Ceisteanna Eile - Other Questions

Question No. 6 replied to with Written Answers.

Tax Code

Pearse Doherty


7. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to the Revenue Commissioners’ decision to end the unvouched disregard allowance for certain workers as of 1 January 2019; and if he will discuss this matter with the Revenue Commissioners and seek to have this decision reversed. [48597/18]

I welcome the deferral of the terrible attack on the flat rate system but note that in his confirmation to me earlier this week, the Minister said the approach will ensure that any changes that may be made to the flat rate expenses regime will not impact on any specific group earlier than the rest. That is a clear indication that there is more to follow and that all of these changes should happen at the one time. Yesterday, we heard from the Taoiseach a suggestion that this may not happen. He said the measures would be politically proofed and that no change would happen before 1 January 2020, if at all. Can the Minister confirm the current position? He has indicated to me on two previous occasions that the review is complete under a number of headings and that what has been deferred is a decision which has already been made. Yesterday, however, the Taoiseach suggested the change may not happen at all.

I am advised by Revenue that the effective date for implementation of the changes referred to by the Deputy is being deferred to 1 January 2020. The intention is that Revenue will have completed the comprehensive review of all flat rate expenses by that date. As such, this approach will ensure that changes to the flat rate expenses regime do not impact on any specific group earlier than the rest. I also understand that Revenue will be in contact with the relevant representative bodies in this regard. However, it is important to be clear that there has been no change to the general rule set out in legislation that all employees are entitled to claim a deduction under section 114 of the Taxes Consolidation Act 1997, or TCA, in respect of an expense incurred wholly, exclusively and necessarily in the performance of the duties of their employment to the extent that the expenses are not reimbursed by the employer. This means that all employees remain entitled to claim deductions for valid and specific expenses incurred.

Revenue is independent in the administration of the tax code and the flat rate expenses regime is an additional concessionary practice operated by Revenue where both specific commonality of expenditure exists across an employment category and the statutory requirement for the tax deduction, as set out in section 114 of the 1997 Act, is satisfied. The purpose of the regime is to simplify administration where the specific legislative criteria are met and help both the taxpayer and Revenue by making it easier for large groups of employees working in the same sector to avail of their entitlement to tax relief in respect of expenses incurred in the performance of their employment duties. Earlier this year, Revenue commenced a comprehensive review of flat rate expenses to ensure the expenses are still justified and appropriate to modern day employment and work practices given the historical nature of the practice and having regard to changes in employment circumstances, regulations and work practices across employments.

The Minister may imply that nothing has changed, but the reality is very different. There is a reason we have this system. It is so that organised groups of workers can avail of their rights. That is why ICTU and Mandate are opposed to this. I commend their activism in that regard. The mechanism is now being taken from individual workers who were previously allocated these deductions as of right as a group of workers and who will now have to hold receipts and claim individually. It is a bureaucratic nightmare for those claiming as well as for Revenue which will have to process and check such claims. The Minister said Revenue was independent in the implementation of the tax code. While that is a clear statement of fact, I quote to him the Taoiseach's statement:

No changes will be implemented before 1 January 2020 if at all. I will make sure changes are politically proofed before they happen.

Can the Minister outline to the House what political proofing the Government intends to engage in on this? Why is the Taoiseach suggesting these changes may not happen at all? Has the review been completed in a number of sectors and has a decision been made in that regard, notwithstanding the deferral of its implementation, or is there a question mark, as outlined by the Taoiseach, over whether this will happen? What engagement has the Minister or his officials had with Revenue officials on this measure?

To date, this has been a matter being implemented by the Revenue Commissioners. On foot of the concern that developed on the matter in the early part of the week, Revenue made the decision on deferral. As to the proofing to which the Deputy referred, it is important that there is broader awareness of what is happening when work like this is under way. I welcome the fact that Revenue will contact representative bodies on the matter so that everyone is aware of what is under way.

The Deputy will know that, because this is a tax relief, the Revenue Commissioners will have to consider that it is therefore worth more to people who are on higher rates of income tax. They will review this matter across next year. As I have said, they have decided that any changes will be deferred until 1 January 2020.

It has already been decided to end the flat-rate expenses relief system in respect of 75,000 workers in five categories. Those working in shops will be most affected by this decision. Will the Minister confirm to the House whether that decision still stands or is now subject to review? Will he outline whether any reviews have taken place in respect of workers outside the five categories to which I have referred? Have decisions been made in respect of those workers at this point? The Taoiseach asserted in this Chamber yesterday that he will personally ensure there is political proofing in this regard. Does that not suggest that this will ultimately be a political decision, as the Taoiseach clearly indicated in this House yesterday, rather than one that is solely in the hands of Revenue? Will the Minister deal with this issue in a transparent way by amending the Finance Bill as it makes its way through the Seanad to ensure any changes to the flat-rate expenses regime will require political proofing by means of the consent of the Houses of the Oireachtas?

I will allow a short supplementary question from Deputy Michael McGrath.

The Minister needs to clarify whether this is a stay of execution or a review of what has already been decided. Will he tell us what Revenue found when it reviewed certain categories of employment? What was the outcome of that review? Was there any consultation with the representative bodies as part of that review? Is it Revenue's case that tax relief is granted in respect of a level of expenses which is greater than the level of expenses actually incurred? Is that what Revenue is saying? Is that its conclusion? The cost of moving to a new system, involving tens of thousands of individual claims by employees in respect of expenses wholly, exclusively and necessarily incurred in the performance of their duties, must be weighed into the equation as well. These key questions need to be answered.

The Revenue Commissioners commenced this review because they wanted to ensure this matter could be dealt with as effectively and efficiently as possible. They wanted to ensure the expenses agreed are still justified, are appropriate to modern employment and work practices, and are in accordance with the requirements of the Taxes Consolidation Act 1997. Arising from the review, there may be an adjustment to the quantum of particular flat-rate expenses. A decision on whether they should be increased or withdrawn is a matter for the Revenue Commissioners. As I have said, they have confirmed that their work is under way and that they will review where it stands for next year. Regarding the question asked by Deputy Pearse Doherty, I have not yet seen the amendment that the Deputy or his party may propose during the debate on the Finance Bill.

I am asking the Minister to introduce an amendment.

I will not be in a position to agree to anything that might compromise the independence or operations of the Revenue Commissioners.

Film Industry Tax Reliefs

Richard Boyd Barrett


8. Deputy Richard Boyd Barrett asked the Minister for Finance the measures he is taking or considering taking to prevent possible abuses of the tax relief such as artificial inflation of costs or failure to adhere to the requirement in the legislation for the provision of quality employment and training in relation to section 481 tax relief in the film industry; and if he will make a statement on the matter. [48532/18]

Richard Boyd Barrett


37. Deputy Richard Boyd Barrett asked the Minister for Finance the way in which he defines quality employment and training in relation to section 481 tax relief for the film industry, access to which is conditional in the legislation and on the provision of quality employment and training; his views on whether such a definition should at a minimum require adherence to all relevant employment legislation (details supplied); his further views on whether a company proven to be in breach of this legislation should have this tax relief withheld; and if he will make a statement on the matter. [48475/18]

We had an extensive discussion on section 481 tax relief for the film industry when we were considering the Finance Bill. I am very keen to press the issue. The monitoring of the quality employment and training condition that applies to those who get this funding must be improved if we are to ensure quality employment in this sector is actually manifest.

I propose to take Questions Nos. 8 and 37 together.

As the Deputy has said, we have dealt with this matter at length in the context of the Finance Bill. I would like to reiterate briefly the key points I have shared with the Deputy. A significant change I am making this year relates to the potential for inflated claims. I am legislating to change the way companies claim the tax credit to provide that they will have to apply for payment of the tax credit under the self-assessment system. This will bring the operation of the credit within the normal penalty and prosecution provisions for incorrect claims. I am introducing a further amendment to the film tax credit as an important first step in addressing concerns that have been raised with regard to training. The splitting of the certification process between Revenue and the Department of Culture, Heritage and the Gaeltacht, and the requirement for the production company to apply to that Department before the commencement of the main production, will allow for earlier engagement on the training requirements associated with the credit. I am advised by Revenue that it carries out a comprehensive programme of outdoor compliance operations each year. Many of these operations are carried out on a multi-agency basis and can include officials from the Department of Employment Affairs and Social Protection and the Workplace Relations Commission. The primary role of the joint investigation units is to detect non-compliance, including non-operation of the PAYE system on foot of bogus self-employment.

I am glad to hear what the Minister has said. It would be a major step forward. I would like to get as much detail and information as possible on this. The allegation being made by some workers can be summed up by comments made by the SIPTU equity representative when he was asked about blacklisting in the film industry. He said:

People are terrified of rocking the boat in any way, shape or form when they are in a precarious situation in work. One of the questions on the survey asked whether respondents had ever experienced or observed any form of bullying or harassment. Something in the region of 65% to 70% of people said yes. The next questions asked if they reported it. Of that 70% of respondents who had said yes, roughly 70% said that they did not report it for fear of not getting the next job.

He went on to attribute this low level of reporting to the "precarious" nature of the industry. If such a level of concern about blacklisting and being seen to rock the boat exists, that does not sound like quality employment to me. It is critical for us to design our approach to attracting the investment that is necessary in this sector in a way that ensures people who are employed in it are not vulnerable to the sort of thing that has been described.

We debated this matter in the context of the Finance Bill as recently as last night. The Deputy has acknowledged my intention to put in place legislative changes to try to make progress on this matter, which is of growing concern for many people within the industry. When the Finance Bill is being implemented across the passage of next year, I will be happy to engage with the Deputy on how the criteria are being applied. I imagine it will take a period of time for a sufficient quantity of applications to come through the system to enable us to see if the new approach is making a difference. It is realistic to hope that by the end of the first half of next year, we will have a sense of what kind of insights this process is yielding and what difference it is making to the kinds of concerns that are being articulated by many people.

There are many things that could be done, but I would like to focus on one of them in the short amount of time available to me. It would help if we had a clear register of the employees in the film industry. If the various stakeholders had to provide a list of the people in the industry, it would help us to ascertain the level of direct PAYE employment, as opposed to contractor employment, to determine whether there is evidence of bogus self-employment, to establish whether the trainee system is being abused, and to assess whether too many trainees are being taken on to avoid employing and paying qualified people. A register would help us to get the sort the information needed for a proper appraisal of the extent of quality employment and possible abuses in this area. I suggest we also need to examine the extent to which the certification process is looking under the surface of the different applications for the review under the different headings.

On the second point, the certification process is new and will take effect and will be implemented once the Finance Bill is passed. It may be a matter on which we can engage in the first half of next year once we see how it is implemented and whether it is making a difference to the issues which are being raised.

Last night, the Deputy asked what was my view of the breach of employment law and the availing of tax credits. I answered his question directly.

I stated that I was aware that incidents take place in workplaces that should not take place but that these developments can sometimes occur if a workplace is big enough. Nevertheless, my view is that if issues of this nature are sustained, frequent and specific to a project that is availing of a credit, it raises issues with me as to how that credit is being used. I hope the changes we are making for next year will provide some clarity on this issue. Where I differ with the Deputy is on his first point. I do not know that other parts of our economy have the kind of register of employment to which he referred. It would be a big ask to register everybody working in a particular sector.

Tracker Mortgage Examination

Pearse Doherty


9. Deputy Pearse Doherty asked the Minister for Finance if his attention has been drawn to the fact that the victims of the tracker mortgage scandal have established that in the case of at least one bank (details supplied), the independent appeals board examining their appeal was not provided with all records pertaining to their case; if this is common practice across the banks; and if he will make a statement on the matter. [48596/18]

Michael McGrath


15. Deputy Michael McGrath asked the Minister for Finance the status of the tracker mortgage examination; the amount paid out to date for redress and compensation; when all affected customers will receive payment; and if he will make a statement on the matter. [48565/18]

I have been contacted by a victim of the tracker scandal with some extremely alarming information. This family's appeal to the Ulster Bank's independent appeals process turned out to be a complete and utter joke. The only document related to her case that the appeal board received from the bank was a document relating to the compensation that was ordered. Is the Minister aware that this practice is taking place in Ulster Bank and what will he do about it?

I propose to take Questions Nos. 9 and 15 together.

Appeals form an important part of the overall tracker mortgage examination process as they ensure an independent and transparent consideration of complaints from customers about any aspect of the redress and compensation they have been offered.

The Central Bank advises that, as part of the framework for conducting the tracker examination, lenders are required to put in place an appeals process as set out by the Central Bank. The Central Bank expects that lenders have put in place the necessary processes to ensure the appeals panel can operate in accordance with the requirements of the tracker framework, including that all relevant and available information which an appeal panel requests is provided by the lender to the panel so that it may consider and decide upon an appeal.

Where a customer who has appealed remains dissatisfied with the outcome of the appeal and does not accept the findings of the appeals panel, he or she retains the option to bring a complaint to the Financial Services and Pensions Ombudsman. The Deputy might indicate if he knows whether this has happened in the case he raised. The Central Bank does not have a detailed role in the operation of the appeals process. If the Deputy provides information on a particular case, including the case he raised, directly to the Central Bank, the bank will consider any information provided.

On Deputy Michael McGrath's question, Deputies will be aware that the Governor of the Central Bank provided an update when he attended a meeting of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on 4 October. At that meeting, he indicated that, as of the end of August, lenders had identified 38,400 affected customers and paid €580 million in redress and compensation. The redress and compensation phases of the tracker mortgage examination are now significantly advanced, with 93% of affected customer accounts identified and verified and they had received offers of redress and compensation by 31 August.

I know the Minister and the Central Bank want to move on from this scandal and the banks are talking about returning to normality, restoring bonuses and so on. This case relates to a couple who submitted an appeal in June 2018. There has been correspondence back and forth between them and the BDO Ireland secretariat, which oversees the independent appeals process for Ulster Bank. BDO requested some additional information from this family relating to their mortgage account. This concerned the family because the request indicated that BDO either had not read the mortgage account file or did not have a copy of it. Two weeks ago, the couple posed the question of whether BDO was capable of adjudicating on the appeal fairly and stated they had lost faith in the appeals process. The appeals board finally came back to them and confirmed that, as an independent secretariat, it only has access to the mortgage account details provided to it. In the case of Ulster Bank, this means BDO only has the compensation letter. It does not have the mortgage file or any other documentation. This raises serious questions about the whole point of the independent appeals process within Ulster Bank and possibly other banks. The latest information available to me indicates that Ulster Bank has identified 3,490 customers who were impacted by this scandal, 472 appeals packs have been dispatched, 81 have resubmitted and 20 appeals have been heard, only one quarter of which have been upheld.

The Minister must take action on this. He needs to ensure that Ulster Bank is providing all the detail to the independent appeals process because it is a complete sham if the only thing the appeals process has is the compensation letter and it must adjudicate based on that.

I do not know how Deputy Pearse Doherty can credibly put forward the allegation that I am looking to move beyond this when I have been crystal clear at all points that I believe the behaviour that caused this issue and the way in which it was dealt with recently were unacceptable. I have been very firm and clear in my support of the Central Bank and the work it is doing. Some €580 million has been returned to citizens. This was their money in the first place.

The Deputy will be aware that I made changes regarding the sanctions available in this area, including increasing to €500,000 the level of compensation the Financial Services and Pensions Ombudsman may award. How the Deputy can deduce from my public statements on this matter, my engagement with the banks and the support that I have offered the Central Bank that I want to move beyond this issue is not clear to me. I reiterate that if he wishes to share the information he has on the case of his constituent with the Central Bank, it has indicated it will examine the matter. Has the family in question had an opportunity to take this matter to the Ombudsman?

My question relates to the tracker examination at a broader level. It is now three years since the tracker investigation commenced. As of last month, the most recent update to the finance committee from the Governor of the Central Bank was to the effect that 10% of the identified effected customers had still not received redress and compensation. In effect, they have still not been given back their money. These are identified customers. In this examination, there are 31,300 effected customers, of whom 28,100 have received redress and compensation. Within this group of 28,100 there are disputes, and they will continue, but there remain more than 3,000 customers which the banks have identified and who have still not got their money back. They have not received compensation or redress. There is no deadline or end date for all of this. This examination has been ongoing for three years, yet 10% of the customers involved, or 3,000 people, have not got their money back. This scandal must be brought to an end. It is bad enough that this happened in the first place, but the way in which it has been handled and the fact it has been allowed to drag on while people continue to be out of pocket are not acceptable.

My most recent figures indicate some 93% of verified affected customers have received offers of redress and compensation. I want to see the matter concluded quickly. The fact that some 93% of customers, that is, our citizens, have been offered redress and compensation is of little solace to me or them, given how long all of this has gone on. It is unacceptable that it happened in the first place.

From my engagement with the Central Bank, I know it is devoting considerable resources and effort to try to ensure this matter is brought to a conclusion. It indicated it has identified the vast majority of people who it believes were affected. I want to see this matter brought to a conclusion and I know the Central Bank feels the same. It is and was a breach of trust on top of everything else we went through between Irish banks and our society. It is one of the key reasons that, as I indicated and discussed at last month's priority questions, I want to introduce a new individual accountability regime for banks based in Ireland next year.

This individual who is going through the appeals process was able to ensure her mortgage file reached the independent appeals process. The mortgage file cannot be provided unless consent is given by the mortgage holder, yet mortgage holders, that is, the victims of the tracker scandal, do not know that consent is needed and the independent appeals process panels are not asking them for consent. There is no concern for the individuals, but one could fill one's boot with the paperwork that relates to this individual's file. The only documentation from the bank that the independent appeals process had for adjudicating in her appeal was the letter of compensation. This is likely to happen across Ulster Bank customers, but if it is the process in Ulster Bank it is likely to be the same across the board.

The Minister may say the woman can go to the Ombudsman, which is true, but Deputy Donohoe is the Minister for Finance. I told him it is probably happening in other banks and we must ensure it is not. On behalf of the people, the Minister is the majority shareholder in AIB and Permanent TSB, and is a significant shareholder in other banks. He meets representatives of the banks and the Central Bank, but the Central Bank will not deal with any individual. Will he take this matter on board? I put the information on the record and I will write to him, as I have done with the Central Bank. He should raise it with the Central Bank, Ulster Bank and the other banks to ensure all the information relevant to a customer's file is provided to the independent appeals process in order that justice can visibly be served.

On the numbers, the figure of 93% was reached by including the 7,100 pre-examination cases, which go back a number of years. We teased all of this out on Committee Stage. The figure in the current examination is 10%, which is more than 3,000 customers who have still not received redress and compensation. The banks know who they are, their name, their address, their mortgage account number and how much they are owed, yet they remain unpaid and out of pocket to this day, which is not acceptable. We and, more importantly, the people who were affected need the Minister and the Central Bank to inform them when they will get their money back. The issues of accountability and the outstanding disputed cases will have to be resolved, which will take time, but these are identified cases, of which there are still more than 3,000, or 10%.

On Deputy Pearse Doherty's point, I repeat what I said from the start. The Central Bank indicated that if the individual's information is shared with it, it will examine the information. On his request to raise the matter with the Central Bank, I will do so and I am determined to ensure this further breach of trust is dealt with in the most robust way possible.

On Deputy Michael McGrath's question, I know that he dealt with this matter as recently as early October. He is correct that the figures I provided include the 7,100 cases that had been identified, but this year there has been an increase of 1,300 in the number of customers who have been identified as affected since March. The number is growing, therefore, which was communicated to the Deputy by the Central Bank.

I cannot give an exact time by which everybody will have his or her money back, but I want it to happen as soon as possible. I will continue to engage with the Central Bank to see if I need to give it any further support to make that happen. In the particular cohort of cases with which we are dealing, as we approach this phase of the inquiry, some of them will be even more difficult and even more demanding. Like both Deputies, I have met people who were affected by the matter. Deputy Pearse Doherty referred to a bootful of correspondence, and I have seen the scale of correspondence that some people have had the trauma of having to process. I am fully committed to ensuring this matter is dealt with as effectively as possible.

Government Expenditure

Thomas P. Broughan


10. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the trends in general Government interest expenditure since 2017; the projections for the next five years; the way in which this expenditure has been impacted by the NTMA's management of the national debt in 2018; and if he will make a statement on the matter. [43866/18]

The Minister may remember I raised concerns about the refinancing of some of our benchmark bonds in 2018 and 2019 with him, the Taoiseach, Deputy Varadkar, and the previous Taoiseach, Deputy Enda Kenny. Since 2008, our national debt and interest payments are approximately the same size as the budget that the Minister launched a couple of weeks ago. The overall size of national debt is projected to be more than 100% of gross national income. What are the Minister's projections for the next four or five years, particularly in regard to refinancing?

The recently published annual report on public debt in Ireland outlines that the interest burden of public debt is perhaps best assessed by examining the interest-to-revenue ratio, which demonstrates the percentage of total Government revenue dedicated to interest expenditure. The ratio has been on a downward trend since 2013 but remains high by EU standards. As of 2017, debt interest payments amounted to almost 8% of general Government revenue, compared with 3% prior to the financial crisis.

As the Deputy may be aware, projections of interest expenditure for the next five years can be found in the economic and fiscal outlook published in budget 2019. As a percentage of total general Government revenue, interest expenditure is projected to amount to 5.8% in 2019, 5.3% in 2020, 4.9% in 2021, 5% in 2022 and 5.1% in 2023, displaying a broadly downward trajectory. At just under €5.3 billion, general Government interest expenditure this year is expected to be close to 9% lower than in 2017, and more than 30% below it 2013 peak, since which it has been on a downward trend.

There are a number of reasons for the drop, such as the early repayment of the €22.5 billion International Monetary Fund loan facility and bilateral bond switching, in which shorter-term debt is redeemed in return for longer-term debt. This year alone, €1.4 billion of 2019 and 2020 maturities have been switched into longer-dated bonds. The European Central Bank’s quantitative easing programme has been a significant factor. The National Treasury Management Agency, NTMA, has taken advantage of these favourable market conditions to issue a large volume of long-term debt at low rates. With funding concluded for this year, the NTMA issued €17 billion in general Government bonds, at a weighted yield of 1.1% and an average maturity of 12 years.

When I look at the NTMA figures, I note the bond component is steadily growing. Does that include the bonds to which the Minister refers, such that that aspect of national debt is increasing but in a safe manner? The concern raised by a number of academics and others over the years was that general interest rates would change and we could be left in a difficult situation. The Minister will agree that the €42,000 of debt per man, woman and child, which he quoted in the budget, remains a dire burden for our country.

How will the rainy day fund operate in the context of gross and net debt? Will that be deducted and taken into account when quantifying the net debt, or does it stand alone?

I will answer the last question first. It will have an effect on our net debt because it is an asset that we have and it is funding that is held by the State. Financial markets look at the solvency of the State and that fact will reduce our net indebtedness position.

Our national debt will be bond-financed more and more and, at a point in the future, will be exclusively bond-financed. I will check but I imagine that, following the early repayment of the IMF programme, we are already almost exclusively bond-financed. The progress that has been made by the NTMA in issuing longer-term debt will insulate us, to a degree, from changes that happen in the future. As the Deputy said, it is a massive constraint for the country to have a national debt of €202 billion and, over time, we have to get the figure down by running surpluses and being careful about one-off gains.

NAMA Loans Sale

Mick Wallace


11. Deputy Mick Wallace asked the Minister for Finance his views on the details surrounding a loan sale (details supplied) which was sold off market and for less than 10% of its original value; if he is satisfied that NAMA is not in breach of section 2(iv) of the NAMA Act 2009, which requires it to protect the interests of the taxpayer; and if he will make a statement on the matter. [48606/18]

I raised the issue of the Project Nantes loan sale in this House in May 2017 with the then Minister, Deputy Noonan. He told me that NAMA could not reveal any information on this loan sale under sections 99 and 202 of the NAMA Act. The current Minister refused to answer twice, on the same grounds, but sections 99 and 202 do not apply to the Houses of the Oireachtas, yet the Minister has allowed NAMA to hide behind them. I had to write to the Committee of Public Accounts to ask it to get involved. NAMA was forced to begin a legal review into the sale and the Comptroller and Auditor General has now become involved. Does the Minister not think that, in the public interest, he too should become involved?

I have already dealt with the background to this in a debate with Deputy Catherine Murphy, so I will not repeat what I said to her. I will answer Deputy Wallace's direct question clearly, however. It is my strong view, and a requirement under law, that the relevant oversight body for this matter is the Comptroller and Auditor General. NAMA is in communication with him and his office and this is the way I believe it should be dealt with.

A correct consensus grew in the aftermath of the crisis that politicians should step out of particular roles and away from making decisions they may have made in the past. I believe it is correct that certain work has to be done on a non-political level, including the regulation of our Central Bank and decisions made by NAMA or banks. If there are issues with organisations such as NAMA, then it should not be politicians who inquire into them, but it appears that, while this consensus sometimes suits some people other than Deputy Wallace, other people call on me to get involved when there are issues they want to be addressed.

The right way for this to be dealt with is through the Comptroller and Auditor General. The Deputy fulsomely acknowledges the work he does and, if there is an issue, his office will inquire into it. As I said to Deputy Murphy, NAMA has given assurances on how the matter was dealt with.

I have great respect for the work of the Comptroller and Auditor General, as I do for the Minister, but I still believe the Minister should get involved. Avestus took over Quinlan Private in 2010. The three principal directors, Olan Cremin, Thomas Dowd and Peter Donnelly, had borrowed heavily during the boom, mainly from Anglo Irish Bank, and owed €489 million when the crash came. The €489 million went across to NAMA and NAMA assembled a portfolio with €352 million of this debt, naming it Project Nantes. The three boys went off to America to find someone to put up the money and found a company called Clairvue. They then set up a shelf company in Luxembourg called Clairvue Nantes and installed another director of Avestus, Mark Donnelly, as a director of the Luxembourg company. He had been a director of Avestus since 2010 and became a director of Clairvue in 2012. The company bought Project Nantes for €26.6 million, with a discount bringing the price to under 10% of the original value. This sale is in breach of the NAMA Act for multiple reasons. It was off market, at a knock-down price and, worst of all, the purchaser was connected to the debtor, which is illegal under section 172 of the NAMA Act.

I reiterate that it is now accepted that politicians should not be involved in inquiries into organisations as vast and significant as NAMA nor should we be involved in their day-to-day operations because of the pressure we could come under. If the Deputy is willing to accept that, he should be willing to accept that the Office of the Comptroller and Auditor General is the right body to do this work. The Deputy respects that office and has publicly acknowledged the work it has done. The Comptroller and Auditor General has requested further information and the Committee of Public Accounts is aware of this. The right thing is for that information to be supplied and, if the Comptroller and Auditor General reaches any conclusions on the issue, it could then be something for me to deal with. We have to allow due process to take place and an independent body like the Comptroller and Auditor General to do its work. NAMA has provided information to me and I have put it on the record of the Dáil. I have to respect the independence of the Comptroller and Auditor General.

There is no doubt that the Comptroller and Auditor General is a serious operator and he is a credit to his office, but he has found it very difficult to get information out of NAMA. It was very obvious during the protracted Project Eagle case that NAMA was very reluctant to co-operate with the Comptroller and Auditor General in a fair manner. NAMA is deliberately downplaying the requirement of section 172, but a purchaser is not allowed to be a NAMA debtor nor to have any connection to the debtor, yet Mark Donnelly was a director of Avestus and Clairvue. This is a deliberate breach of section 172 and all NAMA's talk does not change that.

I accept the philosophy that politicians should not get involved and that other people with the appropriate remit should play their role first, but I see the Government getting involved in things on different occasions in this House and this is one I would love to see the Minister get involved in. I have great respect for him and I believe he could do something really good by doing so.

If I did, I would be getting involved in work the Comptroller and Auditor General is doing and undermining any conclusion he may reach on how this matter was dealt with. The Deputy has named individuals and has given his view on them but I have to ensure due process is followed. This is work that is under way in the Office of the Comptroller and Auditor General and it would be utterly inappropriate for me to reach a view on this matter until that work is concluded.

Tax Code

Thomas P. Broughan


12. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the November 2018 meeting of ECOFIN and the policy debate by EU finance ministers on the proposal to establish a digital services tax; and if he will make a statement on the matter. [48540/18]

The Minister told me a few weeks ago that the digital services tax would cost us at least €160 million per year, but the vibes coming from the ECOFIN meeting were very disturbing. Bruno Le Maire, for example, seemed to say we could bring in a digital services tax by the end of the year and then suspend it for two years and Olaf Scholz said something fairly similar. Is the support the Minister has had in Europe crumbling? Will he have to resort to a veto?

There continue to be a number of other member states who have consistently expressed opposition to the introduction of the digital services tax. Their opposition was reiterated the last time this issue was discussed, which was at the October ECOFIN meeting, and they were very clear in expressing their concern on the matter. This is a change from where we have been over the past year when Ireland and one other country were voicing concern on the matter.

There will be a further discussion on this issue in two weeks' time in December. Regardless of whether the European Union implements an EU-wide measure, we have already seen ten member states introduce their own unilateral measure or indicate that they are planning to bring forward such a measure. We will see these measures being deployed in individual member states in the near future, but I stand by my view that if the European Union was to go down this route on its own, it would open up a significant trade risk. Ireland could find itself at the heart of this trading difficulty in terms of a tax policy matter. That is why the OECD is the best place in which to resolve the issue.

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