NAMA Property Sales

Questions (206)

Pearse Doherty

Question:

206. Deputy Pearse Doherty asked the Minister for Finance if he will explain the decision by the National Asset Management Agency to release two Dublin hotels for sale in 2013 after a previous statement of intent to hold hotels until 2015; if he will state if NAMA was given advice regarding the sale of the two hotels; and if so, by which organisation. [30475/13]

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Written answers (Question to Finance)

Decisions relating to the sale of properties securing its loans are an operational matter for the board of NAMA which is guided by its commercial mandate under the NAMA Act 2009. As has been previously advised by NAMA, the agency’s strategy in relation to any individual asset and the timing of any sale is geared towards maximising the realised value of the asset and the return to Irish taxpayers.

NAMA Court Cases

Questions (207)

Pearse Doherty

Question:

207. Deputy Pearse Doherty asked the Minister for Finance the number of cases in which the National Asset Management Agency is involved in the commercial courts. [30476/13]

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Written answers (Question to Finance)

I presume that the Deputy’s reference to the commercial courts is a reference to the Commercial Court, which is a division of the High Court. I am advised by NAMA that there are 12 proceedings currently before the Commercial Court in which the Agency has a direct involvement.

NAMA Operations

Questions (208)

Pearse Doherty

Question:

208. Deputy Pearse Doherty asked the Minister for Finance the reason the National Asset Management Agency has decided to recently issue a tender for a business procurement support services when the National Treasury Management Agency already provides IT, finance, HR and other support services to NAMA; if this tender was included in the NAMA business plan for 2013; the value of the tender; the length of time for which the tender will be advertised; and the length of time for which the contract will run for. [30477/13]

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Written answers (Question to Finance)

I am advised by NAMA that, in accordance with its ongoing business operations planning, it is seeking proposals for appointment to a panel, under a framework agreement, from which specialist business and project support services, which are currently not available within the NTMA, may be procured as needed for the purposes of augmenting and supporting NAMA’s existing business units to achieve its objectives. It is envisaged that the framework agreement will be in place for a period of four years but the duration of individual appointments from the panel will depend on the nature of the services being sought. NAMA advises that, as the tender relates to services which may be required in the future and which may be procured from the framework, the final value of the tender cannot be provided at this time. NAMA advises, however, that as it expects that the final aggregate value of procured services will be in excess of €200,000, it has advertised the tender on the Government’s public procurement site, www.etenders.gov.ie and on the Official Journal of the European Union, www.ojeu.com. NAMA advises that full details relating to this tender, including all tender documentation, are publicly available on these websites and on the agency’s own website, www.nama.ie/procurement/

NAMA Debtors

Questions (209)

Pearse Doherty

Question:

209. Deputy Pearse Doherty asked the Minister for Finance the number of the the National Asset Management Agency developers who have applied for bankruptcy in Britain since the beginning of 2013. [30478/13]

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Written answers (Question to Finance)

I am advised by NAMA that it is aware of ten debtors petitioning for bankruptcy in the UK to date in 2013. NAMA advises that six have been declared bankrupt while a further four have had their applications adjourned.

Bank Stress Tests

Questions (210)

Pearse Doherty

Question:

210. Deputy Pearse Doherty asked the Minister for Finance the person who will conduct the stress testing of Irish banks to begin at the end of this year and conclude in the first half of 2014. [30479/13]

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Written answers (Question to Finance)

The Central Bank of Ireland is the supervisory body responsible for initiating regulatory led stress tests (such as PCAR). In the last PCAR, BlackRock Solutions provided independent loan loss forecasts as an input to PCAR. In addition, Barclays Capital provided input on PLAR and de-leveraging. Boston Consulting Group provided input on project management and oversight. The Central Bank of Ireland is making preparations, including building internal loan loss forecasting models, to conduct PCAR in line with the agreements stated in the Memorandum of Economic and Financial Polices (MEFP) and MoU with the IMF, EU and ECB. This includes conducting the exercise in line with the expected EU wide EBA exercise. The ECB, as part of the Single Supervisory Mechanism, is expected to also be part of this exercise; however, this is subject to finalisation of proposals on banking union at a European level.

IBRC Liquidation

Questions (211)

Pearse Doherty

Question:

211. Deputy Pearse Doherty asked the Minister for Finance when he expects unsold loans at Irish Bank Resolution Corporation to be transferred to the National Asset Management Agency; and if the expected date of transferal of August 2013 has now moved to late in the year, or next year. [30480/13]

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Written answers (Question to Finance)

The Special Liquidators are continuing the orderly and efficient wind-down of IBRC in accordance with the provisions of the IBRC Act and instructions that have been provided to the Special Liquidators by me, as Minister, under the IBRC Act 2013. I have been informed by the Special Liquidators that they expect to meet the timelines set out, namely that the valuation of IBRC’s loans assets be completed by 30 November 2013 and that the sale of IBRC assets be completed by 31 December 2013 or as soon as practicable thereafter.

The valuation process is ongoing and I have been advised that at this point that the Special Liquidators have not finalised plans in relation to the sale of IBRC loans assets. The Special Liquidators are taking professional advice on the appropriate method of disposing of loan assets and on the appropriate criteria for determining who should qualify to bid for loan assets.

Should the assets not be sold to a qualified bidder at a price that is equal to or in excess of the valuation price then the asset/portfolio will transfer to NAMA.

IBRC Liquidation

Questions (212)

Pearse Doherty

Question:

212. Deputy Pearse Doherty asked the Minister for Finance the average discount that is being offered on Irish Bank Resolution Corporation loans currently for sale. [30481/13]

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Written answers (Question to Finance)

There is an obligation on the Special Liquidators to ensure that maximum value is extracted from loan sales and they are currently devising a process to ensure they meet this obligation. The Special Liquidators are in the process of obtaining suitable independent professional advisors who shall employ standard valuation methodologies appropriate to each class of asset of IBRC. Following that independent valuation process, the Special Liquidators will sell the assets of IBRC (which are subject to the floating charge) in an open and transparent process at or above their independent valuation and failing that, the Special Liquidators will sell the assets to NAMA at their valuation price.

As the valuation and sales process is still being devised and implemented, the Deputy will appreciate that it is not possible to estimate what the outcome of the process will be at this time.

Tax Code

Questions (213)

Pearse Doherty

Question:

213. Deputy Pearse Doherty asked the Minister for Finance the cost to the Exchequer of increasing the entry point to the 41% marginal tax rate for married couples with one earner to each of the respective amounts: €45,000; €47,000; €50,000; €55,000; €60,000 and €65,600. [30542/13]

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Written answers (Question to Finance)

It is assumed that the proposed increase would only apply to the married one-earner standard rate tax band and would not apply to the various other classes of standard rate tax bands such as the single and widowed persons, lone parents and married couples where both spouses have income. On this basis, I am advised by the Revenue Commissioners that the estimated full year cost to the Exchequer, estimated by reference to 2013 incomes, of increasing the married one-earners standard rate tax band to €45,000, €47,000, €50,000, €55,000, €60,000 and €65,600 would be of the order of €70 million, €110 million, €165 million, €245 million, €310 million and €375 million respectively.

These figures are estimates from the Revenue tax-forecasting model using latest actual data for the year 2010, adjusted as necessary for income and employment trends in the interim. They are, therefore, provisional and subject to revision.

National Debt

Questions (214)

Pearse Doherty

Question:

214. Deputy Pearse Doherty asked the Minister for Finance the potential savings that would be made in debt servicing if €10 billion of the current cash holdings in the National Treasury Management Agency was used to write down existing debt or to buy back Government debt and reduce the interest payments on it in 2014. [30543/13]

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Written answers (Question to Finance)

Table A.5 of the Stability Programme Update, published in late April, contains an estimate of 4.1% for the average interest rate on general Government debt in 2014. However, it would not be appropriate to use this figure as the basis for making a realistic estimate of the debt service savings which would arise in 2014 if €10 billion of the current cash balances were used to buy back government debt. Any potential saving would depend on the price at which it would be possible to buy back the debt. Any attempted large scale repurchase programme in an amount of €10 billion would almost certainly result in the current market prices for Irish Government debt being bid up to much higher than their current levels. Indeed, it may not be possible to buy back such a large portion of the debt or if it is only at exorbitant prices. Any such estimate would also depend on the specific coupons payable on the bonds, general market conditions at the time and other factors.

Funds in the Exchequer are used for all the ongoing payments necessary for running the State, which include debt redemptions. The State earns a return on these cash balances and deposits, which the NTMA manages in a prudent manner consistent with minimising risk and always having sufficient cash on hand to cover any volatility which might arise.

Notwithstanding the progress made in stabilising and improving the public finances it remains the case that the State will continue to run large, though declining Exchequer deficits in the coming years. For example, SPU 2013 estimated the cumulative Exchequer deficit over the years 2013-2015 at €25 billion.

In addition to these day-to-day costs and as referred to above, the Exchequer must have sufficient resources to repay debt redemptions, such as the forthcoming €7.6 billion Government bond repayment in mid-January 2014. The continuing Exchequer deficits and debt redemptions must be adequately and prudently funded.

Decisions on the level of cash reserves take account of various factors in addition to the cost of maintaining such reserves. These factors include the potential risks of not maintaining an adequate and prudent cash balance, including the risk that the Exchequer would be unable to meet its obligations and that market interest rates would possibly be higher than would otherwise be the case due to the perception that the State had a precarious liquidity position.

The State is well positioned to have 12 to15 months of advance funding in place when the EU/IMF Programme comes to a conclusion at the end of this year, a level of funding which the Troika have noted in their recent reports on Ireland’s progress in implementing the terms of the Programme of assistance. It is necessary, for reasons of prudence and to assure investors that they will be repaid upon redemption, that the Exchequer maintains a sufficiently strong cash position at year end.

The NTMA continuously monitors market conditions for possible issuance and restructuring opportunities.

Ministerial Transport

Questions (215)

Niall Collins

Question:

215. Deputy Niall Collins asked the Minister for Finance the total cost of ministerial transport in his Department in 2010, 2011, 2012 and to date 2013; the number of drivers employed in each year; and if he will make a statement on the matter. [30553/13]

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Written answers (Question to Finance)

As and from 1 May 2011 all Cabinet Ministers, with the exception of Taoiseach, Tánaiste and Minister for Justice and Law Reform now use their own cars on official business. Prior to this date, transport for Ministers was provided via the Department of Justice and Equality. In relation to the use of my car for Ministerial travel, the total cost has been €272,461 for the period 01 May 2011 to date in 2013. This cost includes mileage ( which is to cover car related expenses) of €41,906, the salaries paid to two civilian drivers, inclusive of Employer PRSI contributions, which amounted to €170,094 and travel and subsistence paid to the drivers of €60,461. This amount is significantly below the €280,000 average annual cost under the previous domestic Ministerial transport regime for each Minister.

Departmental Expenditure

Questions (216)

Niall Collins

Question:

216. Deputy Niall Collins asked the Minister for Finance the total costs of photography incurred by his Department in 2011, 2012 and to date 2013 in tabular form per event. [30569/13]

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Written answers (Question to Finance)

Details of the occasions on which photographers were used in the period in question are contained in the following table:

Use of Photographer

Company used

Details

Cost

Maxwell Photography Ltd.

Brian Lenihan - photo required for Minster’s Conference - Engaged on 30 March 2011

€424.41

Maxwell Photography Ltd.

Signing of Taxation agreement with Germany –Engaged on 31 March 2011

€400.21

Maxwell Photography Ltd.

Signing ceremony for Double Taxation Agreement with Uzbekistan July 2012

€147.60

Maxwell Photography Ltd.

Signing ceremony for Double Taxation Agreement with Switzerland – Minister of State Hayes and Swiss Ambassador- Engaged 26 January 2012

€285.05

Departmental Expenditure

Questions (217)

Niall Collins

Question:

217. Deputy Niall Collins asked the Minister for Finance the details and costs of any newspaper supplements his Department has been involved with in 2011, 2012 and to date in 2013. [30585/13]

View answer

Written answers (Question to Finance)

In the period in question I am not aware of my Department incurring costs in relation to newspaper supplements.

Mortgage Interest Relief Statistics

Questions Nos. 219 to 222, inclusive, answered with Question No. 203.

Questions (218)

Pearse Doherty

Question:

218. Deputy Pearse Doherty asked the Minister for Finance if statistics are collected on the breakdown of mortgage interest relief in accordance with the recipient's mortgage type; and if so, if he will provide the breakdown by category of tracker mortgage, fixed term, SVR and so forth. [30599/13]

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Written answers (Question to Finance)

I am informed by the Revenue Commissioners that the administration of the mortgage interest relief scheme does not require details on individual mortgage types and for that reason such information is not captured.

Questions Nos. 219 to 222, inclusive, answered with Question No. 203.

Tax Reliefs Application

Questions (223)

Pearse Doherty

Question:

223. Deputy Pearse Doherty asked the Minister for Finance if he will provide a break down of the €250 million in carry-over for 2014 due to changes to the tax treatment of pensions; the way these changes would impact on the figure provided for the savings to the Exchequer if pension tax reliefs were standardised; and if he can also explain the changes to the standard fund threshold. [30646/13]

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Written answers (Question to Finance)

The figure of €250 million included in the Budget 2013 arithmetic was, as clearly stated in the Budget 2013 documentation, a provisional figure pending further detailed analysis of the changes necessary to give effect to the Programme for Government commitment to cap taxpayers’ subsidies for pension schemes that deliver pension income of more than €60,000. That analysis is ongoing and involves consideration of changes to the Standard Fund Threshold as well as other potential alternative changes relating to the treatment of supplementary pension arrangements. I made clear in my 2013 Budget speech, however, that tax relief on pension contributions would continue at the marginal rate of tax.

Tax Exemptions

Questions (224)

Pearse Doherty

Question:

224. Deputy Pearse Doherty asked the Minister for Finance the logic behind exempting savings bonds from DIRT and the revenue that could be raised for the Exchequer if DIRT was applied to the bonds, both at the current rate and at a new increased rate of an additional 2%. [30647/13]

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Written answers (Question to Finance)

Interest on Savings Bonds is applied on maturity, which is after three years, or on encashment, which could be at any stage during the life of the Savings Bond. A higher rate of Deposit Interest Retention Tax (DIRT) applies when interest is paid less frequently than annually, as is the case with Savings Bonds, and since 1 January 2013 this rate is 36%. The standard DIRT rate of 33% applies to interest paid annually or more frequently than annually.

Based on the interest payout on Savings Bonds in 2012 of €138.3 million, if this had been subject to the higher DIRT rate, which was then 33%, it would have yielded c. €45.6 million.

Based on projected estimates for the full year interest payout on Savings Bonds for 2013 of c. €178m, if DIRT were to be applied at the current higher rate of 36% for payments made less frequently than annually, the estimated yield would be c. €58.7m. If this rate was increased by 2%, based on projections, this could yield €67.6m.

The foregoing estimates assume no significant behavioural change by investors in Savings Bonds.

State Savings products such as Savings Bonds provide a convenient and State assured method of saving for members of the public. The funds invested provide the State with a low cost form of borrowing. To encourage participation by savers in order to ensure this funding remains available, the interest on Savings Bonds, Savings Certificates, National Instalment Savings and the payment on maturity for the National Solidarity Bond are and have traditionally been tax free. I have no plans to change the tax free status of Savings Bonds or the other State Savings products.