Written Answers Nos. 260-276
260. Deputy Michael Healy-Rae asked the Minister for Finance his views on the fact that although diesel and petrol have come down in recent times, the Automobile Association has stated that prices are still too high; and if he will make a statement on the matter. [24202/13]
View answerIreland, as with other countries, has experienced an increase in fuel prices. This increase is an international phenomenon. Fuel prices are driven by a number of factors including the price of oil on international markets, exchange rates, production costs and refining costs. The rise in oil prices over recent periods reflected additional factors such as geopolitical uncertainty in Northern Africa and the Middle East with potential supply disruptions. The Exchequer yield from excise, as excise is set at a nominal amount, does not increase as the price of fuels increase. On the other hand, the yield from VAT per litre of fuel, as VAT is set as a percentage of the price, increases as the price of fuels increase. It should be noted however that businesses are entitled to reclaim VAT incurred on their business inputs, including VAT incurred on fuel. For example, VAT incurred on auto-diesel and marked gas oil (MGO or green diesel) used in the course of business is a deductible credit for business in the Irish VAT system.
The Deputy will also be aware that, in the context of Budget 2013, I provided for relief from excise duty on auto diesel for qualifying road transport and passenger transport operators.
There are no plans for further taxation adjustments as to do so could lead to significant costs to the Exchequer.
261. Deputy Michael Healy-Rae asked the Minister for Finance in view of the fact that more than 6,000 pubs have closed since 2009, his plans to try and work with the Vintners' Association of Ireland to try and ensure that no more pubs close in view of the fact that for every pub that closes, employment is lost and a service to the local community is lost; and if he will make a statement on the matter. [24203/13]
View answerThe Office of the Revenue Commissioners have advised that 9,082 pub licences were issued in 2009 and 8,250 licences were issued in 2012 . I am aware of the difficulties being experienced by the industry at present. Both I and officials of my Department have engaged with representatives of the industry on various issues and will continue to do so.
262. Deputy Andrew Doyle asked the Minister for Finance when the next opportunity will arise for Ireland to appoint a new director to the board of the European Bank for Reconstruction and Development; if he will provide details of the current and all previous appointments to the board by the Irish Government; the costs associated with the position in tabular form over the past fifteen years; if he will detail annually the salary that this position commands and Ireland's annual contribution to the bank; and if he will make a statement on the matter. [24232/13]
View answerIreland currently holds a Director position at the European Bank for Reconstruction and Development (EBRD) Board under a Constituency agreement with Denmark which provides for an equal rotation of the posts of Director and Alternate Director between both countries on a three-year cycle. Ireland assumed the Director position on May of 2012 and holds this position until May of 2015 – over that period, Denmark holds the post of Alternate Director. After May of 2015, the positions reverse for a further three years. The current Irish representative on the Board of Directors of the EBRD is Mr Eoin Ryan who was initially appointed to the position of Alternate Director on 12 February 2010 and he took over the Director post in May 2012. His appointment on the Board is due to end on 1 July 2013.
The previous Irish representatives at the EBRD, and the dates on which they served, as per their letters of appointment, are set out in the table below:
|
Date |
Name |
|
12/2/2010 to date |
Eoin Ryan |
|
12/2/2007 - 11/2/2010 |
Anne Counihan |
|
17/7/2003 - 31/7/2006 |
Desmond O'Malley |
|
17/7/2000 -16/7/2003 |
Michael Flynn |
|
1/7/1997 - 16/7/2000 |
Tony Brown |
|
3/5/1994 - 30/6/1997 |
Brian Hillery |
|
20/5/1992 - 2/5/1994 |
Phelim Molloy |
|
17/4/1991 - 19/5/1992 |
Pol O'Duibhir |
The salary of the Irish representative at the Board of Directors is paid directly by the Bank and is not contributed to by the State. Currently, the annual gross salary for Director and Alternate Director posts ranges between £124,903 to £131,574 and £104,939 to £111,074 respectively; depending on the personal circumstances of the incumbent.
There is no annual contribution to the Bank. In terms of any liabilities associated with Bank membership, Ireland's initial subscription amounted to paid in capital of €9 million with callable capital amounting to €30 million. In 1996, the Government agreed to subscribe to 3,000 shares in the First Capital Increase of the Bank, of which, 675 shares were paid in via eight equal instalments amounting to €6.75 million. This brought Ireland's paid in capital up to €15.75 million and callable capital up to €44.25 million. Following a capital increase in 2010 and 2011, Ireland's paid in capital in the Bank increased to €18.78 million (this increase was funded through the bank's own reserves) and callable capital increased to €71.260 million (an increase of just over €27 million). Ireland’s shareholding within the Bank is currently 0.3% following this increase.
264. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 65 of 9 May, if he will confirm that a form of SARP, old SARP, was operational in 2011, the conditions of which included the persons having earnings in excess of €100,000, being non-Irish domiciled and paid from a foreign payroll, that once these conditions were met the person was entitled to tax relief of 50% of their salary above €100,000 and that everyone who was entitled to this relief would have claimed it by now through either a form 12 or form 11, due by 31 October 2012, that this relief has now been grandfathered, meaning persons can continue to claim that relief and that there is no job creation condition attached to that relief; the number of persons that availed of the relief; the average cost per person; the total tax lost to the Exchequer; and if he will re-state that he is confident that only six persons have availed of the new SARP regime. [24249/13]
View answerSection 825B of the Taxes Consolidation Act 1997 (which had effect for the 2009 tax year onwards) provides relief to certain individuals who are not Irish domiciled and who, before they came to the State, had been living and working in a country with which the State has a double taxation agreement. This is sometimes referred to incorrectly as the Special Assignment Relief Programme. The provision applies where the individual is sent by his or her foreign employer to work in the State for that employer or for an associated company of that employer and continues to be paid from abroad. Under the provision, such individuals may have the tax on the income from the foreign employment that is attributable to duties of that employment exercised in the State reduced to the greater of the tax due on either (a) €100,000 plus 50% of the income of the employment over that amount; or (b) the income from that employment remitted to the State (any tax deducted by the employer via the PAYE system is deemed to be a remittance). Figures derived from information provided by taxpayers in income tax returns for the years 2009 to 2011 inclusive are as follows. It should be noted by the Deputy that these figures have been compiled in the time available and may not represent the final figures as work is still ongoing to analyse the relevant data. I am advised that the Revenue Commissioners will write separately to the Deputy if the figures are amended when the full data extraction had been completed.
|
Year |
Numbers Availing |
Estimated Cost to Exchequer |
Average Cost |
|
€ |
€ |
||
|
2011 |
15 |
456,020 |
30,400 |
|
2010 |
14 |
358,690 |
25,620 |
|
2009 |
5 |
78,320 |
15,660 |
Figures denoting money amounts have been rounded to the nearest 10.
Tax returns for 2012 are due to be filed October/November of 2013.
In relation to the new Special Assignee Relief Programme introduced in Section 14 of Finance Act 2012, as I indicated to the Deputy in my reply to his question of 9 May last, employer returns received to date indicate that there were 6 individuals who qualified for the relief with 2 of them receiving an aggregate total tax-free remuneration of €39,767. Job increases were reported as numbering 26 with 2 jobs also reported as retained because of the relief. It is expected that the 4 individuals who are not reported in the employer returns as receiving tax-free remuneration are expected to claim it when they submit Form 11 tax returns for 2012 in late 2013. It is also possible that not all employers have submitted a SARP return yet. Also, the figures provided do not include the details for claims that are not included in employer returns received to date but will be made in the Form 11 tax returns for 2012 to be filed under the self-assessment system in October/November of 2013.
265. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 51 of 9 May 2013, if the Central Bank of Ireland’s holding of National Asset Management Agency bonds is considered a financial asset holding with limits; if consideration has been given by him in discussions with the Governor of the Central Bank of Ireland for the Central Bank of Ireland to acquire the outstanding NAMA bonds from Bank of Ireland, Allied Irish Banks and Permanent TSB as a way of reducing the balance sheet of those banks, freeing up capital costs for those banks who have to use or hold capital to provide against the NAMA bonds, reducing the amount of ECB funding that is extended on foot of the NAMA bond collateral to those banks and return the interest payable from NAMA on these bonds directly to the Central Bank of Ireland and thus ultimately to the Exchequer; and if he will make a statement on the matter. [24251/13]
View answerThe Central Bank of Ireland (CBI) has confirmed that, in common with other National Central Banks of the Eurosystem, it can hold financial assets only up to particular limits as part of agreements between the various members of the Eurosystem. Furthermore the CBI has confirmed that the terms of such agreements and related issues are a matter for itself and the ECB and not something that I can comment on. As outlined in my response to PQ 19874/13, the CBI has advised that it does not comment on individual investment holdings.
266. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 187 of 30 April 2013, in which he stated that the exemption of interest on savings certificates, national instalment savings and index linked savings bonds cost the Exchequer €138.2 million in the last full tax year for which there is data, if he will confirm that the money lost to the Exchequer from this exemption is estimated based on DIRT being applied to the interest in these savings; and if he will confirm the current DIRT rate. [24252/13]
View answerI am informed by the Revenue Commissioners that the Exchequer cost of €138.2 million that was estimated for 2009 in respect of the exemption of interest on savings certificates, national instalment savings and index linked savings bonds was based on applying an average marginal rate of tax to the aggregate amount of interest arising from these sources. This average rate was compiled on the working assumption that taxation of this income source would be applied at each taxpayer’s marginal tax rate, that is, at 20 % or at 41% as appropriate. The Deposit Interest Retention Tax (DIRT) rate was not applied to the interest amount. Income from these products is currently exempt from income tax so in working out the cost of the exemption one can make assumptions as to what tax rate should apply. The information given in response to the Parliamentary Question on 30 April was in the context of the providing the cost of a number of reliefs and exemptions, which would apply either at the marginal rate or the standard rate of income tax, so an average marginal rate of tax was applied to the interest on savings certificates, savings bonds and national instalment savings to work out the costs of exempting the interest.
As an alternative, one could assume that the income would be taxable at the higher rate of DIRT which applies to interest which is paid less frequently than annually. In 2009, the year for which the figures were supplied, the higher rate of DIRT was 26% from 1 January to 7 April 2009 and 28% from 8 April to 31 December 2009. On the assumption that the interest was paid evenly throughout the year, the estimated yield from applying the higher rate of DIRT to this interest income in 2009 would have been in the region of €127.7 million. The estimate does not take into account the fact that some account holders will be exempt from DIRT, including individuals aged over 65 years and whose total income, including the income subject to DIRT, is below the income tax age exemption limits (€18,000 for a single individual and €36,000 for a married couple or civil partners); and individuals who are permanently incapacitated, and whose tax credits cover their tax liability.
The total interest paid under savings certificates, national instalment savings and index linked savings bonds in 2009 was €465.04 million, whereas payments for those products in 2011 totalled just under €164.83 million. This would obviously affect the potential yield from applying tax on whatever basis to this interest.
267. Deputy Pearse Doherty asked the Minister for Finance if international investors have to pay capital gains tax on the disposal of property here; and if not, the amount lost to the Exchequer as a result of this exemption. [24255/13]
View answerGains arising from the disposal of property, that is land or buildings situated in this country, are chargeable to capital gains tax, irrespective of whether or not an investor is resident in this country. A relief from capital gains tax was introduced in the Finance Act 2012 in respect of properties, that is land or buildings, situated in Ireland or any EEA State, purchased between 7 December 2011 and 31 December 2013, that are held for at least 7 years. This relief is available to any taxpayer who satisfies the conditions governing the relief. Any gains attributable to that 7-year period will not be liable to capital gains tax when the property in question is ultimately sold. In order to qualify for the relief, any income, profits or gains from the properties must be subject to Irish income tax. In addition, the relief will not apply if arrangements have been put in place whose main purpose or one of whose main purposes is to secure a tax advantage, as defined in Section 546A of the Taxes Consolidation Act 1997, and it can be shown that the relief would be less if such arrangements had not been put in place.
The relief cannot be claimed until properties bought in the incentive period are sold after being owned for at least 7 years. Accordingly, as the incentive period has not expired, it is not possible to estimate the amount of tax lost to the Exchequer as a result of the relief.
268. Deputy Pearse Doherty asked the Minister for Finance if he will detail as part of his Department of Finance’s budgetary calculations if the figure of €800 million for 2013, €875 million for 2014 and €950 Million for 2015 in interest costs cited in the Department of Finance Pro Forma Transaction Impact Analysis – State Finances (Based on No Policy Change) document for those years are interest payments which his Department expect to be returned to the state from the Central Bank of Ireland profits after earnings at the end of 2013, 2014 and 2015 as part of their budgetary accounting for those years; if he will confirm if the full interest payments on these bonds as cited in the aforementioned document are not expected as part of his Department's calculations to be returned to the Exchequer as profits from the Central Bank of Ireland; if he will detail the calculations by his Department of the total profits expected to be returned from the Central Bank of Ireland to the Exchequer for 2013, 2014 and 2015; and if he will make a statement on the matter. [24256/13]
View answerThe interest costs paid by the State on the newly issued Government bonds will contribute to the surplus income of the Central Bank. As explained in Note 5 in the Explanation of Adjustments in the Pro Forma Transaction Impact Analysis, 80% of Central Bank surplus income is paid to the State as a dividend the following year. So, 80% of the contribution to the Central Banks surplus income in 2013 from the newly issued Government bonds will be paid over in 2014 and so on. However, as the Deputy will be aware this new Central Bank income replaces surplus income arising from IBRC's Exceptional Liquidity Assistance (ELA) funding arrangement. The Pro Forma Transaction Impact Analysis clearly outlines the estimated net benefit to Central Bank income as a result of the promissory note restructuring.
Turning specifically to the estimated dividend payment from the Central Bank of Ireland to the Exchequer, the estimate which underpinned Budget 2013 of €1,040m was published as part of the Exchequer Borrowing Profile with the February Exchequer Returns. Since that time, the Central Bank have revised this figure upward to €1,148m which has been reflected in the SPU arithmetic.
Beyond this year, the estimates for the additional Central Bank surplus income arising from the promissory note restructuring as published in the Pro-Forma Analysis remain broadly valid although as the coupon paid on the replacement bonds is based on a floating rate, it would not be surprising if these estimates changed over time. In respect of 2013 interest costs on the newly issued bonds, the current estimate is €700m compared to the original estimate of €800m. The original estimate was based on the assumption that the transaction would take place on 1 January 2013. The Central Bank is in the process of revising their estimate for dividends for 2014 and subsequent years.
269. Deputy Pearse Doherty asked the Minister for Finance if discussions at an ECB level regarding acquisitions of asset backed securities could potentially include acquisitions of National Assets Management Agency bonds; if he will confirm further to his statements to the Joint Committee on Finance, Public Expenditure and Reform on the 8 of May 2013 if discussions at an ECB level regarding acquisitions of asset backed securities could potentially include acquisitions of securities tracker mortgage loans where the actual tracker mortgage loans would be taken completely off the balance sheet of the selling institution and taken onto the ECB’s balance sheet; if he will detail whether he has provided input to the Governor of the Central Bank of Ireland to seek to include NAMA bonds and tracker mortgages as a potential asset class which could be acquired by the ECB in any potential asset backed security purchase programme; and if he will make a statement on the matter. [24257/13]
View answerAs the Deputy will be aware, the ECB is an independent body and I have no role in relation to its internal deliberations. However, I am aware of a number of reports in the media where European Central Bank (ECB) officials, including President, Mr. Mario Draghi, indicated that the ECB is considering buying asset-backed securities (ABS), among possible options to support lending to small and medium sized companies. I understand that President Draghi has said that the ECB's role in this would be mostly catalytic because the ECB works with the European Investment Bank (EIB) and with the EU Commission. I have no further details at this time. As regards the EIB, it has highlighted SME financing as a priority for the Bank. On the domestic front, this has been evidenced when the EIB agreed to work with AIB in providing €200 million for investment by small and medium companies across Ireland. This represents the latest EIB support for SMEs in Ireland since an earlier lending programme intermediated by AIB in 2011. This announcement coincided with a visit by the EIB President and the Management Committee to Ireland on 29 and 30 April 2013. The EIB delegation met with myself and a number of other Government Ministers including Minister Bruton where it was highlighted that access to funding for Irish SMEs is a priority for Ireland.
The Deputy may be aware that Mr. Werner Hoyer was appointed President of the EIB in January 2012. President Hoyer visited Ireland in July 2012. Since then there has been a deepening and widening of engagement between Ireland and the Bank. During this visit it was agreed with the Irish Authorities to establish a joint High Level Working Group (HLWG) to identify concrete and flexible mechanisms to enhance the Bank’s support for Ireland’s growth agenda. The EIB and Ireland are strongly committed to working together to enhance the Bank’s activity in the country and this commitment is beginning to bear results. A solid outcome was achieved for 2012 with EIB group activity in the country approaching €600m, representing an increase of over €100m in 2012 over 2011 levels and covering a diversified range of sectors and transactions.
270. Deputy Pearse Doherty asked the Minister for Finance if he will detail the total combined impairment charges provided against the National Assets Management Agency senior and subordinated bonds in Allied Irish Banks, Bank of Ireland and Permanent TSB; if he will detail the total amount in euro of regulatory capital which is currently held by Allied Irish Banks, Bank of Ireland and Permanent TSB as a requirement arising from its holdings of NAMA senior and subordinated bonds; if he will detail if the regulatory changes at a domestic, European or global level may lead to an increase in capital being necessary to hold for banks retaining NAMA bonds; if he will detail the total amount of interest that shall be paid by NAMA to Allied Irish Banks, Bank of Ireland and Permanent TSB on its holding of NAMA bonds in 2013, 2014 and 2015 assuming no redemption of NAMA bonds are made for those 3 years; and if he will make a statement on the matter. [24258/13]
View answerI have been provided with the following information from the banks:
AIB
All disclosures in relation to AIB’s National Assets Management Agency senior and subordinated bond holdings are contained in pages 267 – 268 of AIB’s 2012 Annual Financial Report. Disclosures in relation to AIB’s regulatory capital can be found on page 44 of the same report.
The regulatory changes at a domestic, European or global level are not anticipated to lead to an increase in capital being necessary to hold for banks retaining NAMA bonds
Bank of Ireland
Bank of Ireland's annual report for the year to 31 December 2012 gives comprehensive disclosures on its holdings of NAMA Bonds (particularly pages 203-205 and pages 316 – 317) and of its relations with the Irish State (pages 259-262). Bank of Ireland's annual reports for the years ended 31 December 2010 and 31 December 2012 additionally provide comprehensive disclosures on the impairment of NAMA subordinated debt. (Particularly pages 23, 66 and page 125 of its annual report for 2010 and page 192 and pages 204-205 in its annual report for 2012).
Bank of Ireland's Pillar 3 report for the year to 31 December 2012 gives comprehensive disclosures on its Regulatory Capital including amounts held in relation to Sovereign Bonds which includes NAMA Bonds (particularly pages 8-12 and pages 14-15), and the regulatory changes arising as a result of Basel 3 (particularly pages 5 - 6).
PTSB
- ptsb has not held NAMA subordinated bonds.
- ptsb holds NAMA senior bonds but has not taken any impairment provisions against them.
- ptsb currently applies 0% risk weights in calculating the regulatory capital requirement for NAMA bonds. 0% risk weight has been confirmed with Central Bank of Ireland to be used in the capital calculation (The conditions for this being that NAMA senior debt is government guaranteed, denominated in the domestic currency and also funded in that currency).
Interest Rate on NAMA bonds
The interest rate that NAMA pays on the Senior bonds held by the Participating Institutions (PIs) is six month euribor flat and is paid semi-annually on the 1 March and 1 September. Details of current NAMA Senior bond issuance can be found on its website www.nama.ie, which is updated following any redemptions.
The current rate of interest on senior debt, set last March is 0.336%. Based on this rate of interest and no further redemptions, NAMA expects to pay €31m to AIB/ESB, €8m to Bank of Ireland, €4m to PTSB and €1m to the Central Bank of Ireland on 1 September 2013. Based on the same assumptions, the same amount would be paid every 6 months (March & September) in 2014 and 2015. However, NAMA expects to make further redemptions this year which will reduce amount paid and interest rates will vary over time.
271. Deputy Pearse Doherty asked the Minister for Finance the total amount in euro of regulatory capital which is currently held by Allied Irish Banks, Bank of Ireland and Permanent TSB as a requirement arising from its holdings of Irish government bonds; if he will detail what regulatory changes at a domestic, European or global level that may lead to an increase in capital being necessary to hold for banks retaining Irish Government bonds; if he will detail the total amount of interest that shall be paid by the Irish Government on these government bonds held by Allied Irish Banks, Bank of Ireland and Permanent TSB in 2013, 2014 and 2015 assuming no sale of these bonds by the banks in question are made for those three years; and if he will make a statement on the matter. [24259/13]
View answerI can inform the Deputy that Allied Irish Banks, Bank of Ireland and Permanent TSB hold zero regulatory capital against their holdings of Irish government bonds as the Central Bank of Ireland has agreed that Irish government bonds which are denominated in the domestic currency and funded in that currency have a 0% risk weighting. As the Deputy will be aware AIB, BOI and PTSB use Irish government bonds as part of their normal liquidity management operations. The institutions cannot provide the total amount of interest to be paid on their Irish Government bonds as this could be construed as a forward looking statement.
Allied Irish Banks, Bank of Ireland and Permanent TSB have provided me with the following responses to your PQ:
AIB
The total amount in euro of regulatory capital which is currently held by Allied Irish Banks as a requirement arising from its holdings of Irish government bonds is zero as Irish Government Bonds are risk weighted at zero percent.
Regulatory changes at a domestic, European or global level are not anticipated to lead to an increase in capital being necessary to hold for banks retaining Irish Government bonds.
BOI
Bank of Ireland’s Pillar 3 report for the year to 31 December 2012 which can be found at http://www.bankofireland.com/fs/doc/publications/investor-relations/boi-pillar-iii-disclosures-2012.pdf gives comprehensive disclosures on its Regulatory Capital including amounts held in relation to Sovereign Bonds (particularly pages 8-12 and pages 14-15), and the regulatory changes arising as a result of Basel III (particularly pages 5-6).
Bank of Ireland’s annual report for the year to 31 December 2012 gives comprehensive disclosures on its holdings of Irish Government Bonds (particularly pages 203-204 and pages 316-317) and of its relations with the Irish State (pages 259-262).
PTSB
Permanent TSB currently holds €0m of regulatory capital for Irish Government bonds and Government guaranteed bonds.
The CBI has agreed this weighting of 0% for Irish Government debt denominated in domestic currency and funded in that currency.
CRD IV rules, effective from January 2014, explicitly assign 0% risk weight for the exposures to the Member States’ central governments denominated and funded in the domestic currency of that Central Government.
272. Deputy Pearse Doherty asked the Minister for Finance in view of the insider knowledge that Blackstone has on the Irish Bank Resolution Corporation arising from the work it has done on the IBRC loan book after it was retained in December 2011 to advise on the bank’s portfolio if it shall be precluded by the special liquidator KPMG from the bidding process for IBRC’s assets; and if he will make a statement on the matter. [24260/13]
View answerI have been advised by the Special Liquidators that borrowers and third party bidders may be permitted to bid for loans and/or portfolio of loans. However, all bidders will have to meet certain pre-determined criteria which are yet to be finalised by the Special Liquidators.
273. Deputy Pearse Doherty asked the Minister for Finance if he will detail further to his statement to the Joint Committee on Finance, Public Expenditure and Reform on Wednesday, 8 May 2013 that 10 days prior to the Committee hearing, the Central Bank of Ireland notified his Department that it had excess profits of about another €120 million or €125 million; if he will confirm if this is in addition to the €1.1 billion after retained earnings of profits announced by the Central Bank of Ireland in the publication of their annual report on the 30 of April 2013 that was paid to the Exchequer; if he will confirm whether the extra €120 or €125 million is above the calculations his Department had expected to be paid to the Exchequer from the Central Bank of Ireland in its published Pro Forma Transaction Impact Analysis – State Finances (Based on No Policy Change) document, and if so by how much; if he will provide an adjustment of the calculations in this document based on any changes to their assumptions; and if he will make a statement on the matter. [24261/13]
View answerThe Central Bank is required to pay its surplus income in respect of the preceding year to the Exchequer each year. As such, the promissory note restructuring had no bearing on the amount payable to the Exchequer in 2013. The Bank's surplus income is generally made up of its profit on the investment of its reserves less depreciation and appropriation of profit to its General Reserve. The Central Bank (and its precursor the Currency Commission) has been paying its surplus income to the Exchequer since 1927 (Section 63(7) of the Currency Act 1927). When Budget 2013 was being prepared, the Bank estimated that, as far as it could tell at that time, its surplus income in respect of 2012 would be €1.040 billion and this figure was included in the budgetary arithmetic for 2013. In the event, the surplus income came to €1.1476 billion, as detailed in the Bank's annual report for 2012, and this amount was paid over to the Exchequer earlier this month.
274. Deputy Pearse Doherty asked the Minister for Finance if he will detail in tabular form the total profits from the Central Bank of Ireland paid to the Exchequer on an annual basis between 2000 and to date; if he will confirm on what calendar date in the year are the profits of the Central Bank of Ireland after earnings paid to the Exchequer; and if he will make a statement on the matter. [24262/13]
View answerThe Central Bank is required to pay its surplus income in respect of the preceding year to the Exchequer each year. The Bank makes the payment once the audit of its Annual Accounts for the previous year has been completed and the Annual Report and Annual Performance Statement has been published. In 2013, the payment was made in early May. The Central Bank has made the following payments to the Exchequer since 2000:
|
Paid In |
Amount - €000 |
|
2013 |
€1,147,628 |
|
2012 |
€958,343 |
|
2011 |
€671,029 |
|
2010 |
€704,866 |
|
2009 |
€290,055 |
|
2008 |
€192,814 |
|
2007 |
€98,496 |
|
2006 |
€109,181 |
|
2005 |
€103,021 |
|
2004 |
€321,726 |
|
2003 |
€583,719 |
|
2002 |
€770,639* |
|
2001 |
€451,303 |
* Figure includes an exceptional gain of €240 million made by the Bank in 2002 from the non-redemption of Irish pound notes in the context of the changeover to the Euro. This was treated as an exceptional item to be paid over to the Exchequer immediately that year.
275. Deputy Pearse Doherty asked the Minister for Finance if he is targeting a sale of Bank of Ireland preference shares before the deadline of the par payment by Bank of Ireland in March of 2014 of the €1.8 billion in preference shares; if he is concerned about risks of dilution of the value of the States shareholding in Bank of Ireland if the Bank is required to raise capital to replace the par payments made to the state under the preference share agreement with the Bank; if he will detail how much of the €1.8 billion par repayment of the preference shares he expects to receive from Bank of Ireland in March 2014 and if he expects to be paid in ordinary shares in the bank or in cash settlement for this par repayment; if he will detail when the total €1.8 billion is required to be repaid in par repayment from the Bank; if he will detail whether any par settlements for these preference shares are directly returnable to the Exchequer or the national pension reserve fund; and if he will make a statement on the matter. [24263/13]
View answerAt its recent results briefing, Bank of Ireland indicated that it was considering a range of options relating to its preference shares issuance. I can confirm to the Deputy that officials in the Department of Finance, as part of their regular interaction with Bank of Ireland management, have discussed options regarding the State’s current holding of €1.8bn of preference shares.
Bank of Ireland has not indicated to the market or my Department that it has any intention to raise more capital from shareholders at this time. I can, however, confirm for the Deputy that, should Bank of Ireland decide to do so at some point in the future, I would naturally consider the options open to the State in this regard at that time. If the mechanism chosen was a rights issue, any decision in relation to exercise of rights attaching to our current holding would be made having assessed the best interests of the State.
The structure of the preference shares includes a provision for a step-up on the principal of 25% if they are not redeemed by March 2014. This would result in an additional liability for the bank of €450m, but payable to the State only on redemption. The step-up applies only to the principal amount and not to the coupon payable. There is no required repayment date as the preference shares are perpetual.
The shares are a directed investment held by the NPRF and any repayment of the shares would be to the NPRF.
As we are only at a preliminary discussion stage of a range of options, with many moving variables, it is not possible at this point to speculate as to the outcomes of what might take place.
276. Deputy Pearse Doherty asked the Minister for Finance further to a meeting of the Joint Committee on Finance, Public Expenditure and Reform on Thursday, 9 May 2013 (details supplied) stating that the persons responsible for assessing budget 2014 and the SPU as part of the EU 6 and 2 pack system shall be the European Commission officials at the Ireland desk if he will detail the names of these officials and the number of officials responsible in the European Commission for supporting or criticising the SPU or the Ireland 2014 budget; and if he will make a statement on the matter. [24264/13]
View answerWith regard to Stability Programmes, the procedure is that the Council adopts an opinion on the basis of a recommendation from the European Commission, if one is made. Under the two pack, which is about to be adopted, the procedure will be that the European Commission is responsible for adopting an opinion on the draft budgetary plans supplied by member states. Within the European Commission, this work is done by DG ECFIN in the first instance. Full details of ECFIN staff, including staff dealing with Ireland, may be found in the directory on the Commission’s website at the address given below.
http://ec.europa.eu/staffdir/plsql/gsys_www.branch?pLang=EN&pId=3&pDisplayAll=1
