Written Answers Nos. 243 -271
244. Deputy Pearse Doherty asked the Minister for Finance the cost to the State of amending the VAT directives to allow for a 0% VAT rate on voluntary rescue activities; and if he will make a statement on the matter. [33844/14]
View answerI am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. While we can maintain the zero rating on those goods and services which were zero-rated before 1 January 1991, the goods and services referred to by the Deputy do not fall within this category. Similarly, Member States may only apply a reduced VAT rate to those goods and services set out in Annex III of the EU VAT Directive (2006/112/EC). Safety equipment is not included in this annex. Therefore, it is not possible to apply a zero or reduced VAT rate to these goods and services.
Organisations involved in rescue at sea may be entitled to specific VAT refunds under the conditions set out in Refund Orders S.I 249 of 2013 which replaced S.I 192 of 2005. The Refund Orders do not apply to mountain rescue organisation.
Notwithstanding the above, it is not possible to cost the proposed change. The information to be provided to the Revenue Commissioners on VAT returns does not require the yield from particular sectors of trade or categories of goods/services to be separately identified.
245. Deputy Pearse Doherty asked the Minister for Finance his plans to implement the Houses of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform's report on hearings on matters relating to mortgage arrears resolution processes; and if he will make a statement on the matter. [33921/14]
View answerI note the recommendations contained in the Report of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform in relation to mortgage arrears. The Deputy is aware that the Government has developed a comprehensive cross-Departmental strategy in this area in line with the main recommendations of the 2011 Keane Report. The implementation of this strategy is overseen at Government level by a special sub-committee which is chaired by the Taoiseach and at official level by a mortgage arrears steering group which is chaired by the Department of Finance.
The Government has significantly advanced a number of key measures in this regard, including;
1. An intensification by the Central Bank of its engagement with mortgage lenders to require them, under the Mortgage Arrears Resolution Targets (MART) process, to propose and conclude sustainable and durable alternative arrangements with their customers in mortgage arrears. Targets have been set to the end of 2014 and by this date the relevant banks covered by the MART process will be required to have proposed sustainable solutions to 85% of mortgages which are more than 90 days in arrears and to have concluded solutions with 45% of such mortgages;
2. Significant reforms to personal insolvency and the establishment of the Insolvency Service of Ireland, to provide more accessible and flexible statutory frameworks for people with unsustainable personal and mortgage debt to address their position;
3. Updating the Code of Conduct on Mortgage Arrears to provide additional safeguards to cooperating borrowers while also promoting and encouraging efforts by both lenders and borrowers to meaningfully address mortgage arrears or pre-arrears;
4. Mortgage to rent which is now available as a social housing response to allow people to remain in their house, where possible; and
5. The provision of an independent mortgage information and advice service.
The Central Bank's latest 'Residential Mortgage Arrears and Repossessions Statistics' publication for the end of Q2 2014 (http://www.centralbank.ie/press-area/press-releases/Pages/ResidentialMortgageArrearsandRepossessionsQ22014.aspx), shows that the number of mortgage accounts for principal dwelling houses (PDH) in arrears, fell for the fourth consecutive quarter, and, at the end of June 2014, 90,343 PDH mortgage accounts (11.8 per cent in total) were more than 90 days in arrears, representing a decline of 3% over the quarter. The data also shows that almost 102,000 PDH mortgage accounts were classified as restructured and, of these, 81.2 per cent were deemed to be meeting the terms of their current restructure arrangement.
Separately from Central Bank quarterly reports, a monthly reporting regime on mortgage restructures and arrears for the six main banks covered by the Central Bank's MART process has been put in place by my Department. The latest publication, with data for the end of July 2014, shows that the number of PDH mortgage accounts in arrears of greater than 90 days has fallen by over 7,100 accounts when compared to the end of Q1 2014 while the total number of PDH mortgage arrears has fallen by 8,845 accounts in the same period.
Taken together, the overall strategy and framework is in place to enable banks to work with distressed homeowners to reach sustainable solutions for dealing with their personal indebted situations. Nevertheless, relevant Departments and agencies will continue to keep the position under review and can make any further adaptions to the overall framework as considered appropriate. However, early and effective engagement between borrowers and lenders remain key to resolving most cases of mortgage difficulty. Where there is effective and meaningful engagement by all parties regarding a mortgage difficulty, the data shows that an increasing number of durable long term mortgage restructures can and is being put in place.
246. Deputy Eric Byrne asked the Minister for Finance his views on correspondence (details supplied) regarding excise duty on alcohol; and if he will make a statement on the matter. [33963/14]
View answerThe correspondence attached to the Deputy's question makes a number of points in relation to excise duty increases in Budgets 2013 and 2014. The correspondence also refers to the incentive for cross-border shopping and the risks to tourism resulting from increases in excise on alcohol.
The increases to excise duty on alcohol in Budgets 2013 and 2014 must be seen firstly in the context of the Government's need to raise revenue to provide services. Secondly, these increases should not be viewed in isolation but together with the history of excise rates on alcohol in Ireland. To this end I would remind the Deputy that excise duties on alcohol were reduced significantly in Budget 2010 and also that the rate of duty on spirits and beer remained largely unchanged between 1993 and 2009. It should also be noted that the excise, as a proportion of the pint, is lower now in 2014 than it was 10 years ago.
In relation to the points raised about tourism, I would point out that in July 2011 I introduced a 9% reduced VAT rate for tourism related services as part of the Government Jobs Initiative. The measure was designed to boost tourism and create additional jobs in that sector. The 9% rate applies to the supply of food and drink (excluding alcohol, soft drinks and bottled water) in the course of catering. I also provided for the abolition of the Air Travel Tax in Budget 2014 to further assist the tourism sector.
In relation to cross-border shopping, the most recent cross-border price survey carried out by the Revenue Commissioners in July 2014 can be found online on the Revenue website. The survey compares prices in the off-trade rather than the on-trade, and does not support the attached correspondence's contention that a price difference of 35% in respect of beer, wine and spirits exists between prices in Northern Ireland and the State.
247. Deputy Dominic Hannigan asked the Minister for Finance his plans to include a tax relief for persons who were first time buyers and did not purchase buy to let properties but have been forced to rent their homes due to negative equity, unemployment or other reasons unforeseen when the homes were originally purchased; and if he will make a statement on the matter. [33974/14]
View answerI am aware of, and have sympathy for, the difficulties some mortgage holders are encountering as a result of finding themselves in the situations which you have outlined in your question.
My officials are currently examining this matter as part of the normal budgetary deliberative process. However, there are a considerable number of complex policy issues that would need to be examined and addressed before I could consider tax relief as a potential solution to the matter.
Notwithstanding the above, it is worth noting that a recent research note from the ESRI, shows a reduction of 45,000 approximately (on 2012 figures) in the number of mortgage loans in negative equity up to the end of 2013 and a further reduction is forecast for 2014. In addition, the Deputy will also be aware of the improving situation as regards employment in the economy.
248. Deputy Ruth Coppinger asked the Minister for Finance the steps he will take to protect from eviction the homeowners living in the homes that are part of Ulster Bank's sale of non-performing home loans, Project Aran; and if he will make a statement on the matter. [33987/14]
View answerIrish financial services legislation, including Codes issued by the Central Bank of Ireland, provide strong protections to borrowers when dealing with regulated lenders. In particular, for borrowers facing financial difficulty on a mortgage which is secured on a primary residence, the Central Bank's Code of Conduct on Mortgage Arrears ("CCMA") sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers who are in genuine mortgage difficulty.
The CCMA applies to the mortgage lending activities of all regulated entities, except credit unions, operating in the State, including, inter alia, a financial services provider authorised, registered or licensed in another EU or EEA Member State and which has provided, or is providing, mortgage lending activities in the State. However, the sale of a loan book by a regulated entity to an unregulated entity does not require Central Bank approval. Nevertheless, as the Deputy will be aware, the Government is currently considering a further legislative proposal to provide that CCMA protections will continue to be available to those consumers whose mortgages are sold to unregulated entities. Furthermore, it should also be noted that, even if a repossession case has commenced in the legal system, the Land and Conveyancing (Law Reform) Act 2013 now provides a statutory power to the Court, if it considers it appropriate in the particular case, to adjourn a repossession proceedings in relation to a principal private residence in order to allow the borrower to consult a personal insolvency practitioner (PIP) and, where appropriate, to instruct the PIP to make a Personal Insolvency Arrangement (PIA) proposal. In formulating a proposal for a PIA, the Personal Insolvency Act 2012 places an onus on a PIP to do so on terms that shall not, insofar as reasonably practicable, require the borrower to dispose of an interest or cease to occupy a principal private residence.
249. Deputy Sean Fleming asked the Minister for Finance when he will confirm the amount by which the national debt was reduced following the transfer of the water-related debt in local authorities to Irish Water; the impact this will have on the national debt; the savings expected on an annual basis in terms of interest on the national debt; and if he will make a statement on the matter. [33994/14]
View answerOne the key benefits of establishing Irish Water as a commercial utility is that it will be able to access capital markets to raise the funds needed to tackle infrastructure deficit in water services infrastructure in a timely manner. So, in the future, the borrowings of Irish Water will not affect the national or general government debt. To access capital markets, Irish Water needs to have credibility in terms of collateral and capacity to service its debt.
The identification and quantification of the relevant financial liabilities transferring from Local Authorities to Irish Water is one of the key tasks being undertaken as part of the overall financial exercise currently being conducted between Irish Water and Local Authorities. My officials have been informed by the Department of Environment, Community and Local Government that a due diligence exercise is underway which, when completed, will clarify the position on the non-domestic debtors, along with any unfunded capital balances and any other miscellaneous debtors that are to transfer to Irish Water. When the due diligence exercise is completed the opening balance sheet take-on from Local Authorities will be known.
250. Deputy Sean Fleming asked the Minister for Finance the number of administrative arrangements, as opposed to contracts for service to which the Department is a party; if he will provide in tabular form the party or parties to the administrative arrangement; the duration of these administrative arrangements; the cost recovery value of these administrative arrangements; and if he will make a statement on the matter. [34003/14]
View answerIn replying to this question, I have limited the response to services received from, or provided to, other Government Departments for 2014.
Following the split of the Department in July 2011, and the establishment of the Department of Public Expenditure and Reform (DPER), my Department entered into an administrative arrangement whereby the Department of Finance continued to organise all accommodation arrangements for the two departments and DPER took responsibility for the provision of IT services for the two departments. External costs are shared on a pro-rata basis and will vary from year-to-year. There is no administrative charges for the services we provide or receive.
|
Services the Department of Finance Provides |
- |
|
Public Expenditure & Reform |
Facilities Management including maintenance, repairs, and cleaning |
|
|
Pay & Pensions |
|
|
File Management |
|
|
Printing |
|
Services Other Departments provide to the Department of Finance |
- |
|
Office of Public Works |
Property management and Property Maintenance |
|
Office of the Government Chief Information Office |
ICT Services |
My Department also provides accounting and financial management services to the Department of Public Expenditure and Reform (including the Office of Government Procurement and the Shared Services Vote), the President's Establishment and the Office of the Ombudsman. Under the guise of the Office of the Paymaster General, the Department provides a banking/funds transfer service to all other Departments and Offices, except the Office of Public Works, and a pension payment service to the Department of Public Expenditure and Reform and to the Department of Education (for VEC retirees), Solas, the Law Reform Commission and the National Education and Welfare Board. Since September 2014, the salary and travel expense payment service, which the Department previously provided for its own staff and to various Departments/Offices and other public sector entities, has been transferred to the Shared Services Vote, which is under the Department of Public Expenditure and Reform.
Finally, my Department administers the EU Council Travel Reimbursement Scheme. This scheme operates in all Member States and reimburses for travel costs incurred in respect of attendance at designated EU Council meetings.
251. Deputy Michael McGrath asked the Minister for Finance if he has prepared a memorandum on the economic implications here of a "Yes" vote in the Scottish independence referendum; and if he will make a statement on the matter. [34118/14]
View answerThe Government's consistent position has been that the issue of Scottish independence is a matter for decision by the people of Scotland. The Government has adopted a strictly neutral approach to the debate in Scotland and has avoided speculation on, or anticipation of, potential outcomes.
Our impartiality should not however be mistaken for indifference. We fully recognise the importance of developments in Scotland and we are monitoring the situation and its implications in light of our own interests and policy objectives. We maintain regular contacts with the relevant authorities and with key people, including through our Ambassador to the United Kingdom and our Consul General in Edinburgh. The Government accords high priority to the maintenance and development of strong relations with all our neighbours in these islands and will continue to do so.
252. Deputy Michael McGrath asked the Minister for Finance if Irish banks’ holdings of tracker mortgages will be eligible for the recently announced plan by the ECB to buy asset-backed securities and covered bonds; the potential benefits of this plan for the economy here; and if he will make a statement on the matter. [34120/14]
View answerI have been informed that the detailed modalities of the ECB proposal to purchase Asset Backed Securities ("ABS") and Covered Bonds ("ACS") will not be announced until after the ECB Governing Council meeting on 2 October 2014. As a result it is currently unclear whether existing bonds retained as collateral or newly created bonds by relevant banks in Ireland will be eligible for the schemes. However, to the extent that the ECB proposals reduce the cost of market funding in the ABS and ACS markets then banks could benefit from lower funding costs on any future issuance of such instruments. If tracker mortgages are contained within an eligible ABS and ACS vehicle they will be indirectly eligible for the scheme.
It is also worth noting that the ECB is this month commencing a funding scheme, Targeted Long Term Refinancing Operation ("TLTRO"), which aims to incentivise SME lending growth amongst Euro area banks. The details of the scheme are complex but I expect that Irish banks involved in SME lending will access the scheme.
While it is probable that the Irish banks will be able to access market funding at lower costs the reduction in ECB base rates will negatively impact the profitability of their tracker mortgages. For consumers the ECB announcement is positive for those holding tracker mortgages, a significant proportion of the total mortgage pool, but could be negative for savers if banks lower deposit rates. The impact of these proposals on the economy is uncertain, though I would expect them to be positive for the domestic economy.
253. Deputy Pearse Doherty asked the Minister for Finance the way the apportionment exercise to determine the price of a property for stamp duty purposes in mixed sales is carried out, monitored and verified; and if he will make a statement on the matter. [34163/14]
View answerI am informed by the Revenue Commissioners that the Stamp Duties Consolidation Act 1999 ("the Act") contains specific provisions governing the apportionment of the overall consideration in mixed sales as between residential and non-residential parts of properties for the purposes of determining the appropriate rate of stamp duty to be applied. These provisions are contained in Section 45 and Schedule 1 to the Act. Essentially, the Act requires that the overall consideration in mixed sales is to be apportioned by reference to the value of the residential and the value of the non-residential parts of properties on a basis that is just and reasonable by reference to the facts.
Stamp Duty is a self assessment tax. Accordingly, it is the responsibility of the taxpayer in the first instance when making a stamp duty return to apply the appropriate apportionment on a just and reasonable basis in accordance with the requirements of the Act.
The Revenue Commissioners monitor tax compliance by taxpayers generally in accordance with their compliance programmes. Cases are selected for compliance checks in accordance with various risk criteria applied by Revenue. Where they consider that a taxpayer has not made a just and reasonable apportionment of consideration as between the residential part and the non-residential part of a mixed property, they will examine the facts (where necessary, obtaining an opinion from a valuer) in relation to the reasonableness of the taxpayer's apportionment. Where it is considered that a taxpayer's apportionment is not acceptable, they will correspond with the taxpayer with a view to reaching agreement on the correct apportionment. If agreement cannot be reached, Revenue may amend a taxpayer's assessment to reflect the correct apportionment. A taxpayer may appeal any such amended assessment if he or she disagrees with it.
254. Deputy Finian McGrath asked the Minister for Finance if he will provide in tabular form the total amount of the local property tax in every local authority area from 2009 to 2014; the amount collected in each local authority from 2009 to 2014; and if he will make a statement on the matter. [34169/14]
View answerThe Deputy will be aware that Local Property Tax (LPT) statistics are only available for 2013 and 2014 as LPT was introduced in July 2013.
I am informed by the Revenue Commissioners that compliance data in relation to the Local Property Tax (LPT) is available broken down by city and county councils nationally and the most up to date figures for LPT collected in 2013 and 2014 were published on 18 July 2014 on the Commissioners' website at: Local Property Tax Preliminary Compliance Data as at July 2014 (PDF, 332KB). 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 August 2014, a further €363m was transferred by Revenue to the Exchequer.
255. Deputy Finian McGrath asked the Minister for Finance his views on correspondence (details supplied) on a personal pension plan; and if he will make a statement on the matter. [34173/14]
View answerAt the outset, I should state that primary responsibility for pensions policy rests with the Minister for Social Protection. However, the services provided by the Financial Services Ombudsman (FSO) supplement the availability of the courts to adjudicate on disputes involving financial services products. FSO complaints are free of charge to the consumer.
The legislation governing the FSO is clear about the circumstances in which he can decline to investigate a complaint.
According to the relevant legislation, the Financial Services Ombudsman can decide not to investigate a complaint or to discontinue an investigation of a complaint on the grounds that
(a) the complaint is frivolous or vexatious or was not made in good faith or
(b) the subject-matter of the complaint is trivial or
(c) the conduct complained of occurred at too remote a time to justify investigation or
(d) there is or was available to the complainant an alternative and satisfactory means of redress in relation to the conduct complained of or
(e) the complainant has no interest or an insufficient interest in the conduct complained of.
The legislation is also clear that the Ombudsman is an independent officer and it would not be appropriate for me to intervene in an individual complaint or to comment on how the complaint was treated.
Allegations of fraudulent or illegal activity should be brought to the attention of An Garda Síochána. It is not the role of the Minister for Finance to act as an intermediary. I understand from the details supplied that the correspondent has reported the matter to an Garda Síochána and it would not be appropriate for me to comment on an ongoing investigation.
256. Deputy Ruth Coppinger asked the Minister for Finance the steps he will take to provide for a low cost, low amount social lending facility operated on a non-profit basis to counter the growth of moneylenders; and if he will make a statement on the matter. [34215/14]
View answerThe legislation governing personal loans of €200 and over is the European Communities (Consumer Credit Agreements) Regulations 2010, as amended. This legislation established common rules on consumer credit aimed at harmonising certain aspects of the laws, regulations and administrative provisions on consumer credit in the EU. It increased the transparency of contractual conditions and improved the level of consumer protection.
In addition, moneylenders must comply with the Central Bank's Consumer Protection Code for Licensed Moneylenders and the Consumer Credit Act, 1995. As the Deputy may be aware, the total number of licensed moneylenders has been reducing over the past number of years, with 41 operating in the State as at 15 July 2014. The Central Bank will continue to monitor this sector closely and will take action, where necessary, to protect borrowers' interests.
While I do not have any specific plans to introduce such a lending facility as described by the Deputy at present, any proposal in this area would have to considered in conjunction with the Department of Public Expenditure and Reform and the Department of Social Protection.
257. Deputy Pat Deering asked the Minister for Finance the amount of money that has been collected through the various rates of the universal social charge since it was introduced in tabular form on a yearly basis; the amount would it cost the Exchequer if all rates were reduced by 1% based on the current level of contribution; his plans to review the current rates and bands in the forthcoming budget; and if he will make a statement on the matter. [34236/14]
View answerThe receipts collected under the Universal Social Charge (USC) are listed in the table. It is important to take into account that these figures are based on end-year outturns and are on a Revenue Net Receipt basis. These can differ slightly from Exchequer Receipts for reasons of accounting and timing.
|
USC Social Charge |
2011 - € m |
2012 - € m |
2013 - € m |
|
USC Net Receipts |
3,114 |
3,790 |
3,930 |
I am informed by the Revenue Commissioners that the necessary data are not compiled in such a manner as to enable receipts to be broken down by band. However, the following table provides a breakdown by rate of the number of individuals who paid USC in 2012 (the most recent tax year for which complete data are available). These figures are rounded to the nearest 1,000.
|
USC Rate |
No. |
|
Exempt |
523,000 |
|
4% |
267,000 |
|
7% |
1,444,000 |
There is a 2% USC rate, applicable to the first €10,036. However where an individual's total income for a year does not exceed €10,036, they are exempt from USC, thus there are effectively no cases where an individual is solely liable to the 2% rate.
I am further informed by the Revenue Commissioners that the first and full year cost to the Exchequer, estimated by reference to 2015 incomes, of reducing the USC rates by 1%, would be of the order of €590 million and €830 million respectively.
These figures are estimates from the Revenue tax forecasting model using latest actual data for the year 2012, adjusted as necessary for income, self-employment and employment trends in the interim. They are provisional and may be revised. Married persons or civil partners who have elected or have been deemed to have elected for joint assessment are counted as one tax unit.
258. Deputy Stephen S. Donnelly asked the Minister for Finance the cumulative loss incurred by the National Asset Management Agency since its inception. [34239/14]
View answerNAMA has reported profits in the last three of the four years in which it has been in operation and reported net reserves of over €800m at end-2013. The profit and loss position for each year is set out in a series of NAMA annual reports and financial statements, which are publicly available on the NAMA website, www.nama.ie
259. Deputy Stephen S. Donnelly asked the Minister for Finance the value of assets under management at the National Asset Management Agency. [34240/14]
View answer264. Deputy Stephen S. Donnelly asked the Minister for Finance the value of assets controlled by the National Asset Management Agency, in both NAMA and par value terms; the value of assets that NAMA would need dispose of by the end of 2016, to meet its recently announced internal target of disposing of at least 80% of assets by the end of 2016; and if he will make a statement on the matter. [34245/14]
View answerI propose to take Questions Nos. 259 and 264 together.
I am advised by NAMA that the value of NAMA loans and receivables at end-June 2014 was €15.3 billion.
NAMA has indicated that it will have redeemed 50% (equivalent to €15 billion) of its bonds by end 2014 and it proposes to redeem 80% of its senior debt by 2016. It is a matter for NAMA, by reference to its independent commercial mandate, to determine how best to meet this target.
260. Deputy Stephen S. Donnelly asked the Minister for Finance if the objective of the National Asset Management Agency is to break even by the time it concludes its operations and if such an objective requires NAMA to generate a profit to offset its cumulative loss, and whether the NAMA objective of breaking even equates to a net annual return on assets under management of approximately 0.3% per annum for each of the next six years. [34241/14]
View answerIn early 2013 after the appointment of Special Liquidators to IBRC, the State had a contingent liability of €43 billion, including NAMA's State-guaranteed senior bonds. By the end of 2015, this contingent liability will have fallen to €15 billion.
I am advised that one of NAMA's key objectives, over its projected life, is to redeem, at a minimum, the Senior Bonds issued as consideration for loans in addition to recovery of its carrying costs and recovery of working and development capital expenditure advanced to debtors. I am advised that, by the time it concludes its operations, based on the assumption that current market conditions will be sustained, NAMA expects that it will be in a position to repay its senior and subordinated debt and it is optimistic that it may also generate a surplus for the taxpayer. However, at this point, it is too early to speculate as to the scale of any potential future surplus and, by extension, the ultimate return that will be achieved on its acquired assets.
261. Deputy Stephen S. Donnelly asked the Minister for Finance the steps that have been taken by his Department or the National Asset Management Agency regarding target rates of returns on investment sought and obtained by asset management companies (details supplied) and other organisations which invested significant sums in Irish financial and property assets to ensure adequate returns on investment; and if he will make a statement on the matter. [34242/14]
View answerNAMA engages actively with a broad array of investors as part of its market activity. These investors are not homogeneous in their objectives and targets; they range from investors with relatively short-term investment horizons and high rate of return targets to investors with long-term horizons and requirements for steady, less volatile, returns. Their asset preferences will also vary by reference to asset classes and regions. Based on prices achieved and the level of competition evident, NAMA is satisfied that the diversity of the asset and loan portfolios which it has offered to the market over the past two years has been well aligned with the broad range of investor requirements.
262. Deputy Stephen S. Donnelly asked the Minister for Finance further to the publication of the report by the Comptroller and Auditor General into the operation of National Asset Management Agency on 20 May 2014, which recommended that NAMA adopt a target annual rate of return, and following the appearance by NAMA at the Committee of Public Accounts on 29 May, when the chief executive officer of NAMA rejected the Comptroller and Auditor General's proposal, his plans to direct NAMA to adopt a target annual return on investment; his views on NAMA’s rejection of the Comptroller and Auditor General’s proposal; and if he will make a statement on the matter. [34243/14]
View answerI am advised that NAMA is currently reviewing its options with regard to the C&AG's recommendation. As was pointed out by the NAMA Chairman at a meeting of the Public Accounts Committee in May, NAMA already has in place a high-quality Management Reporting and Key Performance Indicator (KPI) infrastructure. In that context, NAMA is assessing what incremental benefit, if any, a potential rate of return analysis would yield.
My officials have been in contact with NAMA regarding this issue since the C&AG's proposal and I look forward to hearing the outcome of NAMA's considerations in this regard.
263. Deputy Stephen S. Donnelly asked the Minister for Finance further to the statement by the chief executive officer of a company (details supplied), if he is concerned that State-controlled assets are being sold to this and similar organisations at prices which do not reflect long-term values; and if he will make a statement on the matter. [34244/14]
View answerIt would be completely inappropriate for me to comment on these third party opinions. I am advised that NAMA's strategy in each of its main markets has been to release assets for sale in a phased and orderly manner consistent with the level of demand, the availability of credit and the absorption capacity of each market. In Ireland, over the period from 2010 to 2012, NAMA adopted a strategy of limiting asset disposals into a market where demand was practically non-existent and where prices were still trending downwards. Releasing too many assets for sale could have damaged a very fragile market.
In 2013, the Irish market stabilised and commercial yields were at levels which began to attract the attention of serious investors. The strategy adopted by NAMA in its early years has contributed to the robust recovery that is now evident in the market, a recovery which in turn has enabled NAMA to increase the flow of assets for sale and to sell loan portfolios and properties at very competitive prices.
NAMA's policy is that the sale of all loans and the sale of properties by debtors and receivers should be openly marketed to ensure that the best price available in the market is achieved in all instances. I fully endorse NAMA's strategy of taking full advantage of current strong market conditions to reduce the contingent liability on taxpayers represented by its senior, State-guaranteed, bonds.
265. Deputy Stephen S. Donnelly asked the Minister for Finance the process by which the special liquidators of the Irish Bank Resolution Corporation will attempt to dispose of the remaining assets of IBRC; if those assets will be revalued and, if so, on what basis; the sales process including expected timescales; the outcome for any assets unsold at the end of the process; his plans to direct the National Asset Management Agency to acquire any unsold assets; and if he will make a statement on the matter. [34246/14]
View answerThe Special Liquidators expect that the proceeds raised from the sale of IBRC assets to be sufficient to fully repay the IBRC debt to NAMA (previously the Central Bank of Ireland). NAMA acquired €12.9bn of senior debt in February 2013 as part of the Promissory Note transaction, following repayments by the Special Liquidators this has been reduced to €0.1bn at the end August 2014 and is expected to be fully repaid by the end of the year. As a result, NAMA will not now be obliged to purchase unsold IBRC assets at their independent valuation as previously envisaged.
The Special Liquidators are devising and managing a further sales process in respect of the unsold assets in a manner that maximises the return to all remaining creditors of IBRC, including the State. A revaluation process of the unsold assets, using standard valuation methodologies appropriate to each class of asset, is in the process of being completed by independent professional advisors.
Over the last number of months the Special Liquidators corresponded with all remaining borrowers of IBRC providing them with an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for loan assets. Consideration has been given to these borrower representations and the Special Liquidators are in the process of responding to these borrower representations.
The Special Liquidators expect the sales process for the majority of the loan assets to be completed before 31 December 2014.
266. Deputy Stephen S. Donnelly asked the Minister for Finance the original number of debtor connections managed by the National Asset Management Agency after it had concluded the acquisition of loans from the financial institutions from 2010 to 2012; and the number of debtor connections currently managed at NAMA, following a number of recent disposals of assets by NAMA. [34247/14]
View answerAt the end of 2011, after it had acquired all of its loans, NAMA managed 775 debtor connections. Arising from loan and portfolio sales and a refinancing of loans by some debtors, NAMA currently manages 676 connections.
267. Deputy Stephen S. Donnelly asked the Minister for Finance the number of debtor connections being managed by the National Asset Management Agency whose loans have been foreclosed upon. [34248/14]
View answerI am advised by NAMA that, as at end-August 2014, 427 insolvency appointments had been made across a total of 327 debtor connections. Of these debtor connections, 210 debtor connections are fully enforced whilst 117 debtor connections are partially enforced.
268. Deputy Stephen S. Donnelly asked the Minister for Finance further to the submission for approval in April 2014 to the European Commission of the acquisitions of approximately €47 billion of par value loan acquisitions by the National Asset Management Agency, if he will provide an update on that approval; if the Commission has communicated any issues or problems to NAMA; and if he will make a statement on the matter. [34249/14]
View answerOn July 29, 2014 the European Commission published its decision for case SA.38562 regarding the transfer of tranches 3 - 9 of assets to NAMA. As was the case in previous transfers of assets to NAMA, the European Commission raised no objection to the transfer.
The European Commission decision is available on the European Commission website at http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_38562. The European Commission intends to publish the full text of the decision in due course.
269. Deputy Stephen S. Donnelly asked the Minister for Finance if he will provide an update on the provision of vendor finance by the National Asset Management Agency; the gross amount provided to date; the total repaid to date; the total outstanding today; the total available for buyers of NAMA assets today; the way in which NAMA's vendor finance will operate in light of recent announcements which anticipate an earlier than planned conclusion to the work of NAMA; and if he will make a statement on the matter. [34250/14]
View answerI am advised by NAMA that it has advanced €373m to date in vendor finance and that, taking account of the net impact of cash receipts, interest accrued and currency movements, €356m remains outstanding.
As the Deputy may be aware, NAMA indicated in May 2012 its willingness to provide up to €2 billion in vendor finance, if required, to facilitate investment in Irish commercial property. I am advised that demand for vendor finance has been less than was initially anticipated and that the main reasons for this have been the prevalence of international investors with ready access to capital, a gradual increase in domestic bank lending and the introduction of Irish REITS as an alternative investment mechanism. I do not propose to comment on the particular terms and conditions of particular vendor finance transactions as this is a commercial matter for NAMA. An information document on vendor finance is available on the NAMA website www.nama.ie.
270. Deputy Stephen S. Donnelly asked the Minister for Finance if any buyers of loans from Irish Bank Resolution Corporation have demanded and-or received 100% of par value loans soon after buying those loans at discounts from the Irish Bank Resolution Corporation; and if he will make a statement on the matter. [34251/14]
View answerThe Special Liquidators have been appointed to maximise the overall return for creditors in the liquidation including the Irish taxpayer. I am advised by the Special Liquidators that they are unable to comment on the intentions and/or on the subsequent actions of the third party purchasers of loan assets once the loan assets have been sold.
271. Deputy Stephen S. Donnelly asked the Minister for Finance if he will confirm that the special liquidators of Irish Bank Resolution Corporation refused an offer, in March 2014, to redeem at par a €36 million loan linked to the Galway Clinic; if the loan was subsequently sold by the special liquidators of IBRC to a company (details supplied) which then issued a repayment demand in July 2014 which was met in full; if such details are not available or are commercially sensitive, the controls he has in place to monitor any such occurrences; and if he will make a statement on the matter. [34252/14]
View answerThe Special Liquidators have been appointed to maximise the overall return for creditors in the liquidation including the Irish taxpayer. The Special Liquidators are unable to comment on individual cases or on the subsequent actions taken by purchasers of loan assets once the loan assets have been sold.
