JOINT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE debate -
Wednesday, 8 Nov 2006

Business of Joint Committee.

Vice Chairman (Deputy Finneran)

Apologies have been received from Senator O'Toole. The draft minutes of the meeting of 25 October have been circulated. Are they agreed? Agreed.

We have an item of correspondence from Senator John Paul Phelan which we will leave until he arrives. We have an e-mail from Mr. Kevin Leydon dated 19 October which we will note. We also have an e-mail dated 26 October from a credit card company seeking a meeting to discuss a variety of issues. We decided at an earlier meeting not to meet it.

We have a letter dated 20 October from a finance union requesting a meeting to discuss a pensions issue with a bank. I suggest we write to the Bank of Ireland on the matter. Is that agreed? Agreed.

We have an e-mail from the Department of Finance which we will note. We also have an e-mail from MS Ireland which we will refer to the Department of Finance for further consideration. Is that agreed? Agreed.

We have received the fourth progress report on cohesion entitled The Growth and Jobs Strategy and the Reform of the European Cohesion Policy, which we will note. A copy is available on request from the clerk. We have also received the quarterly bulletin from the Central Bank and Financial Services Authority of Ireland, which we will note. A copy is also available on request from the clerk. We have a letter dated 20 October containing the annual report of the European Court of Auditors for 2005, which we will note. A copy of the report is available on request.

We have an e-mail dated 1 November from the Department of Foreign Affairs outlining the agenda for forthcoming EU Council meetings, which we will note. Members have a list of statutory instruments which I will not go through in front of them. They are noted.

The clerk received a letter from the clerk to the Sub-Committee on EU Scrutiny dated 26 October. Members should note that COM (2006) 247 is an amended proposal for a regulation of the European Parliament and the Council on mutual administrative assistance for the protection of the financial interests of the Community against fraud and other illegal activities. The proposal has been referred to us for further scrutiny. A copy is available on request. COM (2006) 507 is a proposal for a directive of the European Parliament and the Council amending Council Directive 92/49/EEC, as well as Directives 2002/83/EC, 2005/68/EC and 2006/48/EC, on procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of shareholdings in the sector. The proposal has been referred to the committee for further scrutiny. A copy is available on request.

We have received an e-mail, which we will note, from the Department of Foreign Affairs regarding the latest agendas for the GAERC meetings on 13 and 14 November. We also received an e-mail, which we will note, from the Department of Foreign Affairs regarding the meeting of the Council of the European Union on 7 November.

We have received an acknowledgement of a letter sent to the Department of Finance requesting information on retired prison officers. We met the relevant association at our last meeting and will note the correspondence.

We have received a pre-budget submission from the Combat Poverty Agency which we will note. A copy is available on request.

Deputy Nolan

I refer to the letter from Visa seeking a meeting. I do not think it was discussed.

Chairman

My record indicates that it was and that a decision was taken.

Deputy Nolan

I do not recall it. I am looking at the minutes for the meeting held on 8 November and do not see a reference to it. The correspondence is dated 26 October.

Chairman

While I do not have the decision in front of me, we discussed the matter and decided that as the correspondence was from a lobby group, we would write to it.

Deputy N. O’Keeffe

That is not exactly right. The Chairman was present at a meeting we had with it and matters have developed somewhat since. The correspondence refers to electronic banking, which the committee should be promoting to cut the high costs incurred by consumers.

Chairman

I will ask the clerk to supply the information required. We can deal with the matter at a future meeting.

Deputy N. O’Keeffe

What information is that?

Chairman

The decision taken at the meeting. I do not have it to hand.

Deputy N. O’Keeffe

While I was abroad attending other meetings and have missed some recent meetings of the committee, I do not think the matter was discussed.

Deputy Nolan

Can we discuss it at the next meeting?

Deputy N. O’Keeffe

Yes, we can put it back on the agenda.

Chairman

I will ask that the clerk supply the information. We can then discuss it.

Deputy N. O’Keeffe

Since we met the group, matters have changed entirely. The committee is concerned with protecting the consumer and securing cheaper services such as banking.

Chairman

The clerk will circulate the information to members. The matter can be dealt with at a future meeting.

Deputy N. O’Keeffe

Why can we not hear the group's views?

Chairman

I am not saying we cannot hear its views. I want to follow procedure on decisions taken.

Deputy N. O’Keeffe

We are not judge and jury.

Chairman

I am not acting as such. I want to ensure I follow decisions taken.

Deputy N. O’Keeffe

The Chairman has not yet been called to the Bar.

Deputy Ó Caoláin

I wish to refer to two further items of correspondence. In response to the letter from the Irish Bank Officials Association the Chairman indicated that he would seek to establish the Bank of Ireland's position on its decision to scrap its defined-benefit pension scheme for new staff with effect from 1 October. I take it that the request from the IBOA to meet us to discuss the detail of this decision is being parked until such time as we receive the bank's response. Is that the Chairman's understanding?

Chairman

It is. We will seek a response from Bank of Ireland. The matter can then be decided by the committee. I am informed that we wrote to the federation, which indicated it did not have a role in the matter. That is why we decided to write directly to the Bank of Ireland.

Deputy Ó Caoláin

This issue is particular to Bank of Ireland. We met the representatives of retired prison officers at our last meeting. A letter issued to the Department of Finance on 1 November. The concluding sentence was that the joint committee would consider the response from the Department at today's meeting. Am I to understand we have not yet received a reply from it?

Chairman

We have received an acknowledgement that the letter was received, but not a response. The matter has been referred to Mr. Stephen O'Sullivan, assistant secretary, for a reply. We can discuss the matter when we receive it.

Deputy Ó Caoláin

In light of receipt of a substantive reply, which is a holding acknowledgement — I presume that is the interpretation the Chairman is putting on it — we will then revisit the detail of that in the context of the presentation by the retired prison officers at the last meeting.

Vice Chairman

It will be dealt with under correspondence, possibly at the next meeting, if it has arrived by then.

Senator White

This is a serious and important issue. These people have been lobbying and trying to get on to the agenda the disgraceful way in which they have been treated by the Department of Finance. We concluded the last meeting by agreeing we would discuss this matter at the next meeting. We should endeavour to obtain the information from the Department of Finance as quickly as possible. The way in which this small number of people have been treated is inhuman. We said we would discuss it as soon as possible. We should not let it simply lie and add to the bureaucracy in the Department of Finance.

Deputy Ó Caoláin

Is it possible to arrange for the holding reply, which the Chairman has, to be copied and circulated to the members present before the conclusion of today's meeting?

Vice Chairman

Yes, that is possible.

Deputy Ó Caoláin

We have a reply and at least it is an initial acknowledgement.

Vice Chairman

I do not see a problem with that.

Deputy Ó Caoláin

I would like if it could be circulated to us.

Senator White

Will the Chairman give priority to ensuring that we get a reply on this matter?

Vice Chairman

Yes, the clerk of the committee will make contact with the Department on this matter and I hope we will have a comprehensive response for the next meeting.

Deputy Bruton

On a different matter, I note that among the statutory instruments there is one in regard to the Credit Union Act. We had recent hearings with one or two of the credit union bodies. At what stage are we on those hearings? We heard their case, during which they outlined the infirmities of the existing legislation under which they must work, and now the Minister is coming forward with a change in this area. I understand the change will involve some relaxing of a ceiling, but what that ceiling is has not been explained. Clearly, there is a wider agenda of changes, to the making of which I believe the committee will be sympathetic.

I am aware that one of the groups presented a case today for new changes and for a progressive framework for credit unions. At what stage are we in our hearings? The Minister responsible is doing something off his own bat and notifying us, and the credit union groups are pushing ahead with changes. If we want to influence the direction of this thinking, we probably need to draw together what we have learnt from the different groups and make some recommendations as a committee. I do not have a hard and fast view as to what those would be, but it seems there are some ludicrous elements to the existing provision. One example of that is a restriction on ten-year loans. If one borrowed €10,000 and had only €1,000 to repay, that loan is still deemed to be a ten-year loan on the original amount. Some restrictive interpretations are applied to credit unions. We need to decide what we will do on foot of the two hearings we have had and what recommendations we might make.

Vice Chairman

We will ask the officials from the Department of Finance to appear again before the committee. It made its case. Three cases were made by two groups and the registrar. We will seek a response from the Department of Finance and we can decide to progress the matter on receipt of it. Is that agreeable to Deputy Bruton?

Deputy Bruton

We need to see a resumé of where we are at, namely, the key requests of the three bodies, the net decisions that are sought and whether we as a committee decide we want to endorse those positions or that the Department of Finance has a wiser view. We have invested time in this matter and we might as well bring it to a conclusion.

Vice Chairman

We can await a response from the Department of Finance but if the Deputy wishes, we can draft a note of the key issues in the submissions and circulate them to the committee.

Deputy Bruton

We need to advance the cause.

Senator White

I attended the launch of the document this morning and it was done in a succinct manner. We should help the credit unions in this respect. They have a problem with the current legislation. It is properly a matter for the Minister for Finance and it would be helpful if he would come before the committee and deal with this and other matters. For the credit unions to evolve they need to modernise. Mr. Bill Hobbs, who was before the committee last week, said this morning that the huge increase in the number of people joining credit unions relates to the number of immigrants joining. Credit unions are employing immigrants to deal with the affairs of immigrants. Credit unions provide a service to deal with a great social need. They want to compete in a modern way and evolve, and we should help them in doing that. That is our job.

Vice Chairman

We will ask the secretariat to draw up a list of the main points they made and we will circulate them to members. We can then decide whether we want to make recommendations.

Deputy C. Murphy

This matter is linked to another issue. It will fit in somewhere on an agenda in the future. We talked about two other issues at the last meeting. One was the report on decentralisation and the other was an issue we dealt with some weeks earlier, namely, that having regard to the money spent by the State on court cases in terms of children with disabilities, we would revisit that issue. I find it difficult to determine where those issues fit into the agenda. It would be useful to have an idea——

Vice Chairman

To which issue is the Deputy referring?

Deputy C. Murphy

We will receive a report on credit unions and it will be on an agenda at some point. A similar position applies to two issues raised that were to be on the agenda of future meetings of this committee. What is the rota of items on our agenda and where will the credit union report fit into it?

Vice Chairman

As the Deputy is aware, it is part of our work programme. We agreed a number of issues as a work programme and that is one of them. It is something we must see through. I suggest that the secretariat draw up a list of the main points of the submissions and circulate them to members and we can then deal with the matter at another meeting, perhaps by way of recommendations, as Senator White and Deputy Bruton indicated.

Deputy Burton

Realistically, there are five months at most left before the next general election.

Deputy N. O’Keeffe

Five or six.

Deputy Burton

It could be six, but realistically let us say it is five. In that period we will have to deal with the budget and the Finance Bill, consideration of which will take up a considerable amount of the committee's time. In regard to a number of issues we are progressing, we need to organise the completion of our conclusions. We need to pick a number of those issues. The Dáil will not reassemble after the Christmas recess until 31 January or 1 February. I suggest that, not during the first or second week, as many people go away for a week, but during the third week we should have a one or two day session and conclude our viewpoints on a number of the outstanding issues. When the Finance Bill is introduced, we will have to consider it for some time and by the time we will have dealt with it, we will be within two or three months of a general election. We need to conclude many of the items on which we have worked.

Vice Chairman

That seems a practical proposal.

Deputy N. O’Keeffe

Why not have two meetings, one during the second week and one during the third week as there will be other meetings during the third week and we will have to criss-cross between them.

Vice Chairman

Deputy Burton made the point that some people may take a break after Christmas, which they are entitled to do.

Deputy N. O’Keeffe

The election will probably not be held until May or early June.

Vice Chairman

The committee has agreed that we will meet in January to conclude some issues on our agenda.

Deputy Burton

I wanted to make one other point. If we are arranging something regarding the Bank of Ireland situation and it has not been included as part of that particular programme schedule on the defined-benefit pension schemes, we should either hear the IBOA's views or those of somebody else who——

Chairman

I have dealt with that point from Deputy Ó Caoláin.

Deputy Burton

Yes, but I indicated earlier that I wished to contribute. All I am saying is that, as regards the defined-benefit pension issue, we should hear not only Bank of Ireland's view, which is what we intend to do, but also that of someone who has an argument as to why defined benefits ought to continue.

Chairman

We have parked that request. I have already indicated to Deputy Ó Caoláin that as soon as we get a response from Bank of Ireland we will resurrect the request. The request has only been parked.

Deputy Burton

All right. I just wanted to make that point.

Chairman

We are still dealing with correspondence and this room is only available to us until 4.30 p.m., so I would like to move on.

Deputy N. O’Keeffe

What is the budgetary position of the committee? Has all the money been spent?

Chairman

There is no problem with the budget.

Deputy N. O’Keeffe

We wanted to look at banking and investment in Australia and New Zealand. I planned it a year ago yet, to date, we have not come up with that examination. I think we should put that matter back on the agenda because there is much to be seen and learned there concerning regulation and deregulation. I am sorry that the clerk is leaving the committee and will not be here for that visit. I have travelled with him before and I enjoyed my trips. He would be a good person to lead it on this occasion also.

Chairman

I know this matter was discussed and the Deputy is right to suggest that something could be learned from such a visit. As far as I recall, the clerk prepared a paper on that subject. It is a matter for the committee if members wish to resurrect it.

Deputy N. O’Keeffe

Things have advanced more in those countries in terms of deregulation and regulation of the banking sector. That is within the committee's remit and we should also look at the revenue situation, including the taxation system.

Chairman

Perhaps the clerk will update us for the next meeting, when we will see what we can do about that.

Deputy N. O’Keeffe

Are we agreeing in principle?

Chairman

I think so, yes. Is there support from the Opposition?

Deputy P. McGrath

It would be very worthwhile.

Chairman

Obviously, I cannot take a decision on that matter today. It will have to go on the agenda. I ask the clerk to put it on the agenda for the next meeting, when it can be dealt with formally. Is that agreed? Agreed.

The next item is VAT and charities, including a discussion with the Irish Charities Tax Reform Group.

Deputy Bruton

When we decided on this, the impression I had was that we would examine VAT relief, which is part of the charities tax reform group's proposals. In addition, we were to look at the stamp duty proposal that is being circulated by an individual. It seems from the agenda, however, that the stamp duty proposal, which triggered the original discussion, will not figure in the discussions at all. I do not know what has gone wrong. Clearly, the view of the committee was that we should hear the case for this but under the umbrella of an institution that was broadly representative, rather than hearing from an individual. We now seem to be in the position where we will hear from the umbrella group but we have confined it to just one topic, namely, VAT.

Chairman

No. We are responding exactly to what the group requested.

Deputy Bruton

Chairman, you were in the Chair at the time, and the point was that there was a proposal from an individual——

Chairman

Yes.

Deputy Bruton

——that commanded some support and was worthy of consideration. However, you rightly pointed out that the committee was not in the habit of inviting individuals to make presentations. It would be preferable to let the umbrella body, which has commented favourably on this proposal, introduce the committee to whatever ideas are out there about improved tax breaks for charities. However, we now seem to have confined or corralled the group to one topic.

Chairman

No. I am bound by the decision of the committee, which was that the group would be brought in. There was a request to an individual as well but this was the process that was decided upon. They are making a submission on VAT but any member can pose questions under any other heading, including stamp duty. As I understand it, however, their presentation is on VAT, which is what they requested. If members want to expand upon it, I have no problem with that.

Deputy Bruton

That is fine but the impression I got is that there was a breakdown in communications somewhere. The committee wanted to look at both issues but that does not appear to be reflected in the invitations that were issued.

Chairman

We will hear the presentation and if the committee feels it is inadequate and we have not addressed everything, I will certainly be open to suggestions and proposals on it.

We will now suspend the sitting for five minutes to allow the group representatives to come in and be seated.

Sitting suspended at 3.06 p.m. and resumed at 3.08 p.m.