Written Answers Nos. 168-189
168. Deputy Joan Collins asked the Minister for Finance the number of individual offers that have been received by the liquidator of the Irish Bank Resolution Corporation from debtors through the process; and the number that have been rejected and or accepted. [49014/13]
View answerThe Special Liquidators are obligated to ensure that the assets of IBRC are sold at a price which maximises the overall return for its creditors including the State. As a result the Special Liquidators are currently in the process of devising and implementing a sales process in respect of these assets. The valuation process is on-going in respect of certain assets and I have been advised that while the Special Liquidators have commenced the formal sale process in relation to the sale of the four primary portfolios of loans assets in IBRC it will take some time for this process to be completed. It would be inappropriate for the Special Liquidators to release such information whilst they are engaging in the sales process as bids on the assets are being received and evaluated.
I have been advised by the Special Liquidators that they do not intend on releasing this type of information as they believe it is commercially sensitive.
169. Deputy Michael McGrath asked the Minister for Finance if he will provide a breakdown by VAT rate of the total amount of VAT collected by the State to the end of October 2013. [49031/13]
View answerI am informed by the Revenue Commissioners that the total amount of VAT collected by the State to the end of October 2013 is €8,621.9 million but details from tax returns are not captured in such a way as to provide a basis for breaking down the figures by VAT rate.
Certain non-Revenue data is used to provide indicative figures in the estimation of VAT yield by tax rate. This data will not be available to provide a basis for a 2013 estimate until 2014 at the earliest.
170. Deputy Michael McGrath asked the Minister for Finance if he will provide separately for each local authority the average local property tax amount paid within that local authority area in 2013. [49033/13]
View answerI am advised by the Revenue Commissioners that compliance data for the Local Property Tax (LPT) for 2013 are compiled on the basis of the numbers of properties and are available broken down by city and county councils nationally. The most up to date figures are published on the Commissioners website at: http://www.revenue.ie/en/tax/lpt/lpt-stats-11-2013.pdf.
The Commissioners have confirmed that data on the average LPT amount paid within each local authority area in 2013 are not currently available. However, the published data include information on the distribution of properties across the 20 valuation bands which may be of interest to the Deputy. The figures show that, based on returns filed to date, over half of all properties nationally had a declared valuation of €150,000 or less, equating to a half-year charge of either €45 or €112 for 2013. Furthermore, almost 22% of properties were valued at between €150,001 and €200,000, which equates to a half-year charge of €157.
The Commissioners have advised that work is on-going to refine the LPT Register and more detailed and up-to-date data will be published in due course. The Deputy will be aware that the Pay and File campaign for LPT 2014 in underway and this is Revenue’s current priority in relation to LPT.
I am further advised that by the end of October 2013 approximately €215m had been transferred by Revenue to the Exchequer in respect of LPT.
171. Deputy Michael McGrath asked the Minister for Finance if he will provide details of the enforcement activity being undertaken by the Revenue Commissoners against the importation of coal from Northern Ireland where the tax due to the Irish State has not been paid; the number of recent prosecutions that have been taken by the Revenue Commissioners in respect of this issue; and if he will make a statement on the matter. [49066/13]
View answerI am advised by the Revenue Commissioners, who are responsible for collecting tax on coal, that under EU law, the introduction of any tax cannot give rise to import controls between member states. As a consequence, solid fuel carbon tax (SFCT) was introduced in the Finance Act 2010 but was not commenced, in light of concerns about the impact of the tax on cross-border sales of coal, until May 2013. This was to allow the Minister for the Environment, Community and Local Government time to introduce a robust mechanism to address the risk of coal products with lower environmental standards, and on which carbon tax has not been paid, being sourced from Northern Ireland. Under these environmental regulations, suppliers who are producing and supplying coal unlawfully are subject to regulation by local authorities and other State agencies charged with enforcing the regulations and preventing such unlawful supply. Accordingly, the question of enforcement and prosecution for the illegal sale of coal sourced in Northern Ireland is primarily a matter for the respective local authorities and my colleague the Minister for the Environment, Community and Local Government.
Suppliers who suspect or have evidence that illegal coal is being sold in their area should report this to their Local Authority either directly or through their representative associations.
172. Deputy Dominic Hannigan asked the Minister for Finance the type of investigations the Central Bank has undertaken into illegal moneylenders; and if he will make a statement on the matter. [49092/13]
View answerNeither I nor the Central Bank have any role in relation to this matter. Illegal money lending is a criminal offence and a matter for An Garda Síochána to investigate. Such matters are relevant to the Minister for Justice and Equality in the first instance.
173. Deputy Patrick O'Donovan asked the Minister for Finance the numbers of persons who opted to have their local porperty tax deducted from their Department of social welfare payment for the 2013 period; of those persons the number who actually had the charge deducted from their payment; and if he will make a statement on the matter. [49097/13]
View answerI am advised by the Revenue Commissioners that property owners in respect of approximately 15,450 residential properties have opted to pay their 2013 Local Property Tax (LPT) by way of deduction at source from a Department of Social Protection payment. The Commissioners have confirmed that, in the vast majority of cases, deductions from DSP payments have already commenced and over €1m has been collected by Revenue to date. In my reply to Question 228 (38380/13) on 18 September 2013, I informed the House that a number of issues had arisen with this payment option and that these were subsequently addressed by the Revenue Commissioners. The Commissioners have advised that where operational and administrative issues arise, these are being addressed on a case by case basis.
I am further advised that there is an ongoing dialogue between Revenue and the Department of Social Protection, with a view to ensuring that this payment option operates as smoothly as possible.
174. Deputy Jonathan O'Brien asked the Minister for Finance the steps he has taken to address the issue of small and medium enterprise debt and the need to increase credit to the SME sector. [42597/13]
View answer177. Deputy Brian Stanley asked the Minister for Finance the steps he will take to ensure adequate bank lending to the small and medium enterprise sector. [42821/13]
View answerI propose to take Questions Nos. 174 and 177 together.
Facilitating access to finance for SMEs is a key aspect of the Action Plan for Jobs 2013. It is the Government’s vision that all viable businesses operating in Ireland should have the opportunity to access sufficient finance to meet their enterprise needs in a manner that supports growth and employment in the economy.
The Government has imposed SME lending targets on AIB and Bank of Ireland for the three calendar years, 2011 to 2013. Each bank was required to sanction lending of at least €3 billion in 2011, €3.5 billion in 2012 and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks achieved their 2011 and 2012 targets.
AIB and Bank of Ireland are expected to lend to viable businesses both for investment and working capital purposes. The Credit Review Office is available to assist businesses which have been refused credit. The recent CRO report shows that the Credit Review Office upheld the credit appeal in 150 cases or 55% of cases decided. The upheld appeals have resulted in €18.5 million in credit being made available to SMEs and farms, protecting 1,521 jobs. In the recent Budget, I increased the CRO appeals threshold from €500,000 to €3 million and I would strongly encourage SMEs refused credit to seek a review by the Office.
The Government has taken a number of actions to improve the situation in relation to credit availability to SMEs. The range of credit options available to SMEs now include the Microenterprise Loan scheme which can facilitate up to €40million in additional lending to microenterprises over the next five years. In addition, the Credit Guarantee Scheme is designed for SMEs who, because of lack of collateral or because of the specialised sector they operate in, face difficulties in accessing bank credit.
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.
More generally, small businesses can benefit from support, guidance and advice provided at local level through the network of County Enterprise Boards which are currently being transformed into Local Enterprise Offices with closer links to businesses in their local area.
As the Deputy will be aware, the Taoiseach mentioned in this House last week that he had held discussions with Chancellor Merkel. Germany is keen to help and specifically to find ways to reinforce Ireland’s economic recovery by improving funding mechanisms for the real economy, including access to finance for Irish SMEs. The German Government has asked KfW, the German development bank, to work with the German and Irish authorities swiftly, in order to deliver on this initiative at the earliest possible date.
Officials of my Department have already exchanged working papers on this subject with KfW and the German Ministry of Finance. We have held consultations with the German embassy in Dublin which helped pave the way for discussions with the German Ministry which are being held in Berlin today and further discussions will be held with KfW and other key stakeholders over the coming weeks both here and in Germany.
I am keen to see the establishment of a healthy and balanced relationship. As we are trying to ensure that any initiative that comes out of this process is as effective as it can be, we will be discussing approaches that meet the strategic objectives of both States.
175. Deputy Dara Calleary asked the Minister for Finance the steps he is taking to support Irish businesses in preparation for the single euro payments area in view of the extra costs placed on them by the banks’ refusal to implement a business to business system; and if he will make a statement on the matter. [42715/13]
View answerThe aim of the Single Euro Payments Area (SEPA) project is to create a single market for euro-denominated retail payments. SEPA is an EU initiative that will change the way that these payments are processed across Europe. SEPA will allow payment systems users to make euro-denominated retail electronic payments to payees located in any of the participating countries, using a single payment account and a single set of payment instruments.
SEPA comes into full effect on 1 February 2014 and businesses will need to ensure that payroll, direct debit and accounting systems are SEPA-ready.
The implementation of SEPA within Ireland is overseen by the National Payments Plan (NPP) Steering Committee, which was established in 2012 to modernise the way payments are made in Ireland. In this regard, an NPP-SEPA sub-group has been formed, consisting of representatives of consumers, businesses, Government and banks. This sub group provides an avenue for the discussion of any issues that arise in the process of migrating to SEPA.
I understand from the Central Bank that there is significant support available to Irish businesses to help them make the transition to SEPA. The Irish banking sector has led with a comprehensive informational campaign overseen by the Central Bank. All impacted businesses (approx. 50,000) have had individual contact from their bank and the requirements of SEPA outlined to them. The ‘readyforsepa.ie’ website provides general SEPA-related information and in addition, all of the banks have dedicated SEPA pages on their own websites. SEPA migration teams are available to help businesses deal with the necessary changes and many of the banks also have educational videos and webcasts supporting the migration effort. The payments software industry has also provided significant support to the business sector, working with the banking industry to make this complex change happen as seamlessly as possible.
While not all Irish banks are making the ‘business-to-business’ variant of the SEPA direct debit (SDD) scheme available, this should not result in any additional costs being placed on Irish businesses. The banks, through the Irish Payments Services Organisation (IPSO, the representative body for the payments industry in Ireland) have recently announced a SEPA Business Service that will be in place from 1 December, which is an interim direct debit solution that will be provided pending the introduction of the full SDD ‘business-to-business’ service at a later date. The costs associated with this service should be no greater than those associated with the full SDD 'business to business’ scheme.
176. Deputy Dara Calleary asked the Minister for Finance his views on the recent report of the Credit Review Office; the implications of the continuing difficulties for companies accessing credit; and if he will make a statement on the matter. [42728/13]
View answerIn his most recent quarterly report, the Head of the Credit Review Office observed that “the remaining banks continue to lend to low/medium risk credit applications” but that “credit reviewers see too many cases which may not ‘tick all the boxes’ on current bank lending policies and criteria, but are still bankable propositions”. The report states that “while a sizeable minority of enterprises face some form of financial challenge” it expects “the banks can ensure that adequate finance should be made available to support business and associated employment”.
Access to finance for SMEs is a key aspect of the Action Plan for Jobs 2013. It is the Government’s vision that all viable businesses operating in Ireland should have the opportunity to access sufficient finance to meet their enterprise needs in a manner that supports growth and employment in the economy.
The Government has imposed SME lending targets on AIB and Bank of Ireland for the three calendar years, 2011 to 2013. Each bank was required to sanction lending of at least €3 billion in 2011, €3.5 billion in 2012 and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks achieved their 2011 and 2012 targets.
AIB and Bank of Ireland are expected to lend to viable businesses both for investment and working capital purposes. The Credit Review Office is available to assist businesses which have been refused credit. The recent CRO report shows that the Credit Review Office upheld the credit appeal in 150 cases or 55% of cases decided. The upheld appeals have resulted in €18.5m in credit being made available to SMEs and farms, protecting 1,521 jobs. In the recent Budget I increased the CRO appeals threshold from €500,000 to €3 million and I would strongly encourage SMEs refused credit to seek a review by the Office.
The Government has taken a number of actions to improve the situation in relation to credit availability to SMEs. The range of credit options available to SMEs now include the Microenterprise Loan scheme which can facilitate up to €40million in additional lending to microenterprises over the next five years. In addition, the Credit Guarantee Scheme is designed for SMEs who, because of lack of collateral or because of the specialised sector they operate in, face difficulties in accessing bank credit.
The SME State Bodies Group develops key policy initiatives to support SME access to credit and other forms of finance and ensures their implementation through the annual Action Plan for Jobs. It has continued in 2013 to engage intensively in proactively addressing issues associated with SME funding and financing in conjunction with the relevant stakeholders through the SME Funding Consultation Committee. My officials also meet frequently with additional stakeholders who wish to contribute to policy development in relation to access to finance.
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.
More generally, small businesses can benefit from support, guidance and advice provided at local level through the network of County Enterprise Boards which are currently being transformed into Local Enterprise Offices with closer links to businesses in their local area.
As the Deputy will be aware, the Taoiseach mentioned in this House last week that he had held discussions with Chancellor Merkel. Germany is keen to help and specifically to find ways to reinforce Ireland’s economic recovery by improving funding mechanisms for the real economy, including access to finance for Irish SMEs. The German Government has asked KfW, the German development bank, to work with the German and Irish authorities swiftly, in order to deliver on this initiative at the earliest possible date.
Officials of my Department have already exchanged working papers on this subject with KfW and the German Ministry of Finance. We have held consultations with the German embassy in Dublin which helped pave the way for discussions with the German Ministry which are being held in Berlin today and further discussions will be held with KfW and other key stakeholders over the coming weeks both here and in Germany.
I am keen to see the establishment of a healthy and balanced relationship. As we are trying to ensure that any initiative that comes out of this process is as effective as it can be, we will be discussing approaches that meet the strategic objectives of both States.
Question No. 177 answered with Question No. 174.
178. Deputy Micheál Martin asked the Minister for Finance if progress is being made on the programme for Government commitment on tax exiles; and if he will make a statement on the matter. [43145/13]
View answerThe Programme for Government indicated that, as part of its fiscal policy, the Government will ensure that “tax exiles” make a fair contribution to the Exchequer.
The Deputy may be aware I removed the “citizenship” condition for the Domicile Levy to ensure that individuals cannot avoid the levy by renouncing their citizenship. The first year for which the changes apply is tax year 2012; the levy payment for that year was due on 31 October 2013 or on 14 November 2013 for those filing online.
Other measures in recent budgets to increase the tax take from high earners will have an impact on so-called “tax exiles”, such as the High Earners’ Restriction, the increases in Capital Gains Tax and Capital Acquisitions Tax (CAT) rates, and the reductions in the CAT tax-free thresholds.
Apart from the Domicile Levy, the taxation of individuals in the State is broadly in line with the system prevailing in most other OECD jurisdictions, that is to say —
(a) individuals who are resident in the State for tax purposes are taxable here on their worldwide income; and
(b) individuals who are not resident for tax purposes pay tax here only on income arising in the State and on income derived from working here.
The present rules are considered to be consistent with international practice and in particular with OECD standards. It is the view of the Government that our interests would be best served by operating our residence rules within the best practice guidelines of the OECD.
A public consultation on tax residence rules was undertaken last year and the submissions received have been published. Most submissions stated the present rules are considered clear and workable and the clarity, certainly and stability of our domestic tax regime enables us to compete effectively in the international economic context. Significant concern was expressed regarding potential impact on Foreign Direct Investment, and that such changes could inhibit investment in Ireland, and result in a loss to the Exchequer rather than raise money. Concerns were similarly expressed about changing the rules with a view to dealing with a small number of cases, and that for a likely small additional yield generated a disproportionate effect could result on a larger proportion of non-residents, and bring the Irish tax regime out of line with international standards.
I am keeping this area under review.
179. Deputy Micheál Martin asked the Minister for Finance when the fiscal council last met; and if he will make a statement on the matter. [43319/13]
View answerThe Irish Fiscal Advisory Council was established on a statutory basis on the 31 December 2012 under the Fiscal Responsibility Act 2012.
The Deputy should be aware that the Irish Fiscal Advisory Council is an independent body. The Fiscal Responsibility Act states that the Fiscal Council may regulate its own procedures (including quorum) and therefore this question is a matter for the Council directly.
A list of all the Council meetings can be found on the Fiscal Council’s website, which indicates that the last meeting was October 25th.
180. Deputy Micheál Martin asked the Minister for Finance his views on the most recent fiscal council recommendations. [44103/13]
View answerThe Fiscal Council’s most recent Fiscal Assessment Report was published in April 2013. The Fiscal Council’s analysis and recommendations were considered in my Department’s preparation of its updated economic and fiscal projections, published in the Stability Programme Update. Chapter 5 of this Update contains the response to this report.
This report was largely supportive of the rate of fiscal adjustment chosen by Government, and stated that the fiscal stance remains conducive to prudent economic and budgetary management. Comments were also made about economic forecasting methodologies and risks to the forecast. The report was taken into account when preparing the Stability Programme Update, and Budget 2014.
The Fiscal Council intend to publish their November Fiscal Assessment Report shortly, which will contain their assessment of the official forecasts and fiscal stance within the Budget.
181. Deputy Micheál Martin asked the Minister for Finance his views on a precautionary credit line for Ireland; and if he will make a statement on the matter. [44412/13]
View answerAs the Deputy will be aware, the Government decided on 14 November that Ireland is now in the best position to exit the EU-IMF programme of financial assistance on December 15 without the need to pre-arrange a new precautionary credit line from our EU and IMF partners.
Following a careful and thorough assessment of all of the available options, and broad consultation with the European Commission, the ECB, the IMF, the President and members of the Eurogroup, the Governor of the Central Bank of Ireland and the NTMA, the decision was taken to exit without a pre-arranged precautionary facility or backstop.
I am of the view that exiting our EU-IMF programme of financial assistance without a pre-arranged precautionary facility or backstop is the right decision for Ireland. Market confidence in Ireland is high, the public finances are under control, we are reducing our deficit and debt levels and economic conditions and sentiment are improving. We have already returned successfully to the financial markets. We have a domestic backstop in place with cash reserves expected to be of the order of €20 billion by the end of the year. This option represents greater normalisation, with Ireland now subject to EU economic co-ordination and fiscal surveillance, and governance rules that apply to other EU and Euro Area Member States that are not in a programme of assistance. This decision is the latest in a series of steps to return Ireland to normal economic, budgetary and funding conditions. Like most other sovereign eurozone countries, from 2014 we will be in a position to fund ourselves normally on the markets. Confidence in Ireland has improved considerably in recent months and interest rates on Irish Government bonds are at now highly affordable levels. This is the right decision for Ireland.
182. Deputy Micheál Martin asked the Minister for Finance his views on the pension levy and its link to job creation; and if he will make a statement on the matter. [46202/13]
View answerThe pension fund levy applies to the market value, on the valuation date, of assets under management in pension funds and pension plans approved under Irish tax legislation.
The moneys raised from the pension fund levy are being used to pay for the Government’s Jobs Initiative introduced in May 2011. The measures introduced as part of the Jobs Initiative include a new 9% VAT rate on certain activities, the halving of the lower rate of PRSI and other additional current and capital expenditure measures.
I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will however, introduce an additional levy on pension funds at 0.15%. I am doing this, among other things, to continue to help fund the Jobs Initiative, including the continuation of the reduced 9% VAT rate detailed below. The additional levy within the existing legal framework will apply to pension fund assets in 2014 and 2015.
The impact of the Jobs Initiative can be seen by the increase in employment levels, particularly in the accommodation and food services sector. The Jobs Initiative included the reduction of VAT on tourism services to 9% from 13.5% on a temporary basis until the end of 2013. This measure has proved to be a major success, helping create over 15,000 new jobs as well as protecting existing jobs. It was due to end this year. However, it is important that we reinforce success when possible, so I have decided to continue this reduced rate. This will support the increased number of jobs already in place and accelerate the creation of new jobs.
The Deputy will be aware that I announced the reduction of the Air Travel Tax to zero with effect from 1st April 2014. The decision to remove the tax, together with the retention of the 9% VAT rate for tourism services, will help maintain the momentum created by the success of The Gathering this year. Since the Budget announcement, airlines have announced the opening up of new routes resulting in a significant increase in passenger numbers with the associated increase in tourism activity and employment.
The Jobs Initiative also included a number of current and capital expenditure measures, including a number aimed at retraining the workforce. I would ask the Deputy to note that my colleague the Minister for Social Protection, Joan Burton T.D., with responsibility for JobBridge, the National Internship scheme, recently announced that the number of internships, originally planned at 5,000 has now exceeded 20,000. Indecon Economic Consultants undertook an evaluation of the JobBridge scheme in 2012 (published in April 2013) and their report found that 61.4% of the JobBridge survey respondents were in employment within 5 months of finishing their internships.
Under education measures, the Springboard scheme as announced in the Jobs Initiative had initially provided for 5,900 places. During 2011 and 2012, over 10,000 people enrolled on programmes under the Springboard scheme. The scheme has been extended further with my colleague, the Minister for Education and Skills, Ruairí Quinn T.D. announcing in June this year, another 6,000 places under the third Springboard allocation. Further rollouts of the springboard scheme will be considered in the context of the findings of an on-going evaluation.
Finally, I want to reiterate that addressing the difficulties in the labour market remains the Government’s biggest challenge and, accordingly, the Government is giving its highest priority to job protection and job creation.
183. Deputy Micheál Martin asked the Minister for Finance the Government's international tax strategy; and if he will make a statement on the matter. [45860/13]
View answerAs I have outlined in the document "Ireland's International Tax Strategy", published on Budget day, the key word in relation to Ireland's international tax strategy is "openness". As the Deputy is aware Ireland is one of the most open economies in the world and we are "open for business". We will continue to compete fairly to attract business and foreign direct investment into Ireland.
In addition our tax system is transparent, and statute based and our stable competitive corporate tax rate is a key element in attracting investment into Ireland. We engage constructively within the EU and with international organisations such as the OECD in order to further international tax reform.
The strategy document also sets out for the first time Ireland's International Tax Charter which is a set of policy objectives and commitments for how we view and will deal with international tax policy issues.
Ireland's International Tax Strategy can be viewed on the Government's Budget website www.budget.gov.ie.
184. Deputy Micheál Martin asked the Minister for Finance his views on the Irish Stock Exchange; and if he will make a statement on the matter. [45858/13]
View answerThe Irish Stock Exchange (ISE) is an important part of the economic and financial architecture in providing a publicly regulated venue by which investors can allocate capital resources to businesses.
A listing on the ISE provides access to an alternative source of funds for a growing business, and the increased visibility that comes from being listed on the exchange increases their potential for further capital investment by investors. These factors are particularly important to SME growth companies that do not have the same visibility or financial options as larger companies.
From an investor perspective, the ISE provides a regulated venue which promotes greater confidence to invest. Additionally, stock exchanges are an important outlet for pension funds and the many people that are invested in them.
From an economic perspective, the ISE along with other stock exchanges facilitate more efficient capital allocation, increased innovation and ultimately employment. Additionally, information from stock exchanges can provide a useful barometer for the overall health of the domestic and international economy and such information is closely monitored by economists as well as financial market participants.
In the recent budget, I enhanced the attractiveness of investing in Irish SMEs listed on the Enterprise Securities Market (ESM), the ISE’s market for SME growth companies, through exempting from stamp duty investor transactions in ESM companies. The supports the implementation of the Government’s Jobs Action Plan 2013 which provides a commitment to incentivise dynamic companies to grow through using the Initial Public Offering (IPO) route as an alternative to a trade sale exit.
185. Deputy Gerry Adams asked the Minister for Finance if he is concerned at the German Government rebuff to a letter from the Taoiseach to EU leaders asking that the ESM be used retrospectively on Irish banking debt; and if he will make a statement on the matter. [47688/13]
View answer186. Deputy Gerry Adams asked the Minister for Finance the EU leaders that have indicated support for the demand of the Taoiseach that the ESM be used to retrospectively recapitalise Irish banks; and if he will make a statement on the matter. [47689/13]
View answerI propose to take Questions Nos. 185 and 186 together.
The letter to which the Deputy refers was sent by the Taoiseach to the President of the European Council, Herman van Rompuy, and the Heads of State or Government in the 28 EU Member states, for information, prior to the October 2013 European Council. The Taoiseach wrote his letter against the background of our planned exit from the EU/IMF Programme and stressed the need to deliver on long-standing commitments to break the vicious circle between banks and sovereigns.
The European Council conclusions, the agreed output of the summit, reflect the issues the Taoiseach highlighted in his letter to colleagues.
There has been no rebuff from Germany as intimated by the Deputy. Coalition negotiations in Germany are continuing, and it is expected that it will take until mid-December for them to conclude and for any new government's official policy programme to emerge.
The Deputy will be aware that the Euro-Area Heads of State or Government agreed on 29th June 2012 to break the vicious circle between banks and sovereigns, and that when a Single Supervisory Mechanism (SSM) involving the ECB, is in place and operational, the European Stability Mechanism (ESM) could recapitalize banks directly.
The Eurogroup meeting of 20th June 2013 agreed on the main features of the ESM’s Direct Bank Recapitalisation instrument (DBR). The DBR instrument will come into effect when the SSM is operational. There is a specific provision included in those main features. This provision states that “The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement.” Therefore, the agreement that we were active in negotiating keeps open the possibility to apply to the ESM for a retrospective direct recapitalisation of the Irish banks should we wish to avail of it. The SSM is expected to be place and operational in the second half of 2014.
187. Deputy Gerry Adams asked the Minister for Finance the position regarding the decision by the EU Council to reduce the role of the ESM in any future recapitalisation of banks; the way the proposed new rules will affect any retrospective recapitalisation of Irish banks; and if he will make a statement on the matter. [47690/13]
View answerI assume the question refers to the European Council conclusions following the meeting of EU Heads of State or Government in October of this year.
The Council conclusions outline the hierarchy of decision making for bank recapitalisation. It continues to provide for ESM Direct Bank Recapitalisation (DBR) as part of this process.
The ECOFIN Council agreed in June 2012 to break the vicious circle between banks and sovereigns, and that when a Single Supervisory Mechanism, involving the ECB, is in place and operational, the European Stability Mechanism (ESM) could recapitalize banks directly.
The Eurogroup meeting of 20th June 2013 agreed on the main features of the ESM’s Direct Bank Recapitalisation instrument. There is a specific provision included in those main features. This provision states that “The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement.” Therefore, the agreement that we were active in negotiating keeps open the possibility to apply to the ESM for a retrospective direct recapitalisation of the Irish banks, should we wish to avail of it.
The DBR instrument will come into effect when the Single Supervisory Mechanism is in place and operational. This is not expected to take place until the second half of 2014.
The Eurogroup has agreed that there will be strict eligibility criteria as well as a clear pecking order for the ESM DBR instrument, so any possible application for DBR will be determined on its own merits within the rules laid down by the ESM’s DBR instrument.
The overall framework agreed this summer builds upon the earlier Euro area Heads of State or Government agreement secured on the 29th of June 2012 and is an important step in the Eurozone’s efforts in this regard.
188. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which income tax relief is now available in respect of college fees; and if he will make a statement on the matter. [49108/13]
View answerSection 473A of the Taxes Consolidation Act 1997 provides, subject to certain conditions, for tax relief at the standard rate of income tax (20%) as regards a portion of qualifying fees paid by an individual in respect of a third level education course including a postgraduate course.
Qualifying fees means tuition fees in respect of an approved course at an approved college and includes what is referred to as the “student contribution”. No other fees (e.g. administration fees, examination fees, capitation fees) qualify for tax relief. For the tax year 2011 and subsequent tax years, the maximum qualifying fee per course per academic year is €7,000.
The tax relief is confined to tuition fees actually borne by the claimant. Tuition fees that are, or will be, met directly or indirectly by grants, scholarships, employer contribution or other means are to be deducted in arriving at the fees qualifying for tax relief.
An individual can claim tax relief on fees paid by him or her in respect of an approved course pursued by other individuals (e.g. a son or daughter) and that the claim may cover more than one student. Only a portion of the qualifying fees in each claim is eligible for relief. Each claim is restricted by the amount shown in the following table.
|
Year |
Full time (Where any one of the students in respect of whom relief is claimed is a full-time student). |
Part time (Where all the students in respect of whom relief is claimed are part-time students). |
|
2013 |
€2,500 |
€1,250 |
|
2014 |
€2,750 |
€1,375 |
|
2015 |
€3,000 |
€1,500 |
The restriction applies to each claim, the subject of which may be one or more students. Therefore, if a person is claiming for more than one student they will get full relief, subject to the maximum limit, for the second and subsequent students claimed .
Example
A parent with two children in college full time in the academic year 2013/14 and paying €8,000 in fees (including the ‘student contribution’) for each child gets the following relief.
|
Maximum qualifying fee per student per year is €7,000 by two |
= €14,000 |
|
Less the 2013 restriction €2,500 |
= €11,500 |
|
Tax relief @20% |
= €2,300 |
189. Deputy Terence Flanagan asked the Minister for Finance if he has confidence in the Financial Regulator regarding the oversight of Royal and Sun Alliance's Irish operations; and if he will make a statement on the matter. [49168/13]
View answerTo improve regulatory supervision and protect the Irish consumer, the Central Bank has, along with increased staffing levels, introduced a risk-based supervision framework, PRISM (Probability Risk and Impact SysteM). The framework establishes a new approach for supervisory engagement with regulated firms. As part of the framework the Central Bank of Ireland engages with firms at a level that corresponds to their impact category; the higher the impact, the higher the level of engagement. Engagement involves reviews, inspections and meetings, and the frequency and level of engagement is associated with the firms’ impact rating.
The Central Bank of Ireland has had an on-going programme of engagement with RSA Insurance Ireland (RSAII) since the implementation of PRISM, as it does with all high impact companies. This programme includes eight on-site inspections over a two year period and on-going meetings with key role holders such as the Chief Executive Officer, Chief Finance Officer, Chief Risk Officer, etc. The Central Bank carried out an onsite review of claims cases in RSAII in August 2013.
The Central Bank has informed me that it identified an issue with regard to delays in increasing case reserves on large claims in a timely manner and this informed the terms of an internal audit that RSAII had already scheduled in relation to the same area. RSAII brought the findings of this internal audit report to the attention of the Central Bank as soon as they became known. The terms of reference for a further multi-stranded investigation and review were outlined to the Central Bank as were the interim measures that the company planned in relation to the executive team.
The Central Bank will continue to liaise with RSA Ireland, PWC and other stakeholders to ensure that all matters identified are resolved to the Central Bank's satisfaction.
