Paschal Donohoe, the public expenditure minister, has reiterated his call for a reformed TV licence fee as the coalition remains at odds over the future funding of RTE.
In an interview with The Sunday Times, Donohoe said it was his “strong preference” for a reformed TV licence system, putting him at odds with Catherine Martin, the media minister, who wants RTE funded directly by the taxpayer.
“What I absolutely will be making the case for is the retention of a TV licence-like structure,” Donohoe said this weekend. “We are still collecting a large amount of money through the current television licence and if that current television licence is abolished, that money has to be found somewhere else. And if it’s found somewhere else, it means that money can’t be used for other things the country would want it to be used for.
“Second, I believe it is really important that the revenue that RTE collects through the television licence is kept separate from the budgetary process and that they are able to receive revenue that’s independent of government decisions.”
The national broadcaster has been hit by a series of difficulties in recent times, including a scandal over secret payments to its former star presenter Ryan Tubridy and controversy over exit packages made to senior executives. RTE’s troubles have been compounded in the past month by a rash of high-profile departures, with 2fm presenters Doireann Garrihy, Jennifer Zamparelli and the 2 Johnnies all leaving.
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A decision on the future funding model is due within weeks after the government committed to a decision before the summer recess in mid-July.
Martin is continuing to push for exchequer funding, arguing among other things that the funding model needs to be publicly acceptable. Her view is not shared by Micheál Martin, the tanaiste, Michael McGrath, the finance minister, or Donohoe, who are arguing for the retention of a charge on households.
Simon Harris, the taoiseach, has not yet indicated his preference. A senior government source said a “hybrid model” — a combination of a reformed licence fee topped up with exchequer funding — was the “likely landing zone”. However, any reforms to the funding model would require legislation which, coalition sources admit, may not be passed before the general election.
Donohoe was speaking to The Sunday Times during the G7 finance ministers’ meeting in Italy, which he is attending in his role as president of the Eurogroup. Attendees to the event, held in the Italian resort town of Stresa, included Janet Yellen, the US Treasury secretary, Christine Lagarde, president of the European Central Bank, and Jeremy Hunt, the UK’s chancellor of the exchequer.
Subjects planned for discussion in the two-day agenda included the future use of artificial intelligence (AI); key challenges for the international financial sector; reaching a global net-zero economy; and the economic impact of growing conflict in Ukraine and the Middle East.
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Last Friday, the overcast and at times thundery weather cleared by the afternoon when talks on the impact of AI on the global workforce took up a third of the day’s discussion — which Donohoe said was “telling of the role this technology will play in the decades ahead”. He added: “The impact of China on the world economy is getting a lot of time as well, and what trade policy will be and whether subsidies should play a part in that.”
Donohoe was seated next to Paolo Gentiloni, the EU’s economy commissioner, and Lagarde, all representing the European Union, for the talks where only heads of delegation were permitted to attend.
Security efforts were close to “lockdown levels”, as one spokeswoman for Donohoe suggested, and included police boats patrolling Lake Maggiore as talks continued in the conference rooms of two hotels in Stresa, the Grand Hotel Des Iles Borromees and the Regina Palace.
The minister returned on a flight at 10.30pm on Saturday before the National Economic Dialogue (NED) tomorrow, a key forum for discussion on the 2025 budget.
One challenge set to be discussed at the NED is the inevitable costs that will come with Ireland’s ageing population, which the government acknowledges will have a “significant impact” on social protection spending in the future.
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However, Donohoe is certain that welfare spending will not decrease in order to support increased pension demands in the years to come: “The reason for that is the changes that we are committed to making in the years ahead. Gradual increases in the rate of PRSI are going to be so important to allow us to put in place the social insurance fund and the surplus that we will need to be able to meet the commitments that we will have for pensioners in the years ahead,” he said.
Last November, a rise of 0.1 percentage points in PRSI was announced, starting on October 1, 2024, to be followed by the same increase in 2025. There will be 0.15-point increases in both 2026 and 2027 followed by a 0.2-point rise the following year. Donohoe said these incremental increases were “the only and most effective way” of dealing with Ireland’s growing and ageing population.
A report from the Housing Commission, published last week, said that Ireland, in comparison with other European countries, had one of the highest rates of public expenditure on housing but one of the poorest outcomes. Donohoe said he had confidence over how funding was being spent by Darragh O’Brien, the housing minister.
“Ireland was, I believe, one of the few countries in the European Union that built more homes in 2023 than it did in 2022,” he said.
“So yes, I am confident in how that money is being used and I believe the proof of how that money is being used is through the housing commencements and the planning permissions that are now in the pipeline, all of which were shown in the first quarter of this year.”
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Sinn Fein accused the government of deliberately sitting on the report for 13 days to avoid controversy ahead of the upcoming local and European elections, which Donohoe strongly denied.
He described the main opposition party as “all problems and no solutions”, adding: “Any solutions they do offer might work on TikTok and Twitter but they won’t work in the real world. I feel that it is at the heart of the slide in Sinn Fein support I’ve seen coming for quite some time.”
When it was put to him that Sinn Fein was likely to make gains in the upcoming local and European elections, he said: “Only because they did so badly in the 2019 elections — they’re going to be flattered by their terrible performance of a few years ago. But their true measure will be on whether they’re in a position to play a commanding role in forming the next government.
“And I believe that my own party will be able to challenge them on that.”
