I welcome the Minister of State at the Department of Foreign Affairs and Trade, Deputy Joe Costello. As I have not had an opportunity to do so since he was elevated to his current position, I congratulate the Minister of State on his appointment and wish him well in his new portfolio.
Adjournment Matters
Private Residential Tenancies Board
I, too, welcome the Minister of State and wish him well in office. The issue I raise is in respect of the failure of a large number of landlords to register properties with the Private Residential Tenancies Board. This information has emerged as a result of a survey of a large number of properties carried out by Cork University Residents Forum. The survey found that up to 60% of private rented accommodation in the area around University College Cork and Cork Institute of Technology were not registered with the Private Residential Tenancies Board. Of the private rented accommodation occupied by tenants in the area, only 57% was found to be occupied. I understand that on 4 October 2011 representatives of the Private Residential Tenancies Board, appearing before the Joint Committee on the Environment, Transport, Culture and the Gaeltacht, confirmed that 37% of landlords in receipt of rent supplement were not registered with the board. This means that, based on figures issued by the Department of Social Protection on 16 January 2012, the Department is paying out approximately €185 million per annum to landlords who are not legally registered.
The survey by the Cork University Residents Forum found that of 610 houses in the Mardyke area of the city, 233 were occupied by permanent residents, that is, homeowners, 152 were private properties registered with the Private Residential Tenancies Board and 235 were rented properties which were not registered with the board. This means 60% of private rentedproperties in the area were not registered. Another area, Wilton Court near Cork University Hospital, has 105 houses with 26 permanent residents. Some 45 are registered and 31 are not registered.
It surveyed a total of 1,336 houses. Some 395 were owner-occupied, 531 were registered and 413 were not registered. Of 944 houses in the rental market surveyed, 413 were not registered. This is a very high figure.
What action do we propose to take to deal with this? Should rents be paid, especially if they are being paid by a Department or a local authority, if the landlord is not registered? Should the law be clearly implemented if the landlord is not registered? Should there be an audit of houses identified as not being registered? Should the Revenue Commissioners carry out an audit to see if proper returns are being made to them?
Another issue which arose in its examination of documentation with the PRTB was incorrect addresses being registered with the board. The properties registered were not easily identifiable. A further problem it found was that a number of properties were registered more than once. For instance, it found that one property — St. Joseph's, Bendemeer Park, Magazine Road — was registered on five occasions. There is much incorrect information with the PRTB.
Action needs to be taken. If there is a need for amending legislation to be brought in, now is the time to look at it. The PRTB admitted that 37% of landlords in receipt of rent supplement were not registered. We should deal with this matter as soon as possible.
I thank the Cathaoirleach for his congratulations and extend my congratulations to him. We soldiered together here in the past and it is good to see him in the Chair.
I thank Senator Colm Burke for raising this important matter in which I have considerable interest. I am glad to have the opportunity to address it on behalf of the Minister, Deputy Hogan, and to outline the progress made by the Private Residential Tenancies Board in tackling the issue of non-registration of tenancies. I was particularly interested to hear the facts and figures from the survey Senator Burke mentioned.
The PRTB was established under the Residential Tenancies Act 2004. The Act provides the main legislative framework for the private rented residential sector and for the operation of the PRTB. There has been a notable recent increase in tenancy registration applications due to the enforcement drive in this regard by the PRTB in the past year, in particular where it identified unregistered landlords whose tenants were in receipt of rent supplement from the Department of Social Protection. As a result, the rate of non-compliance has dropped from 37% for the last quarter in 2010, which Senator Burke mentioned, to 18% for the second quarter of 2011, a reduction of more than 50%.
The Act applies to all dwellings that are the subject of a tenancy, whether oral or in writing or implied, except for the exemptions outlined in section 3(2) of the Act. There are tenancies where the tenant is in receipt of rent supplement which are outside the ambit of the Act, such as a dwelling within which the landlord also resides. Matters arising within the exempted categories are dealt with, as necessary, by civil proceedings. All other matters fall to be dealt with by the PRTB.
The PRTB enforces tenancies' registration requirements in accordance with the provisions of the Act, specifically sections 144 and 145 which provide for the issuing of notices to landlords and-or occupiers of the dwellings in question and the prosecution of offenders for non-compliance with the registration requirement. Under section 9 of the Act, a person guilty of an offence is liable on summary conviction to a fine or imprisonment for a term not exceeding six months or both.
The PRTB has laid the groundwork for a compliance programme for prosecuting landlords who fail to apply for tenancy registration. New software rolled out in May 2011 is effectively interrogating databases provided by sister public sector organisations — primarily, the Department of Social Protection — and is proving a very effective tool both in identifying unregistered landlords and electronically managing their case files to secure registration compliance and bring prosecutions where necessary.
Tax compliance is a matter for the Revenue Commissioners and the PRTB provides information for them in this regard. In line with increased funding, local authorities have significantly expanded their inspection activities in recent years. In 2010, the Department offered additional funding to all housing authorities to carry out once-off strategically planned programmes of inspection in addition to their usual inspection activity and to target key areas and categories of rented accommodation, including properties that are the subject of rent supplement. Full details of the inspections carried out on a county and city basis are published in the Department's annual housing statistics bulletins.
If the Senator would like to submit new data or research on this matter and if the details of what he mentioned are available, we would like to look at them and the Minister, Deputy Hogan, will ensure the matter receives appropriate attention.
I thank the Minister of State. I note he referred to the second quarter of 2011 and the figure of 18%. The survey carried by the Cork university residents' forum was done in December 2011-January 2012 and its results are from that period. Its information is up to date. I am concerned that the Minister of State's figures are for the second quarter of 2011, which is up to May-June. There is a big difference between the 18% figure presented by the PRTB and up to 60% not being registered on a particular road.
Is that 2011 or 2012?
The survey was done between the end of December 2011 and early January 2012. Has there been a fall-off in registration since the second quarter of 2011? Does that need to be looked at?
Those are my figures. Due to cross-referencing with the different Departments, there has been a huge improvement in the registration of landlords and the percentage of unregistered landlords dropped from 37% to 18% in the second quarter of 2011. Since the Senator's survey relates to a period almost six months later it is appropriate to query whether there has been any worsening of, or any improvement in, the situation. I will take this back to the Minister, Deputy Hogan, and we will check the figures and get back to the Senator on further developments.
I can give the Minister of State a copy of the survey and the roads involved.
Redundancy Payments
I thank the Cathaoirleach for selecting this matter and welcome the Minister of State. However, I express my disappointment that the line Minister is not present. It is a practice I have never really supported, irrespective of the Administration. I understand Ministers can be called away but it is vitally important for the status of, and respect for, the House that the line Minister is present to take Adjournment matters, in particular if the Department accepts them.
ISME carried out a survey following the passing of the Social Welfare Bill 2011 which reduced the State liability from 60% to 15% for statutory redundancies. I understand perfectly why the Minister took this decision and I suggest that it was taken on two fronts. One was for revenue purposes — it reduces the State's liability in difficult times — but it also prevents large companies from walking away and leaving the State to pick up the mess. TalkTalk in Waterford was mentioned as an example of the devastation that can be caused to a local economy in this regard. However, I do not think anybody needs to be reminded that the small and medium enterprise sector plays a significant role in creating and maintaining jobs. Some 85% of such companies have fewer than 20 employees. The survey carried out on week ending 20 January had 766 respondents and confirmed the following. Some 79% indicated that national employment levels will be reduced as a consequence of the change; 71% of companies believe the rebate reduction will negatively influence their future employment decisions; 71% are in favour of reducing statutory redundancy payments to the levels that exist in the UK, with which I am sure the Minister of State is familiar; and 94% of companies would like to see a derogation for SMEs. The last percentage is not all that surprising.
I agree with Mr. Mark Fielding, chief executive of ISME, who stated: "The change is effectively another tax on jobs; a short-sighted move that will have the greatest impact on small and medium Irish enterprises, which do not have the option to up sticks and leave, as the Minister asserts." Mr. Fielding continued: "Even at this late stage, it is imperative that the Minister reviews her position and, at the very least, introduces a derogation from the reduced rate for the SME sector, and reduces the actual statutory payments to UK levels, which will go some way to alleviating the substantial burden that has been placed on already struggling businesses."
I am raising this survey not just because it is an important document and a pointer to what is happening in the struggling SME sector, which provides the vast bulk of jobs, but also because it comes at a time when we are awaiting yet another jobs initiative from the Government. After Christmas, it was promised that there would be cross-referencing of various Departments and that a strong jobs initiative would be unveiled to address seriously the high unemployment rate. If that happens, we on this side of the House will be the first to applaud it. As we are all here to ensure that jobs are created and maintained, this is not a case of taking a cheap shot at the Government. However, questions marks have been raised by this survey. These question marks were there from the time the Government first proposed this plan. I tabled an amendment to the Bill seeking an exemption for small employers engaging up to 20 employees. Some form of accommodation or compromise should be reached because anecdotal evidence, not included in the survey, suggests that once the legislation was passed by both Houses of the Oireachtas employers let people go. They made them redundant because they found that if they were to make anybody redundant in future, they would have to take up 85% of the cost.
I fully understand the financial strait-jacket in which the Government finds itself. That is a given, but there is a certain contradiction. The Government has repeatedly stated its support for the SME sector — as both sides of the House have — and sees it as an integral part of economic recovery. This initiative and any other legal obstacle to maintaining existing jobs or affecting potential jobs should be avoided; otherwise, employers will not take people on. Small businesses are subject to the vagaries of the market and such employers may not wish to hire people because they may feel there will not be economic growth in six months time. All the statistics are not stimulating great encouragement, although I wish it were otherwise.
In the next 12 months this legislation should be revisited to see how it has impacted, irrespective of the survey. I do not wish to impugn the survey's results in any way, but it is coming from a vested interest after all. We need some formula to monitor what impact this legislation has had over a 12 month period. Is it, as the survey points out, having a negative impact, preventing the creation of new jobs or actually losing jobs? I am sure the Minister of State will agree the last thing the Government wants to see is that a legislative initiative it introduced, perhaps for the very best of reasons, is failing and damaging the economy.
I apologise that the Minister for Social Protection is not here.
As the Senator is aware, on 1 January 2011, the Department of Social Protection assumed responsibility from the then Department of Enterprise, Jobs and Innovation for administering the redundancy payments scheme. The purpose of the redundancy payments scheme is to compensate workers, under the Redundancy Payments Acts, for the loss of their jobs by reason of redundancy.
Compensation is based on a worker's length of reckonable service and reckonable weekly remuneration, subject to a ceiling of €600 per week. All payments are made from the social insurance fund, also known as the SIF. There are two types of redundancy payment made from the SIF: rebates to those employers who have paid statutory redundancy to eligible employees; and statutory lump sums to employees whose employers are insolvent and-or in receivership or liquidation. It is the responsibility of employers to pay statutory redundancy to all their eligible employees. Employers who pay statutory redundancy payments to their employees are then entitled to a rebate from the State. Rebates to employers and lump sums paid directly to employees are paid from the social insurance fund.
Significant and increasing amounts have been paid out in redundancy rebates to employers from the SIF in recent years. While the SIF is constituted primarily from employer contributions, the taxpayers' contribution is also significant. One of the factors which influenced the Government's decision to revise the rebate rate was the increasing cost of rebates in recent years.
The Minister is concerned about the deficit in the social insurance fund. Where the date of dismissal for the purposes of redundancy occurred before 1 January 2012, the social insurance fund refunded employers 60% of the cost of making people redundant. A sum of €152.2 million was paid out in rebates to employers in 2006. Some €167.4 million was paid in 2007, €161.8 million in 2008, €247.9 million in 2009, €373.2 million in 2010 and €188.2 million in 2011. The amounts paid out in lump sums to employees have also increased. The Minister does not see why this country should continue to borrow money to plug the hole in the social insurance fund in order to fund the cost of making people redundant, often from very profitable companies.
As part of the deliberations on budget 2012, it was decided that the 60% level of rebate is not sustainable in the current economic climate. While this may cause difficulties for employers, it should be noted that redundancy rebate payments to employers are not common in many European Union and other jurisdictions.
Tax Code
I welcome the Minister of State to the House and congratulate him on his recent appointment.
I wish to raise a matter which has been brought to my attention in recent days and concerns how we do our business. The Minister for Finance should clarify the way in which the Revenue Commissioners collect taxes owed to them, which also threatens the viability of other businesses. I am seeking guidance from the Minister of State on this issue. I know a businessman in the wholesale trade who has been delivering to shops in the west for the past 20 years. He recently called to a couple of customers, but both shops had closed down and had "For Sale" signs outside. He was owed €24,000 by one of the shops. The shop had owed him €31,000 but he had worked with the owners to whittle the sum down to €24,000 over a period. The other shop owed him €27,000. The Revenue Commissioners came in and shut both shops down. This wholesaler has absolutely no recourse to recoup what is owed to him and, as we know, the Revenue Commissioners have first call on what moneys are owed. As a result their actions have threatened the viability of his business.
Apart from the fact that the banks, would not lend to these two men in order that they could borrow to pay the Revenue and keep it at arms length, the viability of this man's business, employing seven people, is threatened. I am aware that the Revenue Commissioners have first call on all moneys owed to them. In this case it held a fire sale of assets of one of the businesses that owed my constituent €27,000 but stock work €27,000 was sold for €4,000 to the highest bidder. If my client had been aware that a fire sale was taking place he might have bought his stock back for €4,000 thus compensating him a little for his loss. It is not right or fair and we must find a better way to resolve such issues.
I am blue in the face speaking in the House about this and many related issues. Revenue's actions in this case is similar to those taken by county councils where a business is closed over an outstanding rates bill. If this company must put seven people on the dole it will cost the taxpayer €147,000 to allow Revenue gain just €4,000. There must be common sense and logic and I ask the Minister of State to relay my message to the Minister for Finance. Perhaps there is something that I or my client have missed and he has rights or recourse to get some of his money back. It is not right that his business and staff are threatened with unemployment by the action of the Revenue Commissioners.
I thank the Senator for his contribution. I apologise that the Minister for Finance is in the Dáil debating the Bretton Woods legislation. I have great sympathy for the person to whom the Senator referred and will convey his remarks to the Minister for Finance.
The Senator will be aware that the Revenue Commissioners are responsible for the collection of the bulk of taxes and duties due to the Exchequer. Its focus is on making sure that every individual and business complies with the responsibility to pay the right amount of tax or duty due in full and on time. Delays in the collection of tax revenues confer an unfair competitive advantage on non-compliant businesses. Revenue approaches the task of securing the collection of the critical taxes and duties in an efficient manner.
It is of vital importance to the economy to have a tax system that is efficient and easy to comply with, that is responsive to the needs of the taxpayer and other stakeholders and encourages and actively promotes voluntary compliance. Internationally, Ireland is among those countries that make it easiest for taxpayers to pay their taxes. In the recently published report of the World Bank Group, Doing Business 2012, Ireland was ranked in fifth position worldwide.
Revenue has invested significant resources in developing its online service, or ROS as it is more commonly called. The service is rated extremely highly both in Ireland and internationally. It delivers a 24-hour year round service. It also enables faster processing times for Revenue and reduced compliance costs for business and taxpayers.
Even in the current difficult economic and financial environment for businesses it is essential that they maintain and organise their financial affairs to ensure that tax debts are paid as they fall due. Revenue will not allow businesses to continue to trade if there is no capacity to meet tax debts as they arise into the future. To do otherwise would have a corrosive effect on our high, timely and voluntary compliance rates by businesses generally. Revenue encourages businesses and individuals experiencing payment difficulties to work proactively with it when difficulties arise. The purpose of this is to maximise the opportunity for an agreed approach to secure timely compliance and enable any possible tax debt to be cleared over a realistic timeframe. I welcome the fact that tax practitioners and trade representative bodies have recognised and supported Revenue's efforts in working with businesses to address tax payment difficulties.
A key feature of Revenue's approach to compliance and debt management is early intervention by its staff when payment and compliance problems arise. Sophisticated Revenue IT systems have been developed and refined to assist in the timely identification of cases for direct intervention on payment or returns compliance. The riskiest cases will be targeted first but there is a structured programme in place to ensure that all cases that are non-compliant in any form are examined and subject to appropriate intervention.
Permission from Revenue to pay a tax debt by a phased payment arrangement is a concession and must be justified to it by reference to the circumstances of each taxpayer or business. Every phased payment arrangement will include interest. Therefore, it can entail substantial additional financial costs for businesses but it is appropriate to ensure that compliant businesses are not disadvantaged. Accordingly, it is in the interest of a business or a taxpayer to minimise their exposure to interest by paying as much of the debt up-front and any balance in the shortest possible timescale.
Revenue is charged with the responsibility for collecting and securing the majority of the revenues required by the Government to fund State services. The majority of taxpayers and businesses readily fulfil their obligations to pay what is due and on time. Taxpayers and businesses can, and do, encounter cashflow problems but these must be addressed in order that timely tax compliance is restored and assured. Addressing these problems, in consultation with Revenue, at the earliest opportunity is essential to avoid debt problems becoming insurmountable or where avoidable interest or enforcement costs are incurred.
With regard to the need for businesses to engage with Revenue, early positive and realistic engagement is necessary when tax compliance problems begin to emerge. Such an approach ensures that businesses maximise the opportunity of arriving at a successful and early resolution of compliance difficulties in a way that meets with Revenue's approval. Tardiness in recognising or addressing tax compliance problems merely serves to exacerbate the compliance challenge for businesses and taxpayers.
This is no reflection on the Minister of State but I know that he was handed a script to respond to my Adjournment matter. I would have got the same response if I had asked him to outline the job of Revenue. He was given a generic script that does not address my issue. Perhaps it is my fault because I did not ask a specific question when I sought to raise this Adjournment matter but I have clearly outlined the matter to him now.
Earlier the Minister of State said that Revenue would not allow businesses to continue to trade if there was no capacity to meet tax debts. My constituent was able to work with a businessman to reduce his debt with the wholesaler from €31,000 to €24,000. Revenue was not able to do that. Please do not blame such people but the banks who are not playing their part.
The Minister of State now knows the concerns and I would like, through legislation or otherwise, for such matters to be dealt with. It is ridiculous that we still forget that we have one pot of money. We are not just dealing with the budget for Revenue or other Departments. The funds come from one pot of money. If Revenue is happy to close a couple of businesses in order to secure €4,000 and put seven people on the dole at a cost of €147,000 to the taxpayer then it is no wonder we have problems. We need to do business differently.
I appreciate the Senator's comments. We are talking about jobs, employment, business, and small SMEs and the maximum should be done by everyone involved. Banks are supposed to be making money available yet Revenue is engaging, or supposed to be engaging, adequately with businesses with problems who clearly intend to sort their problems. That seems to be the way in the Senator's case where debt was greatly reduced.
I cannot answer the Senator's question regarding the business to which he referred but I am sure the Minister for Finance would be interested to know the details. I will bring the matter to his attention and it is an appropriate matter to be brought to the attention of Revenue and the banks on how they conduct business.
General Practitioner Services
I wish to share time with Senator Reilly.
Is that agreed? Agreed.
I welcome the Minister of State, Deputy Costello, to the House and wish him well in his portfolio.
My party colleague, Councillor Shane P. O'Reilly, recently brought to my attention the lack of provision of a general practitioner, GP, service in Mullagh, County Cavan. In the past 12 years the town's population has grown by over 45% to 3,000 people. In 2009, two GPs were in place, one operating for two days for half an hour a day while the other covered three days for the same time each day. Since February 2011, no GP service has been available to the Mullagh community and its hinterland. People there have to travel either four miles to Moynalty or seven miles to Bailieborough. This is unacceptable for a town with no public transport and causing extra hardship and cost for those without their own means of transport to access GP services.
My party colleague, Deputy Smith, raised the matter in the Dáil on 3 February and received a response which was similar to the one he received from the Health Service Executive, HSE, Cavan area manager. It stated a contract was in place with a GP for two sessions per week in Mullagh but that in February 2011 the GP informed the HSE demand was not sufficient for the service. Since then no GP service has been in place. Will the Minister inquire of the HSE as to why this service is not provided even with a contract in place?
I thank Senator Wilson for sharing his time on this issue.
The people of Mullagh do not have access to a GP service in their town. No matter what the HSE says about an existing contract, the service is actually not being delivered. The GP service in the town finished in February 2011 when the GP in place informed the HSE he was discontinuing his sessions there. Under the terms of his contract, he is obliged to do two sessions per week in Mullagh. In correspondence I have seen, all the HSE has done is requested him to consider recommencing the service rather than telling him to do so under the terms of his contract. Will the Minister intervene to get GP services resumed at Mullagh? It has been an ongoing concern and raised by local representatives at the regional health forum. While formal complaints may not be on record, public representatives have been vocal on it.
Canvassing in the town during numerous elections, I have noted how it has grown. Along with an elderly population, there are many young families there. Rural transport services are not great in the area which has resulted in people from the town either hitchhiking or paying for taxis to get to the GP in Moynalty and Bailieborough. It is not acceptable to have young mothers with small children having to thumb a lift or pay for a taxi when they are already struggling. The Minister for Health must put pressure on the HSE to ensure a basic GP service for Mullagh.
I am taking this Adjournment debate on behalf of my colleagues the Minister for Health, Deputy Reilly, and the Minister of State at the Department of Health, Deputy Shortall, which addresses the provision of general practitioner services in Mullagh, County Cavan.
The delivery of a sustainable GP service that effectively meets the health needs of the population in a primary care setting is paramount. The HSE's primary, community and continuing care service in Cavan, which has responsibility for the provision of general practitioner services in the county, continues to make every effort to protect and maintain front line services.
The HSE has a contract in place with a GP in the north east who practices from two centres, one in Mullagh, the other in Bailieborough. Under the terms of his existing contract, this GP is obliged to do two sessions per week in Mullagh. However, in February 2011, the GP informed the HSE there was not a sufficient demand for the service in Mullagh and that he was discontinuing his sessions there. He has not practised in Mullagh since February 2011.
When the HSE contacted the GP in question this week, it was confirmed the GP had not received any complaints from patients about the cessation of the sessions in Mullagh since the service was discontinued. The HSE primary care unit in the north east has also confirmed it has not received any complaints regarding the lack of GP sessions in Mullagh.
The HSE has written to the GP in question requesting him to consider recommencing the two sessions per week in Mullagh, as agreed in his contract. The HSE will also consider the option of encouraging a new GP to set up in Mullagh through the new open entry arrangement being introduced in the Health (Provision of General Practitioner Services) Bill 2011, once the relevant legislation is passed in the coming weeks.
The Minister for Health will present this Bill to the House tomorrow. It provides for the elimination of restrictions on GPs wishing to obtain contracts to treat public patients under the general medical services, GMS, scheme by opening up access to GMS contracts to all fully-qualified and vocationally trained GPs. There will be no limits on the number of contractors. When this Bill is enacted, new GMS contract holders will be free to establish their practice in the location of their choice.
While this may not be an adequate answer, I accept the points made by the Senators that the population of the town has increased by 45% in the past ten years and that a contract has been effectively broken. Neither is it good enough for the HSE to ask the GP to consider recommencing his service. I will bring these points to the Minister for Health and the Minister of State and make clear the Senator's dissatisfaction with the present state of affairs with GP services in Mullagh.
For the HSE to claim it has received no complaints is not accurate. There have been complaints to Councillor Shane P. O'Reilly and other public representatives including me, Senator Reilly and Deputy Smith. It is unacceptable for the HSE to have left Mullagh without GP services for over 12 months even when there is a contract in place for a GP to provide such services. I note from the Minister of State's reply that a contract is in place for a GP to provide these services. It is not acceptable that the community, and its vulnerable members in particular, should be deprived of the services of a GP. I urge the Minister of State to investigate the matter at the earliest opportunity.
I will add that to the points that have been made. It is the Senator's assertion that a number of complaints have been made and what has been said tonight is not quite accurate.
The Seanad adjourned at 8.10 p.m. until 10.30 a.m. on Wednesday, 8 February 2012.