Written Answers Nos. 80-89
80. Deputy Michael McGrath asked the Minister for Finance the change in the general Government debt from December 2007 to December 2014; the way this is broken down between the building up of cash balances, paying for Government goods and services, and recapitalisation of the banks; and if he will make a statement on the matter. [6533/15]
View answerThe increase in general government debt for the period December 2007 to December 2014 is projected to be €156 billion. The first official return for end 2014 will be made by the CSO in the Maastricht Returns at the end of March this year.
The Deputy should note that borrowing is not undertaken for any specific purposes but rather as the requirements for cash-flow occur.
Accumulated exchequer cash and other short-term investment balances which were included in this composition of debt figure have increased by circa €7 billion.
The headline general government deficit for the period is circa €142 billion. Of this, the cumulative underlying general government deficit, i.e. the excess of day to day expenditure over revenue, is €96 billion. The balance of the deficit relates to one-off transactions, including capital injections to the financial sector.
A futher amount of approximately €6 billion was paid into the banking sector in equity injections, which are classified as financial transactions rather than general government expenditure and, as a result, did not have any impact on the deficit figures. Other capital injections that were made include those under Ministerial direction by the NPRF Commission and did not require borrowing, hence there was not any debt effect associated with these payments.
81. Deputy Michael McGrath asked the Minister for Finance his estimate of Ireland’s current structural deficit; and if he will make a statement on the matter. [6535/15]
View answerThe structural deficit for 2014 is estimated at 4.4% of GDP.
This is based on applying the harmonised methodology for the calculation of potential output to Budget 2015 macro-fiscal projections. The structural deficit is calculated as the headline general government balance less the part of the deficit owing to the economic cycle. This is known as the 'cyclical budgetary component' and relies on an estimate of the output gap. From this, one-off temporary measures impacting the deficit are also deducted to arrive at an estimate of the structural budgetary position. This is the budgetary position that would prevail in the absence of the impact of the economic cycle. On this basis, consistent with the Budget 2015 outlook, the structural budget balance is projected to improve to -3.4% of GDP in 2015.
The projected 2015 structural balance will be reassessed in the context of the forthcoming Stability Programme Update next April.
82. Deputy Michael McGrath asked the Minister for Finance the current status of the reports completed by McCann FitzGerald and Ernst and Young into certain corporate governance matters at the former Irish Nationwide Building Society; if the reports have been referred to the Garda Síochána and the Office of the Director of Corporate Enforcement; the action being taken on foot of the content of the reports; and if he will make a statement on the matter. [6536/15]
View answerAs the Deputy is aware, a number of reports were produced by Ernst and Young and McCann FitzGerald at the request of the INBS Board. Copies of all of these reports have been provided to the Central Bank of Ireland (CBI ) under the terms of a protocol for limited disclosure agreed between the parties to preserve legal privilege over the material. IBRC was prohibited from disclosing these reports to anyone without the consent of the CBI, McCann FitzGerald and Ernst & Young.
I am advised by the Special Liquidators that given the on going nature of the investigations by the Authorities, including in particular the investigation being conducted under the Central Bank's Administrative Sanctions Procedure into historic lending practices at INBS, the reports cannot legally be published at this time.
As the Deputy is aware, there are ongoing civil proceedings against former directors of INBS. No reports about INBS legacy issues were submitted to the Office of the Director of Corporate Enforcement as part of these proceedings as that office does not have statutory jurisdiction over building societies.
Publication of the reports may be considered when the Central Bank proceedings are concluded or when any Garda investigation has been finalised (or any proceedings arising from such investigation are concluded).
83. Deputy Michael McGrath asked the Minister for Finance when the special liquidator of Irish Bank Resolution Corporation will be in a position to provide an updated statement of affairs; and if he will make a statement on the matter. [6537/15]
View answerI am advised by the Special Liquidators that they are not obliged to produce a statement of affairs. However, under Section 306 of the Companies Act, the Special Liquidators are required to send to the registrar of companies a statement containing the prescribed particulars about the proceedings in and position of the liquidation of IBRC within 30 days after 2 years from the date IBRC was put into liquidation (6 February 2013), that is no later than 9 March 2015. This statement will be available to access from the Companies Registration Office.
84. Deputy Michael McGrath asked the Minister for Finance if he expects an additional liability to the State to arise in respect of Newbridge Credit Union, County Kildare; and if he will make a statement on the matter. [6538/15]
View answerIn November 2013, on foot of a request from the Governor of the Central Bank, I agreed to the payment to permanent tsb (ptsb) of a financial incentive of up to €53.9m to support the transfer of Newbridge Credit Union Ltd - excluding the premises, to ptsb. The financial incentive consists of:-
- €23m in cash up-front
- €4.25m for restructuring and integration costs
- €2m for other transferring liabilities, and
- a maximum additional €24.7m to cover additional costs resulting from all loans being written-off with nothing recovered.
I have been informed by the Central Bank that the current position in respect of drawdowns to date and expected further expenditure from the Financial Incentives Agreement is as follows:
- Restructuring Costs payments to cover the establishment and maintenance of a recovery and underwriting platform for the Newbridge Credit Union loans. This is capped at a possible €3 million. To date, €1.3 million has been drawn down. The Central Bank expects to incur a further c. €0.2 million in such costs.
- Integration Costs payments to cover the costs of any redundancies of former Newbridge Credit Union staff. This is capped at a possible €1.25 million. To date, nothing has been drawn down, but the Central Bank expects to incur the full €1.25 million allocated to integration costs.
- Transferring Liabilities payments to cover liabilities that transferred to ptsb that were unknown at the point of transfer. This is capped at a possible €2 million. To date, €0.3 million has been drawn down. The Central Bank does not expect further drawdowns under this heading.
- Loss Compensation Payments payments to ptsb to cover deterioration in the performance of the Newbridge Credit Union loan book. The Central Bank has a 50/50 profit and loss sharing arrangement over a ten year period with ptsb in respect of these loans, so that the maximum cost the Central Bank can incur is €24.7 million if all of the loans defaulted. If the loans perform well, the Central Bank may have no liability under this heading, or could actually be paid by ptsb. Given the performance on the loan book to date, the Central Bank expects to incur some costs under this heading, although nowhere close to the capped amount.
In accordance with Section 46(6) of the Central Bank and Credit Institutions (Resolution) Act 2011, the sale proceeds generated by the sale of the Newbridge Credit Union premises (net of expenses) will be paid by NCU into the Credit Institutions Resolution Fund in due course. Under the Act, the Credit Institutions Resolution Fund is the principal creditor of NCU in the amount of the financial incentive paid or payable to ptsb.
85. Deputy Michael McGrath asked the Minister for Finance the number of credit unions currently subject to lending restrictions; the average length of time for which these have applied; and if he will make a statement on the matter. [6539/15]
View answerThe imposition of lending restrictions is the responsibility of the Registrar of Credit Unions, who is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
As Minister for Finance, my role is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
I have been informed by the Central Bank that it has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns and resultant risk to members' savings.
The Registrar of Credit Unions informs me that currently about 56% of all credit unions are subject to lending restrictions. 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.
There are two main types of lending restrictions:
1. Monthly lending restrictions. At this time less than 10% of all credit unions have this restriction in place which limits the total amount of lending within one month. Therefore, over 90% of credit unions (i.e. over 350 credit unions) have no monthly lending restrictions.
2. Maximum loan size. The average loan size in the credit union sector is just above €6,000. Currently 10 individual credit unions have lending restrictions that limit the amount per loan to less than €10,000. Although there are individual credit unions with lending restrictions above €10,000 per loan, that the vast majority of credit unions (over 95%) can continue to make individual loans significantly greater than the average loan size for the sector.
These restrictions are reviewed on a regular basis to determine whether or not they are still set at appropriate levels. Reviews of individual lending restrictions are included within the planned 2015 supervisory work programme of the Registry of Credit Unions. Where a credit union can evidence improvements in its credit management practices, and systems and controls which support prudent lending, the Registrar is open to removal of restrictions. I have introduced legislative change whereby, as of 1 August 2013, regulatory directions are appealable to the Irish Financial Services Appeals Tribunal.
I have, on a number of occasions, highlighted the Governments' recognition of the important role of credit unions as a volunteer co-operative movement in this country and also the importance of getting lending going in the economy. However, the issue of lending needs to be constructively considered in order to ensure a viable credit union sector into the future.
86. Deputy Michael McGrath asked the Minister for Finance the amount of vendor finance that has been provided by the National Asset Management Agency to date; the number of projects financed; the number of housing units that will be provided by these projects; and if he will make a statement on the matter. [6541/15]
View answerI am advised by NAMA that it has to date advanced €373m in vendor finance across six transactions involving the sale of commercial property securing its loans. These transactions have involved the sale of completed office and retail accommodation and therefore the Deputy's reference to housing units does not arise.
NAMA advises that a number of positive market developments in the past year mean that vendor finance is not currently required as part of its market offering. These developments include the prevalence of international investors and international debt providers with ready access to capital, the introduction of Irish REITs as an alternative investment mechanism and a gradual increase in domestic bank lending to property. Vendor Finance was introduced by NAMA in 2012 in a very different market and financing context and was one of a range of measures introduced by NAMA to encourage investment in Irish property at a time when there were few transactions in the market and when there was limited finance available.
87. Deputy Michael McGrath asked the Minister for Finance the taxation provisions currently in legislation that are due to expire at the end of 2015; and if he will make a statement on the matter. [6542/15]
View answerThe following provisions are due to expire at the end of 2015:
|
Legislative Provision |
Brief Description |
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Section 486C of the Taxes Consolidation Act 1997
|
This section provides relief from corporation tax for a company that commences a new qualifying trade, and the relief is available where the total corporation tax payable for an accounting period does not exceed €40,000. Marginal relief is available where the corporation tax payable is between €40,000 and €60,000. The value of the relief is linked to the amount of employer PRSI paid by a company, in order to link the scheme with the creation of jobs. The relief was due to expire at the end of 2014, and was extended by section 39, Finance Act 2014 to companies which commence a new qualifying trade in 2015. A review of the operation of this measure is taking place in 2015 to ensure that it meets the policy objectives of creating jobs and activity in Ireland and provides value for money for the Irish taxpayer. |
|
Sections 666, 667B and 667C of the Taxes Consolidation Act 1997 |
The stock relief for farmers provided under section 666 is due to expire on 31 December 2015. The enhanced stock relief available to qualifying farmers under section 667B, and to registered farm partnerships under section 667C, in respect of increases in stock values, will also expire on 31 December 2015. |
|
Section 477B of the Taxes Consolidation Act 1997 |
The Home Renovation Incentive in section 477B provides for tax relief on qualifying expenditure incurred by homeowners on the repair, renovation or improvement of their main home, and by landlords on the repair, renovation or improvement of rental properties. Homeowners who incur qualifying expenditure in the period from 25 October 2013 to 31 December 2015 may claim the relief. Landlords who incur qualifying expenditure in the period from 15 October 2014 to 31 December 2015, may also claim the relief. Relief in respect of expenditure incurred before end 2015 will extend into subsequent years |
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Section 825B of the Taxes Consolidation Act 1997 |
This section, which provides for the repayment of tax where earnings are not remitted to the State, was closed off with effect from 1 January 2012. However, any individual who was first entitled to claim the relief in 2011, will continue to qualify for the relief up until 31 December 2015. |
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Paragraph (5) of Schedule 1 to the Stamp Duties Consolidation Act (SDCA) 1999 |
This legislation provides for consanguinity relief in respect of stamp duty on transfers or conveyances of farmland, on or prior to 31 December 2015, by a person of any age. From 1 January 2016 to 31 December 2017, the relief is continued in relation to transfers or conveyances of farmland but only where the individual transferring or conveying the farmland has not reached the age of 67 at the date of transfer or conveyance. |
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Section 125B of the Stamp Duties Consolidation Act (SDCA) 1999 |
This section relates to the levy on pension schemes, which is to expire in 2015. The final payment (0.15% of the aggregate market value of assets) is to be made on 25 September 2015. |
88. Deputy Michael McGrath asked the Minister for Finance the current cash balance on the discretionary portfolio in the National Pension Reserve Fund; and if he will make a statement on the matter. [6543/15]
View answerPursuant to the National Treasury Management Agency (Amendment) Act 2014 the Ireland Strategic Investment Fund (ISIF) was established (effective 22 December 2014). The ISIF will take over the assets of the National Pensions Reserve Fund (NPRF) which will be used for investment on a commercial basis to support economic activity and employment in Ireland.
The National Treasury Management Agency has advised that the preliminary and unaudited holding of cash and cash equivalent was €2.4 billion as at 31 December 2014.
89. Deputy Alan Farrell asked the Minister for Public Expenditure and Reform if he will provide approximate costings for all referenda, held by the State, since 2001, in tabular form; if he will provide estimated costings for the upcoming referenda in May 2015; and if he will make a statement on the matter. [6439/15]
View answerThe approximate costings for all referenda since 2001 are set out in the following table with the exception of the referenda held in 2004 and 2011*. The referenda in those years were not taken on their own but were combined and accounted for with European and Local Elections in 2004 and with a Presidential and bye-election in 2011. It is not, therefore, possible to give an accurate cost of the referenda as there would have been an extensive sharing of staff and facilities for the different polls taken.
|
Month/ Year |
Referendum |
Approximate Cost |
|
June 2001 |
Prohibition of Death Penalty International Criminal Court Treaty of Nice |
€11.1m |
|
March 2002 |
Protection of Human Life in Pregnancy |
€10.8m |
|
October 2002 |
Treaty of Nice |
€15.0m |
|
June 2004 |
Citizenship |
* |
|
June 2008 |
Treaty of Lisbon |
€22.2m |
|
October 2009 |
Treaty of Lisbon |
€17.5m |
|
October 2011 |
Houses of Oireachtas Enquiries Judges' Remuneration |
* |
|
May 2012 |
Treaty on Stability, Coordination and Governance in the Economic and Monetary Union |
€14.8m |
|
November 2012 |
Children |
€12.8m |
|
October 2013 |
Abolition of Seanad Court of Appeal |
€14.4m |
The costs of holding referenda, while significant, have been reduced since 2008. The estimated cost of the referenda (Marriage Equality & Qualifying Age for the Presidency) in May 2015 is c.€15 million. However if these referenda are held in conjunction with the forthcoming bye-election it will be more difficult to isolate the actual cost of the referenda as staff and facilities are shared in the taking of polls and in the counting of votes.
