Written Answers Nos. 34-41
34. Deputy Pearse Doherty asked the Minister for Finance if he will provide an estimate for the general Government deficit in 2015 on the basis of no new discretionary changes in public expenditure and Government revenue in budget 2015. [23749/14]
View answerThe most recent fiscal forecasts were contained in the Stability Programme Update published in April. The forecast for 2015 is predicated on a consolidation package of €2.0bn which has been well flagged over recent years and represents no change in stated Government policy. This is estimated to deliver a general government deficit of 2.9% of GDP.
However, I would state that there remains a lot of moving parts, and the most up to date economic and fiscal information will be used in deciding the adjustment package necessary closer to Budget time.
35. Deputy Lucinda Creighton asked the Minister for Finance further to Parliamentary Questions Nos 10 and 41 of 27 May 2014, if the reports which Central Bank of Ireland staff make to appropriate specified bodies, specifically An Garda Síochána, include the names of persons who Central Bank of Ireland staff suspect have committed criminal offences in an entity supervised by the Central Bank of Ireland; if named criminal suspects are included rather than just the name of the supervised entity; and if he will make a statement on the matter. [23827/14]
View answerI have been informed by the Central Bank that in accordance with section 33AK of the Central Bank Act 1942, in all cases where the Central Bank has information that leads it to suspect that a criminal offence may have been committed by a person or entity supervised by it, the Central Bank is required to report the information to the appropriate specified bodies (including An Garda Síochána). Depending on the specific circumstances involved and the level of information available to the Central Bank, the report may include names of specific individuals together with the name of the supervised entity.
36. Deputy Terence Flanagan asked the Minister for Finance the initiatives in place to assist young persons in securing mortgages; and if he will make a statement on the matter. [23837/14]
View answerThe recently announced 'Construction Strategy' sets out a comprehensive strategic approach to housing that is being undertaken by Government. As part of this strategy, my Department is committed to examining international best practice, including the concept of a mortgage insurance scheme, to ensure sustainable levels of mortgage lending in the medium term.
The objective of any scheme would be to ensure adequate availability of mortgage finance on affordable terms for new completions, particularly for 'First Time Buyers', as the economy recovers. In doing so we would aim to provide the certainty needed to support greater levels of investment in new housing, with the associated benefits for the construction sector and ultimately for the consumer.
It is important to note that no decision has yet been made and my Department is still at a preliminary stage of investigation. My Department is undertaking an economic impact analysis which will assess the impact such a scheme would have on the Irish housing market. Once this analysis has been completed and presented to me, I will consider the next steps.
My colleague, the Minister for the Environment, Community and Local Government, Phil Hogan T.D., may be in a position to advise on residential property schemes under the remit of his Department.
37. Deputy Catherine Murphy asked the Minister for Finance if he will provide a list of all credit unions with lending restrictions imposed upon them from 2012 to date in tabular form, including the reasons for each restriction and the terms applicable in each case; and if he will make a statement on the matter. [23864/14]
View answerThe Central Bank has informed me that it is subject to confidentiality requirements under Section 33AK of the Central Bank and Financial Services Authority of Ireland Act 2003 and therefore cannot comment on individual credit unions or disclose the information requested.
Acting as the independent regulator, the Registrar of Credit Unions at the Central Bank has applied lending restrictions to some credit unions. In its recently published 'Credit Union PRISM Risk Assessments: Supervisory Commentary', the Central Bank has highlighted that the majority of credit unions visited have been required to implement actions to remediate risk and substantially improve their lending and credit risk management standards and practices. Where required, risk mitigation has included the Central Bank imposing lending restrictions until fundamental weaknesses are addressed. These lending restrictions have been put in place in credit unions where there are regulatory concerns about the operation of these individual credit unions and the resultant risk to members' savings. The Central Bank advises me that it sees restrictions as short term in nature, to be lifted when risks have been addressed satisfactorily and necessary corrective measures embedded.
Where lending restrictions are imposed they tend to take the form of a restriction on individual loan size or on commercial lending activity and in some cases, a limit on the total lending permitted each month. Currently about 59% of all credit unions are subject to lending restrictions. This compares to a corresponding figure of 57% at the end of 2012. Almost all credit unions with a lending restriction in place have a maximum individual loan size restriction. Of the credit unions with lending restrictions, over 67% currently, which compares with 68% at the end of 2012, can lend €20,000 or more to an individual member.
2.8% of all credit unions are restricted to issuing loans of less than €10,000 to an individual member. The corresponnding 2012 figure was fewer than 2.5%. Fewer than 1% of all credit unions are currently restricted to issuing loans of less than €5,000 per member, unchanged since 2012. These are the cases where there are more significant concerns in terms of risk to members' savings.
For those credit unions where there is an individual loan size restriction in place, the level at which the limit is imposed ensures that the vast majority of those credit unions can continue to make loans significantly greater than the average loan for the sector of just above €6,000. Lending restrictions are, in most cases, intended to be short-term in nature and kept in place until the credit union has addressed the issues giving rise to the particular concerns advised to the credit union.
The Registrar of Credit Unions informs me that lending restrictions are reviewed on a regular basis to determine whether they are still set at appropriate levels. Section 14 of the Credit Union and Co-operation with Overseas Regulators Act 2012 provides for the appeal of certain decisions of the Central Bank, including some lending restrictions, to the Irish Financial Services Appeals Tribunal.
38. Deputy Michael McGrath asked the Minister for Finance if he will provide details of any investigations that have been undertaken into the collapse of Custom House Capital; if he is concerned at the failings of the regulatory system exposed in this case; and if he will make a statement on the matter. [23873/14]
View answerThe Central Bank's investigation into Custom House Capital Ltd (in Liquidation) and persons concerned in its management has been on-going since the publication of the Final Report to the High Court by Court Appointed Inspectors dated 19 October 2011. Following consultation with An Garda Siochána, the Central Bank's investigation has been deferred pending completion of investigations by An Garda Síochána.
Upon presentation of the Final Inspectors' Report on Custom House Capital Ltd (CHC) to the High Court in October 2011, Justice Hogan ordered that CHC be wound up immediately. It should be noted that copies of the Final Report have been provided to other relevant state authorities for their consideration i.e. the Minister for Justice and Equality, to the Director of Public Prosecutions, to the Director of Corporate Enforcement, to the Revenue Commissioners and to the Garda Commissioner.
The Central Bank provides regular updates on Custom House Capital on its website.
In relation to enhancing the investor protection legislative framework, I can assure the Deputy that the Central Bank has been provided with extensive new powers since the onset of the financial crises to prevent the loss of client assets as occurred in the case of Custom House Capital. The principal developments are set out below:
Client Assets Regime
An independent review of the Regulatory Regime for the Safekeeping of Client Assets was published by the Central Bank in 2012 and is available on the Central Bank website. The Central Bank fully accepted the specific recommendations contained in this independent review and established a process of implementing all of the necessary changes required. In 2013 the Central Bank published on its website a Consultation Paper on Client Assets Regulations and Guidance, which will replace the existing client assets requirements (issued in 2007). The Review set out the following three objectives as the foundation of any client asset protection regime:
- The maintenance of public confidence in the client asset regime;
- The mitigation of the risk of misuse of client assets whether as a result of maladministration or fraud; and
- The provision of a system which in the event of a firm's insolvency will enable the expeditious return of available client assets to the owner at lowest cost.
It is envisaged that the new rules for the Safekeeping of Client Assets will be in place before the end of the year.
New rules in respect of key management positions
I have already brought forward a very wide range of statutory powers to enable the Central Bank to deal with such an issue across the financial service sector under the Central Bank Reform Act 2010, which sets out a far-reaching regime for the Central Bank to set out and enforce standards of fitness and probity across the financial service sector, including standards of honesty, integrity and ethical judgement, which apply to those in key management positions. The Act provides for sanctions, at the discretion of the Central Bank, of suspension, or even, prohibition orders, following an investigation and due process. In terms of addressing poor management, the code applies similar requirements in respect of skills and experience.
Enhanced monitoring and enforcement powers for the Central Bank
The Central Bank (Supervision and Enforcement) Act 2013 also sets out a number of new provisions that are relevant. The fitness and probity provisions are reinforced by the whistleblower protections, which place an onus on those performing pre-approval controlled functions to disclose information relating to offences, prescribed contraventions, and breaches of Irish financial services legislation or the destruction of evidence. The Act also provides for the Central Bank to commission, as part of the proper and effective regulation of financial service providers, an independent expert report at the cost of the financial service provider. It strengthens the authorised officer regime, enables the Central Bank to secure assurances from auditors of regulated financial service providers. It strengthens the enforcement powers of the Central Bank through enabling it to apply to the High Court for (i) an order to restrain a party from engaging in conduct that contravenes financial services legislation and (ii) an order for restitution where a person has been unjustly enriched as a result of contravening financial services legislation. It provides for a substantial increase in monetary penalties: for a corporate body, the maximum penalty is increased to the greater of either €10m or 10% of the turnover of the corporate body for its last complete financial year before the finding is made. For an individual, the maximum penalty is increased to €1m. The Central Bank also has the power to suspend or revoke a regulated entity's authorisation following an Inquiry.
39. Deputy Anthony Lawlor asked the Minister for Finance the number of licensed gaming machines that are currently in operation here; the revenue generated to the State from these machines; his plans to increase the level of the licence fee for gaming machines to a comparable level as that in Northern Ireland; and if he will make a statement on the matter. [23878/14]
View answerI am advised by the Revenue Commissioners, who are responsible for issuing gaming machine licences, that the number of licensed gaming machines currently in operation is 1,672 and the revenue to the State generated from these machines is €765,160. These figures refer to licences of up to 1 year and licences of up to 3 months and the current rate of duty on these licences is €505 and €145, respectively. As there is no set licensing year for gaming machines, the numbers above relate only to machines licensed at close of business on 29th May 2014 and do not include recently expired licences which operators may be in the process of renewing.
It is not possible to compare the licence fees applicable to gaming machines in the State with those applying in Northern Ireland as the licensing and duty arrangements differ between the two jurisdictions. In particular, in Northern Ireland the operator pays machine gaming duty which is chargeable on the total net takings from his or her dutiable gaming machines rather than a fixed amount per machine.
40. Deputy Tony McLoughlin asked the Minister for Finance the reason a person (details supplied) in County Sligo has been waiting six months for tax credit payment from the Revenue Commissioners; and if he will make a statement on the matter. [23887/14]
View answerI am advised by the Revenue Commissioners that the tax credit of €3,600 referred to in the Deputy's question concerns Capital Gains Tax (CGT) liability for the 2006 tax year and relates to the disposal of an investment property by the person (details supplied) in May 2006.
This person paid preliminary tax in the sum of €25,000 on 3 November 2006. The CGT return for the 2006 tax year was required to be submitted to Revenue by 31 October 2007. This return was not received by Revenue until 5 November 2013. It was processed and an assessment issued on 6 November 2013 showing a final liability of €21,400. The credit of €3,600 referred to by the Deputy is the excess of the Preliminary Tax initially paid over and above the final liability which was determined when the return was made to Revenue.
Repayment of tax by Revenue is provided for by Section 865, Taxes Consolidation Act 1997. Section 865(4)(c) provides that a claim to repayment of tax shall not be allowed unless it is made within 4 years after the end of the chargeable period to which the claim relates. In the case in question, the latest date for lodging a claim for the 2006 tax year was 31 December 2010. The CGT return giving rise to the tax credit was not furnished until 5 November 2013 and it is not possible now to repay the amount in question.
Provision is made in Section 865(7) of the Taxes Consolidation Act 1997 for any person aggrieved by a decision of the Revenue Commissioners in relation to a claim for repayment of tax to appeal against such a determination to the Appeal Commissioners. Should the person wish to lodge an appeal under Section 865(7) of the Act and to have such an appeal heard before the Appeal Commissioners, he should write to his local Revenue office stating :
his wish to appeal against the decision made by Revenue to disallow his repayment claim;
the reasons for his appeal; and
his wish to have the appeal listed for hearing by the tax Appeal Commissioners.
41. Deputy Pat Deering asked the Minister for Finance the reason a diesel rebate due to a person (details supplied) in County Carlow cannot be offset against a revenue liability for VAT and PAYE, even though the amount of rebate is greater than the tax due; and if he will request the Revenue Commissioners to be more flexible in these difficult times where cash flow is very limited, especially when the money is coming in and out of the same account, without putting undue pressure on small businesses. [23918/14]
View answerI am advised by Revenue that before any refund of tax, including funds arising from the Diesel Rebate Scheme (DRS), are repaid, all of the 'taxheads' that the relevant person is registered for are automatically scanned for any outstanding tax liabilities. Where a liability exists, the refund or part of the refund as applicable is offset against the amount outstanding and any remaining balance is repaid.
In the case to which the Deputy refers, Revenue has confirmed to me that two DRS claims in respect of 2013 were offset in full against the person's VAT liabilities. A further claim was recently received in respect of 2014 and is currently being processed. Once the claim is verified as correct, it will be offset or partly offset against any tax liabilities that are still outstanding.
