Select Committee on Finance, Public Expenditure and Reform, and Taoiseach debate -
Wednesday, 8 May 2024

No apologies have been received. I welcome the Minister and his team here again today. I thank them for their time. I hope we will be able to deal with most of the Bill over the next couple of hours.

I welcome all the members. I also welcome the viewers who might be watching our proceedings in public session on Oireachtas TV to the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach. We will resume Committee Stage consideration of the Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill 2024.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person outside the House or an official, either by name or in such a way as to make him or her or identifiable. I remind members who are attending remotely of the constitutional requirement that they must be physically present within the confines of the place in which Parliament has chosen to sit, namely, Leinster House, in order to participate in public meetings. It is important to note that in order to participate in a division in a committee, members must be physically present in the committee room.

I will now refer to a bit of housekeeping. In order to provide for the smooth running of the meeting, any member acting in substitution for a member of the committee should formally notify the clerk now, if they have not already done so. I think we are okay in that regard. Divisions will be taken as they arise.

Members must attend in person in the committee meeting room for divisions, although they can attend the meeting remotely, in line with the Standing Order. Members attending this meeting, in accordance with Standing Order 106(3) should be aware that, pursuant to that Standing Order, they may move an amendment but cannot participate in voting on the amendment.

We will now resume discussion where we finished the last day, which was on section 8. Deputy Doherty was in possession.

As I said to the Minister, section 8 is the meat and bones of the legislation, so we should take a bit of time on it and hopefully then make progress on the rest of the legislation. I support the establishment of the funds but I am opposed to the idea that we set down in legislation that a percentage of GDP would go into the fund at a set point in time and that the Minister would have the ability to restrict it to half of that amount if there is a deterioration in the public finances. That is subjective. It will be up to the Minister at the end of the day to get his or her officials to write a report to give support to it because no actual criteria are laid down specifying whether there is a deterioration in the public finances. What we could see is a gradual reduction of the general Government balance, which may not be determined as a deterioration or a sudden deterioration, and that would leave us in a situation where we would have to borrow to put money into the fund, or indeed where the Minister would make decisions because the legislation specifies it rather than investing in housing. We have not said that we will put X amount of the size of our economy into supporting housing, which is the major issue that all of us face, or at least people across the State face, whether they are young or older, in terms of access to housing and affordability.

In the way it is drafted, this legislation restricts the hands of future governments. That being said, let us be clear, a future government will come in and just change this legislation and then that would be the case. If I were Minister for Finance I would not commit to 0.8% of GDP to be put in the fund in any given year without knowing whether that type of funding was available to us and the impact of making those provisions in any given year vis-à-vis other needs. I say that in particular in relation to capital expenditure, which in my view needs to have a catch-up programme because of the fact that capital expenditure for the past ten years had reduced - in fairness, it has been since the Minister's party was last in government when it drove the economy off the cliff- to the levels it did. We need a catch-up programme to allow for that type of one-off expenditure. I say that because, as I mentioned in our previous session, the fund is a good thing. I supported the transfer of more than €4 billion into the fund last year. I believe that transfers can be made this year. Given the fiscal outlook, I believe it is possible to meet the 0.8% the following year as well, while also meeting the needs of housing and other challenges. It may become more challenging in the years ahead.

I ask the Minister to address those comments. I also am conscious that in legislation like this, this is not the first time in which a number or percentage to be transferred into funds has been stated in legislation.

The Minister's predecessor, Deputy Donohoe, had to bring resolutions before the House in three different years to say we would not make the transfers. It is one thing putting it down in legislation. I also do not know why he stipulates a number if in some cases it is not possible to reach it. I could ask questions about how this measure commits us to putting in 0.8% of relevant GDP in 2035. None of us know what the GDP of the country will be in 2035. We do not even know what it will be in 2028, given that the SPU has not given us figures beyond 2027. None of us know what the general Government balance will be at that time, yet we are legislating for this. We really need to look at the SPU. It is okay to sit here on the finance committee and say we should put 0.8% of the general Government balance into a fund for the future but that will translate into real numbers and real cash. Between that and the infrastructure and nature fund, you are talking about €6.2 billion in 2026. That number will increase as the size of the economy increases. In that same year, we will have an Exchequer deficit of almost €2 billion. In his contribution, will the Minister walk us through what that means, because the general Government balance that year will be €8.6 billion? That sits in two places, namely, the Social Insurance Fund and in these two new funds. The general Government balance is less than the amount we would transfer into those two funds in that year, giving us an Exchequer balance. Will he talk us through what that would mean in relation to making the funding available in that given year?

I will outline my big concern. The stability programme update is based on a 5% expenditure rule. In fairness to the Government, it developed that rule but also in fairness to it - it is consistent - the Government has never met the rule. It has always breached the rule since it has been in government, that is, since 2020. In some cases, the Government is starving public services of the funding they require. Some of what is in the SPU is laughable. Look at the contingency reserve fund. The SPU came out two weeks ago and our surplus is reduced by €4.5 billion overnight. Why? Because the one-off contingency reserve, which the Government was saying up until budget day was year by year, will now be projected out for a number of years to 2027, which is as long as the SPU projects the numbers. Does the Minister believe that the contingency reserve of €4.5 billion is likely to continue beyond 2027 because if it does, that will obviously impact on the general Government balance? The majority of our contingency reserve, approximately €2.6 billion of the €4.5 billion, is made up of the issue of Ukraine and the immigration challenges the country faces. I have made the point to the Minister and his officials that it makes sense to project that over a longer period because these needs will not disappear overnight. There is €1.3 billion in Covid expenditure and that is where it is laughable. That is €1.3 billion in Covid expenditure the Minister believes will still exist in 2027. Everybody knows that is core health expenditure. I am saying that some of it is laughable, because it was not done last year and it was not put into the base, just as it was laughable that the contingency reserve was not being projected beyond one year.

There are a couple of moving parts in this regard. The other part is that we are not fully clear on the full impact of the OECD BEPS process. What is projected into our figures for the coming years is a reduction in corporation tax of €2 billion, beginning in 2026. However, that number could change and the funding available to the Government could change. That is why I have concerns about this specific number. None of us around this table can say whether 0.8% of general Government balance will be available to put into these funds in any of the years ahead. None of us know whether half of that will be available or indeed how that could be funded.

My other point was about the inflexibility of this measure. In any of these years there could be a situation where the Government does not have €4.5 billion to put into the future Ireland fund. It may not even have half of that, €2 billion, but it may have €1.5 billion surplus it would like to put in. However, from my reading of the legislation you cannot put the €1.5 billion in because it is 0.8%, 0.4% or zero. That is problematic. The legislation allows the Government to go above 0.8% as a one-off payment, but from the way it is drafted I understand that it can only go above it when it is making the payment. There needs to be flexibility on that. When we look at the legislation and how it is drafted beyond 2035, it allows for discretionary payments to be made into the fund. I think that is the appropriate way we will have surpluses. For example, it is likely that pillar 1 will not take effect in 2026, but we are hopeful that it will, which will be very much down to external players, in particular the US. Even if the Government were to decide soon and to legislate for it, it is unlikely it will take effect in 2026. If that is the case, there would be a significant turnaround in the general Government balance. We projected a €2 billion reduction in corporation tax that year as a result of pillar 1. If that does not happen, the €2 billion reduction - and more - will be there for us. Having the ability to make discretionary payments into the fund is therefore a positive thing but none of us can project what will be available in the future.

My big problem is that if you were to do this on the numbers, the contingency reserve, and the potential greater impact of pillar 1 and pillar 2 when it takes effect, then the Government is not building the houses we need. It is not building them. It cannot do that, because it is stuck to its figures. Its capital expenditure increase is less than €1 billion per year. How will we ramp up the type of housing we need - social, affordable, cost rental - while also meeting the needs of this fund? We will deal with amendments later on that stipulate how the funds can support the issue of housing. My problem is that under the law, this will force the Government to make a decision which has a higher hierarchy that housing and that is my serious problem in this regard. Some of these windfall receipts need to be used for the catch-up programme to build social, affordable and cost-rental homes. I believe we can do that while in some other years transferring money into the fund. However, this hard rule of 0.8% of GGB is the wrong approach. We do not know what our general Government balance will be in 2028 or 2029, what our contingency reserve will be, or what impact pillar 1, combined with pillar 2, will have on corporation tax. If this Government remains in place, it will be forced to bring a resolution in many years year saying that the 0.8% is not achievable.

Deputy Doherty is right, to a point. Most of us would probably anticipate a scenario where it will be an annual routine for the Government to require itself to bring a resolution to the floor of the Dáil.

There are some guardrails, if I can describe them as such, here in the legislation, which cites the figures of 0.8% and 0.4%. There is also a function here for the Irish Fiscal Advisory Council, IFAC. It would be helpful, because it would assist in our understanding of the meaning of the legislation, to know how the Minister believes it will work in practice. Could he outline some scenarios regarding the flexibility he believes he would have as Minister for Finance to, for example, make changes in terms of the provision regarding the economic and fiscal situation and what might prompt him to reduce payments to 0.4% or maintain it at 0.8%? Crucially, on Committee Stage, I also seek the Minister’s view of the function of the Irish Fiscal Advisory Council in advising future Governments about what would constitute a deterioration of the economic and fiscal situation. I ask this because we know only too well that the advice of the Irish Fiscal Advisory Council has been routinely ignored by the Minister, as Minister for Finance, and by his predecessor. It is his right to do that. While he explained why he may not take the advice of the Irish Fiscal Advisory Council, he might advise us as to whether the provisional legislation advice by the Irish Fiscal Advisory Council is somewhat tokenistic. Is he prepared to be wedded to and commit himself to taking the advice of the Irish Fiscal Advisory Council when it advises that a different path ought to be pursued in the context of the deterioration of the public finances?

I am afraid I have to disagree with my colleagues on this particular area. The Minister of Finance has a duty and a job that is strictly laid down in legislation. We can speculate all we like about the precise amount we have available to us at any given time. That may change from year to year and that has always been the case. Yet, it is the responsibility of the Minister to deal with the situation that emerges before him or her as the case may be. There is no changing that and there can be no changing that. It is laid down in law and the Constitution. That is our job and the job of the Minister. It applies to all Departments, so that no single Department can go off on a foray and decide there is some fat on the bone here and we should take it when the time is ripe and so on. That does not work. We cannot have that. It certainly will not work within the European institutions, which are always on the lookout for measures of that nature taking place in individual countries. That happened during the infamous financial crash when some countries blamed us as a nation for not taking steps they said were visible to us. They were right and that is the problem. We needed to apologise literally and metaphorically at that time. It all comes down to the person or people with responsibility. It may be a Minister or a number of Ministers but or one way or another, the Minister or Ministers will have to make a decision that stands up alongside other decisions that are being taken at the time. There are also the prevailing factors, such as GNP, GNI* or whatever the case may be. At all times there has to be a reference on which the Minister can rely. If they cannot rely precisely on a specific amount - and that would have to change - they would then have the reference to fall back on a percentage of whatever that may be. The Minister is right that this is the correct way to proceed. We can speculate forever about easier, better and less challenging ways to proceed, but I stand by what the Minister is doing.

At the outset, I thank committee members for facilitating this session this morning. I know it is out of their normal calendar cycle, so I do appreciate the co-operation of colleagues in that regard.

I will say a few words on section 8 first and I will then deal with some of the specific issues that colleagues have raised. Section 8(1) provides the mechanism for contributions to the fund. Subject to section 9, section 8(1) requires that 0.8% of relevant GDP is contributed to the future Ireland fund, FIF, from the Exchequer in each of the 12 years between 2024 and 2035. The 2035 end date is intended to recognise first that the windfall corporation tax receipts may be finite. It also recognises that there is the potential for extra demands on the Exchequer over time. By halting the payments from 2036, the State will have additional flexibility to use the money that would otherwise be contributed to the fund for other State expenditure. The term “relevant GDP”, which is defined in section 2, is used to calculate the level of contribution to the future Ireland fund in a given year. By way of example, the 2026 payment will be allocated in the budget in 2025, based on the latest available GDP outturn figures at that time, which will be the 2024 GDP figures.

Section 8(2) provides for further payments above 0.8% of GDP to the fund between 2024 and 2035 following a Dáil resolution. It will be a choice for the Government of the day to decide whether to provide more resources to the fund. There is no upper limit on the size of any potential contribution. Section 8(3) provides for the possibility of making further payments in any given year. This may be particularly useful after 2035 when the normal payments to the fund are due to cease. This is an option for the Government of the day. As with section 8(2), there is no limit on the scope of such payments.

We have set contributions to the future Ireland fund at 0.8% of GDP because this takes into account estimates of the level of potential windfall corporation tax receipts, as well as the medium-term budgetary projections. The 0.8% of GDP to the future Ireland fund accounts for just under half of the projected windfall corporation tax receipts over the medium term. This means there is a buffer to take account of potential risks that may materialise.

On the question of flexibility, which has been raised by colleagues, it is important to note at the outset that there is no perfect approach to setting contributions to the future Ireland fund, and there will always be trade-offs in the approach that is chosen. In this case, there is a trade-off between introducing flexibility in the contributions to the FIF and ensuring that a long-term asset is built to contribute to future long-term costs. The Bill gives the Minister of the day the flexibility he or she needs to contribute to the FIF while ensuring the contributions continue to be made where there is no deterioration in the economic or fiscal position of the State. One of the main rationales for the FIF is to save windfall corporation tax receipts. The contribution amount of 0.8% of GDP was calibrated, as I said, so that approximately half of the estimated annual windfall corporation tax receipts would be contributed to the funds. This provides a buffer to take account of potential risks that may materialise. This is the default and at normal times this rule will determine the level of contributions to the FIF.

Another primary rationale for the FIF is to build up financial assets to help offset future fiscal pressures. It is in this context that I note that the longer the fund receives the full contributions and the longer it is invested, the larger the fund will grow and the more resources will be available to deal with future financial pressures on the State. The flexibility contained in this Bill means that where the Minister is satisfied that there is, or is likely to be, a deterioration, payments to the FIF may be halved to 0.4% of GDP. Furthermore, when a Minister is satisfied that there is, or is likely to be, a significant deterioration, payments to the FIF may be paused. This gives the Minister the flexibility he or she needs, while also ensuring the contributions are made in order that a financial asset is built up to contribute to future long-term challenges.

It is certainly the case that a lot can change. We are looking well into the future time horizon, which is into the 2030s and 2040s. Yet, based on the information I have available to me today as Minister, I am convinced that this is the right course of action. In broad terms, it is worth pointing out the support this proposal has received from the Irish Fiscal Advisory Council, the European Commission, the IMF, the OECD, our own Central Bank of Ireland and, indeed, many other independent institutions, which have recognised the risks to Ireland of being dependent on windfall corporation tax receipts.

This does help us to provide for costs that we know are going to come our way. I am satisfied overall that there is adequate flexibility built into this legislation. Ultimately, it is a judgment call for the Minister and Government of the day with regard to whether to reduce or ultimately to halt the contributions into the fund. In making such a decision, the Minister and the Government will have to take into account a range of factors, which we will come to in more detail in section 25, regarding the assessment of the Irish Fiscal Advisory Council, IFAC, but also in section 26 with regard to the Minister's own assessment.

On the question of Exchequer deficit versus general Government balance, Deputy Doherty has rightly taken us on a walk-through of reconciliation in broad terms between the Exchequer balance and the general Government balance. Again, however, I would make the point that the flexibility is there within the legislation. If it is the view of the Minister of the day that it is inappropriate in the context of a deficit, where there is borrowing taking place, to continue to make a contribution to the fund then that decision can be taken to either reduce or not to do so. Of course, to reduce by half means that the other half is then available in terms of additional resources available to the State in that context. That point is important.

On the question of why not allow the Minister and Government to put in €1 billion, €3 billion or €4 billion year on year, that is a very ad hoc approach in my view. That does not provide a sound and consistent structure for the establishment and operation of such a fund. Also, when it comes to the work of the agency, namely, the National Treasury Management Agency, NTMA, which will be responsible for managing this investment, I believe it is important that we give it as much certainty as possible, while acknowledging that there may be changes, circumstances change and there will be downturns. There could be shocks. Who knows what will happen over the next 15 to 16 years? From the perspective of enabling it to professionally manage the fund, however, it is important that it has as much certainty as possible about the level of contribution that is going to go into the fund over the period ahead. That is why we set it at the 0.8% or 0.4% or, indeed, 0%. Ultimately, however, that is a matter for the Minister of the day. There is, therefore, significant flexibility there. While it is true that on the fiscal side we have projections out to 2027, in the stability programme update, SPU, we do have macroeconomic projections out to 2030, including GDP. Because of that lag effect, it means we can show and have all the projections there. What the contribution is can be worked out directly from the SPU in terms of GDP to 2030, which means the contribution up to 2032 can be drawn directly from the data provided within the SPU that was published a couple of weeks ago. I know there will be a fair bit of over-and-back on this. I just want to give my broad perspective on section 8 and my view that there is adequate flexibility within the parameters of the legislation to take account of the concerns colleagues have expressed.

I thank the Minister. That is helpful. First of all, while we have the data in terms of GDP, what we do not have the data for is general Government balance out to 2030 or 2032. We do not have the data in terms of the Exchequer balance. We do not have any of the capital expenditure data from that period. I am sure the Irish Fiscal Advisory Council by now is sick, sore and tired of telling the Government that it needs to provide five-year projections and it still is not doing five-year projections. Therefore, we do not have that data. The one thing we can tell - the Minister is 100% right - is how much money we will have to put into the fund. What we are completely blind to is the impact that would have in terms of our Exchequer deficit or the funding available to meet other needs at that point in time. That is a problem.

I completely agree with the Minister when he listed off a number of bodies and organisations that say we should not use and should not be dependent on windfall taxes to fund repeated current expenditure. He could add my party to that. I do not believe we should be dependent on and use windfall taxes for repeated current expenditure. That would be inappropriate. It would not be learning the mistakes of previous Governments. In the lead-up to the crash, Governments did rely on volatile stamp duty in the middle of a housing boom to fund current repeated expenditure. We saw the consequences of that when we had the financial crash. We had both. We were left exposed as a result of that. However, that does not mean to say that windfall corporation taxes cannot be used for one-off or, indeed, catch-up programmes. I have been saying this for quite a number of years and I see now that the Government has talked about windfall additional capital expenditure. It is right and appropriate that we would have one-off expenditure to meet the needs not only of society, but also to address the biggest issue that businesses are now talking to us and to the Government about, which is that housing is becoming a serious issue for them in terms of attracting new investment and expanding the footprint they have at the minute. The competitiveness council also pointed that out.

The Minister talked about deterioration in the public finances. As Deputy Nash mentioned, there is no definition as to what that means. The SPU that was published two weeks ago stripped €4.5 billion off our surpluses because the Minister suggested that the €4.5 billion contingency fund will be required for each and every year into the future the SPU covers. Is that a deterioration of the public finances? If we did a calculation, which we have not done in four years, regarding the impact of pillar 1 and pillar 2 and found that this had a larger impact, is that a deterioration in the public finances? Have we got a deterioration in the public finances when we still have a general Government balance? Is going into Exchequer deficit a deterioration in the public finances?

Let us just stick with that point now in terms of Exchequer deficit. The Minister said that if we have to borrow then it would be up to future Governments to decide not to put the 0.8% into the fund but maybe a lesser number or nothing at all. However, what we see here with the lack of information beyond 2027 from the SPU is that if we put this money into the fund in 2026 and 2027, we are going to have an Exchequer deficit. We will have an Exchequer deficit of close to €2 billion in 2026 and €1.3 billion in 2027. The Minister might explain to the committee how that Exchequer deficit is funded. Does that trigger a question for the Minister for Finance with regard to putting the entire amount into the fund?

Ultimately, that question, which we will come to consider in more detail in section 26, is a matter of judgment. The criteria are laid out within section 26.

Factors will have to be considered such as the general Government balance at the point in time, corporation tax receipts, GDP, employment, unemployment and any other such matters that IFAC and then the Minister in his or her assessment consider appropriate. It is very broad in the scope of potential issues that can be considered. It is a matter of judgment. It is appropriate that that flexibility is there, essentially, for the Government of the day to make that decision.

The Deputy asked about the potential scenarios around OECD and the BEPS agreement. There is uncertainty about pillar 1. Will it be agreed? When will it be agreed? When will it be implemented? Will a critical mass of countries implement it by 2026? Nobody can give a definitive answer to that question.

With regard to the non-core expenditure, which we will have an opportunity to go through later in the evening at the Committee on Budgetary Oversight, it is an assumption that the Government has made for the purposes of the stability programme update. Certainly, a substantial proportion of those costs are likely to continue for the foreseeable future, although I would point out that we were in a position where the non-core expenditure was at a high of over €15 billion at the height of Covid. It is now €4.5 billion. As the Deputy acknowledged, much of that relates to the consequences of the war in Ukraine and the costs of international protection. There is provision for Covid-related spending of approximately €1.25 billion which, again, had been over €15 billion.

There are still legacy issues in terms of Covid and real costs that have to be met arising from that provision. Later this year, we have to set out a medium-term fiscal plan under the new EU governance framework. There is no distinction between core and non-core. Over the coming months, there will be work by the Minister, Deputy Donohoe, and his officials, in particular, to arrive at a view as to the likely level of what we called non-core, appropriately, until now. What is the appropriate provision for that over the period ahead? That has to be considered in the context of the summer economic statement and in even greater detail in the context of the budget in the autumn. That feeds into the five-year medium-term plan we submit to the European Commission. There is no longer a distinction between core and non-core under that economic governance framework. It will fall to a new Government, when it is formed, to change the medium-term fiscal plan if it so decides.

On the question of a deficit, the Deputy is right in pointing to the forecasts on the Exchequer side from 2026 onwards. The NTMA has adopted a conservative but professional approach to managing debt and built up a significant buffer in terms of cash and liquid financial assets, which, at its discretion, can be used in the period ahead. We borrow on an ongoing basis to refinance existing debt. It is good practice for the NTMA to remain in the market and maintain the relationships it has in terms of bond issuances. We expect that to continue. Even if the Government was running consistent surpluses, I would support the continuation of that practice. It maintains experience, corporate knowledge and intellectual capital within the system, which is important.

The NPRF was set up in the 1990s and allowed borrowing to fund it over its existence. The design of these funds allows more significant control and decision-making power to the Minister and Government. If it is the conclusion of the Government of the day that an Exchequer deficit of a few billion euro that cannot be reasonably met from existing resources held by the NTMA means it is no longer prudent to invest in the fund and is tantamount to a significant deterioration, I am satisfied the enabling infrastructure is in the legislation to facilitate such a decision. Where you are running modest deficits, such a decision is not required. That is my view; another Minister might take a different view. The Bill provides the flexibility to make such a decision.

The projections we have are for 2026. We do not know about pillar 1 and pillar 2 but their impact, if implemented in 2026, is likely to involve a worse position for Ireland. The Exchequer deficit would increase and the general government balance would come down. We have the Minister's projections for 2026. Is it his view that we should borrow close to €2 billion to fund the future Ireland fund? That is what would have to happen. I agree with all the Minister has said on the NTMA and on continuing to be involved in the market. The NTMA has substantial liquid asset and cash reserves built up but will want to keep them replenished. We have that money to deal with the Exchequer deficit but the NTMA will want to borrow to bring us back up to that point. On these numbers today, is it the Minister's view the €2 billion borrowing to put into that fund is fine?

My view on that is there is not a one-to-one relationship there. If we have a deficit of X, it does not necessarily mean additional borrowing of X by the NTMA. There is considerable flexibility in its view of what is required to be held on reserve. It has built up a considerable level of cash and liquid financial assets. Based on the numbers we have here, I stand over the plan to continue to invest 0.8% in the coming years. The Deputy is correct there are different potential outcomes in terms of pillar 1 and pillar 2. There is the interaction effect. We have baked in the net cost of €2 billion into 2026. If there is a delay to pillar 1, the outcome will be better. If pillar 1 happens in 2026, the Department will firm up its estimate of what the impact will be. It could be worse. It could be more than that. That is a possible scenario.

It comes back to the fundamental question of whether there is sufficient flexibility. If there is a scenario of economic deterioration, an unfavourable outcome in terms of pillar 1 taking effect in 2026 and we are in a considerably worse position than set out in table 1 of the SPU, then the Minister of the day may make a different decision. That is provided for and facilitated within the legislation. These are Department of Finance projections working with our colleagues in Department of Public Expenditure, NDP Delivery and Reform. They are not my personal projections and they are not political projections; they are the central scenario in the view of both Departments, particularly my Department. I am satisfied, based on the time horizon, the known knowns and the known unknowns, that we should proceed. I am also satisfied that, were events to change and things to go against us, the future Minister, whether me, Deputy Doherty or somebody else, will have the ability to pause or reduce the contribution. We will come to section 26, which goes through those criteria. That ultimately is where that flexibility sits and I think it is adequate.

What is the emerging evidence behind the scenes as to the eventual impact on this country of pillar 1 and pillar 2? From the evidence of the past 12 months or two years, changes have impacted our budgeting for the future. What can we expect, given we do not have many friends in that area when it is all boiled down, but we have many hostiles, from the United States to the rest of Europe, big countries and small countries? The net impact of what they say is they like small countries but they do not like small countries to be successful. That is a threat - perhaps to themselves. Maybe it is and maybe it is not. We have to protect in every way possible our interests in that debate because nobody else can protect us.

We see an Exchequer deficit is projected from 2026 onwards. If that were to continue, there would be increased borrowing, but that is not the be-all and end-all. With all these SPU numbers concerning borrowing and so on, we know the risks could increase with pillar 1 and pillar 2 or there may be some improvement if pillar 1 does not go through. However, that is all based on the current projections of the Government. This is where we have dire problems. At its Ard-Fheis, Fine Gael promised 250,000 houses. I think with Fianna Fáil the figure is roughly the same. I am not sure if it has made a statement on it yet. The Commission will argue, I presume, that we need 50,000 houses per year. These figures include capital increases of roughly €500 million per year.

That is not cumulative. How can the Government build the number of social, affordable and cost-rental homes we need to build in the coming years with that reduced level of capital? It simply cannot meet the challenges. Even if the Minister is saying that from 2026 onwards, we would have to borrow to put money into the fund, it would be on the basis that we would still leave people high and dry in terms of housing because the actual ramp-up in capital investment is to be extremely low from 2027. In 2026, there is a bit of windfall capital. We do not know how much of it will go towards housing yet, but in 2027 the increase in capital will be €635 million. That is nowhere near what is needed to meet what is required under the programme.

We are having these conversations and parties are claiming they will do X, Y and Z, but the only way it could work for Fine Gael, and possibly Fianna Fáil, with these numbers would be by leaving it to the private sector and having it continue to build apartments in Dublin that are not within the reach of ordinary people. I was out with Deputy Andrews and Councillor Daithí Doolan yesterday. They were looking at apartments and saw that many lie empty because of what is being charged. Nobody in the community can afford the prices being asked. What we need are affordable, social and cost-rental homes that are affordable to people in their communities. We will not be able to meet that demand with transfers of the scale in question into the funds, particularly in subsequent years. Some of it can be met in the first couple of years but there will be a problem.

The SPU is based on the numbers I have mentioned. Taking 2027, for example, there is a core year-on-year increase of €5 billion, but €3 billion of that relates to existing service levels. Capital is only €635 million, and then we have new measures, which is the remainder. Between social welfare and tax packages, it will not even meet what is required. That is the problem. How do we square the circle? That is my main concern. I genuinely believe some of the windfall corporation tax revenue needs to be used for a catch-up programme to build houses across the State that meet the needs of people within their communities. That is the core issue. If the Government does what it proposes in this legislation, it will simply not achieve this. If it tries to do what it has set out in the SPU in terms of new measures, we will just continue with what we have had up to now, with no major ramp-up over the coming years by way of State-funded support for housing.

I thank Deputies Doherty and Durkan. I will deal first with the issue of corporate tax and the OECD, which Deputy Durkan raised. It is very difficult to make a prediction when it comes to corporate tax reform and the potential cost for Ireland. There are scenarios in which, if pillar 1 is agreed and implemented in 2026, the cost could be greater than we have already provided for. There are certainly scenarios that point to that. We cannot be certain because the negotiations are continuing and significant outstanding items have yet to be negotiated that could have an important impact on Ireland in either direction. The negotiations have not been finalised and that is why we cannot finalise a revised Estimate. I want to be open and honest about the fact that there are scenarios where the cost could be greater; however, there are also upsides. Owing to the uncertainty, we have stuck with the current net cost of €2 billion in 2026. This was first arrived at several years ago, and there are certainly possible scenarios that could result in an increased cost for Ireland.

It is important to recognise that the cost of borrowing at a given time is an important consideration. At present, we can issue ten-year bonds at less than 3%. That is on par with or lower than the figure for core eurozone countries, including France, Belgium, the Netherlands and Finland, and this could be at a point in time when the fund is earning 5%. Even where there is a deficit and the NTMA is borrowing in the market, it could be its view that it still makes commercial sense for the State to borrow at reasonable rates of interest, given the investment environment in which the fund is operating. That is also a consideration, so I do not think we should have a hard and fast rule that, where there is a deficit, the contributions to the fund should stop. There are several factors that would need to be considered at a given time, including the sovereign debt markets. If we have a few full years of experience built up with the future Ireland fund, the run rate in terms of the return would have to be considered. As we know, it can vary, but I have strong faith in the expertise and professionalism of the NTMA such that it will do the very best it can in this scenario.

I suspect we will discuss housing at length later on. We have to look beyond the direct Exchequer capital position, which is what is provided for within the capital ceilings and the SPU. The Irish Strategic Investment Fund is supporting the delivery of 25,000 homes by 2030. As the Deputy knows, we have just executed a directed share buy-back in respect of AIB. We received €1 billion from the transaction, and we will also receive well over €200 million through dividends. For now, that money sits within the Irish Strategic Investment Fund. It will fall to me, as Minister, to make a decision on how these proceeds can be used. They could be used to complement the existing investment ISIF is making in the delivery of housing, for example. That is an important point. Home Building Finance Ireland has already approved funding of about €1.75 billion for development. Deputy Doherty will be very conscious of the need for international capital to play a part in meeting the cost of building homes at the scale needed. I also point to the work of the Land Development Agency, for which very significant capital has been provided. Up to €5 billion in funding has been made available to the agency to deliver social and affordable units.

We do face constraints in terms of planning, zoned sites, the servicing of land, labour and all these issues. We are working on these but I am making the broad point that one cannot measure our commitment or indeed our capacity to respond to the major housing challenge, which I acknowledge exists, by examining only the direct Exchequer capital line within the national development plan or indeed the SPU.

I understand but this relates to the core of this legislation, which we really need to address. I do not dispute anything the Minister is saying about ISIF, but it is funding private homes for mass delivery. We can accept that if we want to increase the amount of social, affordable and cost-rental housing delivery, we need voted capital expenditure. The problem is that given the numbers the Minister has presented and that underpin the SPU, voted capital expenditure increases by only €500 million approximately. That is across all sectors, not just housing. That means that if we want to address the housing crisis, we will not do so based on these numbers. It is not possible to ramp up housing unless you just provide private housing and keep the numbers of social, affordable and cost-rental houses at the same levels. It is not possible to do so with the numbers the Minister has presented in the SPU.

I do not know what the Taoiseach’s ambition is regarding the delivery of 250,000 homes over five years because he has not given a breakdown of how many would be State-supported social, affordable and cost-rental units. To meet community needs, the Government need to increase significantly the number of social houses being delivered. Also, it needs to increase significantly the numbers of cost-rental and affordable houses being delivered, because these numbers are in the ha'penny place at the minute. That requires voted capital expenditure.

It is not possible to do that at any scale under these numbers, so I challenge the Minister in that regard. We all know what is being delivered now. Under the stability programme update, capital expenditure will increase by just over €500,000 in 2027. How are we supposed to increase the number of public social, affordable and cost rental homes with that type of increase across all Departments? That is the problem and the core issue. The reason some of the windfall corporation taxes need to be used is to have that catch-up programme.

-----the national development plan. To go through some of the numbers, last year almost 33,000 homes were built. Just under 12,000 new social homes were delivered last year, up from about 10,200 the previous year. In 2023, there were more than 8,000 new-build social homes, there were more than 1,800 acquisitions and 2,000 were delivered through leasing programmes. More than 4,000 affordable housing supports were delivered in 2023 via approved housing bodies, AHBs, local authorities, the Land Development Agency, LDA, the first home scheme, cost rental, the tenant in situ scheme, the vacant property refurbishment grant and so on. We can see the scale of what is being done and the progress in terms of output. This delivery of social homes is the highest annual output of social homes in decades and the highest level of new-build social housing since 1975. When the housing assistance payment, HAP, is added in, at more than 8,200 units, as well as the rental accommodation scheme, almost 22,000 new social housing supports were delivered in 2023.

The point I am making is that we will need capital from many different sources, including direct Exchequer capital. I already referenced the work of ISIF. It can play an important role. I referenced the funding capacity of up to €5 billion within the Land Development Agency, which is about delivering social and affordable homes. Taking my home city of Cork as an example, an apartment scheme has just commenced construction on the quays. It is the first major apartment scheme since the Elysian was built in 2008. It will involve properties for sale using Croí Cónaithe as well as social homes and cost rental. However, much of that does not appear on the direct Exchequer capital; it is through the work of the LDA as well. That has to be acknowledged. One cannot just measure the level of ambition we have through the provision in the housing Vote in the direct Exchequer capital. We have the work of the LDA and the Housing Finance Agency, which has significant lending capacity into the sector as well. I already mentioned HBFI. We have a range of different actors. We will need international capital to build 40,000 homes and, ultimately, if we are moving towards building 50,000 homes. We also have to reform and pass the planning legislation. We have to work with our councils in respect of zoned land and we have to make sure Uisce Éireann is properly funded so it can service the land in the years ahead. I am satisfied that we are significantly increasing the overall level of capital for the delivery of housing, and I believe that it will continue.

We touched on some of these topics earlier. The section allows for the Minister to make a reduced payment into the fund. I want to circle back to a point I made earlier. It is all, half or nothing in this regard. He mentioned in his contribution that this may give certainty to the NTMA. I would dispute that because the agency will not be certain about any money going into the fund given a deterioration can happen quite rapidly. It would be wrong of the NTMA to bank on money before it is provided, and I am sure it would not do so. The section provides for the full amount or zero, so that is the level of the certainty for which it provides. It is structured as a percentage of the general government balance, GGB, of the previous year and a decision is, therefore, made in advance. It does not allow for a certain scenario. I will go back to my earlier point. The Minister talked about capital that is available privately or through the ISIF for private housing but voted capital expenditure is far too low to meet the needs of society and he did not address that issue. We are talking about an extra €500 million across all Departments in 2027. How can we expect to ramp up social, affordable or cost-rental homes to the scale required if that is the level of ambition?

The Minister or a future Minister could increase voted capital expenditure. It may be the case that we cannot put €4 billion into the future Ireland fund. It may be the case that we do not want to reduce it to €2 billion, which is the second option provided for in this legislation, but we may want to put in €3 billion. Instead of putting zero into the fund, we may want to put in €1.5 billion but there is no flexibility in the legislation to go in between the numbers that have been suggested.

The bigger question is: what is a deterioration in the economic and fiscal position of the State? Let us examine what has happened in the stability programme update, SPU, and consider a hypothetical situation. If we were having this conversation three weeks ago, our surpluses in the years 2027 and 2028 would have been anticipated as €4.5 billion higher. If we have this conversation in a couple of months, perhaps when all the negotiations at OECD level are finished, we might find that our expected surpluses have reduced further by quite a significant amount. Given the situation in terms of immigration and the challenges with regard to our health budget, we may find that our anticipated surpluses have reduced further. That may not all happen in one year and may happen gradually. We have seen the SPU impact. Perhaps next year we will see impacts on pillars 1 and 2. We could then see an issue in respect of the cost of €2.6 billion as the immigration challenges may have significantly increased. Does all of that lead to a deterioration in the fiscal position? The description is so broad that there are no real criteria for what it means. It does not suggest going into Exchequer deficit, or an Exchequer deficit as a percentage of the economy. It does not suggest that it relates to a general government balance or a general government deficit. Because this legislation applies over a significant period, we could have a gradual deterioration. In a way, that is beneficial. For a Minister for Finance, it is a great section because he or she makes the call at the end of the day. He or she can say that in the round, when we look at this and that, he or she believes there is a deterioration in the public finances and a resolution is brought to Cabinet. In a way, I support that because it gives the Minister the flexibility to increase capital investment, which is lacking. However, the problem is that there are only three options under this section, those being the full amount, half the amount or zero. We could obviously go above the full amount, which would be welcome because there may be windfall receipts, particularly if pillar 1 is not implemented. There may be additional receipts from which we could benefit and, therefore, it would be appropriate that those receipts would go into the fund in a given year or years.

I will read a short speaking note on the section before I deal with the specific question. The section provides the mechanism to reduce or pause the annual payments to the future Ireland fund. It is important to provide the option for payments to be either reduced or not made into the fund when there are negative fiscal or economic conditions.

While the analysis of whether there is a deterioration and the extent of that deterioration is a matter for the Irish Fiscal Advisory Council and the Minister for Finance to determine, ultimately, the decision to make the proposal on whether to halve or halt the payment to the fund is a matter for the Minister in line with the relevant procedures.

Section 9(1) provides that the Minister for Finance may recommend to the Government following consultation with the Minister for Public Expenditure, National Development Plan Delivery and Reform to reduce the payment to the fund to 0.4% if he or she considers there has been or is likely to be a deterioration in the economic or fiscal position of the State. To put some numbers on this, in the context of the 2025 figures, halving the contribution would mean making a payment of approximately €2 billion and would mean that the further €2 billion would not be paid into the fund. This would provide the Exchequer with an additional €2 billion while maintaining a level of saving. This type of decision will be subject to the passing of a resolution by the Dáil under section 9(2).

Section 9(3) makes it clear that the full 0.8% payment is not paid into the fund when such a resolution has been passed and that the Minister will instead transfer 0.4% to the fund in the subsequent year. Section 9(4) mirrors section 9(1) but here the Minister determines that there is a significant deterioration in the economic and fiscal position of the State such that it would not be appropriate to make any payment into the fund. A similar process is provided for in section 9(5) and (6) providing for the passing of a Dáil resolution and preventing the Minister making any payment into the fund in the subsequent year when such a resolution has been passed.

The Deputy raised two key issues. One is about the assessment. If I had sought to tie in a tighter manner the hands of future Governments, I think the Deputy would rail against that very strongly. I have not done that. I know we will come to sections 25 and 26. It involves a deterioration or significant deterioration in the economic or fiscal position of the State. The fiscal position of the State will have to have regard to the fiscal plans of the Government concerned and that will be a very direct part of the consideration of whether or not those plans will result in a deterioration or not. That is adequately provided for in section 25 in terms of the Irish Fiscal Advisory Council's assessment and then section 26 by the Minister. It also allows the Minister to consider any other such matters as the Minister considers appropriate, so it is actually quite broad in its nature and gives the Government of the day considerable latitude. There is the option to pay additional funding in. On the question of why zero, half or the full, it is my view that it is important to have a solid structure and to have as much certainty as possible. The Deputy made the point that there is no certainty and that there are only three options and asked what would happen if there was €1 billion, €3 billion or €5 billion. That would be a very open annual process and annual decision and I would not have confidence in that circumstance that it would actually happen over the years ahead with such a structure. This lays out a formal structure. Decisions have to be made. There is flexibility as to which decision you make. This is appropriate. That is one for the Government of the day. If the Minister is deciding every year to put €0.5 billion in this year and €1.5 billion in next year given the known pressures and stresses of managing a budgetary, I would be concerned that this project, which I believe is a very important one strategically for the State, would not progress in the manner I believe it needs to. I would also make the point that all the risks are not to the down side. There are many down side risks. A lot can happen. Who would have thought six or seven years ago that we would have had to deal with everything we have had to deal with over the past number of years? There are up side risks as well and things could go better than expected so we have to prepare for the worst but also anticipate that there could be up side risks when it comes to even some of the issues we discussed this morning.

I agree with the Minister regarding the up side risks. I have made that point. My assessment is that I do not think Pillar 1 will be in effect in 2026, which is a large up side for the State during that year. There are other up side risks.

I made the point that this is so broad that it allows the Minister to bring the resolutions. I do not like the language in this. The issue here is that the Minister would have to bring a resolution to say that there has been a significant deterioration in the fiscal outlook of the State-----

-----or is likely to be. That would be in the context of a Government increasing capital investment to meet the housing needs of the State, which is building up the stock of assets within the State. Is it a deterioration or a significant deterioration in the fiscal position of the State? The Government could still have a surplus at the end of that process or just not put it into the fund to be invested in the future. What the Government has decided to do is invest in the future by building the houses here and now. The language in this is not good because a Minister for Finance bringing a resolution to the House saying there is or is likely to be a significant deterioration in the fiscal position of the State is not just heard in this Chamber. It is heard externally and it is not the right type of message. The Minister is right in saying that this is very loose. The Irish Fiscal Advisory Council will give its review but at the end of the day, the Minister will make the decision on foot of a resolution to Government but will have to make that determination and say that. That is not a good position to be in, particularly in a situation where there might be a general Government balance or surplus but the Minister is not in a position to put €2 billion, €4 billion or €6 billion into funds because he has decided to invest it into what is really needed here and now, which is what people are crying out to us about. Of the thousands of people who are going to Australia, some are doing what generations before them did but others are telling us that their lives are being put on hold because of the housing crisis and they do not see a future and they do not see hope here. When we meet any chamber of commerce or business organisation or talk to large employers, including FDI, the number one issue on their agenda is housing. The National Competitiveness and Productivity Council is telling us that housing is the number one issue on the agenda, so a Minister for Finance and Government deciding to meet those needs here and now in a different way - and I know the Minister thinks he is meeting those needs in his way - by ramping up capital investment and using the windfall corporation tax receipts we have is not a significant deterioration in the fiscal position of the State because the Minister could still have a balance but just not have the funds in that given year to put into the future Ireland fund. What this section does is make the Minister say that there has been a serious deterioration.

The Minister has his plan and outlook over the next number of years. He has calculated what the general Government balance is without looking at those up side risks and the proportion that could be put in those funds. If I agreed completely with the Minister's plan, that would be exactly the way to go because we will have those surpluses if the down sides do not come into play and, therefore, it makes sense to invest those surpluses into the future. This is why I agreed with last year because we can put money into the fund while also ramping up public housing. We will be able to do the same this year because of the scale of the surpluses. My view is that we will be able to do it next year but the Minister may have challenges doing this in 2027 or 2028 and we do not know what 2029 and 2030 look like. That is the problem with this legislation. Regarding the Minister making that determination, I know it is easy. It is so loose. I am sure any Minister will do it. If this Government was re-elected, given what I think is likely to happen, it is likely that resolutions will come before the House. This language could have an impact when the impact should not be there because it is literally a decision of Government to invest the surpluses it has in capital expenditure to meet the needs of the here and now but also the future and it is not a significant deterioration.

Perhaps one could argue that this does not meet a significant deterioration but it does. That is the point. It is so loose. The Minister would have to bring that resolution in order not to put the money into the fund. I believe that has consequences. I would not like to see headlines in some of the newspapers saying that the Minister for Finance is bringing a resolution to the Dáil because he or she believes there is a significant deterioration in the public finances when we are still running a general government balance or indeed a surplus.

The important point is that externally investors and those who are making decisions about their relationship with Ireland have welcomed this Bill. They welcome that the Government is forward-looking and that we are now planning for the long term in the management of our public finances. Among the most influential actors are ratings agencies, whether we like it or not. Reading the various reports on Ireland in recent weeks and months this proposal has been welcomed by the ratings agencies. They understand the importance of this for Ireland. At any point in time investors and people who are considering their relationship with Ireland will consider a whole range of factors, including the economic conditions, where we are on debt sustainability, which thankfully has improved significantly in recent times. They will consider where we are on the public finances, where we are on employment and whether Ireland is a business-friendly country. They will also consider issues like housing availability for sure. I am satisfied that in the round they understand the nature of the Irish economy, the strengths of the Irish economy and the challenges we face. They will point to their welcome and their support for what the Government has provided for here in the legislation.

I believe the Minister is constraining himself in a way he does not need to in the approach to that. Everybody welcomes the principle of setting up these funds but the devil is in the detail. It is awfully important that we look not only at this year and next year but the years beyond that.

On the Minister's concerns around the three options and the lack of flexibility I suggest the way to do that is to have a proper assessment of the investment that is made. If one is investing in housing, for example, it would be linked to productivity so one can show it really clearly. It would be linked to productivity but if we were in a do-nothing position it would also be linked to the constraints that will continue in the economy in the context of human capital and other investments there. I believe there is a broader way for the Minister look at it rather than constraining the provision to just the full amount, half the amount or zero and the messages that would send.

Let us look at the language. I am aware that investors will look at this in the round but I am talking about what the legislation forces the Minister for Finance to state in the Dáil, which has an impact. We understand that investors are not going to just look at headlines when they are making their investments and I take the Minister's point on that. Let us take a scenario, however, where because of an increased capital cost on housing, for example - or it could be for other reasons - there was a need to bring a resolution forward in any given year to say there was a significant deterioration in the economic or fiscal position of the State, and given this has happened no money has gone into the fund that year. Say we are still operating on a general government balance with a modest surplus of €1 billion and we were not allowed to put money into the fund that year, if everything remained static, no money was put into the fund and the outlook remained the same for the following year, and we were still operating with a general government balance of €1 billion, the Bill states "... the Minister, having carried out an assessment in accordance with section 26(1), is of the opinion - (a) that there has been, or is likely to be in the subsequent year, a deterioration in the economic or fiscal position of the State,". I suggest that the deterioration does not have to happen. The fiscal position of the State could actually be the same as the previous year but it still does not allow for the transfer to be made.

The Minister also mentioned a scenario where a Minister had the ability just to put in whatever he or she believes is the appropriate level in any given year. The Minister does not believe it would work because there are other pressures and so on, which in my view really speaks to the point of this Bill as being about the big pressure that is housing in the State. That is where Exchequer voted capital has to be ramped up. This Bill is a comfort blanket to a Minister for Finance who operates on a conservative basis, so that he or she can say, "I cannot do it because we have legislated for this and therefore we cannot meet the needs of housing." The Minister made the point that if a Minister for Finance was allowed to make the payments he or she thought necessary without having the structure of 0.8% or 0.4% of GDP, he believes that would not happen. That, however, is exactly what the Minister is legislating for in this legislation beyond 2034; it is to allow a Minister to decide on his or her own assessment what is the appropriate amount of money to go into the fund at that point in time. The Government cannot have it both ways. This legislation does include that provision. This 0.8% is only for the first nine years of the legislation and the remainder then is in relation to a Minister's own assessment. That assessment would be better viewed in terms of general government balance or indeed Exchequer balance. Using it just as a percentage of GDP in the economy means that it does not take into account any expenditure pressures or needs that are there.

GDP is used for a number of reasons not least because we believe it does capture that inherent volatility that is relevant to windfall corporate tax receipts. The investors want to see the funds build up and to see Ireland become more secure in managing the public finances and managing the economy, and combining that with an ambitious programme of public capital investment. I believe this is what would give them confidence. In a situation where the Government of the day changes its fiscal plans, and that still leaves a modest general government surplus as the Deputy put it, then why would we not continue to contribute to the fund in that situation?

On the question of why have just three options of 0.8%, 0.4% and 0.0%, I believe it is too open-ended for it to be a very broad annual decision with no guardrails really as to what it would be. I do not believe this would send out a clear enough signal about Ireland's commitment to providing for demographic costs that are coming at us very quickly. There is adequate flexibility within those three options. There are upside risks as well as downside risks so a Government of the day may decide to do more. Were it just a decision to be made every year in the budget as to whether we put anything in, and if so how much we were to put in, and we were to argue about a few hundred million euro here or there, that would not be appropriate for a structure of this kind that is intended to be medium to long term in nature with as much certainty as possible, while acknowledging that a lot can change. We are looking here to the mid-2030s and into the 2040s. Of course nobody can predict what way the world will be and what will happen in the next 15 years or so. Based on what we know now, I believe we have got this plan right.

That has been legislated for. The Minister queried my point on having a modest surplus, an example of which I gave as €1 billion, and why would the Government not put money into the fund.

Is it the Minister's assessment that if there was a general Government balance of €1 billion the Government would still have to put €6.5 billion into the fund or, indeed, almost half that amount at €3 billion? Let us remember that a large portion of the general Government balance is made up of SIF, therefore, it has quite a significant impact on the Exchequer balance. That is the reason the Government would not do that.

If the Government had a general Government balance of €1 billion, even if it wanted to put in €1 billion, it would not be able to under the legislation before us because it is either half 0.8% or zero. That did not answer the question. The legislation is based on there being a further deterioration. Section 9(4)(a) states, "that there has been, or is likely to be in the subsequent year, a deterioration in the economic or fiscal position of the State." There may not be any further deterioration. There may be a situation where the Government could not invest this year. God forbid, if we had a Covid pandemic or something similar, and we all knew this provision would be enacted, that is what it is really for and, therefore, the Government would not make any provision into the fund. One may not have a deterioration the following year and, indeed, there could be a slight improvement the year after that, but the legislation states that the Minister has to determine that there is a further deterioration in the fiscal position. I contend that the fiscal position could improve but the Minister is still not be in a position to put money into the fund. The legislation does not allow us to do that unless we just want things done with a nod and a wink and bring the resolution before the Dáil even though the fiscal position is improving.

First, on what happens from 2036 onwards, of course there will be a review of the legislation. A lot of water will flow under the bridge between now and then. Yes, it is the case that the Bill is providing that flexibility from that point onwards because we believe that 12 annual contributions is the appropriate amount. From that point, there will be an annual assessment but I have no doubt the legislation will be reviewed well in advance of that point in time.

Again, on the question of a general Government surplus of €1 billion, and at that point the contribution would amount to around €6 billion, and whether I would go ahead, it all depends on the factors we spoke about earlier on. Perhaps we can borrow at 2% or 3%. Perhaps the fund is earning 5% or 6% a year. In that scenario, yes, I would because it would make perfect financial sense but that is an assessment that can be made at a point in time.

On section 9(4), as the Deputy will know, the assessment is whether "there has been, or is likely to be in the subsequent year, a deterioration", or a significant deterioration, "in the economic or fiscal position." It is on that basis the Minister makes a decision.

I move amendment No. 5:

In page 10, line 2, to delete “31 July 2040” and substitute “31 July 2033”.

My amendment No. 5 seeks the deletion of "31 July 2040" in section 10(1). My amendment No. 6 seeks the deletion of "before 2041" in section 11(1). Finally, my amendment No. 7 seeks the deletion of “in 2040 or in any year thereafter”. The dates are connected. The date mentioned in amendment No. 6 is quite explicit in terms of when payments from the fund will be made to the Exchequer. My reading of the provision in section 11 is that no payment will be made until 2041. Why were those particular dates chosen? I refer especially to the dates on which payments from the fund to the Exchequer will be made. What is the rationale for that and why not earlier than "before 2014"?

I understand that we are taking amendments Nos. 5 to 7, inclusive, together. As I understand it, the intention of the Deputy’s amendments is that the resources of the future Ireland fund would be available to be drawn down in 2034. I will start by mentioning the fund’s interaction with the public finances around that time in the mid-2030s. In the Bill, as drafted, it is intended that contributions to the fund are made up to and including in 2035. There is, of course, the option for the Government to transfer funding should it so wish beyond that date, but that will be a decision for the Government of the day.

The absence of default contributions to the fund after 2035 frees up potential resources for use by the Exchequer - resources that would otherwise have been added to the fund. This is in recognition that there is likely to be additional demands on the Exchequer in or around this period. If the current level of contribution - approximately €4 billion in 2024 - was the same in 2036, this would be a significant amount to add to State expenditure. We also cannot predict the future. It is possible - and the Bill allows for it - that the full amount or, indeed, less resources may be provided to the fund depending on economic or fiscal circumstances. While it is intended that the fund will be fully resourced we cannot predict the future. It is important that as much revenues as possible are provided to it in order to deal with future costs and liabilities.

The level of contributions, along with the return on the fund and the compounding effect, requires a number of years in order for the fund to build to a sufficient scale. This is why the fund is intended to contribute up until 2035 and then reinvested in full each year until 2041.

By allowing drawdowns from the future Ireland fund to take place earlier, the value of all future drawdowns would be lower. Under this amendment, my Department estimates that the amount potentially available to be drawn down in 2034 would be approximately €2 billion. This compares with almost €3.5 billion if the first draw down does not happen until 2041. Drawing down earlier from the future Ireland fund would mean these drawdowns contribute less to offsetting the future fiscal challenges such as those relating to an ageing population and the climate transition. In addition, I note that the amendment is not consistent as annual transfers continue to the future Ireland fund until 2035. By accepting this amendment, it would put us in a situation where we are making contributions to the future Ireland fund in the same years are we area also drawing down from it.

The Bill provides for 12 years of contributions in order to build the fund. Under the Deputy’s proposals, we would begin drawing down from the fund before the 11th and 12th contributions were made in 2034 and 2035. I am conscious of the need to increase the value of the fund over time and I believe that because no further contributions are required to be made post-2035. This potentially frees up resources and the fund can increase its size through investment return and compounding. On that basis, I do not propose to accept the amendments.

I move amendment No. 6:

In page 10, line 20, to delete “before 2041” and substitute “before 2034”.

I move amendment No. 7:

In page 10, line 22, to delete “in 2040 or in any year thereafter” and substitute “in 2033 or in any year thereafter”.

The Minister has addressed some of the issues concerning the draw down of funding in response to amendments tabled by Deputy Nash. The Bill does not specify what use would be made of the transfers from the fund from 2041 onwards. Is there a reason for that? We have discussed some of the demographic challenges in terms of ageing, particularly pensions and health ageing costs. I ask the Minister to give us his view.

Why is it not specified in the legislation? This says it can be used for any purposes. Will the Minister give the numbers to the committee, if it is okay, on projected drawdowns from the fund? It is stated it will not be greater than 3% of the net asset value of the future Ireland fund as it stood on 31 December of the previous year. Will the Minister give us details of what that would look like and also, if there were earlier drawdowns from the fund, what it would look like in that case? He has put two different years on the record, with figures of €3.5 billion and €2 billion, so if he could provide that information, we would appreciate it. What underpins that? Is it just the transfer of 0.8% each year, with no additional transfers, that is available under the legislation or no reduced transfers as well?

I thank the Deputy. The design of the future Ireland fund allows for it to be drawn down as the Government of the day decides. There are already recognised pressures on expenditure in respect of ageing costs, but these are not the only costs. There are likely to be other pressures on expenditure such as climate and digital transition costs. While there are identifiable issues to be addressed, it is difficult to quantify other potential issues now which may emerge in the 2040s. Leaving decisions on the use of the investment return of the fund to the Government of the day asserts democratic control over the fund. The essential point is that by that time, it is certain that many of the age-related costs will have crystallised and materialised. They will have to be met and there will of course be many other spending pressures. I felt, on balance, it was better not to be prescriptive, given how far away it is, about how that funding would be used in the annual budgetary process.

We can provide some numbers and we will, perhaps for ease of reference, send them to the committee about-----

We have just under 5% pencilled in, on the advice of the NTMA, as a portfolio expected rate of return. I suggest, for ease of reference, that we provide to the committee our forecast each year of how much will be going into each fund and then, at a number of points in time based on certain assumptions, what the fund value could be. Then one can derive what the 3% drawdown of the net asset value would be each year arising from that.

I move amendment No. 8:

In page 12, between lines 16 and 17, to insert the following:

“ “designated housing project” has the meaning assigned to it by section 21;”.

This amendment moves us on to the infrastructure, climate and nature fund, as opposed to the future Ireland fund. "Infrastructure, climate and nature fund" is a nice name, but the only drawdowns are for climate and nature, so we know who won the arm wrestle at the Cabinet table on that one. This is about trying to bring balance because this is about an infrastructure, climate and nature fund. This is not about dismissing in any way the challenges we have with the climate end of this, but these amendments are also trying to include infrastructure. The provision for drawdowns from this fund allows Ministers to designate climate projects that would lead to a reduction in carbon emissions and therefore a designated project would be able to draw down from this fund. Designated housing projects should be included as well. Otherwise we can just call it a climate and nature fund as opposed to an infrastructure, climate and nature fund. That is what the amendments are trying to do. The only specification under the investment strategies is that the moneys are invested in or outside the State. As we discussed earlier, there should have been more clarity on some of the provisions that are there. This amendment is about allowing some of the money that builds up in the fund be drawn down for infrastructure projects that are non-climate in nature but are concerned with housing and designated as such.

The purpose of the infrastructure, climate and nature fund, as stated in the Bill, is to support State expenditure during a deterioration in the fiscal or economic position of State and on specific climate and nature matters. The climate and nature element recognises there is a need for additional investment to help Ireland deal with the transition to climate neutrality and the ongoing concerns with reductions in biodiversity and water quality issues in lakes, rivers and in the seas. In recognition of this, €3.15 billion of the infrastructure, climate and nature fund may be drawn down to support climate- and nature-related capital projects. This is a considerable amount of resources being committed to climate and nature projects, but would be significantly diluted if other types of projects were to be in competition for the same €3.15 billion.

In addition, focusing on the countercyclical element of the infrastructure, climate and nature fund in periods of economic stress and pressure on the public finances, capital expenditure, including spending on housing, has typically been reduced at a time when it would be of economic and societal benefit. This has create a stop-start approach not conducive to creating certainty or medium-term strategic planning. This stop-start approach also impacts on the capacity to deliver infrastructure as skills and competencies in businesses get lost in times of economic downturn and are difficult to replace when economic conditions improve. This fund can be deployed to smoothen this investment cycle and support capital projects, including housing development.

I expect we will go into housing again in more detail, a Chathaoirligh, so I will allow for an over-and-back discussion.

I am sorry, but I did not get what the Minister was saying at the end. The amendments before us do not alter the total amount that can be drawn down, that is, the cumulative amount of €3.15 billion by 2030. Instead of just having designated environmental projects, I also include designated housing projects and therefore, within the portion of that fund from 2026 on, it could be used for those purposes. Amendment No. 13 provides that the Minister for housing may "designate in writing a housing project ... where he or she is satisfied that the project contributes directly or indirectly, or is likely to contribute, to the provision of social or affordable housing". Amendment No. 16 inserts a provision to include addressing "housing and infrastructure deficits in relation to such years as the Minister considers appropriate". My amendment does not reduce the overall cumulative amount, but it would have an impact on the amount available for climate and nature.

Some of this needs to be funded through voted capital expenditure. That is the point I am making. We have a climate crisis now and we need to increase capital expenditure in any case. The fact this is not available for designated housing projects is, to tell the God's honest truth, a symptom of how this Government just does not get how bad the housing crisis is. That is the real problem here. I have been chatting to people over the last couple of weeks and I am sure the Minister is on the doors as well. He must be getting it in the ear. Housing is the major issue. I was talking to young ones yesterday at a youth project. They were being recognised in the national Garda awards because of the work they did.

These are 15- and 16-year-old kids from the inner city who are being recognised for the work they did trying to shepherd people to safety during the Dublin riots. When I asked them what the biggest issue is, they said housing and overcrowding. At 15 and 16 years of age, they should not be worried about housing. Cramped accommodation is just everywhere. We are asking families if there are any free homes in their communities. These are rural communities where homelessness was never an issue yet friends of mine have been homeless. They live in west Donegal, four hours from here. I never thought that would be the case.

Just this morning, we were dealing with families who are going to be evicted and we have nowhere for them. I say this because these amendments are about making sure we are able to have sufficient capital resources to build the social and affordable homes that these families need. This is not a natural disaster. What we are seeing in my community and inner city Dublin and elsewhere is a direct result of Government policy. The problem with this legislation is that the Government is going to compound because it is based on the Government’s plan, which is laid out and starves the State of the capital resources it needs to meet the scale of the problem. That is the problem.

There is no way that families in the most rural communities should be facing homelessness. It is just not acceptable. We can stamp out homelessness in cities and urban areas as well. The Minister is making a decision here now that it will not be possible to draw down funding from a fund that is set up for infrastructure, climate and nature in order to address the biggest infrastructure problem we have in the State. That is what this is about. It is why I say, with all due respect to the Minister and his predecessor, that he is causing the problems of the future. Homelessness has been caused by the policies of Fianna Fáil and Fine Gael. That is what has happened. The children who woke up this morning in emergency accommodation were there because of Government policies. There is no other reason. Government decisions were made to put this level of investment here and that level of investment there, to do this or to hand it over to the private sector or to do that. The Minister will argue that he is doing his best and I genuinely believe he believes that because who wants to see homelessness? Nobody wants to see homelessness and I do not suggest the Minister does but his policies are resulting in it. That is the problem. The policies of this Government are resulting in homelessness and so many people losing hope in this State. Its policies have seen friends of mine in the most rural communities being made homeless. In some cases, they did not even have emergency shelter to go to. It is appalling what is happening and it is worse because we can change it.

When the Minister votes against this amendment, as he decided to do with earlier amendments, this is the consequence. In years to come, we will have this problem, just as we had when a Fianna Fáil Government stripped youth funding from areas. You reap the consequences of that. I make that point because we are sitting here talking about funds, numbers and so on, and that is really important, but there are real consequences of the decisions we are taking here. Not to allow this infrastructure fund to actually be used for designated social and affordable housing is another example of the Government being out of touch and not getting the scale of the crisis it has created.

There is a conflict here. We need to look at the long-term impact on the children who are now being born and those who are growing up in emergency accommodation and unsuitable accommodation. The cost of not investing in housing to provide a home for those children will be huge in the long term. We will have to meet that cost at the same time as all the other costs the Minister mentioned, yet we are in a position to address it now. That is the failing of this fund. In the meantime, we are transferring €1 billion each year to private providers through HAP and RAS and we have absolutely nothing at the end of it. In the same way, we are transferring hundreds of millions to private developers for immigration because we have a developer-led strategy in that area. Political instability and an erosion of social cohesion are happening because we are constraining ourselves in a situation where we have funding to address these issues. By not allowing housing to be explicitly mentioned in the legislation, the Minister is making a major mistake. This needs to be thought through. What is the disadvantage of allowing housing to be explicitly mentioned? Has there been any long-term assessment on this regarding the people who do not have homes?

This is a serious subject. There are two elements that we need to keep in mind. There is no doubt that the Government’s policy is working but the problem is that it is working too slowly by virtue of a whole series of things that are happening. For instance, there are people living in houses where there was no benefit from selling the house and moving on, and no need to do so. However, they have done just that in recent times because they could reduce their mortgage dramatically. That happened just before the housing crash. They moved on and it lightened the burden on them. It created a problem in schools, hospitals, etc., in the areas to which they moved. That is happening again at the moment and we need to do something about it. In the past month, I have seen a number of people whose tenancies have been terminated – wrongly in many cases – because the landlord wants the house back. That can be for various reasons and there is no one particular reason. There is a fear that house prices may crash and I believe we are heading towards a crash and we need to be careful.

In recent weeks, I have seen families who are either a long time waiting or had to vacate a house they had bought previously because of anti-social behaviour. It is appalling behaviour in some cases. We have vetting in this country but I wonder what sort of vetting was done in those particular cases. People moved into apartment blocks and made life impossible for their next-door neighbours. I had a host of people in my clinic at the weekend on that subject. It is not going away; it is getting worse. There are people who have no regard for anyone else’s rights or entitlements. They think that once they get into particular accommodation, it is their right and entitlement to make life miserable and unbearable for their immediate neighbours, above, below or beside them. Last weekend was worrying in that regard. There is a clear indication from such people that they have the right to do whatever they wish to make life unbearable for their neighbours, leaving the neighbours virtually homeless because they have nowhere to go. Where do they go? I suggest, as an emergency measure, that provision be made fairly soon. There is no point doing it in six months or a year, as we tend to do. I am not blaming anyone for this; it is a fact of life. We need to have a stock of houses that are complete, in urban areas in particular, and we need to purchase them and make them available to people.

The local authority or the approved housing body could get rent for it. Incidentally, the approved housing bodies were good in the beginning in terms of discipline within the estates and so on. It is not so anymore. Not all of them apply the same standards. As a result, there are people coming to us as public representatives saying they used to feel that this was a safe place but it is not anymore. Something has to be done about that.

In conclusion, there is an urgent necessity to acquire a variety of houses for people now - a mix of four-bedroom, three-bedroom, two-bedroom and one-bedroom houses. There are a lot of single adults, women and men, now applying. They have nowhere else to go. For example, last night I met a young person in a large family with difficulties within the family etc. What can one say to such a person in order to make his or her life less miserable than it is at the moment and to improve their quality of life?

I have not made reference to the climate and nature elements that may come on board but I can do that. I am open to that, Chair.

I thank the Deputies for their contributions. First, I wish to make the point that the area of housing will benefit from the infrastructure, climate and nature fund. We have to learn the lessons from what happened in recent decades, when investment in housing and other areas of critical public infrastructure was cut from peak to trough by approximately 60% because the funding was not there. The principal purpose of this fund is to ensure we can maintain a consistent, high level of public capital investment in to the future, including in housing. That is the first objective of this overall fund that we are setting up.

I believe we are making progress on housing. I went through some of the numbers earlier and I can tell many anecdotes like the Deputy as well. Of course I meet people while canvassing who have a very acute housing need, but I also meet people who have been allocated a social house, been successful with the shared equity scheme or are applying for some of the affordable purchase local authority homes that are currently being built.

Last week, I was at two sites where 115 affordable purchase homes have been built or are about to commence construction. I accept that we need many more and that is why we are using all the levers open to the State. We already went through a number of them such as the direct Exchequer capital and the role of the LDA, which is growing and expanding all the time. There is capacity of up to €5 billion supporting the LDA to deliver approximately 21,000 units on lands in the medium to long term. 5,000 units are to be delivered under Project Tosaigh which delivers units on private land.

I have highlighted what I am doing in relation to funding that is currently within ISIF to support the delivery of further housing as well. We have also supported Home Building Finance Ireland and the Housing Finance Agency in terms of their work as well. The Government is not lacking in commitment when it comes to supporting the delivery of housing. The State can do a lot but it needs the support and co-operation of the private sector. As a country, we need institutional capital as well to be deployed here to help us to build the kinds of homes, at scale, that we need.

When I look at the overall data, I see that in the first quarter of this year there were almost 12,000 new homes commenced. I acknowledge that the development contributions waiver and the suspension of collection fees to Uisce Éireann, and the possible ending of that, resulted in an acceleration of commencements. I am not saying we will get four times that number of commencements across the year but I believe commencements will be up and we will complete, collectively, more homes this year than we did last year. By any yardstick, this Government has restored a major programme of house building in Ireland. For some, it will not go far enough but I believe we are making progress. It is a top priority of the Government to use all of the levers that I have already spoken about. The principal element of this fund here is to maintain a high level of public capital investment in to the future, including in the area of housing.

The Minister mentioned "by any yardstick". No one is taking away that there are more houses being built than in previous years, but let us look at other yardsticks. Homelessness, house prices and rents have increased every year since the Minister has been in government. Those are other yardsticks to measure whether the collective efforts of Government are actually working. This is man-made. The crisis we have is a result of policies that were enacted in previous years. The crisis that we will have in future years will be because of decisions that are made now.

The Minister says that all the levers are being pulled, but they are not. Exchequer capital is far too low. That is the core problem with this legislation. The Minister says that housing will benefit from this fund and while a countercyclical fund makes complete and utter sense, what is being done with this fund is a bit different. Early drawdowns from the fund are allowed for exclusively designated environmental and nature projects. We are saying that should include housing. The problem here is that not all levers are being pulled.

I know that it has to give the Minister and the Government some comfort, or a bit of a comfort blanket, to be able to continue to tell themselves that they are doing more than they did last year and all the rest and that they need to do more, but where does this stop? When do house prices or rents go to a certain level for us to say that this is not working? How many more children have to become homeless? These are the consequences. I always say in here when we consider these matters at budget time and at other times that the decisions that are usually taken in these rooms result in the homelessness of the future. That is the reality. While Deputy Durkan is a good friend of mine, we completely disagree in relation to this issue.

It is not just the volume of homes we need to increase. The private sector absolutely has a role in relation to that. We need to make sure that homes are affordable to purchase and to rent and for those who cannot purchase or rent, we need to make sure there is an increased stock of social housing.

The Minister has made his contribution and I stand with what I said after his contribution. I simply do not think the Minister, or his Government, gets it because they are making conscious decisions when other options are available. They could increase Exchequer capital expenditure. There are needs out there and we are being told, from the largest FDI in the country to the smallest chamber of commerce, that it these needs are impacting them. We see it every day in the number of people who are in emergency accommodation. It is absolutely heartbreaking. There is going to be massive damage done to these children.

A couple of years ago, I was staying in a hotel in Dublin which accommodated a large number of homeless families as well. It broke your heart to see the children every morning at around 7.30 a.m. in their school uniforms going to different parts of the city. We know, because the experts tell us, that raising families in those circumstances is not good. I am not going to go on any further. The Minister has made his mark and the legislation is very clear. I am sure he will vote against one of the biggest crises facing the State and that is not to take away from the environment because it is absolutely one of the biggest crises facing not only the State but indeed the world. That is why we actually argue that it should be both. This is about being able to draw down from 2026 onwards on the same basis that designated environmental projects can.

If the Minister really wanted to pull all the levers, he would support this amendment.

I thank Deputy Doherty for identifying the difference between his views on the subject and mine. He did not say who was right, however. That also has to be evaluated. I would claim that I am right and I know a fair bit about this particular subject, having dealt with it at the coalface in an area that has suffered from a very significant amount of development over the past 20 years. We will have to wait and see but what I am saying is that there is now a need for a change in the way we deal with the issue of housing. That need for change is manifesting every hour and every day and leads me to believe that if something is not done urgently, really serious issues will arise. They are coming before us already. People are under such pressure that they are thinking of things they should not have to think about at all to solve their problems. It is that serious. We have never been here before. I have never seen things at that level before.

We see problems in the case of a person who applies for a local authority house, for example. I am talking about willing workers who have worked all of their lives. They would not be the highest paid in the world but they discover that, because they have worked so hard for so long, they do not qualify for a local authority house. They are above the income threshold. The local authority will say it is sorry that it cannot help and advise them to come back in five or ten years' time. This is disgraceful. It is just crazy. It drives people wild. These kinds of situations drive me, and all of us here, wild.

There is then the case of people who apply for a bank loan. The response is that the bank is sorry but that it can only provide a third, a half or three quarters of the full amount requested as their income is not high enough. Why is that? It is because property prices have gone way up. They are coming very close to the edge of tolerance. These people are caught between having too high of an income for the county council and too low of an income to qualify for a loan. In any event, they have insufficient income to fund the purchase of a house in the marketplace so that is out. There is nothing happening fast for them. I believe we can find a way and a means of dealing with this. It is not that we do not understand the issue. The Government has priorities it has to deal with and so on but the time has come for an emergency reaction. I repeat this deliberately. I know the Minister is well disposed towards listening to the proposals that come forward from Members of the House who are at the coalface all the time, trying to learn from it. I am still learning from what is happening at the moment. This is very dangerous. We should take emergency steps. If there were no houses available, I would not put this forward, but there are. However, they are in an enclosed market and the people cannot get at them.

Last night, like everybody else, I was travelling across my constituency to attend public meetings, clinics and so forth. I had to arrive at a juncture very close to my own home where a family found themselves facing eviction. I do not believe there is an entitlement to evict them. They have been living in rented accommodation for 17 years. I always advise people against that. All of my life, I have advised people against that because, at the end of the day, they have no security. That is what has happened. They have been told, I believe illegally, that they must vacate because the landlord wants to sell or because a family friend or family member wants to move in. That is no way to handle a housing situation. People need to have some sense of security.

HAP is now a farce in my area. It does not work at all. The fact of the matter is that top-ups are now so widespread that the borrower cannot fund it. Invariably, they end up borrowing from a credit union or a bank to help them pay. Again, this is unsustainable.

The jury is still out but I believe we have to change to an emergency reaction to this rapidly developing situation. Can I say more? I would really love to. I believe I am right. I apologise to my colleague, Deputy Doherty. He is coming on and he is learning but he is not right just yet.

I absolutely believe that Deputy Durkan is 100% right. A long-standing Government TD is now saying that it is time to call an emergency. The only thing I would disagree on is that it is actually past time to call an emergency in light of what is happening. I agree 100% that the thresholds are too low. A great many hardworking families in my constituency and across the board are trapped in a situation whereby they do not earn enough to be considered by the banks but earn slightly too much to be considered for social housing because the thresholds are so low. The message they are getting is that they do not count. As the Deputy rightly says, renters are paying hundreds of euro extra each month and the vulture funds are again indicating that they are going to increase mortgage rates next month, which means that people will be trying to pay mortgages at rates of 6%, 7%, 8%, 9% and up to 10%. It is wholly unsustainable. I wonder how many of those who are in that situation are going to feature in the homelessness figures in the months ahead because there is nowhere for them to go. It is just not financially viable. It is financially impossible for those people to hang on to their homes. When these people's mortgages were transferred to vulture funds, although many did not fulfil the criteria to be so transferred, they were promised that there would be no impact on the conditions of their loans. My god, have they been left exposed to the vultures again. There are a great many things involved here but we are only asking the Minister to do one thing, which is to explicitly allow more investment to be made in housing under this fund. As Deputy McGrath will know as Minister for Finance, the clear bottom line is that, looking at the years ahead, Exchequer funding is far too low. That is the bottom line as regards what we are talking about today.

I move amendment No. 9:

In page 12, line 26, to delete “designated environmental projects” and substitute “designated environmental projects or designated housing projects”.

In the rest of this legislation, in the main, many of these sections are just a repeat of the sections we have had before. I wish to record that my observations in respect of many of these sections are similar to those in respect of earlier sections. However, I do not want to repeat them because they are cut and paste. Is that okay? I just wanted to put that on record.

This is a section where there is a bit of difference from the previous one in respect of the future Ireland fund. To make sure I am reading this correctly, can I clarify that this section provides that where there is or is likely to be a significant deterioration in the economic or fiscal position of the State, not more than 25% of the net asset value of the fund can be drawn down to support expenditure in climate-related projects? Again, the criteria for “deterioration” are vague, but I will not go into that because we already discussed it. Can the Minister clarify that the 25% is in addition to the 22.5% annually that can be drawn down for designated environmental projects? Is this a total of 47.5%?

This is an important group of issues, as regards the climate and nature fund, and we all subscribe to and agree with them. There is, however, some indication that there is a lack of scientific evidence as regards some of the areas on which we spend money or refuse to spend money which are of an environmental or climatic nature. We accept that there is climate change and that it is a serious issue. There have been climate changes in the past and there were serious issues then. In recent days, there was a report from some European group to the effect that they have now decided that the month of April just gone was the hottest month ever. I do not know how they came to that conclusion, but the problem is that there are members of the public who are confused by this and who find themselves asking themselves questions, and we find ourselves having to answer questions when we go to meetings. The problem is that in order to achieve what was alleged to have been the case, they would have had to put the thermometer in the cooker for a half an hour in this country, or else we were not part of the evaluation at all.

As regards the agrifood sector, cereal growing and so on, I saw a well-known grower recently and he made a comment that was very interesting. Effectively, he said we cannot produce what we used to produce. Why? Because it is raining all the time. That is correct. Why is it raining all the time? We have experts who tell us that. I am not so sure that is the only reason. For instance, we had the Covid pandemic here. It was an extraordinary visitation on this country. I am sure it was accidental but I am not so sure that is entirely provable. One of the things we have to do from here on in is prove to the people of this country - the other Europeans have to do this as well - that we are dealing with the situation as it emerges. Across Europe, the farming community, who produce the food for Europe and elsewhere and who are well aware of the reasons the European Union was invented, are now asking questions. They are worried and they are demonstrating, protesting and so on. They are referred to as the far right. They are not the far right. They are nowhere near the far right. They are just faced with situations that affect them directly, and there are farming communities in this country with the same worry.

The last point I will make on that is that when I see people sludging through ploughed fields in wheel tracks 2 ft. deep, there is something wrong. Something has gone wrong with the draining and something has gone wrong with the way we are handling the soil. Soil has to be aerated, the heat has to be encouraged, etc. What do contractors do? What have they done in recent years? In order to grow potatoes, they have taken all the stones out and trapped them in a machine. That is a bad decision. It is bad for drainage, bad for heating the soil and so on. There are areas there that we need to talk about. Incidentally, organic farmers are pissed off about these things. We Government backbenchers do not get to talk about these things at all, except at parliamentary party meetings, and then you are talking to yourself. We need to do something about this. I feel we are sliding inexorably in a direction which will reduce the capacity of the food-producing sector in this country to cater for the need. We will be encouraged to do that by other people who will benefit from it in different situations. The time has come, to my mind, to look at this situation very carefully; otherwise we might find ourselves in a very difficult position in the not-too-distant future.

I move amendment No. 13:

In page 16, between lines 24 and 25, to insert the following:

“Designated housing projects

21. The Minister for Housing, Local Government and Heritage may designate in writing a housing project (in this Part referred to as a “designated housing project”) where he or she is satisfied that the project contributes directly or indirectly, or is likely to contribute, to the provision of social or affordable housing.”.

I move amendment No. 15:

In page 19, between lines 15 and 16, to insert the following:

“(b) housing and infrastructure deficits,”.

This is the same as previous assessments. I do not want to talk about the fiscal council and the valuable work it does but, after the passage of this Bill, what legal weight is on the recommendation of IFAC? I presume the Minister just has to consider it and that after that he or she can just put it up on a shelf if he or she wishes or can take the recommendation and implement it or tweak it. It is not, however, judicially reviewable or anything like that where there could be a situation in which the Minister brought forward a resolution, with IFAC having a very different point of view. I am talking about the legal status. I assume that once the Minister is satisfied that-----

Yes. It is section 26, subsection (3):

The Minister shall, in preparing his or her report under this section, have regard to—

(a) the report received from the Fiscal Council ...

and

(c) such other matters as the Minister considers appropriate.

He or she will then reach his or her own conclusion. The wording is "have regard to", that is, consider.

I move amendment No. 16:

In page 20, between lines 13 and 14, to insert the following:

“(c) housing and infrastructure deficits in relation to such years as the Minister considers appropriate,”.

I do not agree with the way in which sections 25 and 26 have been drafted, the reason being the considerations that have been stipulated, again by the Irish Fiscal Advisory Council. All you have to do is have regard to them. Again, it fails to deal with, for example, the issue of infrastructure or housing deficits in determining its consideration. I just wanted to make that point as to why I have a concern about this section and the previous one.

May I make a point? It may not be tied to this section, but we are trying to get through this. All the reports being made available, including the report from IFAC and the report from the NTMA, will be published. Is that correct?

Will every report be published? In terms of the timing, the IFAC report happens on a date in September, from memory. It is just before the budget cycle. Will that report be published prior to the budget? I am thinking about its availability to Opposition Members and so on. I know the report is due on or before the date, but the date is very close to the budget cycle. If IFAC is going up to the date, it is very close for the Minister to have regard to it and consider it, and to make the determinations that are required.

I thank the Deputy. As he said, the fiscal council shall report not later than 30 September. There is a requirement to publish it in each year in which the Minister receives a report. It shall publish it on a website. It is not defined in legislation exactly but I think it should be published quickly.

Yes, 30 September is the deadline but IFAC will be aware of the timing in the context of the calendar and I am sure it will provide it earlier. That is the deadline for it to be considered in the context of the budget. I have no doubt it will be earlier. That is a point we can take up administratively with IFAC, that such a report would come as early as possible to allow full consideration.

On section 31, can we get the follow-up note from the Department on the justification of the 15% investment in terms of maximum aggregate turnover of a particular investment in fossil fuel undertakings? We would still be able to make investments that had less than 15%. I know it stems from previous legislation but I would appreciate if we could get the note for consideration before Report Stage.

On section 33, I thought we should discuss this as it is separate and not repeating previous discussions. This is in respect of the numbers that make up the agency. Could the Minister talk briefly to that point? It goes from six to eight. Are there any stipulations regarding the make-up of the committee?

Section 33 provides for the amendment of the National Treasury Management Agency Act 1990. That Act is a foundation for the NTMA. It does two things. It increases the size of the board of the NTMA by two members and enables the establishment and dissolution of subcommittees by relevant committees of the NTMA. These changes expand the governance capacity of the NTMA, ensuring increased oversight for the future Ireland fund and the ICNF. Although investment decisions will be designated to the committee established under section 5(b) of the 1990 Act, the role of the subcommittees will be to advise the committees on specific elements of the management and investment of each fund. This approach provides sufficient operational flexibility to the NTMA in the management of funds by the agency.

Section 33(3) inserts a new section into the 1990 Act to put such subcommittees on a statutory basis, in a similar way to how committees are provided for. It sets out the parameters of the size and composition of such subcommittees and provides for the remuneration of members and the ability for the subcommittees to regulate their own procedures with the approval of the agency. Section 33(4) amends the section in the 1990 Act that deals with the NTMA's expenses. It reflects, by way of cross-reference, the fact that section 30 of this Bill provides that the expenses of the agency in the performance of its duties regarding the new funds shall be paid out of those funds rather than the central fund.

Subsections (5) to (7) provide the necessary language changes to the 1990 Act to reflect the development of subcommittees, that is, where committees are referenced, subcommittees are now also referenced where relevant. Section 33(5) relates to the disclosure of certain interests. It must apply to committee members. Subsection (6) extends to a member of a subcommittee the indemnification against claims of someone whom the agency is satisfied has discharged their duties. Subsection (7) amends the 1990 Act so that the requirement not to share confidential information obtained in the course of the work of the agency is also extended to subcommittee members.

Subsection (8) amends Schedule B to the 1990 Act to clarify the quorum for a meeting of the agency depending on the number of members that are appointed to the board at the time. This arises as the board membership will be amended from six to between six and eight. This maintains the quorum of five generally, and four where there are fewer than six members appointed. If we did not make this change, it would be unclear whether there was a vacancy when fewer than eight members were appointed.

I have two questions on section 35(1). When does the Minister envisage giving effect to section 35(1), which provides for the transfer of the €2 billion from what is known as the rainy day fund into the infrastructure and nature fund? That will trigger the remainder going into the future Ireland fund no later than a month later. Can the Minister update us as to what would be the remainder? How much is in the fund at the moment, less the €2 billion? How much is going into the future Ireland fund and when will the €2 billion transfer into the infrastructure and nature fund? When does the Minister expect this section to be commenced?

Following the commencement of the Act, the payments from the National Reserve Fund will be transferred to each of the funds. It is envisaged that this would be a quick and swift operation. It is intended that following the transfers from the National Reserve Fund to the two new funds, the fund would be subsequently dissolved. The NTMA would then submit the final set of annual accounts to the Comptroller and Auditor General for approval. Following this, the Minister for Finance will issue the commencement order to repeal the Act of 2019. It will happen quite quickly once we have the Act commenced.

I thank the Minister and his officials for their time today. More importantly, I thank all the members for facilitating today's meeting. We have got to a conclusion in good time.

Deputy Doherty, you want to make a quick comment.

Yes. I thank the Minister again. I want to be associated with the thanks, particularly to the officials, who put huge work into legislation such as this. This is really important legislation which deals with billions of euro, so it is appropriate that we took the time to consider it. We are not finished yet, however; it is going to Report Stage. Will the Minister indicate when he envisages this legislation going to Report Stage in order that we can have time to consider amendments? It is important that we have these funds established, but I have difficulties as to how the transfers will happen. We will not rehash that. When does the Minister think Report Stage will be taken?