Wednesday, 3 Oct 2012

Written Answers Nos. 66-72

Tax Collection

Questions (66)

Richard Boyd Barrett

Question:

66. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide the latest figures on income tax in tabular form in bands of €10,000 ranging from €0 to €5 million; the gross income in each band; the numbers in each band; the percentage of total numbers in each band; the average income in each band; the income tax paid in each band; the universal social charge paid in each band; the PRSI paid in each band; the total tax including USC and PRSI paid in each band; the total income after all taxes paid in each band; the average income after all tax is paid in each band and the effective tax rate after all taxes, including USC and PRSI, as a percentage of income paid in each band. [42354/12]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that the most detailed relevant information that can be readily provided at this time in terms of the income distribution and tax liabilities of income earners is estimated by reference to the income tax year 2012, and is set in the following table. However, because of the Revenue Commissioners' obligation to observe confidentiality in relation to the taxation affairs of individual taxpayers and small groups of taxpayers, the breakdown by income bands requested by the Deputy is not provided in relation to incomes exceeding €2 million due to the small numbers of income earners with incomes in excess of that level.

Combined Income Tax, USC & PRSI - Post Budget 2012 (Base Year 2009)

Range of Gross Income	Gross Income	Tax/USC/PRSI	Numbers	% of Total Numbers	% of Total Tax/ USC/ PRSI	Average Gross Income	% Effective Rate of all taxes	Income after taxes	Average Income after Tax/ USC/ PRSI
€	€	€				€		€	€
0-5,000	488,131,256	0	227,078	10.49%	0.00%	2,150	0.00%	488,131,256	2,150
5,001-10,000	1,253,596,105	6,976,506	167,528	7.74%	0.04%	7,483	0.56%	1,246,619,599	7,441
10,001-15,000	2,312,485,072	57,720,581	184,558	8.52%	0.31%	26,532	2.50%	2,254,764,491	12,217
15,001-20,000	3,484,280,522	158,631,978	198,371	9.16%	0.86%	17,564	4.55%	3,325,648,544	16,765
20,001-30,000	9,590,057,348	935,136,874	386,339	17.84%	5.07%	24,823	9.75%	8,654,920,474	22,402
30,001-40,000	10,258,657,137	1,505,941,661	295,068	13.63%	8.16%	34,767	14.68%	8,752,715,476	29,663
40,001-50,000	9,233,596,409	1,779,918,325	206,874	9.55%	9.65%	44,634	19.28%	7,453,678,084	36,030
50,001-60,000	7,600,348,121	1,710,908,056	139,022	6.42%	9.28%	54,670	22.51%	5,889,440,065	42,363
60,001-70,000	6,189,082,128	1,517,148,428	95,641	4.42%	8.22%	64,712	24.51%	4,671,933,700	48,849
70,001-75,000	2,727,818,924	706,315,373	37,665	1.74%	3.83%	72,423	25.89%	2,021,503,551	53,671
75,001-80,000	2,460,385,544	662,029,386	31,778	1.47%	3.59%	77,424	26.91%	1,798,356,158	56,591
80,001-90,000	4,079,790,804	1,143,781,572	48,173	2.22%	6.20%	84,690	28.04%	2,936,009,232	60,947
90,001-100,000	3,174,795,435	936,659,669	33,515	1.55%	5.08%	94,728	29.50%	2,238,135,766	66,780
100,001-120,000	4,565,439,796	1,430,393,858	41,890	1.93%	7.75%	108,986	31.33%	3,135,045,938	74,840
120,001-140,000	2,983,516,699	993,161,460	23,114	1.07%	5.38%	129,078	33.29%	1,990,355,239	86,110
140,001-160,000	1,960,277,282	678,721,677	13,140	0.61%	3.68%	149,184	34.62%	1,281,555,605	97,531
160,001-180,000	1,359,220,515	481,690,586	8,029	0.37%	2.61%	169,289	35.44%	877,529,929	109,295
180,001-200,000	1,013,060,376	366,091,852	5,350	0.25%	1.98%	189,357	36.14%	646,968,524	120,929
200,001-250,000	1,791,691,539	658,452,673	8,071	0.37%	3.57%	221,991	36.75%	1,133,238,866	140,409
250,001-300,000	1,177,244,030	438,294,588	4,322	0.20%	2.38%	272,384	37.23%	738,949,442	170,974
300,001-350,000	850,570,163	318,196,139	2,631	0.12%	1.73%	323,288	37.41%	532,374,024	202,347
350,001-400,000	608,215,973	232,244,256	1,630	0.08%	1.26%	373,139	38.18%	375,971,717	230,658
400,001-450,000	491,782,546	186,358,473	1,161	0.05%	1.01%	423,585	37.89%	305,424,073	263,070
450,001-500,000	386,210,649	147,475,511	815	0.04%	0.80%	473,878	38.19%	238,735,138	292,927
500,001-750,000	1,218,485,106	467,037,155	2,030	0.09%	2.53%	600,239	38.33%	751,447,951	370,171
750,001-1,000,000	552,453,776	217,533,809	647	0.03%	1.18%	853,870	39.38%	334,919,967	517,651
1,000,001-2,000,000	701,243,630	259,614,694	537	0.02%	1.41%	1,305,854	37.02%	441,628,936	822,400
Over 2,000,000	1,033,458,034	449,232,794	120	0.01%	2.44%	8,612,150	43.47%	584,225,240	4,868,544
Total	83,545,894,919	18,445,667,934	2,165,097	100.00%	100.00%

The figures are estimates from the Revenue tax-forecasting model using actual data for the year 2009 adjusted as necessary for income and employment trends in the interim. These are, therefore, provisional and likely to be revised. It should be noted that Gross Income is as defined in Revenue Statistical Report 2010. The numbers of income earners shown in the table counts a married couple who has elected or has been deemed to have elected for joint assessment as one tax unit although USC and PRSI are individualised charges and as such the yield is calculated on the basis of individual incomes.

Eurozone Crisis

Questions (67)

Micheál Martin

Question:

67. Deputy Micheál Martin asked the Minister for Finance if he supports the proposals of Prime Minster Monti regarding the best way to deal with the eurozone crisis; and if he will make a statement on the matter. [33232/12]

Written answers

Minister for Finance

I can voice broad agreement with a number of PM Monti's more commonly known views and proposals. Generally speaking, I share PM Monti's view that the problems besetting the euro area are solvable and that cohesive action can reduce the cost for all. The market reactions to the June 29 HoGS statement clearly show that markets believe this also. During their meeting in Rome, both the Taoiseach and PM Monti stressed the need for rapid implementation of the Council's decisions of June 28 and 29. As you know, I also support these agreements and their rapid implementation. Notably, PM Monti is openly supportive of relief measures for Ireland, as also reiterated during that meeting in Rome. Of course, I also consider it particularly important that the agreement on this proposal is suitably delivered on.

PM Monti has repeatedly proposed a greater role for the ECB, as have I. Given the positive reaction of markets to announcements by ECB President Draghi that culminated in Outright Monetary Transactions, I think it is also clear that these views are shared elsewhere. Notably, PM Monti has argued that, far from undermining discipline in vulnerable countries, such measures, with appropriate conditionality, would facilitate the difficult structural changes required in vulnerable countries. It is, therefore, also necessary for Member States to re-establish mutual trust, as PM Monti has outlined. So, in summary, there are many views held by PM Monti that I am broadly supportive of.

European Banking Sector

Questions (68)

Micheál Martin

Question:

68. Deputy Micheál Martin asked the Minister for Finance the timeframe he believes the process will take at EU level before a decision is taken on shared liability in relation to bank debt; and if he will make a statement on the matter. [33231/12]

Written answers

Minister for Finance

In their statement made following their meeting on 29th June 2012, the Euro Area Heads of State or Government said that "it is imperative to break the vicious circle between banks and sovereigns". Their statement also noted that this is conditional on the creation of a "single supervisory mechanism", and tasked Finance Ministers with establishing it. Work is continuing at a technical level with a view to putting in place both the single supervisory mechanism, and the European Stability Mechanism's direct banking recapitalisation facility, at the earliest possible date.

European Council Meetings

Questions (69)

Micheál Martin

Question:

69. Deputy Micheál Martin asked the Minister for Finance his views on whether there will be agreement on eurobonds at the next EU Council meeting; and if he will make a statement on the matter. [33236/12]

Written answers

Minister for Finance

The European Commission published a discussion document in November 2011 on options for Eurobonds (which it called Stability Bonds). It put forward three options:

(1) the full substitution of Stability Bond issuance for national issuance, with joint and several guarantees;

(2) the partial substitution of Stability Bond issuance for national issuance, with joint and several guarantees; and

(3) the partial substitution of Stability Bond issuance for national issuance, with several but not joint guarantees.

Eurobonds in principle would offer Member States like Ireland a cheap form of market access and we would be supportive of the proposal in principle. However, it should be noted that the introduction of Eurobonds, in whatever form, would not reduce the need to bring the public finances under control and to reduce the debt to a manageable level. In fact, it is likely that any agreement on their introduction would also involve common structures to ensure control of public finances in Member States and a greater degree of fiscal and economic integration.

As a contribution to the debate, the recent paper by the "Four Presidents" on the deepening of Economic and Monetary Union states that "in a medium-term perspective, the issuance of common debt could be explored as an element of such a fiscal union and subject to progress on fiscal integration".

European Banking Sector

Questions (70, 87, 88)

Micheál Martin

Question:

70. Deputy Micheál Martin asked the Minister for Finance following the EU Council meeting, if the prospect of an EU banking union is achievable within the next 12 months; and if he will make a statement on the matter. [33230/12]

Micheál Martin

Question:

87. Deputy Micheál Martin asked the Minister for Finance his views regarding EU proposals on banking regulation and its impact on the International Financial Services Centre here; and if he will make a statement on the matter. [40094/12]

Micheál Martin

Question:

88. Deputy Micheál Martin asked the Minister for Finance if he has commissioned any analysis regarding the proposed European Banking Union agreed in principle by him in June. [40251/12]

Written answers

Minister for Finance

I propose to take Questions Nos. 70, 87 and 88 together.

The European Council meeting of 29 June considered a report from the President of the European Council in cooperation with the Presidents of the Commission, Eurogroup and ECB which set out building blocks for future Economic and Monetary Union. One of these building blocks is an integrated financial framework or banking union which comprises three elements: (a) an integrated system for the supervision of cross-border banks; (b) a European deposit insurance scheme; and (c) a European resolution scheme.

The Euro Area Summit also on 29 June called on the Commission to quickly present proposals for the setting up of a single supervisory mechanism which would be considered by the Council as a matter of urgency. Significantly, the statement of the Euro area Summit clearly stated that when such a mechanism is in place for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalise banks directly. The statement also committed the Eurogroup to examining the situation of the Irish financial sector with a view to further improving the sustainability of our well-performing adjustment programme. The Commission presented legislative proposals in September for a single supervisory mechanism conferring powers on the ECB for the supervision of all banks in the euro area, with a mechanism for non-euro countries to join on a voluntary basis. The Commission called on the Council and European Parliament to adopt the legislative proposal by the end of 2012. While the timetable is ambitious we will be supporting efforts by the European Council to meet this target.

Ireland supports in principle the development of a banking union for Europe. Our support for a single supervisor is contingent on such a system definitively breaking the link between the sovereign and the banking sector. We are also seeking to ensure that shared supervision is progressed as part of a package which will also address shared risk and mutualisation of debt. The question of retrospective application of ESM remains firmly on the table as far as Ireland is concerned and we would expect to see more detail on how this can be addressed over the coming months. Any move to a banking union must respect the integrity of the single market and be consistent with the principle of free movement of capital throughout the European Union.

I do not propose at this stage to commission an analysis of the proposal. My officials are working closely with the Central Bank in relation to our position on the details of the shared supervisory mechanism proposal and will also be consulting with industry stakeholders. The interests of the IFSC will of course be taken into account by my officials in these deliberations.

European Council Meetings

Questions (71, 74, 75)

Micheál Martin

Question:

71. Deputy Micheál Martin asked the Minister for Finance the actions that will be taken, following decisions made at the EU Council meeting in June, regarding growth and job creation; and if he will make a statement on the matter. [33235/12]

Peadar Tóibín

Question:

74. Deputy Peadar Tóibín asked the Minister for Finance his understanding of the additional resources for jobs creation arising from recent EU meetings of Ministers. [33871/12]

Peadar Tóibín

Question:

75. Deputy Peadar Tóibín asked the Minister for Finance if he will outline proposals for increasing job creation arising from the EU Council Ministers [33872/12]

Written answers

Minister for Finance

I propose to take Questions Nos. 71, 74 and 75 together.

Heads of State or Government in the EU decided on a compact for growth and jobs at the European Council on 28 June. This involves action by Member States and at EU level in order to boost growth, investment and employment. Measures to be implemented at national level include the full implementation of the country-specific recommendations from the European Semester as well as pursuing differentiated growth-friendly fiscal consolidation. From an Irish perspective, I want to assure the Deputy that the required consolidation over the next few years will be pursued in as growth-friendly a manner as possible. A number of measures are to be implemented at EU level in order to boost growth, and I believe the cumulative impact of all of these measures will have a positive impact in terms of supporting economic activity in the EU at this difficult juncture. This, in turn, can be expected to benefit Ireland, given the importance of the EU as a trading partner.

At EU level, the measures announced include a deepening of the Single Market and reducing the regulatory burden. Another important measure is the mobilisation of EUR120 billion - about 1 per cent of EU gross national income - to boost European growth. These funds will be made available via EU structural funds, the Project Bonds initiative, and EIB lending. We continue to make progress in terms of maximising the amount of funding that can be made available to Ireland in these regards. Constituting part of these efforts is a EUR10 billion paid-in capital increase for the European Investment Bank, which increases the lending capacity of the Bank by about one-third. This is of particular interest to Ireland because the Bank has been an important source of funding. Funds received in the past already have been substantial, covering commercial semi-states, local authorities, road projects (PPPs) and loans to banks for on-lending to SMEs. The Exchequer can also borrow directly from the EIB in respect of capital projects such as school-building. For instance, a EUR 100m loan was agreed with the EIB for the purpose of building 550 classrooms across Ireland on 6 July. Other examples of projects currently under appraisal include funding up to EUR 200m for the improvement of water infrastructure and funding up to EUR 200m for use in SME and mid-cap investment via AIB.

Further, on 6 July, EIB President Werner Hoyer visited Dublin and met myself and Minister Howlin in order to discuss how Ireland can best work together with the EIB, notably developing flexible and innovative funding solutions to invest in infrastructure and key sectors of the economy. We had a very constructive discussion and remain actively and constructively engaged with the EIB on these and related matters, including at the time of the informal Ecofin in Nicosia mid-September.

EU Summits

Questions (72)

Bernard Durkan

Question:

72. Deputy Bernard J. Durkan asked the Minister for Finance the progress that continues to be made arising from and in the wake of the recent EU summit with particular reference to the various issues identified as being fundamental to future fiscal and economic stability throughout the Eurozone and the EU in general; when he expects to be in a position to avail of any benefits accruing from this country’s perspective; and if he will make a statement on the matter. [33664/12]

Written answers

Minister for Finance

As the Deputy will be aware, on June 28 and 29 Heads of State and Government confirmed their commitment to ensuring the integrity of the euro area and agreed on important general principles for achieving this, notably by breaking the link between sovereigns and banks. The ensuing positive market reaction would indicate that these agreements were perceived as substantial. Furthermore, important steps have since been taken and continue to be taken at the European and Member State level. Since then, Ireland's spreads have reduced considerably. This indicates that Ireland has already benefitted from these measures, with markets appearing to take heart, in particular, over commitments to specifically further improve the sustainability of Irish debt under its well-performing programme.

With President Draghi's August announcement that the ECB stands ready to do whatever it takes within its mandate and the Outright Monetary Transactions announcement last month, the ECB has played an important role in further boosting market confidence. A marked improvement for Irish spreads ensued and, with opportune timing, Ireland successfully returned to long-term capital markets at this time. This confluence further underlines the credibility of Irish debt sustainability and the relevance for Ireland of the measures taken since June 29.

Finally, let me mention that the general improvement of market sentiment and return of confidence is crucial from an Irish perspective. First, after some disappointing European and global data in the first half of 2012, the uplift in global and European confidence should lead to higher demand for Irish exports, which are driving our recovery. Second, a sustained reduction in borrowing costs for the sovereign should eventually filter through to the rest of the economy. Of course, Ireland has taken important measures in order to regain market confidence. Continuation along this path will be important for markets to continue to be reassured about Ireland's prospects. So, Ireland has already benefitted from important measures taken since June 29 and we expect further improvements as measures continue to be taken at the Member State, including in Ireland, and European levels.