Vol. 734 No. 3
21 Deputy Michael McGrath asked the Minister for Finance when it will be necessary to raise funds outside of the €85 billion EU and IMF loan agreement based on the projected Exchequer deficits; and the date of maturity of existing Government bonds which will need to be re-financed. [14409/11]
22 Deputy Pearse Doherty asked the Minister for Finance his view that the State, with support from the EU-IMF-ECB, has sufficient funding to meet all requirements until the end of 2013; if he will provide a detailed account of the funding requirements of the State for 2011, 2012 and 2013; the funds available to the State to meet those requirements for the same years; and if he will make a statement on the matter. [14498/11]
I propose to take Questions Nos. 21 and 22 together.
The joint EU-IMF programme of financial support for Ireland provides for a total financial package of €85 billion. Some €67.5 billion comes from the European funding facilities — that is, the European financial stability mechanism, EFSM and the European Financial Stability Facility, EFSF — bilateral loans from the UK, Sweden and Denmark and the International Monetary Fund's extended loan facility, EFF. The remaining €17.5 billion comes from the State's own resources, namely the National Pensions Reserve Fund and other domestic cash balances.
Some €35 billion of the total €85 billion financial support package was originally set aside for the banking sector with the remaining €50 billion available for the purposes of financing the State. The recent banking stress tests carried out by the Central Bank identified an additional €24 billion in respect of the banking sector as being required, including €3 billion of funds which take the form of contingent capital. However, it is anticipated that mitigating actions, such as burden sharing with subordinate bondholders, will mean that up to €5 billion of this €24 billion will not have to be provided for by the State.
The budgetary forecasts contained in the recently published stability programme update prudently assume that an additional €20 billion in State support to the banking sector will be required. On that basis, therefore, some €15 billion of the funding originally earmarked for the banking sector is now available for use for sovereign purposes, bringing the potential total available under the programme for sovereign purposes to €65 billion.
Based on the forecasts recently produced in the stability programme update, the combined Exchequer deficits for the years 2011 to 2013 are estimated at €48.5 billion. Maturing Government debt, both long-term and short-term, over the same period amounts to some €27 billion, including an assumption for some short-term debt funding. In terms of our funding requirements for the individual years, factoring in Exchequer deficits and maturing debt, the State will require approximately €30 billion, €23 billion and €22.5 billion in each of the years 2011, 2012 and 2013.
It is the stated intention of the National Treasury Management Agency to return to sovereign debt markets as soon as market conditions permit. The steps necessary to enable such a return include resolution of the banking sector issues and continued progress in the reduction of the budget deficit in line with the targets agreed in the EU-IMF programme of financial support, together with the implementation of policies that will see us return to sustainable economic growth. A key development in that regard has been the publication of bank stress tests results on 31 March 2011 and the associated recapitalisation exercise which have been well received by investors and rating agencies alike.
The NTMA is in constant contact with market participants and will advise me when it feels that the time is right to re-enter the markets. I should say that, based on conservative projections of our funding needs and taking account of funding possibilities, there is no urgency about a return to the markets. Indeed, the purpose of a programme such as the EU-IMF programme for Ireland is to provide the space necessary for economic and financial adjustment to take place. Based on current projections and assuming no market access, the State has access to sufficient funds for its needs into the second half of 2013.
I thank the Minister for his response. In an effort to deal with the fallout following last week's comments by the Minister, Deputy Varadkar, concerning Ireland possibly requiring a second bailout, we were reassured by the Minister for Finance, the Taoiseach and other Ministers that Ireland was fully funded to the end of 2013 and into the beginning of 2014 under all circumstances. However, in a reply to the Dáil last week repeated today, the Minister stated that we were funded into the second half of 2013, which could be interpreted as meaning July 2013. It is important that we be clear and precise in our language regarding such a vital issue.
Last month's European Commission update report on the bailout showed that Ireland would require €3.4 billion from the markets in 2012 and €14 billion from the markets to get to the end of 2013. The IMF believes we will need to raise €19.3 billion from the markets and small savers by the end of 2013. Even private sector analysts such as Glas Securities believe we will need to raise €11.3 billion in 2013 alone. As the Minister knows, a bond worth approximately €12 billion will mature and need to be refinanced in the middle of January 2014.
A question please, Deputy.
Based on this evidence, is it not clear that we are not fully funded under all circumstances into the beginning of 2014? We all share the Minister's wish that Ireland would return to the markets next year. However, if this does not prove possible, is it not the case that we are not fully funded through the calendar year of 2013 and into the following year?
I am giving the Deputy the most prudent assessment of what we are facing in terms of what must be repaid and what is available to us. I could give him a more benign estimate of the figures and say we could carry through to the end of 2013, but I want to be prudent and tell him the worst case scenario. There is no question of the sovereign side requiring additional funding in 2011 or 2012. The funding will carry us into the second half of 2013. This is based on a prudent assessment of the figures. As the Deputy knows, there are variables that could be inputted two and a half years hence.
It is also worth repeating for the benefit of those who are interested in and like debating these issues that the recapitalisation of the banks is a one-off sum that must be paid against the rigorous stress tests. It is not a recurring sum whereas looking after the deficit is. As we make fiscal adjustments, the latter will decline. When we factor in all of these elements, we are not in a difficult fiscal position. The programme was intended to run a certain distance and to provide us with funds for recapitalising the banks and dealing with the day-to-day costs of running the country until the economy was restored to a growth path. As the Deputy knows, that is under way.
I agree with the Minister about the requirement for prudence and that we should plan on the basis of returning to the markets late next year, but we must prepare for a worse scenario. The Minister anticipates that we have enough funding to carry us into the second half of 2013 based on prudent assumptions but we will not allow the State to run towards the bottom of the cash buffers. In such circumstances, funding will be required earlier, in all likelihood in the first half of 2013. Assuming there is no market access — we hope there will be — and basing our figures on prudent assumptions, does the Minister agree that Ireland will need an alternative source of funding in the first half of 2013?
Theoretically the Deputy may turn out to be correct but his comments are speculative. The programme only commenced in December 2010 and we are now at the start of June 2011. We are approximately six months into the programme under two Governments. The programme under the current Government is three months old and gives us sufficient money to carry us forward for the next two years at a minimum. Much will happen in that time. Consider what is occurring in Europe. In terms of the attempts to retrofit the instruments of policy to address a currency zone in crisis, there are developments every month. As regards the Greek crisis, there will have been further developments by 20 June and further instruments of policy will be developed.
Our job is to work the programme, keep to the targets, get the economy growing again and return people to work. External issues over which we have no control might be interesting for debating purposes but they butter no parsnips.
I call Deputy Doherty.
I am not indicating. Are these questions linked?
I understand they are being taken together.
They are similar. We will forget that the Taoiseach stated we were funded through to the end of 2013. We will forget that the Minister for Enterprise, Jobs and Innovation, Deputy Bruton, stated we were funded for all eventualities through to the end of 2013. We will park those comments to one side, as they clearly did not know the figures. The Minister, Deputy Noonan, stated that we were funded through to the second half of 2013 based on the figures he presented. Perhaps I caught them wrong, but he indicated that the amount of the Exchequer deficit plus the maturing debt up to the end of 2013 will be €75.5 billion. The amount of money available to the State will be €65 billion if we are allowed to use some of the bank recapitalisation money for sovereign purposes. This would leave a deficit in 2013 of €10.5 billion.
In 2013, the deficit plus the maturing debt will be €20 billion, or thereabouts. We will not have enough to get us through to the second half of 2013. We know what is fixed. The income from the EU-IMF programme and the maturing debt are fixed. The optimistic projections of the Department of Finance, the Government and the programme in terms of economic growth were based on an unemployment rate of just over 400,000, but the actual figure is approximately 40,000 in excess of that.
Could we have a question Deputy, please?
Will the Minister clarify, based on the figures he presented, if we funded up to and after July 2013? If so, when will the Government need to return to the markets? If we are funded up to 1 July, we will not return to the markets at the end of June. If we are to be prudent and get enough money to pay the State's bills for 2013 and 2014, when will we need to re-enter the markets?
I have provided in great detail the elements comprising the totals. The Deputy can run the numbers himself. In reply to Deputy Michael McGrath, I stated I was giving the most prudent assessment of where we will be by the middle of 2013. I could outline a more benign scenario. For example, we have suggested €20 billion for bank recapitalisation but the actual amount may be less, given the variables. On the growth side, all forecasting agencies agree we will return to significiant growth next year. While the OECD predicted no growth in 2011, it predicted growth of 2.3% in 2012. All the agencies predict growth of between 2% and 3% in 2012 and most predict growth of between 3% and 4% in 2014-2015.
In regard to when we will return to the markets, it remains the policy of the National Treasury Management Agency, NTMA, to test the market in the third or final quarter of next year. However, it is not intended, and never was, that we would be fully funded in 2012 without help from the outside agencies. Deputy Michael McGrath will be aware that that is what is provided for in the programme negotiated by the previous Government. While we face many difficulties in this country at present there is reason to be optimistic. There is much change in Europe and two years is a long time. We will see how things work out. All we can do is work at it every day.
The Minister is pushing it to the limit. In two years time, the tap will be turned off. We will have to return to the markets before that happens. The Minister for Transport, Tourism and Sport, Deputy Varadkar, is probably correct that we are possibly heading in the direction of a second bail out. I have consistently said this on the floor of this House. I have also asked the Minister for Finance, Deputy Noonan, what is plan B. What is the appropriate rate on ten year bonds that we would have to achieve to enable us return to the markets to obtain the amount of money required to run this State in 2013? The Minister is well aware that this morning the rate on ten year Irish bonds was 10.7%. When the Minister took office it was approximately 9.3%. The rate continues to rise for external and domestic reasons.
What rate would we have to achieve on ten year bonds to enable us re-enter the market, which if not achieved will result in our being technically shut out and requiring bail out number two, which I believe is on the cards?
The Irish bond rate is a little academic when the State or banks are not in the market. This is as much a reflection of what is happening in other European countries as in Ireland. The rate quoted by the Deputy is more a reflection of what happened in Portugal and what is not happening in Greece. I will give the Deputy my most honest answer. It will be worth our going back into the markets, even for €1 billion or €2 billion, if the bond yield falls below the rate being charged on the bail out package. The NTMA intends to put its toe in the market in the third quarter of 2012. We are 15 months away from that yet.
The markets predicted the last 30 recessions. They were correct on six occasions. The bond and stock markets are a little like sheep in that they all move in the same direction. The sheep-like behaviour has been accentuated with the movement of trading onto computers which, when a particular margin is reached, give a buy or sell instruction. I would use other evidence as well as the price being quoted on the bond market, in which we are not currently involved. I hope the Deputy is not right. The longer one is a Member of the Dáil the more influential one becomes and the more one's credibility increases. Deputies McGrath and Doherty have credibility. In regard to a second bail out, if credible people keep saying it, it becomes a self fulfilling prophecy. What one says will be carried internationally.
The best approach is to put out the facts and to then let the commentators, external markets and bankers judge them. I do not believe there is much point in trying to talk up or talk down the situation. We should put out all the relevant facts and then let people make up their minds. When Ireland puts out all the relevant facts it is in way better position than is Greece or Portugal. There is no comparison in terms of how our economy is structured. The Deputies should remember that we are running balance of payments surpluses this year.
23 Deputy Seamus Healy asked the Minister for Finance in view of the recovery in net financial asset values by €27.3 billion in 2009 (details supplied), if he will propose that the net financial assets of households with net financial assets above €2.3 million having incomes above €100,000 per annum be taxed in budget 2012 to avoid further impositions on low and middle income households and reductions in public services; and if he will supply the actual figures for year 2010 and the estimated figures for the year 2011. [14408/11]
The Deputy appears to be suggesting the imposition of a type of wealth tax. Asset values increase and decrease over time. In the context of current economic circumstances, they have declined considerably in many cases, notwithstanding the recovery in the value of net financial assets referred to by the Deputy. If the value of an asset or of an individual's wealth is measured at a particular time there is no guarantee that the asset value or the individual's wealth will remain at that level or increase thereafter. When taken with variations in income levels it would make a tax of this nature very unpredictable.
Capital Gains Tax, CGT and Capital Acquisitions Tax, CAT are, in effect, taxes on wealth. They are levied on an individual or company when they dispose of an asset, CGT, or acquire an asset through gift or inheritance, CAT. The rate of these taxes has been increased by a quarter in recent years, from 20% to 25%. Also, the tax-free thresholds for CAT have been reduced to take account of the fall in asset values over the last number of years. The current CAT tax-free thresholds are 39% below their peak levels in early 2009. Although an individual's assets and liabilities are declared in a limited number of specific circumstances, for example, following a death, the Revenue Commissioners have informed me that they are not in a position to link an individual's income to his-her financial assets. It would, therefore, be difficult to gauge the likely return from a tax along the lines suggested. This is an important consideration, if the Deputy's proposed tax was to be regarded as an alternative to other more predictable revenue sources. For example, the tax measures outlined in the memorandum of understanding with the EU-ECB-IMF have a combined projected yield of €1.2 billion for 2012. It is highly unlikely that a tax along the lines suggested by the Deputy would yield anything like this amount.
While I do not propose at this time to introduce such a tax, all taxes and potential taxation measures are constantly reviewed in the context of the budget and finance Bill. I am informed by the CSO that the figures for the financial assets of households for the year 2010 will not be available until October next and it is not their practice to produce forecasts for the net financial assets of households.
The net financial assets of wealthy people increased by 27.3% between 2008 and 2009 and are likely to increase again in 2010 and 2011. These are personal rather than business, commercial, building or housing assets and are net. I believe people with such assets who are on significant incomes should pay their fair share of taxation. They are not doing so now. I believe it is time super rich Irish people who have these assets should make a considerable contribution given our current situation.
Will the Minister consider following the example of several states in the US and of France, Norway, Spain and Switzerland in imposing an assets tax such as this?
I remind Members that there is only six minutes allowed per question.
An asset tax is in effect a wealth tax. We currently have in place two wealth taxes. Normally, wealthy people are taxed when they gift some of their assets to their children or when they die and their children inherit their assets. There are two forms of tax, which run at 25%, which is considerable. Naturally, we will consider every tax coming up to budget time. So many taxes are currently being suggested and mooted. I am not suggesting the Government is considering an asset tax. The Deputy referred to the wealth tax in France, which is at 1.5%. On a pro rata basis, that kind of tax in Ireland would have a yield of €400 to €500 million per annum. However, if one is talking about it as a substitute for other taxes, one would lose more in the take on, say, income tax than one would gain on this new form of asset tax. We also have the situation of those with assets in Ireland being domiciled elsewhere, so I am not sure what the actual yield would be.
The Minister referred to those domiciled elsewhere. Surely it is time Irish taxation should be on the basis of citizenship, as it is in the United States, which is where United States citizens in Ireland are paying tax. The Minister's former colleague and former Minister, Mr. Richie Ryan, introduced an asset tax in this country. Does the Minister not believe very wealthy people should show a bit of patriotism in the situation in which we now find ourselves?
As I said, while we will consider all options, an asset tax is not one we are considering at present. Many other taxes are mooted in the memorandum of understanding, certainly enough to keep us going between now and budget time.
24 Deputy Michael McGrath asked the Minister for Finance when he expects to secure a reduction in the interest rate on the European element of the loan facility in the EU-IMF agreement; the progress that has been made to date and the obstacles that will prevent achieving the reduction. [14410/11]
The Heads of State or Government of the euro area decided on 11 March last that the "pricing of the EFSF loans should be lowered to better take into account debt sustainability of the recipient countries, while remaining above the funding costs of the facility, with an adequate mark up for risk, and in line with IMF pricing principles" — that is the text of the communique following the meeting. While the rates are, in my opinion, still very high, they have been reduced somewhat for Greece and Portugal. However, the reduction has not yet been applied to Ireland's EU loans. This is because some countries are seeking further concessions from Ireland on corporation tax as a quid pro quo. This was, and remains, the principal obstacle to achieving a reduced interest rate. We have made it clear that this condition is unacceptable.
Since then, the issue of a reduction in the interest rate for Ireland's EU loans has been pursued vigorously by me, by my Department and by other Ministers at European level. I have raised the issue at EU Finance Ministers meetings, most recently at the meeting in May. I have also taken the opportunity to raise it at a recent meeting with the French Finance Minister, Mme Christine Lagarde. I took this opportunity to impress upon Mme Lagarde the importance of the current corporation tax arrangements to the competitiveness and future economic growth of Ireland. In doing so, I stressed the importance of safeguarding the factors that will facilitate the resumption of growth in Ireland.
We also point out in our contacts on this issue that Ireland is living up to its end of the bargain by delivering on all the conditions and targets in the EU-IMF programme by the required deadlines. We have also made clear to our European partners that our success will be their success. To this end, we continue to believe that a swift decision to grant us an interest rate reduction that has been agreed in principle, and from which Greece and Portugal are benefiting already, is in Ireland's and the wider European interest. While, for a variety of reasons, agreement of the interest rate reduction has not been secured, I believe our efforts to date are bringing a better understanding of our position, which is essential to bring about a positive result.
I thank the Minister for his reply. It seems Ireland is being treated very unfairly on this issue. As the Minister acknowledged, the other two countries, Greece and Portugal, are benefiting from a lower interest rate. It is now three months since the Heads of Government at euro group level decided in principle there would be an interest rate reduction yet it has not been applied to Ireland.
According to media reports last weekend, approximately €23 billion of our facility has now been drawn down, which would represent over a third of the overall facility and is being levied at the higher interest rate. The Minister previously acknowledged that a 1% interest rate reduction on the European sources of funding under the facility would represent a saving of approximately €450 million a year, which would be very significant. By any objective measure, the elements of the EU-IMF agreement that have been renegotiated to date are very modest and have not resulted in a direct cash saving for the Exchequer. This is one change which would result in a saving and the sooner it happens, the better.
The one element not dealt with in the Minister's reply was when we might expect an outcome to these negotiations. Is the problem still with the French insistence on the corporation tax issue? Is progress being made? When does the Minister expect this to come to a head, one way or another?
The Deputy is familiar with the situation. The European Commission has stated publicly that it is in favour of the reduction in the interest rate applying to Ireland, the IMF has stated publicly, through its acting director, Mr. John Lipsky, that the reduction should apply to Ireland and the OECD has stated that the reduction should apply to Ireland. However, the decision is made at the meeting of 27 member states and there must be unanimity. At present, France has been very vocal in opposing the reduction and Germany is also opposed to the reduction, although it is less vocal.
The French position is that because there is a recommendation to reduce the interest rate in Ireland, a quid pro quo must be given by Ireland — in other words, an additional condition must be added to the memorandum of understanding. The condition the French are seeking is an increase in the 12.5% corporation tax rate for Ireland, which we are refusing point blank. We are also refusing to make any variation on the tax base, although we are prepared to participate with all our other colleagues in the discussion on the paper being produced by the Commission on the CCCTB. We have no problem with a full discussion and we will discuss any issue.
The value of the reduction is being exaggerated and, in my view, too much is being made of this. The Deputy knows how it works with the different funds in that there is eventually a blend of interest rates. The Portuguese got 60 basis points. If Ireland were to get the same as Portugal, it would mean €148 million a year, and if we got what Greece is supposed to have got but may not retain next month, the figure would be just over €200 million. There is no way whatsoever that I will negotiate with anyone in the French Government to concede anything on the Irish corporation tax rate for that amount of money.
The last Government committed to a fiscal adjustment of €6 billion in 2011 — targets we are working to meet — and the commitment for 2012 is €3.6 billion, giving a total of almost €10 billion. Does anybody think we will give away the heart and soul of our industrial strategy for €150 million? This is not real. To those who are opposing us and trying to force us to change our corporation tax rate, I tell them once more today that they have no negotiating position because the amounts of money are so small in regard to the adjustments we are being required to make that we will not concede.
We will be reasonable. If they suggest something we can agree with elsewhere in the programme, we will talk to them. If, for example, they want harder fiscal rules going forward, I am in favour of those anyway and would be prepared to negotiate them. I am prepared to be communitaire and to be European — that is kind of tradition I come from and it is what I believe in. However, I will not be waltzed around by any member state, especially when the gain is so small in contrast to the potential industrial promotion.
As a final point, I note that what is going best in Ireland at present is export-led growth, which is where GDP is growing. It is what is giving us a balance of payments surplus and where the jobs are being created, particularly jobs for bright young people. Does anybody think we will give this away for the sake of a small reduction in interest rates? It is not on.
I welcome the commitment of the Minister and the Government not to trade our corporation tax sovereignty for a reduction in the interest rate. However, a reduction in the interest rate was held up during the election campaign as a prize worth pursuing and one which was deliverable. A 1% reduction on all the EU sources would mean €450 million a year, which is not insignificant and might help to soften the austerity measures being applied. When is the next opportunity to pursue this, is it firmly on the agenda and when does the Minister hope to have an outcome?
I do not believe the Deputy's figures are correct. The concession, or arrangement, is that the reductions for Greece and Portugal did not apply to money already drawn down — only to that going forward. Therefore, the Deputy's figures are much greater than that for the actual available reductions.
This matter is always on the agenda. We have negotiated a position in which we have the support of the IMF, the European Commission, the OECD and, I believe, 25 of the 27 member states. We will continue to push for it because we were promised it and should get it. However, although we are not prepared to give any concession on corporation tax — either on the rate or the base — in exchange for it because it is too important to us, we are prepared to consider suggestions elsewhere in the programme.
25 Deputy Pearse Doherty asked the Minister for Finance the reason he was unable to provide the Commission on Taxation with costings for 42 of the 131 tax expenditures that were in place at the time of the commission’s research for its 2009 report; the number of these tax expenditures currently in operation; if he will provide an estimate of the cost to the State for 2008, 2009, 2010 and projected cost for 2011 from these 42 tax expenditures; and if he will make a statement on the matter. [14499/11]
The Deputy will be aware that the Office of the Revenue Commissioners is the main source of statistics and data on tax incentives and expenditure. However, Revenue's primary functions are the administration of the tax system and the collection of tax. The extraction of statistical information flows from those primary functions.
In Part 8 of its report the Commission on Taxation reviewed 115 tax expenditures that were in place at the time. Of these, costings were provided for 73 expenditures and it is accepted that Revenue were not in a position to provide tax cost estimates for 42 of the tax expenditures examined in the report. One key reason for this is that many of the tax reliefs in question relate to incomes which are tax exempt and not required to be returned to Revenue, for example, those of credit unions, sports bodies and charities. Others are constituent parts of larger tax reliefs where estimates of cost are only compiled by Revenue at aggregate level. In situations such as these the detail at sub-aggregate level is either not sought or provided in annual tax returns or is not separately captured on the computer system which generates the statistics. Another reason for the limited data is where new reliefs had been recently introduced and the relevant tax returns were not due until after the publication of the commission's report.
In recent years, the Department of Finance and the Office of the Revenue Commissioners have worked closely to identify mechanisms for enhancing the level of information captured in respect of tax reliefs, and significant progress has been made in that direction. However it is necessary to balance the need of the Exchequer for statistical information with the desire to minimise, as far as possible, the administrative burden placed on individual taxpayers and on the business community.
In addition the Revenue Commissioners have made major advances in data capture and in the e-filing of tax returns to create a supportive environment for acquiring tax-based statistical data. The development of e-filing was the specific recommendation of the Commission on Taxation in respect of securing additional data relating to tax expenditures.
As regards these 42 tax expenditures I can now provide additional information in respect of nine. Five have been abolished including long-term care policies, BIK exemption for employer-provided art objects in a heritage building or garden, accelerated capital allowances for farm buildings for the control of pollution, payments made to National Co-operative Farm Relief Services Limited and payments made to its members, and investment allowances in respect of mining exploration expenditure and plant and machinery.
There are four further measures which Revenue has been able to provide cost estimates for, namely, stamp duty exemption for single farm payment entitlements, estimated at €2,845; palliative care units, for which no claims were allowable as the scheme was not commenced; relief for investment in renewable energy generation, namely, €100,000; and the mid-Shannon corridor tourism infrastructure investment scheme, namely, €700,000.
Additional information not given on the floor of the House.
In most instances cost estimates are for 2008 because this is the latest year for which the necessary detailed information is available. An exception to this is the stamp duty exemption for single farm payment entitlements where the availability of an estimate for 2010 is associated with the effective launch of the e-stamping system in that year.
It is likely that some additional tax reliefs will be capable of being costed for the first time for the tax year 2009. The work of assembling the necessary detailed data to underpin the updating of the costs of all tax allowances, reliefs and credits for the 2009 tax year is at an early stage and is ongoing. It will be some time yet before it is completed.
According to his reply, to date the Minister for Finance cannot outline to the House the cost of 33 tax reliefs, namely, almost one in every three tax reliefs that exist in this State. Some of the information was truncated but I presume that is what is stated therein.
I refer to the report in 2009 of the Commission on Taxation. Of the 42 reliefs, five were abolished, the Minister can provide additional information on four but cannot do so for the remaining 33. A number of them apply in areas such as health, enterprise and employment. When we come to deal with Committee Stage of the Finance (No. 2) Bill how will we be able to make accurate decisions in this regard if we do not have information as to how much these tax reliefs will cost? Does the Minister plan within his Department to have information prior to the 2012 budget on all the other 33 tax reliefs available? Will he publish the costs and benefits that apply to each of those tax reliefs prior to the budget?
At a level of principle there is merit in the Deputy's point. However, the primary purpose of the Revenue Commissioners is to collect tax. It is obviously very useful if they supply us with data so that when the Government makes decisions on the incidence of taxation it knows where to direct it. However, the Revenue has information on all principal tax reliefs and those for which it does not are minor in nature. I reiterate there are 33 remaining tax expenditures, or, as the Deputy terms them, tax reliefs, for which the costing data is not available. However, the bulk of these are small in nature and targeted at particular deserving sectors that continue to need support from the Exchequer. A number of tax expenditure measures support Irish sport, for example, and there are income tax exemptions and capital gains tax exemptions for sport bodies. Others support Irish charities, such as capital acquisition tax exemptions from gifts taken by charities, in addition to income tax exemptions. A significant number of the measures support the farming sector, for example, capital allowances on the purchase of milk quotas and capital gains tax relief for the disposal of a farm on retirement. Others include measures to support the unemployed, such as the income tax exemption for termination payments related to death or injury, and benefits-in-kind exemption for retaining a part of a redundancy package.
The information on big yield or big cost tax reliefs is available to me, as Minister for Finance. If I wish to change the reliefs in the budget I have that information. I am advised by Revenue that those reliefs for which it does not have information are small in nature and limited in cost or yield. The reason Revenue does not have such information is probably threefold. In the first place, Revenue does not wish to add additional bureaucracy to compliant taxpayers in order to gain a great deal of information that is of little value. More important, it must measure the cost of obtaining information and the manpower required to so do against the potential yield or cost to accrue from any such benefits.
I believe the situation is in order even though the Deputy has a case to criticise at a level of principle. I will make further inquiries.
I ask Deputy Doherty to be very brief because there are other questions.
I do not argue the merits of tax reliefs and expenditures among the 33 quoted. Does the Minister believe it is good practice that, as Minister for Finance, he does not know the costs of almost one third of all tax reliefs in the State? How can he, as Minister, make any decision on any of those reliefs or how can we, as the Opposition, make proposals in their regard if we do not have a clue about how much tax is forgone to the State? The Minister is making guesses as to why we do not have the figures. Does he intend to have them? Is it not good practice for us to have the cost, or at least the estimated cost, of all tax reliefs? We do not have any figures for one third of them.
It is acceptable, provided Revenue can assure me that the cost of the tax reliefs is nugatory and that if they were abolished the yield would be insignificant. Revenue can do that. If it tells me a certain tax relief exists but does not amount to more than €50,000 there is no point in diverting resources from tax collection into an examination, purely in order to have statistics. One might lose more revenue than one would gain. However, if there is any serious tax relief to which the Deputy can draw my attention, concerning which he believes the cost is great and the abolition thereof would lead to a significant yield, I will ask Revenue to provide as detailed a costing as possible.
If the Deputy can bring any serious tax relief to my attention — if he thinks its cost is big and its abolition would lead to a significant yield — I will get the Revenue Commissioners to do as detailed a costing as possible on it.
Why has the Government abolished five of them?
They were of very little consequence to those who benefited from them or to the Exchequer. Tax keeps changing.
