Written Answers Nos. 80-86
80. Deputy Micheál Martin asked the Minister for Finance if he has discussed the suggested 75% top rate of income tax that is being suggested by Francois Hollande in France with him directly, or with Prime Minister Cameron; and if he will make a statement on the matter. [36898/12]
View answerThe position is that I have not discussed with President Francois Hollande or Prime Minister Cameron the new 75 per cent income tax rate for top earners that the French Government has announced that it intends to introduce in Budget 2013.
81. Deputy Micheál Martin asked the Minister for Finance if bank bonuses were discussed at the recent EU Council meeting; if any action will be taken; and if he will make a statement on the matter. [36899/12]
View answerI attended the recent Informal ECOFIN Council meeting which took place on the 13th and 14th September in Cyprus. At this meeting the issue of bank bonuses was not discussed under any of the agenda items. I understand that the issue of bonuses has been raised by the European Parliament as part of the Trilogue considerations under the Capital Requirement Regulation and Directive. My officials are engaging proactively in these discussions through their engagement with the European Council.
82. Deputy Micheál Martin asked the Minister for Finance if he has spoken to President Draghi recently in relation to the European Central Banks recent announcement on short term bond markets; and if he will make a statement on the matter. [38796/12]
View answerAt the ECB press conference on 6 September it was announced that the ECB intends to purchase short-term bonds of countries that are within a full EFSF/ESM programme, subject to strict conditionality. It was also announced that the ECB would rank pari passu with other investors in such bonds. This has been a major issue for markets since the Greek bond restructuring. The amount of bonds purchased will also be made public.
The President of the ECB, Mario Draghi, at the recent Ecofin which I attended, took the opportunity to brief Ministers on the new monetary policy initiative.
I welcome the ECB initiative as a worthwhile contribution to the firm measures being made to bring the financial crisis in the eurozone under control. As Deputies will be aware, the National Treasury Management Agency (NTMA) has been availing of the gradual fall in the yield on Irish Government bonds over recent months to issue new debt and new types of debt instruments as part of our programme of rebuilding a presence in the markets with a view to ensuring that Ireland is able to fund itself as the EU/IMF Programme draws to a close in 2013.
83. Deputy Micheál Martin asked the Minister for Finance if he has received a copy of the study from the Central Bank of Ireland on lending and access to credit to small and medium businesses across the EU which concludes that Irish small and medium enterprises have the highest rejection rate from banks; the actions he will take following the reports findings; and if he will make a statement on the matter. [39023/12]
View answerI presume the Deputy is referring to Volume 2012, No.8 of the Economic Letter Series published by the Central Bank on 22 August last, entitled “Irish SME credit supply and demand: comparisons across surveys and countries.” I welcome all analysis in this key area which is used to inform all stakeholders. The Deputy should note that the Economic Letter contains a footnote stating that the views expressed in this paper are those of the authors and do not necessarily reflect those of the Central Bank of Ireland or the ESCB. The figures published in the report are based upon previously published data and I should point out that they show that Ireland has the second highest rejection rate rather than the highest as stated by the Deputy. While this rejection rate is obviously a concern, I feel that it is important not to always focus on the worst aspect of such reports. Business confidence is crucial in the restoration of the credit market and the continued negative narrative is unhelpful. The report also found that there was a slight improvement in the rejection rates compared with the previous survey.
The findings of the Mazars survey commissioned by my Department and other independent surveys, such as the SAFE survey, are used by the Department of Finance and the Credit Review Office to inform discussions with banks on this key area of the Irish economy and that the pillar banks, in particular, adhere to their lending commitments under the recapitalisation agreements. Robust discussions have taken place between the Department, the Credit Review Office and the banks to ensure that the banks are lending into the real economy. In addition, the Government, through the EMC, continue to meet with the banks on a regular basis to underscore the requirement to have credit available to viable SMEs to facilitate and support the recovery of the economy.
In terms of rejection rates from banks in general, I remind the Deputy that the Credit Review Office (CRO) can review decisions by the pillar banks to refuse, reduce or withdraw credit facilities (including applications for restructured credit facilities) from €1,000 up to €500,000. The Credit Review Office is overturning 55% of the refusals decisions referred to them and I would appeal to SMEs and farmers who have been refused credit by the banks to avail of the services of the CRO.
The latest initiatives by my colleague the Minister for Jobs, Enterprise and Innovation in relation to the credit guarantee scheme and the microfinance loan fund should also assist the flow of credit to SMEs.
In summary, it is vital that the banks continue to make credit available to support economic recovery. However, it is not in the interest of the banks, businesses or the economy for finance to be provided unless the business is viable and has the capacity to meet the interest payments and repay the sum borrowed. I remain open to any constructive suggestions which could augment the Government’s initiatives in this area.
84. Deputy Joe Higgins asked the Minister for Finance if he will report on any recent discussions with Troika officials. [38966/12]
View answerThere is a good and professional relationship with the EU Commission, the ECB and the IMF (The Troika) at all levels and this is reflected in the reports that are published after each Review. As the deputy may be aware, contact between the Irish authorities and the EU, the ECB and the IMF concerning the support programme continues before, during, and after the review missions. In particular, officials from my Department along with the Department of Pubic Expenditure and Reform, the Central Bank, the NTMA and the appropriate Government Departments are in contact with the Troika on a frequent basis. In this context, I, and my colleague, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, will meet the Troika delegation during the upcoming quarterly review of the EU-IMF Programme of Financial Support for Ireland.
The ongoing discussions are part of the regular programme management arrangements. Such discussions culminate in the quarterly programme reviews, and the resulting amendments, if appropriate, to the programme documents. These are made publically available at the appropriate time.
Furthermore, the Irish Government has been working extremely hard to secure a deal on enhancing the sustainability of the Irish Programme and further detailed work will be stepped up to ensure that the recent developments in Europe, particularly the agreement reached by the Euro Area Heads of State or Government on 29 June last, are harnessed to maximise the benefit to the Irish taxpayer. This work has involved dedicated technical discussions by senior Irish officials with the external partners. I also take the opportunity to raise these issues with the EU, ECB and the IMF as appropriate, for example at the recent informal meeting of EU Finance Ministers in Cyprus.
It is my intention to meet again with the Troika delegation during the upcoming quarterly review. The review will comprise a series of meetings-discussions to evaluate all the elements of the programme including fiscal adjustment, the macro-economic outlook, progress on commitments in the restructuring of the financial sector and structural reform.
85. Deputy Joe Higgins asked the Minister for Finance if any representatives were sent to the World Economic Forum in Tianjin on 11 to 13 September. [38953/12]
View answerThe World Economic Forum organises a range of meetings through the year. The Taoiseach attended the World Economic Forum Annual Meeting in Davos in January this year where he participated in a number of events including in a plenary panel on ‘Rebuilding Europe’. There was no Government representative in attendance at the World Economic Forum’s sixth ‘Annual Meeting of the New Champions’ in Tianjin from 11 to 13 September.
86. Deputy Micheál Martin asked the Minister for Finance if he will explain the way in which the previous administration had jeopardised Ireland's corporation tax level; and if he will make a statement on the matter. [39024/12]
View answerI understand this question was originally submitted to the Taoiseach but as it is within my functional area of responsibility it was passed over to me. I am pleased to confirm for the Deputy that the Government remains committed to retaining our 12.5% corporate tax rate. This has been made clear on many occasions by the Taoiseach, the Tánaiste, myself and other Government colleagues, both inside and outside of this House.
In addition, our commitment to the 12.5% corporation tax rate is recognised globally and our long term commitment to the 12.5% rate, which has broad political consensus as well as general public support, means that this rate is now regarded as part of "brand Ireland" throughout the business world.
