Written Answers Nos. 239-255
239. Deputy Jerry Buttimer asked the Minister for Finance the changes to the EU-ECB-IMF programme of financial support he has secured since taking office; the amount of savings generated by each change; the cost to the State had each change to the programme not been achieved; and if he will make a statement on the matter. [2497/15]
View answerThere have been a number of improvements to the terms of our EU-IMF Programme loans since they were initially agreed in late 2010. These changes have included reductions of the interest rates and, in the case of the EU facilities, extensions of maturities. While not part of the EU-IMF Programme we have also negotiated the replacement of the Promissory Notes issued to the Irish Bank Resolution Corporation (IBRC) with a series of longer term, non-amortising floating rate Government bonds. In addition, we have recently made an early repayment of a large portion of Ireland's IMF programme loans and further early repayments are planned.
The savings arising from these measures are set out below. These savings are equivalent to the cost of not having achieved these measures.
When the programme was initially agreed in late 2010, the average interest rate on the €67.5 billion available to drawdown from the external sources was estimated by the EU Commission to be 5.82% on the basis of market rates at that time. The average life of the borrowing was initially set at 7.5 years.
In July 2011, the Euro Area Heads of State or Government (HOSG) agreed to reduce the cost of the European Financial Stability Facility (EFSF) loans, and similar reductions were subsequently agreed for the interest rates on the loans provided by the European Financial Stabilisation Mechanism (EFSM) and also by the three bilateral lenders (UK, Sweden and Denmark). It is estimated that the interest rate reductions on the EU funding mechanisms and the bilateral loans are worth of the order of €9 billion over the initially envisaged 7½ year term of these loans. As of end-December 2014 the all in euro equivalent cost of our EU IMF programme loans is estimated to have been 3.3%.
Also in 2011, the average maturity of the EFSM and the EFSF loans was extended to a planned 12.5 and 15 years respectively.
In April 2013, EU Finance Ministers agreed in principle to further extend the maximum weighted average maturities on our EFSF and EFSM loans by up to 7 years, over and above the extension agreed in 2011. This further maturity extension removes a refinancing requirement of some €20 billion for the Irish State in the years 2015 to 2022. This extension of maturities has a number of significant benefits for Ireland, including smoothing our redemption profile, improving long term debt sustainability and it also has a positive impact on the cost of Exchequer borrowing through creating further downward pressure on our borrowing costs.
While not part of the EU-IMF Programme, it is also worth mentioning that in February 2013, the Irish Government replaced the Promissory Notes issued to IBRC with a series of longer term, non-amortising floating rate Government bonds. This has resulted in significant benefits to the State, including increasing the weighted average life from c.7-8 years for the Promissory Notes to c.34-35 years for the floating rate notes.
The most recent initiative we have undertaken is the early repayment of up to €18.3 billion of our IMF loans.
Following completion of all necessary approval procedures by our EU and bilateral lenders in November 2014, Ireland repaid the first €9 billion tranche to the IMF over two dates in December 2014. The €9 billion repayment represents almost 40% of Ireland's IMF loan facility.
This repayment transaction is estimated to reduce the interest bill by approximately €750 million over the lifetime of the loans.
By reducing the interest bill on the national debt we reduce the amount of resources that go towards servicing the debt. This frees up resources for investment in activities that will grow the economy, create jobs and opportunities. This has knock on benefits across the economy and can lower the cost of debt for businesses and families.
Further early repayments of up to €9.3 billion are planned. .
Total estimated interest savings in excess of €1.5 billion are expected to be achieved when the early repayment to the IMF is completed. The actual interest savings will depend on a range of factors including the timing of, and interest rate on the bonds issued as well as the timing and volume of early repayments to the IMF.
240. Deputy Jerry Buttimer asked the Minister for Finance the amount spent by his Department on special advisers for each of the past four years; the way this compares with the four years from 2007 to 2010; and if he will make a statement on the matter. [2506/15]
View answerI wish to advise the Deputy that the total amount spent by my Department on special advisors for the past four years was €757,052. This compares to €756,333 spent by my Department on special advisors in the four years 2007 to 2010.
I have 2 special advisors. In total there were 5 special advisors in the years 2011 to 2014, 2 from the previous Government and 1 of my special advisors left on a career break and was replaced.
There were 3 special advisors in the four years 2007 to 2010.
241. Deputy Jerry Buttimer asked the Minister for Finance the amount spent by his Department on ministerial drivers and associated travel expenses for each of the past four years; the way this compares with similar expenditure for the four years from 2007 to 2010; and if he will make a statement on the matter. [2522/15]
View answerThe information requested by the Deputy in respect of my Department is set out in the table below.
Prior to 2011 Ministerial transport was provided by An Garda Síochána through the Department of Justice and Equality.
|
Year |
2011 |
2012 |
2013 |
2014 |
|
Pay |
€48,139.35 |
€71,117.00 |
€70,936.50 |
€69,636.90 |
|
Subsistence |
€24,015.19 |
€25,673.94 |
€27,638.40 |
€28,482.43 |
242. Deputy Seán Ó Fearghaíl asked the Minister for Finance if he will address concerns raised in correspondence (details supplied) in County Kildare regarding vehicle registration tax; and if he will make a statement on the matter. [2560/15]
View answerI am advised by the Revenue Commissioners that in order to qualify for relief from Vehicle Registration Tax a person must have use and possession of a vehicle for six months before transferring residence to Ireland. The individual concerned did not have possession and use of the vehicle for six months before he transferred residence to Ireland and accordingly does not qualify for the relief.
It is open to the individual concerned to appeal the decision of Revenue. The individual concerned was advised by Revenue in writing on 23 December 2014 regarding the appeals process.
243. Deputy Michael McGrath asked the Minister for Finance the position regarding the reclassification by the Revenue Commissioners of smoothies and milk-based drinks for VAT purposes, which has resulted in the standard 23% VAT rate being applied; if his attention has been drawn to the likely impact this will have on the sector; the basis for the reclassification; if the Revenue Commissioners are the final arbiter on the issue; and if he will make a statement on the matter. [2562/15]
View answerI am advised by the Revenue Commissioners that "smoothie" is a generic term for a range of blended products containing, among other things, fruit juices and other products derived from fruit, frozen yogurt and/or ice cream and, in some cases, chocolate and confectionery products.
Paragraph 8(1) of Schedule 2 of the Value-Added Tax Consolidation Act 2010, provides for the application of the zero rate to food and drink, but specifically excludes, from the zero rate, frozen yoghurt, juice extracted from, and other drinkable products derived from fruit or vegetables. Accordingly, frozen yoghurt and smoothies are taxable at the standard rate (currently 23%).
The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. The EU VAT Directive generally provides that supplies of goods and services be chargeable to VAT at the standard rate. Member States can retain historical zero-rated VAT treatment under Article 110 of the EU VAT Directive, where a good or service was zero rated on and from 1 January 1991. Ireland applies the zero rate to most food. In this context, it is not possible to apply the zero rate to any new food and drink items that have not already applied at the zero rate.
Interpretation of VAT law by the Revenue Commissioners is guided by the decision of the Appeal Commissioners and the Courts and decisions of these institutions may lead to changes in interpretation such as those that relate to smoothies. VAT cases before these fora have been determined on the basis that food products that may benefit from the zero rate must fall within the ordinary and everyday meaning of "food" and not be excluded from the zero rate by the goods specified in Section 8 of the Second Schedule. Any business that is dissatisfied with the rate of VAT has a number of avenues of redress available including internal review by another Revenue officer, external review by a nominated person and formal appeal avenues to the Appeal Commissioners and onwards to the Courts.
244. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare has an entitlement to a tax refund; and if he will make a statement on the matter. [2570/15]
View answerI am informed by the Revenue Commissioners that records indicate that no PAYE income tax was deducted from wages of the person concerned during 2011, 2012 and 2013. Universal Social Charge (USC) was deducted in those years.
The Revenue Commissioners have arranged for PAYE Balancing Statements to issue for 2011, 2012 and 2013 and the overpayments of USC for those years will be refunded to the person concerned.
In relation to the tax year 2014, the Revenue Commissioners have written to the person concerned requesting him to forward his P60 to enable a review to be carried out for that year.
245. Deputy Robert Dowds asked the Minister for Finance his views on the bankruptcy arrangements put in place in respect of a person (details supplied) who previously owed €1.2 billion to the Irish Bank Resolution Corporation, and therefore to the taxpayer and will now pay a total of €10,000 per year for two years before being absolved of all debts; and if he will make a statement on the matter. [2615/15]
View answerNeither I, as Minister for Finance, nor the Special Liquidators of IBRC were involved in the decision(s) made by the Bankruptcy Trustee in respect of Mr Sean Quinn and therefore are unable to comment on same.
Additionally, neither I, as Minister for Finance, nor the Special Liquidators of IBRC are in a position to comment on individual cases.
246. Deputy Dan Neville asked the Minister for Finance if the Revenue Commissioners has a legal right to block a person's current account; if so, the circumstances under which this will be allowed and facilitated; and if he will make a statement on the matter. [2625/15]
View answerI assume that the Deputy's reference to blocking a person's current account relates to the use of Attachment Orders by Revenue.
That being the case, the legal basis for the use of Attachment Orders is provided for by Section 1002 of the Taxes Consolidation Act 1997 (as amended). The Section gives Revenue the authority to instruct financial institutions to transfer funds, to the value of the outstanding debt, from any account held in the name of a defaulting taxpayer. It also provides Revenue with the authority to instruct any third party owing a debt to the defaulting taxpayer to pay those funds directly to Revenue.
Section 1002 does not provide for the blocking of accounts as indicated by the Deputy and Revenue has assured me that it does not instruct the financial institutions in this regard. Any such actions are a question for those bodies rather than for Revenue.
In regard to the deployment of its various debt collection/enforcement options, including Attachment, Revenue has assured me that before any such action is considered, the defaulting taxpayer is given every opportunity to engage and agree mutually acceptable arrangements in respect of the outstanding debt. The enforcement process only starts where there is no meaningful engagement by the taxpayer in seeking realistic solutions.
With specific regard to the use of Attachment, Revenue has confirmed to me that the power is normally only deployed where other enforcement options have failed to secure the outstanding debt. For example, during 2014 Revenue deployed Attachment in less than 5,000 cases out of a total of almost 41,000 cases where debt was enforced. Revenue has also assured me that it has strict guidelines in place, including authorisation at a senior level, to ensure Attachment is only used in appropriate circumstances.
247. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is due any refund on the taxes they have paid; and if he will make a statement on the matter. [2709/15]
View answerI am advised by the Revenue Commissioners that their records indicate that the person concerned was last employed in 2011 and that during that year no tax or universal social charge was deducted from her wages.
The Revenue Commissioners will write to the person concerned to establish her employment status and income since December 2011.
248. Deputy Michael McGrath asked the Minister for Finance the amount of dated subordinated debt on 30 September 2008 in the banks which would become covered institutions; the total amount of losses which have been imposed until now in respect of those dated subordinated bonds; if any of those dated subordinated bonds from 2008 remain in the system; and if he will make a statement on the matter. [2715/15]
View answer249. Deputy Michael McGrath asked the Minister for Finance the amount of undated subordinated debt on 30 September 2008 in the banks which would become covered institutions; the total amount of losses which have been imposed until now in respect of those undated subordinated bonds; if any of those undated subordinated bonds from 2008 remain in the system; and if he will make a statement on the matter. [2716/15]
View answerI propose to take Questions Nos. 248 and 249 together.
Since 2008 burden sharing of c.€15bn has been achieved with holders of dated and undated subordinated bonds in the covered institutions.
Unfortunately my Department has been unable to obtain the remainder of the information requested by the Deputy in the time available. I will write to the Deputy directly with the information as soon as it becomes available.
250. Deputy Michael McGrath asked the Minister for Finance as at 1 October 2010 following the expiry of the original bank guarantee, the amount of unguaranteed secured senior bonds not covered by the eligible liabilities guarantee scheme in the covered institutions; and the amount of unguaranteed unsecured senior bonds not covered by the eligible liabilities guarantee scheme in the covered institutions. [2717/15]
View answerUnfortunately my Department has been unable to obtain the information requested by the Deputy in the time available. I will write to the Deputy directly with the information as soon as it becomes available.
251. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied); and if he will make a statement on the matter. [2718/15]
View answerFirstly, I must confirm to the Deputy that I have no responsibility for any variation in the variable mortgage interest rate charged by regulated financial institutions. The lending institutions in Ireland - including those in which the State has a significant shareholding - are independent commercial entities. I have no statutory role in relation to mortgage interest rates charged, that is a commercial matter for each institution concerned. A Relationship Framework has been specified that defines the nature of the relationship between the Minister for Finance and the banks in which the State has a shareholding. These Frameworks were published on 30 March 2012 and can be found at: http://www.finance.gov.ie/what-we-do/banking-financial-services/shareholding-management-unit/shareholding-management-unit/.
The interest rates charged by lending institutions in Ireland are determined taking into account a broad range of factors, including European Central Bank base rates, deposit rates, market funding costs, the competitive environment and an institution's overall funding mix.
I should also point out that while the cost of funds for Irish lending institutions has come down significantly in the past couple of years, it is still much higher than the ECB base rate. Finally, lending institutions in Ireland, including those in which the State has a significant shareholding, must ensure that the rate they lend at is economically sustainable and provides a return for that institution and ultimately the State, where it is a shareholder. Without a positive return on their lending, these institutions would not be capable of maintaining and growing their capital base and thus be in a position to support the economy.
The Deputy should also be aware that the Central Bank has responsibility for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements and for ensuring ongoing compliance with applicable statutory obligations. However the Central Bank has no statutory role in the setting of interest rates by financial institutions, apart from the interest rate cap imposed on the credit union sector in accordance with the provisions of the Credit Union Act, 1997.
252. Deputy Róisín Shortall asked the Minister for Finance the number of housing units under the control of the National Asset Management Agency with a breakdown by county; his plans for bringing these into use by way of letting or sale; and if he will make a statement on the matter. [2795/15]
View answerI am advised by NAMA that of the approximately 14,000 completed residential units currently within the Agency's portfolio, 86% are located in Dublin, the mid-east counties of Wicklow, Kildare, Meath and Louth, and the other main urban centres of Cork, Limerick and Galway. A more detailed breakdown is set out below.
|
Region |
Percentage |
|
Dublin |
48 |
|
Mid-East (Wicklow, Kildare, Meath, Louth) |
5 |
|
Rest of Leinster |
5 |
|
Cork |
16 |
|
Limerick |
5 |
|
Rest of Munster |
6 |
|
Galway |
12 |
|
Rest of Connacht |
2 |
|
Donegal, Monaghan, Cavan |
1 |
NAMA advises that all of these properties are currently available as supply in the residential market. Approximately 9,000 are rented in the private rental market, whilst the remainder are either let or reserved for social housing or are available on the open market through professional agents appointed by NAMA debtors and receivers to either rent or buy.
In addition, as a secured lender NAMA is making a very substantial contribution to the creation of additional supply in the residential market through its funding to debtors and receivers to complete existing residential schemes and for the construction of new residential schemes. This includes NAMA funding for the construction of 4,500 new residential units in the Dublin area in the three years to end-2016, over 1,000 of which were delivered in 2014.
253. Deputy Derek Nolan asked the Minister for Finance the estimated cost of the change announced in budget 2015 of the reduction in the 41% rate of income tax to 40% for income earners earning over €70,044; and if he will make a statement on the matter. [2799/15]
View answerI am informed by the Revenue Commissioners that the estimated cost to the Exchequer of the reduction in the 41% rate of Income Tax to 40% for income earners earning over €70,044 is in the order of €180 million. This cost includes the benefit these income earners get on all of their incomes liable to the higher rate and not just on the portion of their incomes above €70,044. It should also be noted that most of these income earners will have been liable to increased Universal Social Charge (USC) rates on income in excess of €70,044, which limits the benefit of the total tax package to any one individual to a maximum of around €14 per week. It is estimated that the additional yield on USC for these cases will be in the order of €113 million.
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 estimated by reference to 2015 incomes and are provisional and may be revised. Married persons or civil partners who have elected or who have been deemed to have elected for joint assessments are counted as one tax unit.
254. Deputy Brendan Griffin asked the Minister for Finance his plans to extend the VAT rebate scheme for persons with disabilities to include the costs of construction of new houses adapted to their needs; and if he will make a statement on the matter. [2828/15]
View answerI am advised by the Revenue Commissioners that there is provision for the refund of VAT incurred on qualifying goods for the exclusive use of disabled persons in the Value Added Tax (Refund of Tax) (No 15) Order 1981. The order specifies the degree of disability and defines the qualifying goods as goods which are aids or appliances, including parts and accessories, specially constructed or adapted for use by a disabled person. The Order extends to works carried out on homes to adapt them to make them more accessible for disabled persons but it does not cover the general costs of construction of a new house.
255. Deputy Dara Calleary asked the Minister for Finance the way he will pursue his support for a European debt conference; if he will raise the issue at EU Finance Ministers Council; and if he will make a statement on the matter. [2857/15]
View answerThe question assumes my support for a European debt conference. This does not represent my position. My view is that when countries have difficulties, a process of negotiation is always better than one of conflict.
