Tax Collection Forecasts

Questions (175)

Alan Farrell

Question:

175. Deputy Alan Farrell asked the Minister for Finance based on the 2013 budget, the income that would be generated from tax collected from PAYE employees and self-employed persons if a 1% income tax cut was implemented; the extent to which the revenue generated through such a measure differs from the projected tax take if such a tax cut were not implemented; and if he will make a statement on the matter. [24453/14]

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Written answers (Question to Finance)

I am informed by the Revenue Commissioners that the full year cost to the Exchequer, estimated by reference to 2014 incomes, of decreasing the standard rate of Income Tax by 1 percentage point from 20% to 19%, would be approximately €453 million.

These figures are estimated from the Revenue tax forecasting model, using actual data for the year 2011 adjusted as necessary for income, employment and self-employment trends in the interim. They are provisional and may be revised.

I assume the deputy is enquiring as to the revenues that would be generated from consumption taxes across the economy as a result of any extra spending that might occur as a result of such a cut in income tax. It is not possible to estimate such a figure. However, it is unlikely that a reduction in labour taxation would pay for itself through additional spending in the economy, in the short run.  It cannot be assumed that any loss in Exchequer revenue from reductions in income tax or USC would be completely offset by additional indirect taxes that might arise, for example, from additional consumer expenditure, not least because taxpayers might apply their additional take-home pay to saving or to debt reduction. If the resulting shortfall was not made up for in tax increases elsewhere this could jeopardise our goal of reaching a 3% deficit by 2015.

Mortgage Resolution Processes

Questions (176, 177)

Bernard Durkan

Question:

176. Deputy Bernard J. Durkan asked the Minister for Finance the total number of family homes surrendered and-or repossessed by the various lending agencies in each of the past three years to date; if such arrangements were entered into by agreement through the courts or an intermediary, including personal insolvency practitioners; the extent to which the families have become the responsibility of the local authorities or other agencies in respect of their housing needs; and if he will make a statement on the matter. [24456/14]

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Bernard Durkan

Question:

177. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which in the context of debt resolution and the need to enter into arrangement with borrowers, lending institutions are relying more on the last option of voluntary surrender or repossession rather than pursuit of various other options to enable the borrower retain the family home, particularly where the sustainability of the proposal is at least as viable as it was when the loan was first negotiated; and if he will make a statement on the matter. [24457/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 176 and 177 together.

The strong view of the Government is that, in respect of co-operating borrowers under the Central Bank's 'Mortgage Arrears Resolution Process', repossession of a person's primary home should only be considered as a last resort and that every effort should be made to agree a sustainable arrangement as an alternative to loss of ownership.

In that context, the Deputy will be aware that the Central Bank's Code of Conduct on Mortgage Arrears (CCMA) places an onus on the banks, in respect of a co-operating borrower, to explore all the options for an alternative repayment arrangement offered by a lender to address a mortgage difficulty and that a lender may only commence proceedings for repossession where the lender has made every reasonable effort to agree an alternative arrangement with the borrower.

If a borrower is offered an alternative repayment arrangement, the lender must give the borrower a clear explanation of the proposed arrangement and how it works, including the reason why the lender considers it to be appropriate for the borrower. The lender must also provide the borrower with the advantages of the offer and explain any disadvantages.

If the lender is not offering the borrower any alternative repayment arrangement, the reasons for this must be given in writing. The lender must also inform the borrower that a copy of the most recent Standard Financial Statement (SFS) is available on request, and provide the borrower with details, in writing of:

- other options available

- the borrowers right to make an appeal

- the website of the Insolvency Service of Ireland

The same information must be given to the borrower if he/she does not accept the alternative repayment arrangement offered to by the lender.

Furthermore, the CCMA provides that if a borrower is not satisfied with the alternative repayment arrangement offered by the lender, or if the lender declines to offer an alternative repayment arrangement, the borrower will have the right to appeal that decision to the lender's internal Appeals Board.  If the borrower is not happy with the outcome of an appeal/complaint made to the lender, s/he can refer the matter to the Financial Services Ombudsman (FSO). Further information on how to make a complaint to the FSO is available at www.financialombudsman.ie .

Regarding data on repossessions, Central Bank statistics indicate the following is the position since the start of 2011 in respect of primary dwelling properties:-

 -

2011

2012

2013

2014 (Q1 only)

Court Order

196

194

251

54

Voluntary or abandoned

412

410

515

227

Total

608

604

766

281

Central Bank statistics are not in a position to indicate the housing status of households following repossession or the number of houses that were surrendered arising from the new statutory insolvency processes, though it is noted that these only became operational towards the end of 2013.  The Department of the Environment, Community and Local Government (in respect of the housing authorities) and the Department of Justice and Equality (in respect of the Insolvency Service) will be the appropriate Departments for the provision of available data on these aspects.

Hidden Economy Monitoring Group Meetings

Questions (178, 179)

Thomas P. Broughan

Question:

178. Deputy Thomas P. Broughan asked the Minister for Finance the number of times the Hidden Economy Monitoring Group meets on an annual basis. [24498/14]

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Thomas P. Broughan

Question:

179. Deputy Thomas P. Broughan asked the Minister for Finance if the Hidden Economy Monitoring Group has considered any information on shadow economic activity in the construction industry, particularly potential cases of persons working in the Republic of Ireland who are also illegally claiming social protection entitlements in Northern Ireland. [24499/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 178 and 179 together.

I wish to inform the Deputy that the Hidden Economy Monitoring Group (HEMG) is a non-statutory multi-agency group (currently chaired by the Revenue Commissioners) comprising of business representative bodies (including the Construction Industry Federation), the Irish Congress of Trade Unions and the State agencies such as the Revenue Commissioners, the Department of Social Protection and the National Employment Rights Authority (NERA).   The primary focus of the Hidden Economy Monitoring Group is to provide a forum for all parties to exchange views on combatting shadow economy activity. 

I am informed by the Revenue Commissioners that, in general, a plenary meeting of the HEMG takes place twice a year (or more frequently if required).  For 2014, the HEMG is conducting its detailed work through three sub-groups.  One sub-group is concentrating on the construction sector, another sub-group is examining the merits of consumer protection awareness of the downsides of engaging with, or purchasing goods from, shadow economy operators and the final sub-group is exploring the merits of having in place 'plain English guides' that may make it easier for businesses to comply with their tax and duty obligations.  The HEMG has also previously conducted its discussions through four Regional sub-groups where local State agency officials met, and exchanged views, with their local counterparts from business representative bodies and trade unions.  During 2013, the Regional sub-groups met on nine occasions.

Apart from their involvement in the HEMG, I am further informed by the Revenue Commissioners that, as part of their normal compliance operations in the construction sector, Revenue staff carry out routine visits to building sites including visits to building sites wherein the capital expenditure is State funded (such as the Department of Education & Skills capital expenditure sites).  In some instances, such site visits are undertaken jointly with relevant officers from the Department of Social Protection and from the National Employment Rights Authority.

I am further informed by the Revenue Commissioners that their officers have a very good working relationship with the Department of Social Protection. Joint Investigation Units are in place and comprehensive exchange of information takes place, including in relation to suspected 'working and signing'. 

As to individuals making false claims for social protection payments in another jurisdiction, that is primarily a matter for that jurisdiction.  However, I am aware that Department of Social Protection officials works closely with their counterparts in Northern Ireland and I'm sure that if the Deputy will pass to DSP any evidence he has of individuals making false claims for social protection payments in Northern Ireland, they will have the matter examined. 

Construction Sector Strategy

Questions (180)

Terence Flanagan

Question:

180. Deputy Terence Flanagan asked the Minister for Finance the rationale for a mortgage insurance scheme for first time buyers under the construction 2020 strategy when lenders already have access to indemnity insurance which is not a cost to the State; the way it will be financed if the proposal goes ahead; if the cost will be borne directly or indirectly by the first time buyer or the banks; and if he will make a statement on the matter. [24519/14]

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Written answers (Question to Finance)

The Government recently launched 'Construction 2020: A strategy for a renewed construction sector'. The purpose of the strategy is to underpin the future competitiveness of the country, ensuring that we continue to be well-positioned to attract the inward investment that has been so important to our economic development.

The strategy includes the Government's desire for a return to sustainable levels of mortgage lending as part of a healthy market. This involves the consideration of measures to stimulate the development of housing. In order for developers to be supported, they need confidence that customers will be capable of accessing finance to purchase new builds. This means mortgage products being available to potential purchasers with an ability to support repayments.

In Ireland's recent abnormal housing market, lending volumes have declined dramatically. The banks are highlighting the lack of supply of houses in particular urban areas as a contributing factor for the lack of drawdown of approved mortgage facilities.  I would look upon the development of this initiative as being an aid to encouraging and facilitating the supply of new homes particularly for young families.  

In other jurisdictions, such as the UK and Canada, "mortgage insurance" markets have been developed to support bank mortgage lending, particularly to 'First Time Buyers'. Mortgage insurance allows banks to share the risk of mortgage lending, either with the public sector or with private sector insurance companies with the aim of increasing bank lending in general or to target groups.

My Department is committed, under this strategy, to examine the concept of a mortgage insurance scheme and how it might benefit new housing completions in the Irish market. 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.

 As the Construction Strategy mentions, my Department is undertaking an economic impact analysis which will assess the impact such a scheme would have on the Irish housing market, taking into consideration time limits, targeting 'First Time Buyers' or owner occupiers and focussing on new housing. The analysis will draw lessons from mortgage insurance initiatives undertaken in other countries and will include questions as to the appropriateness of a price cap as well as regional or geographic restrictions. Some schemes, currently in place in other jurisdictions, operate on a commercial basis. Once this analysis has been completed and presented to me I will consider next steps.  

Tax Clearance Certificates

Question No. 182 answered with Question No. 146.

Questions (181)

Bernard Durkan

Question:

181. Deputy Bernard J. Durkan asked the Minister for Finance if a tax clearance certificate will issue in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter. [24532/14]

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Written answers (Question to Finance)

I have been advised by the Revenue Commissioners that they have not received a request for a tax clearance certificate from the person concerned.

I have further been advised by the Revenue Commissioners that, having contacted the person concerned, they understand that a tax clearance certificate is required by him in relation to a local authority grant application.

An application form  for a PAYE Tax Clearance (TC11) has now issued to the person concerned.  His application will be processed on receipt of the completed form.

Question No. 182 answered with Question No. 146.

Ireland Strategic Investment Fund Investments

Questions Nos. 184 and 185 answered with Question No. 166.

Questions (183)

Ciara Conway

Question:

183. Deputy Ciara Conway asked the Minister for Finance if he will make a commitment to ring-fencing moneys from the strategic investment fund for investment in County Waterford in view of recent job losses, the higher than average unemployment rate and the ongoing threat to jobs represented by the current uncertainty at a company (details supplied); and if he will make a statement on the matter. [24573/14]

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Written answers (Question to Finance)

The National Treasury Management Agency (Amendment) Bill 2014, which is currently being debated by Dáil Éireann, will reorient the National Pensions Reserve Fund into the Ireland Strategic Investment Fund (ISIF), which will have a mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland.  This means the ISIF will have a dual objective both investment return and economic impact.

One of the key potential advantages of the ISIF will be its ability to attract co-investment from domestic and international third parties. International investors will only put their money to work alongside the ISIF if they have confidence in the commerciality of the investment process.

In recent months, the NTMA, in consultation with the Department of Finance and a number of other Government Departments and Agencies, has been developing an Economic Impact Framework to identify target areas for investment which have higher potential economic and employment impact, and which will also facilitate the identification of categories of investment that would be expected to assist and accelerate normalisation of capital markets in Ireland following  the financial crisis.

Given that the ISIF is not yet operational, it is not possible to say now what will be the nature and shape of the ISIF's ultimate investment portfolio. I expect that the ISIF will seek investment opportunities across the country; however, the draft legislation does not mandate fixed allocations of capital for specific regions because the ISIF is primarily a provider of finance and so will be only one player in the development of proposals with economic and employment impact. It would not make sense to have ISIF capital segregated waiting for investment proposals in a particular region when it could be put to good use elsewhere. In any case, the ISIF will be a revolving fund, in the sense that it will seek to realise its investments as appropriate in order to have capital available to make new investments. 

The ISIF is open for business and is actively seeking investment opportunities across the country. In March this year the NTMA held a market engagement event in Dublin castle seeking investment opportunities and co-investors. The ISIF can be contacted directly with proposals for commercial investment.

Questions Nos. 184 and 185 answered with Question No. 166.

Ministerial Responsibilities

Questions (186)

Lucinda Creighton

Question:

186. Deputy Lucinda Creighton asked the Minister for Finance if he will list in tabular form all legislation and specific sections therein that refer to powers delegated to the Minister for State with special responsibility for public service reform and the Office of Public Works; if he will detail the title of the civil servants who are responsible for reporting directly to said Minister of State; and if he will make a statement on the matter. [24615/14]

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Written answers (Question to Finance)

No order under the Ministers and Secretaries (Amendment)(No. 2) Act 1977 delegating functions to the Minister of State has been signed by me. However, following a Government decision of 18th October 2011, the Minister of State was assigned responsibility for International Tax Issues and Customs Reform. The senior civil servant with overall repsonsibility in the areas mentioned is the Assistant Secretary who heads the Fiscal Policy Division.

Functions in respect of the Office of Public Works and Public Service Reform are a matter for my colleague, the Minister for Public Expenditure and Reform.

Central Bank of Ireland

Question No. 188 answered with Question No. 163.

Questions (187)

Pearse Doherty

Question:

187. Deputy Pearse Doherty asked the Minister for Finance if a recent audit at the Central Bank of Ireland uncovered the fact that staff at a company (details supplied) had access to the data held in the bank's data centre; and if he will make a statement on the matter. [24626/14]

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Written answers (Question to Finance)

It has not been possible to obtain the information sought by the Deputy in the time available. However, it will be forwarded to the Deputy as soon as possible.

Question No. 188 answered with Question No. 163.

Public Sector Staff

Questions Nos. 190 and 191 answered with Question No. 165.

Questions (189)

Pearse Doherty

Question:

189. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 49 of 28 May 2014, if he will consider appointing an investigator as per section 14(2) of the Public Service Management (Recruitment and Appointments) Act 2004; and if he will make a statement on the matter. [24663/14]

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Written answers (Question to Finance)

I have no role in relation to Section 14 (2) of the Public Service Management (Recruitment and Appointments) Act 2004.  The question of appointing an investigator is a matter for the Commission for Public Service Appointments

However, as indicated in my reply to Parliamentary Question No. 49 of 28 May 2014, I am advised by the Revenue Commissioners that a full investigation has been launched into the matter in question by the Revenue Commissioners who have requested the Commission for Public Service Appointments to undertake an audit of this competition on its completion.

Questions Nos. 190 and 191 answered with Question No. 165.

General Government Debt

Questions (192)

Michael McGrath

Question:

192. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed breakdown for the projected general Government deficit for 2015 increasing from 2.2% in the 2013 Stability Programme Update to 2.9% in the 2014 Stability Programme Update. [24691/14]

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Written answers (Question to Finance)

As the Deputy points out, the deficit forecast for 2015 has changed since the SPU published in April 2013.  Given the significant number of moving parts, changes to the fiscal forecasts are not unusual.  The overall 2015 nominal deficit is some €1.2bn higher than estimated in April 2013.  This higher nominal deficit coupled with lower economic growth has resulted in the forecasted deficit changing from 2.2% of GDP to 2.9% of GDP in the 2014 Stability Programme Update.

While nearly all estimates have changed in the interim, there are three principal reasons for the lower forecast. Firstly, nominal economic growth has not materialised as expected and the forecast nominal GDP for 2015 (which is used as the denominator for deficit purposes) has reduced from €181.6bn to €174.5bn

Secondly, given the latitude provided by the restructuring of the promissory note last year, estimated voted expenditure ceilings have increased by c. €0.5bn.  This was agreed in the context of Budget 2014. Finally, related to the lower than expected economic growth, tax revenue in 2015 is forecast at some €1.2bn lower than this time last year.  There were also some minor positive offsetting factors.