Written Answers Nos. 72-80
72. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which credit remains available to small and medium sized businesses; if he has had submissions from the business sector in this regard; and if he will make a statement on the matter. [8817/14]
View answerAs the Deputy is aware, as part of the 2011 recapitalisation exercise, the Government 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 last year and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks have achieved their 2011 and 2012 targets. I am informed that both banks sanctioned circa €4bn in lending in 2013.
In the forthcoming Action Plan for Jobs 2014 a range of actions are outlined to encourage access to credit for SMEs and enhance the measurement and reporting by the banks of their lending to the sector. These include:
- Work with KfW and the German Ministry of Finance to develop an initiative that will improve funding mechanisms for SMEs.
- Detailed data from AIB and Bank of Ireland will be collated and examined, on a monthly basis ensuring a more informed understanding of the SME bank lending environment, with a particular focus on new lending.
- The SME State Bodies Group will be rolling out a comprehensive communications strategy to ensure that SMEs are aware of the State supports for which they may be eligible.
In addition to my meetings with various business representative organisations in the context of the Budget and Finance Bill process, the SME Funding Consultation Committee, chaired by my Department, provides a forum for consultation with stakeholders around Government policy regarding the provision of credit to SMEs. In addition, officials from my Department, along with the Credit Review Office, recently met with representatives from Chambers Ireland, ISME and SFA to discuss issues pertaining to credit availability affecting their members. These meetings take place on a regular basis and inform the workings of the SME State Bodies Group.
73. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which personal savings in this jurisdiction have fluctuated over the past four years to date; the degree to which any such savings remain invested outside the State; and if he will make a statement on the matter. [8818/14]
View answerData relating to personal (or household) savings are compiled and published by the Central Statistics Office. Household savings is defined as that part of household disposable income which is not used to purchase goods and services. The savings rate is the level of savings expressed as a percentage of household disposable income.
The profile for the quarterly savings rate (adjusted for seasonal factors) over the past four years is provided in the table.
|
- |
Q4 2009 |
Q1 2010 |
Q2 2010 |
Q3 2010 |
Q4 2010 |
Q1 2011 |
Q2 2011 |
Q3 2011 |
|
Household savings rate (%, sa) |
14.6 |
14.9 |
13.4 |
12.2 |
12.1 |
9.7 |
9.7 |
13.3 |
|
- |
Q4 2011 |
Q1 2012 |
Q2 2012 |
Q3 2012 |
Q4 2012 |
Q1 2013 |
Q2 2013 |
Q3 2013 |
|
Household savings rate (%, sa) |
12.2 |
12.4 |
11.1 |
9.0 |
8.3 |
8.8 |
8.7 |
8.4 |
In the early phase of the crisis, the household savings rate rose rapidly as households (in the aggregate) sought to build up a safety buffer. In addition, the increase in the savings rate reflected households desire to repair their balance sheets.
After peaking at over 17 per cent in early 2009, the savings rate has been on a downward trend over the last number of quarters and fell to 8.4 per cent in the third quarter of 2013. The CSO does not provide a breakdown of household saving held outside the State.
74. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which banking charges for various services remain a concern; and if he will make a statement on the matter. [8819/14]
View answerAs the Deputy is aware bank fees, charges and commissions are subject to regulation under Section 149 of the Consumer Credit Act 1995, as amended. Section 149 came into effect in 1996 and currently requires that credit institutions, prescribed credit institutions and bureaux de change must make an application to the Central Bank if they wish to introduce a new customer charge or increase any existing customer charge in respect of certain services. Section 149 does not apply to interest rates; it applies to fees, charges and commissions only.
My Department recently published a review of the regulation of bank fees and charges which is available on the website www.finance.gov.ie. The review concluded that it would not be appropriate to repeal Section 149 at this time. The lack of competition in the banking sector means that the repeal of section 149 would give unfettered price setting power to the incumbent banks. The report recommends that this issue should be revisited when competition in the banking sector has improved significantly. It is my view that the current regulatory regime offers appropriate protection to consumers against unjustified increases in bank fees and commissions.
75. Deputy Bernard J. Durkan asked the Minister for Finance the measures taken to restore credit ratings for small businesses detrimentally affected by the economic downturn; and if he will make a statement on the matter. [8820/14]
View answerThe Government recognises that SMEs are the lifeblood of the economy and will play a vital role in the recovery of employment growth in our country. It also recognises that businesses with legacy debts may be viable. One of the key priorities of the Programme for Government is to ensure that an adequate pool of credit is available to fund SMEs in the real economy during the restructuring and downsizing programme. As the Deputy is aware, the Irish Credit Bureau is a private entity and I have no direct function in the day-to-day operational decisions. In relation to the credit ratings provided to SMEs my Department recognised the need to reorganise the Government reporting system and established an inter-agency working group at the end of 2010 to develop a strategy to put in place an effective credit reporting system in Ireland. The working group's report formed the basis of the Credit Reporting Act 2013.
The Deputy will be aware that the Credit Reporting Act 2013 provides for the creation of an effective statutory based credit reporting system. The Bill includes the following provisions:
- The database will be owned by the Central Bank and the Bank will be responsible for the operation of the Central Credit Register.
- There will be mandatory reporting of a comprehensive range of credit information by credit providers.
- The Bill provides for controls with regard to access to information on the Register. By including provisions relating to access to data and security measures as well as provisions to help to deal with identity theft, this legislation should inspire confidence in businesses and in the consumer.
- The legislation proposes to extend the role of the Data Protection Commissioner to deal with complaints from micro enterprises and SMEs (with a turnover of less than €3m) in respect of their data held on the Credit Register. This initiative may provide some comfort to enterprises where they have a concern in relation to the potential storing of inaccurate data and where they do not have the resources to take legal action through the Courts to seek to have the data corrected. Inaccurate data on the Central Credit Register could result in the refusal of credit to a small company.
- In line with International practice, it provides for a retention period of 5 years in relation to credit information with respect to debts from the day on which it is entered on the Register. The Bill provides for the retention of information for a period of 6 months in relation to credit applications from the day it is entered on the Register. Anonymised information may be retained indefinitely. In addition, the Government is fully engaged in supporting the SME sector and 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 the targets for 2011 and 2012. I am informed that both banks sanctioned circa €4bn in lending in 2013. In June 2013 the Central Bank set quarterly institution-specific performance targets for covered banks to move distressed SME borrowers onto longer-term solutions. The targets set reflect the banks' capacity, processes and systems. I should stress that the Credit Review process remains available to any SMEs whose credit has been reduced or withdrawn by AIB or Bank of Ireland as well as when credit is refused by them. I would strongly advise any SME whose credit is reduced or withdrawn to avail of the services of the Credit Review Office.
76. Deputy Michael McGrath asked the Minister for Finance the amount of local property tax collected in respect of properties in the jurisdiction of Cork County Council in 2012 and 2013; and the amount expected to be collected in 2014. [8824/14]
View answer77. Deputy Michael McGrath asked the Minister for Finance the amount of local property tax collected in respect of properties in the jurisdiction of Cork City Council in 2012 and 2013; and the amount expected to be collected in 2014. [8825/14]
View answerI propose to take Questions Nos. 76 and 77 together.
I am informed by the Revenue Commissioners that as the Local Property Tax (LPT) was only introduced with effect from 1 July 2013 compliance data in relation to LPT is only available for 2013 onwards. The most up to date figures for LPT collected relating to properties in Cork City and County Councils were published on 18 February 2014 on the Commissioners website at: http://www.revenue.ie/en/tax/lpt/lpt-stats-0214.pdf.
While the 2014 forecasted yield for LPT nationally is €550 million, the Commissioners advise that it is not possible to state the precise amount of LPT which is expected to be collected for Cork City and County Councils in 2014. A number of factors could affect the outcome, including the continuation of the strong level of voluntary compliance that was achieved in 2013, the impact of Revenue's compliance programme to follow up with those liable persons who have failed to meet their LPT obligations for 2013 and 2014, and the compliance programme for the collection of arrears of household charge/LPT.
The Commissioners have confirmed that by the end of December 2013 €318m had been transferred by Revenue to the Exchequer in respect of LPT. Of this amount, €242m was in respect of LPT for 2013 and €76m relates to 2014 LPT. By the end of January 2014, a further €32.6m was transferred by Revenue to the Exchequer.
78. Deputy Lucinda Creighton asked the Minister for Finance the consultation his officials are having with the Department of Health in drafting the Universal Health Insurance White Paper in view of the early leaks of the paper which detail tax reliefs on health insurance as one of the tools used to increase insurance take-up; if he supports the use of insurance tax relief to incentivise people to take up health insurance; and if he will make a statement on the matter. [8830/14]
View answerOfficials from my Department have had discussions with officials from the Department of Health regarding the draft Universal Health Insurance White Paper. It is not unusual for discussions to take place at official level before coming to the political level and these discussions are on-going.
In addition, I should point out that decisions regarding tax matters are taken in the context of the annual Budget with the consent of the Government.
More generally regarding the use of tax relief to incentivise people to take up health insurance, the Deputy will be aware that the Commission on Taxation in 2009 acknowledged that medical insurance is expensive and that tax relief plays a role in attracting and retaining individuals within the medical insurance system. However, it also stated that there is a sizeable deadweight element to this relief as many individuals would pay these premiums in the absence of the income tax relief. On that basis, the Commission recommended that the relief should be continued but on a more limited basis. As a result of this recommendation, I introduced a restriction in terms of the amount of medical insurance premiums that qualifies for tax relief in Budget 2014. The introduction of an upper ceiling on the amount of medical insurance premiums that will qualify for tax relief is intended to ensure a continuing incentive via the tax system for those who purchase medical insurance policies, while reducing Exchequer exposure to more expensive policies.
80. Deputy Michael McGrath asked the Minister for Finance the manner in which the proceeds from the disposal of State bank assets will be deployed; and if he will make a statement on the matter. [8832/14]
View answerIn answer to a previous Parliamentary Question, I stated that I had given instructions that the proceeds from the sale of Bank of Ireland preference shares in December 2013 should remain with the National Pension Reserve Fund for the time being and that further consideration would be given as to how best to utilise the proceeds having regard to the NTMA's debt management plan and the future profile of our cash balances. The position remains unchanged in this regard.
In relation to any future disposals of bank assets, it would be premature to speculate on the use of such proceeds. However as the Deputy will be aware one of the Government's key objectives is to reduce the State's level of indebtedness relative to GDP in the coming years and hence I do envisage the gradual disposal of our bank assets making an important contribution to this aim.
