Written Answers Nos. 97 - 107
97. Deputy Bernard J. Durkan asked the Minister for Finance the extent, if any, to which he and or his Department has observed inflationary or deflationary tendencies throughout the economy with a view to utilising opportunities for economic growth and recovery; and if he will make a statement on the matter. [50799/12]
View answerThe latest data show that consumer price inflation remains moderate, with prices in October 1.2 per cent higher than in the same month in 2011. As measured by the harmonised index of consumer prices (HICP) – the comparable measure of inflation across the EU – prices in Ireland rose at an annual rate of 2.1 per cent in October. While the pass-through of the increase in global energy prices is driving headline figures, I would point out that core or underlying inflation remains very contained. Following on the fall in consumer prices in 2009 and 2010, the moderate rate of inflation that we have seen over the last two years or so is assisting us in regaining our price competitiveness, and helping the exporting sector to grow. Ireland’s HICP inflation rate has now been below or equal to the euro area average for every month since March 2008.
98. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department has isolated the main issues affecting economic growth; the extent if any to which these matters can be addressed in the short term; and if he will make a statement on the matter. [50800/12]
View answerIreland is continuing to record low, but positive growth. GDP expanded by ½ per cent in the first half of 2012 relative to the same period of last year. The shift in the composition of activity – away from domestic demand and into the exporting sectors – that has characterised developments in recent years is continuing. Support for overall activity is coming from the exporting sectors, with services exports becoming an increasingly important engine of growth in recent quarters. The most recent figures show a year-on-year increase in services exports of 9.0 per cent in Q2. This, in no small part, reflects the improvements in price and cost competitiveness that have been evident since the onset of the crisis.
Domestic demand, on the other hand, remains weak. Households, firms and the government sector are still working through the imbalances built up during the boom. Available high-frequency indicators point to a continuation of the divergence between domestic and export-facing sectors well into this year. A return to sustainable growth will require these imbalances to be worked through. In particular, we will need to restore order to the public finances.
We will also need further improvements in our competitiveness and a banking sector capable of supporting real economic activity. These are the areas in which government policy is focused.
The ongoing rebalancing of activity continues to have adverse implications for the labour market, given that the employment content of export-led activity is typically lower than that for activity driven by domestic demand. Employment has continued to fall in the first half of the year, with job losses being recorded in a majority of sectors. Notwithstanding this, unemployment has shown some tentative signs of stabilisation over the course of the year, albeit at a level that is too high (14.8 per cent).
The emerging picture is one of modest growth in the second half of this year, with a positive contribution from net trade offsetting further weakness in domestic demand.
99. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which savings have been identified over the past three years and to date in 2012; the way such savings are generally held and the way it might be possible to reward those with savings for investment in job creation in the manufacturing or service areas; and if he will make a statement on the matter. [50801/12]
View answerThe household savings rate has been in double digits over the past three years and remains so in the year to date, while household indebtedness in Q2 2012 fell to the lowest level since Q1 2007. This reflects both households' efforts to reduce their high indebtedness built up during the boom years as well as precautionary motives due to the challenging economic environment. In terms of the percentage share of household financial assets, there has been little change in how they are held. The main difference between Q2 2008 and Q2 2012 is a slight decrease in the percentage of assets held in shares and other equities, with the share of deposits increasing marginally. A number of incentives are available to those who wish to invest in job creation, including the Employment Investment Incentive (EII), a tax relief incentive scheme which provides tax relief for investment in certain corporate trades. Relief is initially available to an individual at 30%, with a further 11% tax relief available where it has been proven that employment levels have increased at the company at the end of the holding period.
The film relief scheme was also introduced, which aims to promote the domestic film industry, by encouraging investment in Irish made films. Tax relief on the full amount of the investment is available to individual investors at their marginal rate of tax (41% for top rate taxpayers) and individual investors can invest up to 50,000 euro under the scheme in any year of assessment .
100. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the economic fundamentals are becoming more positive by way of reference to the past three years to date; and if he will make a statement on the matter. [50802/12]
View answerSupport for overall activity is coming from the exporting sectors, with services exports becoming an increasingly important engine of growth in recent quarters. This, in no small part, reflects the improvements in price and cost competitiveness that have been evident since the onset of the crisis. Such internal price adjustments are crucial for Ireland’s recovery, given that Ireland’s membership of the euro area eliminates the option of currency devaluation. The European Commission recently forecast that our nominal unit labour costs will have fallen by a cumulative 16 percentage points in the period 2009-2014 compared with an increase of 8 percentage points for the euro area as a whole. Furthermore, from a macro-economic perspective an important measure of competitiveness is the real harmonised competitiveness indicator (HCI). This reflects relative consumer prices trends, together with weighted exchange rates. Since mid-2008, the real HCI has fallen by 21 percentage points, indicating an improvement in our international competitiveness.
So many of the necessary improvements are taking place, and this will support economic growth into the future.
101. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department continues to be kept up to date in respect of the level of default by insurance companies with particular reference to mortgage or other debt protection; and if he will make a statement on the matter. [50803/12]
View answerMy Department does not keep up to date information on the level of default by insurance companies with particular reference to mortgage or other debt protection. I have made enquiries with the Central Bank about this matter which I understand relates to cases such as where a couple has mortgage protection insurance policy and then fall on hard times and as a result can no longer afford to pay for the protection and/or who make a claim which is rejected.
The Central Bank has informed me that it does not collect this information.
Finally, it should be noted that if a policyholder has a complaint about an insurance company not honouring a claim on a policy, they can refer the matter to the Financial Services Ombudsman for adjudication http://www.financialombudsman.ie/ .
105. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the economic performance of all sectors has been monitored over the past five years and to date in 2012; the extent to which specific areas have been identified for the need for improvement; and if he will make a statement on the matter. [50808/12]
View answerMy Department monitors the performance of all sectors of the economy on a continuous basis both in terms of official statistics from the CSO and also in terms of high frequency survey based indicators such as purchasing managers’ indices (PMIs) and consumer confidence. The Action Plan for Jobs 2012 sets out a whole-of-Government approach to the Government’s central policy of getting people working. This is key to economic recovery and spans all sectors of the economy. This is an annual process and my Department has already fed into the 2013 process. I might also mention that as part of my Department’s reform programme, a new, expanded Economics Division has been established with a greatly expanded economic capacity, allowing the Department to now conduct additional sectoral analysis as part of its economic planning and forecasting function .
106. Deputy Finian McGrath asked the Minister for Education and Skills if he will support a matter (details supplied) regarding student grants. [50572/12]
View answerUnder the terms of the student grant scheme, grant assistance is awarded to students who meet the prescribed conditions of funding including those relating to nationality, residency, previous academic attainment and means. The eligibility criteria for student grants is reviewed annually and set out in the student grant scheme and the student support regulations each year. Students awarded a grant are paid the maintenance element subject to confirmation and verification of attendance from the institution being attended.
Students who have previously attended, but not completed an approved course of study are required to complete an equivalent period of study on an approved course before being eligible to be considered for a grant.
107. Deputy Dara Calleary asked the Minister for Education and Skills when a student grant application is respect of a person (details supplied) in County Mayo will be processed; and if he will make a statement on the matter. [50588/12]
View answerOfficials in my Department have confirmed with SUSI, the new centralised grant awarding authority, that further supporting documentation was requested from the student referred to by the Deputy on 2nd November 2012. When the documentation is returned to SUSI the student will be notified directly of the outcome.
