Officer - part time

  The Data Protection Officer is also supported by a team of nominated “data champions” in each business unit. This network of officers meet once a month and are increasing their skills and knowledge of GDPR. They support colleagues in business Units in adhering to the requirements of GDPR and ensure that all compliance documentation is developed and maintained.

General Data Protection Regulation

 145. Deputy Catherine Murphy Information on Catherine Murphy Zoom on Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney the data protection impact assessments his Department has commenced since 15 May 2018; and if he will make a statement on the matter. [31513/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney My Department has not carried out any privacy impact assessments since 15 May 2018. A number of assessments were carried out prior to this date and plans are in place for further assessments in the coming months.

Passport Applications Data

 146. Deputy Catherine Murphy Information on Catherine Murphy Zoom on Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney the number of passport applications that have been processed using a public services card as photo ID since the card was introduced; the number of passport applications that have been processed using a form of photo ID other than a PSC since it was introduced; and if he will make a statement on the matter. [31558/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney Since March 29th 2016, the Passport Service has required all first time passport applicants, aged 18 and above, who are resident in Ireland to submit a copy of their Public Services Card with their passport application. The number of first time adult applications received by the Passport Service from applicants resident in Ireland from March 29th 2016 to June 30 2018 was 245,045. In cases where the applicant’s most recent passport has expired by more than 5 years, the new passport application will have the same documentary requirements as a first time passport application. The requirement to submit a copy of the Public Services Card also applies to the small number of adult passport applicants whose passport was issued before 1 January 2005 and which has been reported as lost, stolen or damaged.

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 Information on Catherine Murphy Zoom on Catherine Murphy asked the Tánaiste and Minister for Foreign Affairs and Trade Information on Simon Coveney Zoom on Simon Coveney the measures he has taken in his Department further to the Minister of State at the Department of Public Expenditure and Reform's statement (details supplied) that the Data Sharing and Governance Bill 2018 is needed to provide a legal basis for certain data transfers; and if he will make a statement on the matter. [31624/18]

Tánaiste and Minister for Foreign Affairs and Trade (Deputy Simon Coveney): Information on Simon Coveney Zoom on Simon Coveney The Data Sharing and Governance Bill 2018 is the responsibility of the Department of Public Expenditure and Reform. The Deputy is therefore referred to the response issued by the Department of Public Expenditure and Reform.

Stability and Growth Pact

 148. Deputy Jonathan O'Brien Information on Jonathan O'Brien Zoom on Jonathan O'Brien asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe if the provisions of the Stability and Growth Pact allow for the withdrawal of the rainy day fund without breaching the existing fiscal rules. [29131/18]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The creation of the rainy day fund forms part of the Government’s policy to stabilise the public finances and increase the State’s resilience to external economic shocks.

  The rainy day fund is intended to be used to address severe events as opposed to the normal fluctuations within the economic cycle. However, severe impacts of the economic cycle could be addressed by the rainy day fund.

  Deployment of the fund will be subject to Dáil oversight. It is envisaged that the drawdowns from the fund be linked to a force majeure event such as:

  - A natural disaster

  - Public emergency

  - Other unforeseen one-off occurrences

  This approach would align it with the current EU fiscal rules framework.

  Regulation (EC) 1466/97 provides that: “In the case of an unusual event outside the control of the Member State concerned which has a major impact on the financial position of the general government or in periods of severe economic downturn for the euro area or the Union as a whole, Member States may be allowed temporarily to depart from the adjustment path towards the medium-term budgetary objective referred to in the third subparagraph, provided that this does not endanger fiscal sustainability in the medium term.”

National Economic Dialogue

 149. Deputy Richard Boyd Barrett Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe if he will report on his attendance at the National Economic Dialogue. [29397/18]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe As the Deputy will be aware the fourth National Economic Dialogue took place on June 27th and 28th this year. This dialogue plays an integral part in the preparations for Budget 2019 and provided an opportunity to consider how best to optimise available resources in the interests of all citizens.

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 Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe his plans to take action on the issues identified in the April 2018 Revenue Commissioners report, Income Dynamics and Mobility in Ireland: Evidence from Tax Records Microdata in particular in respect of the narrowness of the corporation tax base; and if he will make a statement on the matter. [31077/18]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe It is my understanding that the Deputy is referring to Revenue’s ‘Corporation Tax 2017 payments and 2016 returns’ report published in April 2018.

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 Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe his plans in respect of the employment, incentive and investment scheme for budget 2019; and if he will make a statement on the matter. [31078/18]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe Indecon Economic Consultants are currently carrying out a review the Employment and Investment Incentive (EII). I expect that the report will be completed within the next month or so.

  The findings of the review, when concluded, will, amongst other factors, inform any decisions I may make on the future configuration of the incentive in the context of Budget 2019 and otherwise.

  The scope of the review is as follows:

  - An examination of the extent to which the objectives of the incentives remain valid.

  - An examination of the extent to which objectives of the incentives are being met.

  - An examination of the cost effectiveness of the incentives.

  - An examination of alternative options which may exist for the provision of state support.

  - An examination of the effect of GBER (the General Block Exemption Regulations) on the incentives.

  - A comparison of the incentives with similar incentives in operation in other EU Member States in terms of design: objectives, criteria, take-up, impact and cost-effectiveness.

  - An examination of whether the incentives, as currently designed, provide a platform for the effective operation of the reliefs.

  - The review of the design of the incentives should include:

  - Conclusions and Recommendations arising from the analysis.

  I await the outcome of the review and I do not propose to comment further on the future arrangements for the relief at this point.

State Assets

 152. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the State's holding of cash and liquid assets at the end of June 2018; and the value of Government bonds due to mature in 2018. [31080/18]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe I am advised by The National Treasury Management Agency (NTMA) that total Exchequer cash/liquid asset balances stood at €23.4 billion at end-June.

They also advise that the benchmark Irish Government 4.5% Treasury Bond 2018   matures in October and has a current outstanding balance of €8.8 billion.

Economic Policy

 153. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the extent to which he remains satisfied that Ireland remains a competitive economy and attractive to indigenous investors and foreign direct investors; and if he will make a statement on the matter. [31115/18]

 157. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the extent to which he expects to be in a position to counter negative economic impacts arising from Brexit; and if he will make a statement on the matter. [31119/18]

 159. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the extent to which he remains satisfied that all economic indicators remain stable and consistent with requirements for the future notwithstanding changes in the international political situation; and if he will make a statement on the matter. [31121/18]

 162. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the extent to which he expects the economy to maintain positive performance over the next five years; if he anticipates corrective measures arising from external factors; and if he will make a statement on the matter. [31124/18]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe I propose to take Questions Nos. 153, 157, 159 and 162 together.

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 Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the degree to which he monitors house property prices with a view to prevention of inflation through that sector; and if he will make a statement on the matter. [31116/18]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe My Department continues to monitor developments in the property market, including trends in property prices, on an ongoing basis. According to the Central Statistics Office's Residential Property Price Index, national property prices increased by 0.7 per cent between March and April, and by 13 per cent on an annual basis. At the regional level, residential property prices in the 12 months to April 2018 increased by 12.5 per cent in Dublin and by 13.6 per cent outside of Dublin. Relative to peak, prices in Dublin are 23 per cent lower, with those outside Dublin some 26 per cent lower.

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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