The Government plans to outline a framework early next year on how the €14 billion-plus Apple windfall should be spent addressing “known challenges” in the areas of housing, energy, transport and water infrastructure, Minister for Finance Jack Chambers said.
The European Court of Justice’s ruling last month that Apple pays billions of euros of back taxes and interest to the Republic has “provided the State with one-off revenue that has the capacity to be transformational”, said Mr Chambers in the Dáil as he unveiled his part of Budget 2025.
“It is this Government’s view that we should utilise these revenues to address the known challenges that we face in housing, energy, water and transport infrastructure,” he said.
[ Plans for ‘transformational’ Apple tax money to be announced in early 2025Opens in new window ]
“We are in a global environment where competition for attracting foreign investment is intensifying. Infrastructure is a fundamental component of Ireland’s competitiveness, and is vital to businesses, large and small, and to attracting new foreign investment into the State.”
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He said that work on the framework “will begin now”. Minister for Public Expenditure and Reform Paschal Donohoe’s officials will also feed into the plans.
Pushing the publication of the framework out to early next year will ensure the Apple windfall — stemming from a 2016 European Commission decision that the iPhone maker had received illegal tax aid, which was challenged by Ireland and the company through the EU courts — will be a key general election battleground. The latest date that a vote can be held is March 22nd.
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Meanwhile, Mr Chambers has earmarked €3 billion raised this year from the sale of AIB shares for infrastructure and development.
Some €1 billion will be given to Uisce Éireann (Irish Water) for non-domestic capital investment, to provide services for new housing developments and for remedial actions.
A further €1.25 billion will be made available to the Land Development Agency, bringing total funding of the agency since it was established six years ago to €6.25 billion, to boost the delivery of social and affordable housing.
The remaining €750 million will be used to support upgrades to the State’s electricity grid infrastructure to encourage more on- and offshore renewable energy projects, he said.
He said that any further money raised from AIB share sales will also be used for water, housing and the electricity grid. The Government’s remaining 21 per cent stake in the bank is worth €2.43 billion.
“The announcement of €3 billion in ring-fenced funding for specific infrastructure investment in today’s budget is hugely welcome, as we see the Government’s ongoing commitment to the development of all aspects of the country’s infrastructure detailed — including specific funding amounts outlined for housing, water and energy infrastructure,” said Ferga Kane, a strategy and transactions partner with EY Ireland.
“It will be important, however, to balance that investment against the limited spare capacity that exists in the economy to ensure it delivers value for money.”
The economy is running at full tilt, according to economists, with the unemployment rate running close to historically low levels, at a little over 4 per cent. The fear, for some, is that hiking infrastructure spending at this point of the cycle could have inflationary effects.
However, the Irish Congress of Trade Unions criticised the budget for pushing out hard decisions on infrastructure “to the next administration”.
American Chamber of Commerce (AmCham) chief executive Paul Sweetman gave a cautious welcome to the focus on critical infrastructure and housing.
“As highlighted in AmCham’s Foreign Direct Investment Insights surveys, housing is constantly ranked as the number-one challenge for Ireland to overcome to support future growth and investment … It is essential that there is a continued focus on the delivery of housing,” he said. “The increase in funding for the Land Development Agency by €1.25 billion is positive. However, this must be accompanied by continued planning reform.”
