Following a commitment to renew the Confidence and Supply Agreement between Ireland’s Fianna Fáil and Fine Gael for a period of at least 12 months, and amid a House of Commons defeat for Theresa May’s Withdrawal Agreement, this year presents itself as a defining year for the Irish Government, and for Ireland as a whole.
Emerging from years of austerity, and having balanced the Budget this year for the first time since 2006, Ireland must begin to pass legislation to develop and insulate the economy against forecasted economic turbulence.
In the short-term, much of this work will be contingent on the state of play in Westminster.
A ‘no deal’ Brexit would hamper the Irish government’s ability to pass any significant legislation for several months as the EU takes the lead on the necessary amendments, meaning that the Oireachtas would need to pass emergency legislation.
The Government has now published its Legislative Agenda for the coming term, which includes the so-called Brexit ‘Omnibus’ Legislation.
Despite these distractions, substantive policy decisions will continue to be made in the lead-up to, and in the aftermath of the 29 March deadline.
If we assume the UK Prime Minister Theresa May, does indeed manage to see a Withdrawal Agreement through Westminster with success, there are a series of legislative priorities for the Irish Government in 2019.
Department of Health
Having passed landmark legislation in 2018 including the Public Health (Alcohol) Bill and the Health (Regulation of Termination of Pregnancy) Bill 2018, Minister for Health Simon Harris must now usher through long-awaited reforms to the health services with a view to improving access for patients.
The Government has published the Health Service Executive (Governance) Bill 2018, which seeks to reform the governance structure of the HSE, increasing transparency and accountability within a system which is widely recognised to be opaque and overly bureaucratic.
The Bill has passed all stages in the Seanad and will now be debated in the Dáil at Second Stage.
Similarly, reform is urgently needed within Ireland’s medicines reimbursement process. Despite Ireland being home to one of the world’s largest biopharmaceutical manufacturing industries, Irish patients are not being granted access to new and innovative treatments in a timely fashion, registering 18th out of 26 European counterparts in terms of speed of access.
The Minister for Health is set to launch a review of the system this year after which we expect a public consultation on the topic.
Government must also seek meaningfully to shift the nodal point of health and social care in Ireland away from the acute, and into communities across the country.
Built on cross-party consensus, the ten-year programme to transform our health and social care services, Sláintecare and its Executive Office have the potential to begin this process, but the development of regulations governing the supply of home care support will also be crucial. The Department of Health concluded a public consultation on the topic in mid-2018 and is now preparing regulations.
Finally, Government will also have a renewed focus on the Department of Health in the context of public expenditure. Following persistent run-away spending by the HSE, and amid warnings from the Irish Fiscal Advisory Council (IFAC) that Department of Health overspends threaten the development of the economy, Government has sought to put in place cost containment measures. Key among these is the recently formed Budgetary Oversight Group comprising of the Departments of Public Expenditure and Reform, Department of Health and HSE.
Department of Housing, Planning and Local Government
Perhaps no issue other than housing will be as important for the Government in 2019. Despite rental caps having been implemented in recent successive years, along with schemes introduced to assist younger generations to purchase houses, securing stable tenancy or affordable housing continues to elude much of the population.
In an attempt to combat this growing problem, Housing Minister Eoghan Murphy made a number of significant policy announcements in 2018 as he believes building apartment blocks is key to solving Ireland’s housing shortage.
Earlier in the year, the Minister published guidelines which reduced the minimum acceptable size of apartments, seeking to increase the number of apartments that can be built per development.
To complement this, in December the Minister announced that the caps on ‘arbitrary’ maximum building heights were being removed, with a focus on built-up urban areas. Planning authorities must now explicitly identify areas where increased building heights will be actively pursued for development. It will be interesting to see what impact this has, if any, in 2019.
To-date, Government has failed to build sufficient social housing to quell the rising tide of homelessness, missing many of its own targets, while incentives are not being rolled out for developers to deliver homes in the €200,000 – €450,000 range.
One of the rarely-mentioned problems facing developers is the cost of raw materials on international markets, with booming economies facilitated by historically low interest rates.
Due to these high costs, margins on constructing affordable homes are too low, and therefore, developers have opted for construction in the commercial and/or high-end domestic sectors.
A remedy to this situation could be to cut the current VAT rate for the construction industry from 13.5 per cent- as has been proposed by Fianna Fáil and the Construction Industry Federation for some time.
Department of Finance
One of a few ‘Brexit dividends’ to emerge from the June 2016 referendum has been the increased presence of financial services institutions in Dublin and across the country.
In light of Brexit, along with opportunities presented by the North American market, the Government has sought to revise its International Financial Services Strategy, IFS 2020. A public consultation was held on the future IFS 2025 strategy, with the Minister for Financial Services, Michael D’Arcy, intending to publish the new, cabinet-approved policy, at this year’s European Financial Forum in early February.
Brexit developments, however, may mitigate against this, given that substantial reform would be needed depending on the nature of the post-March 29 relationship.
In contrast to the solidarity demonstrated by the European Commission and EU 27 on the issue of the Irish backstop, taxation issues at EU level have continued to prove troublesome for Ireland.
The European Commission is continuing to press for harmonisation of taxation levels across the EU, having recently published a call for views on amending the voting rules on issues relating to national taxation. The Commission would like to remove national vetoes on certain taxation policy issues, a move which Ireland and several other smaller states have vehemently opposed.
Despite a failure to agree on a European digital taxation levy, the EPP led Commission appears intent on progressing the Common Consolidated Corporation Tax Base (CCCTB), which would see a single set of rules applying to companies operating within the EU to calculate their taxable profits.
CCTB is a significant concern for the Irish economy, with the Irish Fiscal Advisory Council previously warning the Government that it posed a bigger threat to the Irish economy than Brexit.
The Commission has recently published a communication on eliminating the unanimity rule for certain tax issues and moving to qualified majority voting.
While such proposals face significant obstacles via the “passerelle clause”, meaning that any decision on ending unanimous voting must be unanimously passed by the Council of Europe, and is therefore highly unlikely to be returned under the current Commission, indications are that this policy will be pursued irrespective of future Commission make-ups.
Department of Communications, Climate Action & Environment
As Ireland continues to struggle with meeting its carbon reduction targets, the threat of significant financial penalties of up to €600 million from the European Commission have emerged. Ireland remains one of the only European Union countries which still sees rises in the use of greenhouse gas emissions rather than reductions.
In light of such concerns, and following a year of unprecedented severe weather incidents across the globe and domestically, the Government appears increasingly willing to act.
The newly appointed Minister for Communications, Climate Action & Environment, Richard Bruton TD, has been given a mandate by Government to begin the preparation of a new ‘all of government plan’ to bring about a step-change in our climate ambition over the next decade.
Minister Bruton has noted that he will be looking at how Ireland can further step up activity in the area of deep retrofits, and energy efficiency in general.
In addition to this, it now appears likely that Government will in fact introduce a carbon tax, but in light of the “Gilet Jaunes” protests across France, may instead put in place a carbon dividend which will return carbon taxes to the people. Indications from the Minister are that the measures will be brought in under Budget 2020.
The Government is also preparing a national strategy for the reduction in use of plastic, as well as readying itself for the forthcoming ban on single-use plastics, as will be mandated by the European Commission.
In preparation for this, the Department is currently reviewing “A Resource Opportunity – Waste Management Policy in Ireland”, and have initiated a review of the provisions contained within the Green Party’s Waste Reduction Bill, with a view to developing its own policy or adopting and amending that proposed by Green Party leader Eamon Ryan.
While it is vital that Government acts on the scourge of plastic waste, it is important that it also also considers financial, lead-in time, supply chain and shelf-life implications which may accompany any policy propositions.
Department of Foreign Affairs & Trade
As the UK departs the European Union it will be incumbent on Ireland’s diplomatic corps, led by Tánaiste Simon Coveney TD, to continue forging new and deeper relationships with European partners.
In order to deliver on this ambition, the Government has launched the ‘Global Ireland’ initiative, aimed at doubling Ireland’s global impact by 2025.
The goal was initially announced in June 2018, with the aim of increasing the number of diplomatic and consular posts. The Government will publish a series of key strategies which will map out how Ireland will deliver on the aspirations of the ‘Global Ireland’ programme, namely:
- Asia Pacific Strategy
- North America & Canada Strategy
- Central & South America Strategy
- A new policy for International Development
- A new Diaspora Strategy
Department of Justice & Equality
Having passed the Public Health (Alcohol) Bill to begin managing one of Ireland’s most prominent social issues, alcohol abuse, focus will now shift to the Department of Justice & Equality with a view to minimising the impact of problem gambling on society.
According to conservative estimates, there are currently at least 45,000 people living in Ireland with a “severe pathological gambling addiction”, and based on international evidence, there are a further 110,000 Irish citizens who suffer from a milder form of problem gambling.
The General Scheme of the Gambling Control Bill 2013 is currently undergoing an inter-departmental review with a report on necessary updates currently being finalised.
While this is due to be shared with Government for approval in the coming weeks, it is not expected that the Gambling Control Bill will progress until 2020.
The European Commission is also working with legal firm McCann Fitzgerald to develop policy proposals for the Department of Justice. A public consultation is currently open, and will conclude in late January.
In the same sector, the Government intends to publish the Gaming and Lotteries (Amendment) Bill in the coming weeks as a means of modernising the archaic Gaming and Lotteries Act 1956. The Bill is expected to update stake and prize limits and standardise the minimum gambling age at 18, as well as bring the online sector under the purview of the Act.
Ireland now stands at a potential inflection point in terms of both its economic and political future. Brexit, and the nature of the relationship between the EU and UK will – at least in the short-term – dictate both our legislative agenda and economic fortunes.
That being said, while Brexit preparations are being made and contingency plans being put in place, substantive long-term policy decisions are being made by Government on key national issues, and it is imperative that we are not distracted or solely focused on the political fallout in Westminster at the expense of important domestic legislative developments.