Written Answers Nos. 57-66
57. Deputy Pearse Doherty asked the Minister for Finance the steps he will take to make sure the potential sale of €1 billion of mortgages at ICS Building Society does not leave mortgage owners outside the protection of the code of conduct on mortgage arrears. [15757/14]
View answerAs the Deputy may be aware, in July 2013 Bank of Ireland agreed an amendment to its Restructuring Plan which had been agreed with the European Commission in respect of State Aid received by the Bank. This allowed the Bank retain its life assurance subsidiary New Ireland. As part of this amendment, the Bank committed to certain substitution measures including the sale of the ICS distribution platform together with, at the option of a purchaser, up to €1bn of mortgages and up to €1bn of matching deposits. The purpose of the ICS substitution measure is to support new entities in entering the Irish market and thereby increasing competition to the ultimate benefit of the consumer.
In order to facilitate the sale, the State committed to enact appropriate legislation, the effect of which is to extend the same powers to building societies that currently exist for banks to transfer assets and liabilities to other banks. ICS is the sole remaining building society in Ireland. Although the proposed legislative change does not preclude an unregulated entity from acquiring a portion of the ICS mortgage portfolio, the probability of such an outcome must be considered in conjunction with the purpose of the commitment and the safeguards included in the Restructuring Plan to ensure that this purpose is achieved. The Restructuring Plan includes a provision that "In order to be approved by the Commission, the purchaser must meet the Purchaser requirements" which covers, inter alia, that the Purchaser "must have the financial resources, proven expertise and incentive to maintain and develop the Divestment business as a viable and active competitive force in competition with BoI and other competitors".
With reference to the wider issue of CCMA protection for residential mortgage borrowers who have had their loans sold by a bank to an unregulated entity, the Deputy will be aware that The Sale of Loan Books to Unregulated Third Parties Bill, which is listed in the Government legislative programme, was always intended to address concerns surrounding the continued applicability of the code after the sale of loan books to unregulated entities. The Government is committed to bringing forward legislation to protect mortgage holders and will work with other interested parties to achieve the best solution for consumers. Officials in my Department are examining this fully with the Central Bank and the Attorney General's Office.
58. Deputy Brendan Griffin asked the Minister for Finance the rate of unemployment in the State when the Government took office; the current rate of same; and if he will make a statement on the matter. [15793/14]
View answer61. Deputy Brendan Griffin asked the Minister for Finance the number of persons in employment in the State when the Government took office; the current number of same; and if he will make a statement on the matter. [15797/14]
View answerI propose to take Questions Nos. 58 and 61 together.
This Government took office on the 9th of March 2011. According to the Quarterly National Household Survey (QNHS) prepared by the Central Statistics Office (CSO) the unemployment rate was 14.3% in the first quarter of 2011. The most recent QNHS data from the CSO show that the unemployment rate fell to 11.7% in the fourth quarter of 2013, which represents a fall of 54,400 in the number of people unemployed. Live Register data up to the end of March 2014 indicate that the downward trend in unemployment is continuing. According to the QNHS data, the total number of persons in employment in the Irish economy in the first quarter of 2011 was 1,841,800. The most recent data from the CSO show that 1,909,800 people were employed in the fourth quarter of 2013, an increase of 68,000 people since the Government took office. In addition, in the fourth quarter of 2013 the CSO recorded year-on-year employment growth of 3.3%, the strongest rate of growth in over six years.
Since it came into office, the key objective of this Government has been to get our people back to work. The above figures demonstrate that we are implementing the right policies to achieve this objective.
59. Deputy Brendan Griffin asked the Minister for Finance the State's overall budgetary deficit in monetary and percentage terms when the Government took office; the current figures for same; and if he will make a statement on the matter. [15794/14]
View answer60. Deputy Brendan Griffin asked the Minister for Finance the rate of deficit as a percentage of GDP when the Government took office; the current rate of same; and if he will make a statement on the matter. [15795/14]
View answerI propose to take Questions Nos. 59 and 60 together.
The general government deficit in monetary and percentage terms for 2010 and the latest projections for 2013 (as at Budget 2014) are detailed in the following table. The outturn for 2013 will be finalised and published on EUROSTAT's website on 22nd April 2014 -http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/.
|
Description |
2010 |
2011 |
2012 |
2013* |
|
General government deficit |
€48,389m |
€21,358m |
€13,511m |
€12,150m |
|
General government deficit / GDP |
30.6% |
13.1% |
8.2% |
7.3% |
|
Underlying general government deficit / GDP |
10.6% |
8.9% |
8.2% |
7.3% |
* As set out in Budget 2014 on 15th October 2013
The underlying general government deficit excludes the effect of capital injections into financial institutions, in particular the promissory note transactions in 2010. The underlying balance is the measure set under the EDP targets.
In regard to the rate of the deficit as a percentage of GDP, the deficit is not expressed in real terms and therefore, there is no applicable rate of deficit. For comparative purposes across the EU, the general government deficit is expressed as a percentage of the GDP in the given year.
62. Deputy Brendan Griffin asked the Minister for Finance the timeframe for his future efforts to secure a detailed deal with European colleagues on Ireland’s legacy banking debt; and if he will make a statement on the matter. [15798/14]
View answerAs I have outlined in my replies to a number of previous Parliamentary Questions, the Euro-area Heads of State or Government (HoSG) agreed in June 2012 that "it is imperative 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 could recapitalise banks directly.
The Eurogroup meeting on 20th June 2013 agreed on the main features of the European Stability Mechanism's Direct Recapitalisation Instrument or DRI. There is a specific provision included in those main features, which 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 European Stability Mechanism for a retrospective direct recapitalisation of the Irish banks, should we wish to avail of it. The single supervisory mechanism is not expected to be in place and operational until late in the current year. Therefore, it would not be possible to make a formal application to the ESM for retrospective recapitalisation in advance of the Instrument being in place.
However, both I and my Government colleagues will ensure that Ireland's case for retrospective direct recapitalisation is made at all levels as appropriate. I remain confident that the commitment made by the Euro-area Heads of State or Government in June 2012 to break the vicious circle between banks and sovereigns will be respected.
63. Deputy Brendan Griffin asked the Minister for Finance the way he believes income tax and-or USC cuts could best be applied to achieve increased economic activity and greater social fairness; and if he will make a statement on the matter. [15799/14]
View answerThe Deputy will be aware that I have put on record my belief that the income tax burden is currently too high in Ireland and that I believe it needs to be reduced. However, I have also said that although it is my intention to alleviate the burden I can only do so when the public finances allow it. It should be acknowledged that Ireland has a progressive taxation system which ensures that the burden of taxation falls most heavily on those with a higher ability to pay. The low effective tax rates for low income workers ensures that work pays and is a growth friendly aspect of Ireland's tax system. The latest data from the OECD's 2013 Taxing Wages report shows that Ireland has one of the most progressive income tax systems in the developed world. It is in this context that the Government has committed in the Programme for Government not to increase the marginal rate of income tax.
The Programme for Government also contains a commitment not to change tax credits, which at current levels ensure that an estimated 856,000 workers are excluded from the charge to income tax entirely. Furthermore, delivering on a commitment in the Programme for Government, the USC was reviewed by the Department of Finance in the lead up to Budget 2012. As a result of the review of the USC, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. It is estimated that this removed almost 330,000 individuals from the charge. It is a little early to consider, let alone set out, changes to the tax system in advance of the Budget, which is still over six months away. As is normal, my officials will model and examine potential options for changes to the tax system for my consideration as part of the overall Budget package.
64. Deputy Brendan Griffin asked the Minister for Finance the rate of GNP expansion and-or contraction, in tabular form for each year since 2000; and if he will make a statement on the matter. [15800/14]
View answerThe following table sets out the level of Gross National Product (GNP) in both current and constant prices in Ireland and the annual volume percentage changes since 2000. GNP is a measure of income accruing to residents of a country. In Ireland, GNP is currently considerably lower than GDP because of outward income flows to non-residents, especially profits and dividends of foreign direct investment enterprises. Since 2000, GNP has ranged between 80 per cent and 87 per cent of the value of GDP and stood at close to 84 per cent in 2013.
|
Year |
GNP at Current Market Prices €m |
GNP at Constant (2011) Market Prices €m |
GNP Volume Change % |
|
2000 |
90,156 |
111,350 |
11.0 |
|
2001 |
98,549 |
114,397 |
2.7 |
|
2002 |
107,021 |
116,411 |
1.8 |
|
2003 |
118,911 |
121,879 |
4.7 |
|
2004 |
127,146 |
126,493 |
3.8 |
|
2005 |
138,636 |
134,117 |
6.0 |
|
2006 |
154,309 |
142,874 |
6.5 |
|
2007 |
163,134 |
148,033 |
3.6 |
|
2008 |
154,933 |
145,317 |
-1.8 |
|
2009 |
133,919 |
132,051 |
-9.1 |
|
2010 |
131,812 |
132,750 |
0.5 |
|
2011 |
130,662 |
130,662 |
-1.6 |
|
2012 |
132,649 |
132,984 |
1.8 |
|
2013* |
137,917 |
137,476 |
3.4 |
*Provisional
Source: CSO 'National Income and Expenditure'
65. Deputy Brendan Griffin asked the Minister for Finance if data exist to show that the 9% reduced rate of VAT for newspapers is helping to sustain and or create jobs in that sector; the actions he proposes to protect jobs in that sector; and if he will make a statement on the matter. [15816/14]
View answerThe rate of VAT on newspapers was reduced from 13.5% to 9% in 2011 as part of the Government's Jobs Initiative for a temporary period until end 2013. Tentative figures from the Central Statistics Office suggest that the number of persons employed in the newspaper and book publishing sectors increased from 3,700 in the final quarter of 2011 to about 5,100 in the fourth quarter of 2013, the period over which the lower rate of VAT has applied. However, I am informed by the CSO that caution should be exercised in interpreting this disaggregated data due to their small sample size and therefore high margin of error. The Deputy will be aware that I provided for the retention of the 9% VAT rate on newspapers in Budget 2014 to maintain the growth in this sector and in the wider tourism sector. Under the current Irish VAT rate structure, the application of the 9% rate to newspapers is the lowest allowable VAT rate in accordance with EU VAT law.
66. Deputy Michael McGrath asked the Minister for Finance the number of staff employed by the Irish Bank Resolution Corporation at the time the special liquidator was appointed in 2013; the number currently employed; the number currently serving out a notice period; the special liquidator's plans for the remainder of the staff; and if he will make a statement on the matter. [15943/14]
View answerI have been advised by the Special Liquidators that there were a total of 978 employees in IBRC on the date of the Special Liquidation, 07 February 2013. Of these, 468 people remain employed and 10 of these are currently serving out their notice periods. The remaining 458 employees are currently scheduled to exit at various dates as the liquidation is completed.
