Paul Murphy
Question:301. Deputy Paul Murphy asked the Minister for Finance if he will report on his meeting with the Premier of China, Mr. Li Keqiang, and other Chinese officials, on 17 May 2015. [20481/15]
View answerOfficial Engagements
Questions (301)
Written answers
The Chinese Premier, Mr Li Keqiang paid a visit to Ireland on 17-18 May last. This was his first visit to Ireland. Premier Li was accompanied by his wife, Professor Cheng Hong, as well as a 119-strong delegation.
A delegation of Irish Government Ministers had a bilateral meeting with the Chinese Ministerial delegation at Ashford Castle.
The Irish delegation was led by the Taoiseach and, in addition to myself, included the following Ministers:
- Minister for Foreign Affairs, Mr Charlie Flanagan TD
- Minister for Jobs, Enterprise and Innovation, Mr Richard Bruton TD
- Minister for Agriculture, Fisheries and the Marine, Mr Simon Coveney TD
- Minister for Education and Skills, Ms Jan O'Sullivan TD
- Ministers of State Mr Dara Murphy TD and Mr Tom Hayes TD
Among the topics discussed were developments in the Irish economy/Eurozone and in the Chinese economy and scope for increasing trade links. In addition we also discussed global issues including EU-China relations, the post-2015 development agenda (and the role that Ireland is playing in this context), UN issues, human rights and climate change.
Prospects for advancing Chinese investment in Ireland were discussed - a major "Invest in Ireland" conference is planned in Beijing later this year. We also agreed to see how connectivity between Ireland and China can be improved and to further strengthen people-to-people links, including educational exchanges.
Tax Code
Questions (302)
Mary Mitchell O'Connor
Question:302. Deputy Mary Mitchell O'Connor asked the Minister for Finance the rate at which a flat tax on income would be, if all existing tax credits, allowances and reliefs were abolished, with the first €15,000 of earnings exempt of tax for every income earner, in order to achieve a target yield equal to the amount currently raised from income tax, the universal social charge and employee’s pay related social insurance; and if he will make a statement on the matter. [20590/15]
View answerWritten answers
I am advised by the Revenue Commissioners that an estimated flat tax rate of 46%, on all income over €15,000, would be necessary to achieve a target yield equal to the total amount currently raised from universal social charge and income tax combined, and the abolition of all existing tax credits, allowances and reliefs, including the various income exemptions, marginal reliefs, personal, married and child credits. The amount currently raised from employees' PRSI is not readily available to the Revenue Commissioners.
The target yield is based on the Department of Finance's forecasts published in the Budget 2015 Economic and Fiscal Outlook and the Revenue Commissioners 'Cost of Tax Credits, Allowances and Reliefs' for 2012 published on Revenue's website at http://www.revenue.ie/en/about/statistics/index.html#section4. The estimated flat tax rate figure has been calculated on the basis of estimates for 2015, using the actual data for the year 2012 (the latest year for which data are available) adjusted as necessary for income, self-employment and employment trends in the interim.
I am advised by the Revenue Commissioners that this scenario is presented purely for illustrative purposes, there may be other permutations that could deliver similar outcomes. The Commissioners have not examined the administrative issues involved in the above scenario.
Property Tax
Questions (303)
Pearse Doherty
Question:303. Deputy Pearse Doherty asked the Minister for Finance the fee paid or payable to a person (details supplied) for his work on the local property tax review. [20623/15]
View answerWritten answers
I can advise the Deputy that the person concerned has generously offered to undertake the work in connection with the LPT Review on a pro bono basis and that this offer has been accepted. The question of a fee does not therefore arise.
Tax Code
Questions (304)
Pearse Doherty
Question:304. Deputy Pearse Doherty asked the Minister for Finance the nominal value of the 2% indexation of the income tax system, as referred to in the 2015 stability programme update for the years 2016 to 2020. [20645/15]
View answerWritten answers
In relation to the fiscal outlook post 2016 projections, the 2015 Stability Programme Update incorporates a technical assumption in respect of the income tax system. The assumption allows for the indexation of the income tax system of around 2 per cent, which is in line with the medium-term increase in non-agriculture wages and equates to a nominal value of approximately €300 million in respect of each full year.
Fiscal Policy
Questions (305)
Pearse Doherty
Question:305. Deputy Pearse Doherty asked the Minister for Finance the reference rate and convergence margin for the years 2017 to 2020, when estimating the structural balance in the 2015 stability programme update. [20647/15]
View answerWritten answers
Firstly, I wish to clarify for the Deputy that projections of the structural balance set out in the 2015 Stability Programme Update (SPU) are not estimated using either the reference rate or convergence margin. Rather, the structural balance is calculated using a measure of the output gap (based on potential GDP growth) which is set out in Table 15 of the SPU.
In contrast, the two concepts referred to by the Deputy - the reference rate and the convergence margin - are used to determine permitted expenditure growth under the other metric used to assess compliance with the preventive arm of the Stability and Growth Pact - the expenditure benchmark.
The 2015 SPU set out an illustrative, ex ante application of the expenditure benchmark for 2016 on the basis of a reference rate of 1.9 per cent. This is based on the latest European Commission estimates of Ireland's potential GDP growth rate over the years 2010 to 2019.
In light of major issues raised by myself at the March ECOFIN meeting and followed up at a technical level by officials in my Department, the Commission has amended the way the 10-year average potential growth rate is calculated for all Member States. The 10-year average reference rate is now calculated annually rather than every three years. This will allow greater levels of expenditure consistent with the expenditure benchmark for Ireland than was previously the case when reference rates were set for a three-year period. This is because with an annual update in the rate, the impact of the weak potential GDP growth rates evidenced during the crisis drop out earlier than would previously have been the case and this is a more realistic approach.
On a purely technical basis, the reference rate consistent with the European Commission's Spring 2015 forecasts for Ireland's potential GDP growth would rise to 2.2 per cent in 2017 increasing steadily up to 2.7 per cent in 2020.
The convergence margin used in the illustrative application for 2016 in the SPU is 1.8 per cent. The European Commission, in its assessment of compliance with the expenditure benchmark, will also now update the convergence margin on an annual basis. However, as the Commission does not publish projected primary expenditure ratios beyond 2016, it is not possible at this point to derive a consistent estimate of the convergence margin for the years out to 2020.
Economic Data
Questions (306)
Pearse Doherty
Question:306. Deputy Pearse Doherty asked the Minister for Finance the estimated nominal non-accelerating wage rate of unemployment and the percentage non-accelerating wage rate of unemployment of the labour force used in the 2015 stability programme update. [20648/15]
View answerWritten answers
The non-accelerating wage rate of unemployment or NAWRU is the concept of structural unemployment used within the harmonised framework for estimating potential output used by the European Commission. The rate of structural unemployment is not observed and must be estimated empirically.
The NAWRU estimates consistent with the 2015 Stability Programme Update indicate a rate of structural unemployment falling from just over 10 per cent in 2015 to just under 6½ per cent by 2020.
Notwithstanding improvements negotiated at technical level last year in how the NAWRU is estimated for Ireland, estimates of the NAWRU using this harmonised methodology remain unsatisfactory to the extent that they continue to be overly pro-cyclical - in other words, estimated structural unemployment closely follows the path of actual unemployment.
Central Bank of Ireland
Questions (307)
Andrew Doyle
Question:307. Deputy Andrew Doyle asked the Minister for Finance in view of section 19 of the Central Bank Act 1942, if he will provide details of the selection process which will be undertaken to determine the recommendation to the President for the appointment of the 11th Governor of the Central Bank of Ireland; his plans to ensure that a transparent selection process will be undertaken, in view of the publicly accountable nature of the position; and if he will make a statement on the matter. [20726/15]
View answerWritten answers
Section 19 of the Central Bank Act 1942, as amended, sets out the rules and procedure for the appointment of the Governor of the Central Bank. Section 19 provides that the Governor is to be appointed by the President on the advice of the Government. The term of appointment is seven years. While the Governor has announced his intention to retire, the details of the date of retirement are yet to be confirmed. A process for appointment of a new Governor will be commenced shortly.
Tax Reliefs Costs
Questions (308, 309, 310)
Maureen O'Sullivan
Question:308. Deputy Maureen O'Sullivan asked the Minister for Finance the expected savings in 2016 from the reduction of the higher rate of tax relief for private occupational pensions to 20%. [20735/15]
View answerMaureen O'Sullivan
Question:309. Deputy Maureen O'Sullivan asked the Minister for Finance the total annual saving to the Exchequer of reducing tax relief on pension contributions, including the public service pension-related deduction, from the marginal rate to the standard rate of income tax; of a reduction in the standard fund threshold from €2.3 million to €622,500; of a reduction in the annual earnings limit for determining maximum allowable pension contributions for pension purposes from €115,000 to €75,000 per annum; and a reduction in the maximum tax-free lump sum payment allowable at retirement to €122,500. [20736/15]
View answerMaureen O'Sullivan
Question:310. Deputy Maureen O'Sullivan asked the Minister for Finance the savings to the Exchequer of standard rating all discretionary non-pension related tax reliefs above an annual cost of €10 million. [20737/15]
View answerWritten answers
I propose to take Questions Nos. 308 to 310, inclusive, together.
In relation to the first question, I am advised by the Revenue Commissioners that the estimated impact to the Exchequer on the reduction of the marginal rate of tax relief to 20% for employee and individual contributions to pension schemes or plans is a saving in the order of €410 million.
In relation to the second question, I am advised by the Revenue Commissioners that the estimated total annual saving to the Exchequer of reducing tax relief on pension contributions to the standard rate would be in the order of €500 million. This estimate includes €90 million in respect of Public Service Pension Related Deductions.
The Standard Fund Threshold (SFT) is the maximum allowable pension fund on retirement for tax purposes which was introduced in Budget and Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements. The threshold was initially set at €5 million, which was subsequently reduced to €2.3 million and further reduced in the 2013 Finance Act to €2 million.
I am advised by the Revenue Commissioners that information on the numbers and values of individual pension funds or on individual accrued benefits are not generally required to be supplied to them by the administrators of pension schemes and personal pension arrangements. There is, therefore, no underlying data readily available to the Revenue Commissioners on which to base reliable estimates of the savings that would arise specifically from a reduction to the SFT from €2 million to €622,500 as requested by the Deputy.
Regarding the cap on the annual earnings limit for determining maximum allowable pension contributions for pension purposes, based on the latest information available, reducing the €115,000 ceiling to €75,000 per annum is tentatively estimated to yield in the region of €100 million.
As there is no general requirement for data on the number of persons who are receiving payments of retirement lump sums of less than €200,000 (the current life-time limit on tax-free retirement lump sums) to be returned to the Revenue Commissioners, I am advised that they are not in a position to provide definitive figures demonstrating estimated savings to the Exchequer on the impact of reducing the tax-free retirement lump sum amount to €122,500.
In relation to the final question, I am advised by the Revenue Commissioners that the estimated yield if the discretionary non-pension deductions and reliefs, which are currently allowable for tax at an individual's marginal rate of income tax, were confined to the standard rate would be in the order of €480 million.
These estimates, for all Questions, are based on data for 2012, the latest year for which returns have been filed and fully processed.
The Deputy might note that these various estimates take no account of the behavioural impact which the suggested changes would be bound to have either individually or collectively.
Tax Code
Questions (311, 312)
Maureen O'Sullivan
Question:311. Deputy Maureen O'Sullivan asked the Minister for Finance the estimated return to the Exchequer from introducing a tax on online gambling of 5%, in view of the changes brought into force by the Betting (Amendment) Act 2015. [20738/15]
View answerMaureen O'Sullivan
Question:312. Deputy Maureen O'Sullivan asked the Minister for Finance the estimated return to the Exchequer from introducing a tax on online gambling of 15% in view of the changes from the Betting (Amendment) Act 2015. [20739/15]
View answerWritten answers
I propose to take Questions Nos. 311 and 312 together.
Following commencement of the licensing provisions for remote operators, provided for in the Betting (Amendment) Act 2015, provisions for the extension of duty to remote bookmakers and remote betting intermediaries were commenced on 15 April. These operators are liable for duty at 1% on the amount of a bet from customers in the State and betting intermediary duty of 15% on the commission charged to customers in the State.
In 2014, betting duty receipts from traditional bookmakers amounted to €26.2m.
It is not possible to be certain about the additional revenue which will be raised for the Exchequer, however, using available data, it has been estimated that the extension of the betting duty, at a rate of 1%, to remote operations could raise up to €25m in a full year.
It is unlikely that an increase in rates, as proposed by the Deputy, would raise a proportionate amount of revenue. In reality it would be expected that some customers would reduce their gambling expenditure and others might divert their expenditure to other gambling products or to unlicensed operators.
The Betting (Amendment) Act 2015 was only commenced last month and the application of duty to remote operators will not come into effect until 1 August 2015. I am therefore reluctant to estimate prospective yields from the rates proposed by the Deputy until I have had the opportunity to examine a substantial set of Exchequer returns arising from the new legislation.
Public Sector Staff Recruitment
Questions (313)
Mary Mitchell O'Connor
Question:313. Deputy Mary Mitchell O'Connor asked the Minister for Finance the number of public and civil servants who were recruited under the aegis of his Department in 2014; and if he will make a statement on the matter. [21108/15]
View answerWritten answers
I wish to inform the Deputy that in respect of my Department the following were recruited in 2014.
|
Grade |
Recruited |
|
Secretary General |
1 |
|
Assistant Secretary |
2 |
|
Principal Officer |
2 |
|
Assistant Principal |
4 |
|
Administrative Officer |
14 |
|
Higher Executive Officer |
1 |
|
Clerical Officer |
2 |
|
TOTAL |
26 |
In addition to the recruitment within my own Department the following information on staff who have been recruited has been provided for the bodies under the aegis of the Department of Finance.
|
Organisation |
Staff Recruited 2014 |
|
Comptrollers and Auditors General |
20 |
|
Central Bank of Ireland |
200 |
|
Financial Services Ombudsman |
2 |
|
Investors Compensation Company Limited |
1 Recruited through the Central Bank |
|
Office of the Revenue Commissioners |
99 |
|
National Asset Management Agency (NAMA) |
38 Recruited through the NTMA |
|
National Treasury Management Agency (NTMA) |
102 Includes 38 staff assigned to NAMA and 3 staff assigned to the SBCI |
|
Strategic Banking Corporation of Ireland (SBCI) |
3 Recruited through the NTMA |
Public Sector Staff Redeployment
Questions (314)
Mary Mitchell O'Connor
Question:314. Deputy Mary Mitchell O'Connor asked the Minister for Finance the number of public and civil servants under the aegis of his Department who were seconded abroad or to another Department in 2014; and if he will make a statement on the matter. [21123/15]
View answerWritten answers
I wish to inform the Deputy that in respect of my Department the following staff have been seconded abroad or to another Department in 2014.
2 Assistant Principals seconded to the European Commission
1 Administrative Officer seconded to the European Commission
1 Administrative Officer seconded to the German Finance Ministry
In addition to the secondment of staff within my own Deparrtment I have been advised of the following secondments in respect of bodies under the aegis of my Department.
|
Organisation |
Staff Seconded Abroad/other Departments |
|
Comptroller and Auditor General |
1 |
|
Central Bank of Ireland |
37 |
|
Revenue Commissioners |
35 |
|
National Treasury Management Agency |
14 |
Public Sector Staff Retirements
Questions (315)
Mary Mitchell O'Connor
Question:315. Deputy Mary Mitchell O'Connor asked the Minister for Finance the number of public servants under the aegis of his Department who retired in 2014; and if he will make a statement on the matter. [21144/15]
View answerWritten answers
I wish to inform the Deputy that in respect of my Department the following staff retired in 2014.
|
Grade |
Retired |
|
Second Sec Gen |
1 |
|
Director |
1 |
|
PO |
1 |
|
AP |
7 |
|
HEO |
1 |
|
EO |
2 |
|
TOTAL |
13 |
In addition to the retirements within my own Deparrtment I have been advised of the following retirements in respect of bodies under the aegis of my Department.
|
Organisation |
Retirements 2014 |
|
Comptroller and Auditor General |
2 |
|
Central Bank of Ireland |
48 |
|
Financial Services Ombudsman |
1 |
|
Revenue Commissioners |
146 |
|
National Treasury Management Agency |
2 |
Office of Government Procurement
Questions (316, 331)
Brian Stanley
Question:316. Deputy Brian Stanley asked the Minister for Public Expenditure and Reform the date from which the Office of Government Procurement will take over from local authorities in issuing tenders for the supply of products and services, in particular the tenders that fall below the limits required under European Union rules for advertisement. [19858/15]
View answer
Peadar Tóibín
Question:331. Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform if all local authority discretionary expenditure for goods and services is to be moved to a central framework created by the Office of Government Procurement; if so, the date by which this will occur; and if he will provide a breakdown, by county, of the value of the expenditure to be so moved and accordingly lost to local authorities and, in turn, to local business and economies. [20264/15]
View answerWritten answers
I propose to take Questions Nos. 316 and 331 together.
The Office of Government Procurement (OGP) was established as a key element of the Procurement Reform Programme to drive a more professional and joined up approach to procurement and to achieve better value for money for the taxpayer on goods and services purchased by Public Sector Bodies (PSBs). The OGP's mission is to deliver sustainable procurement savings for the tax payer by optimising value for money across the public service.
The model for public service procurement being implemented by the OGP and its sourcing partners in Health, Local Government, Education and Defence is based upon the "lead buyer" principle from professional procurement, whereby the main customer of a category of goods or services sources in the market on behalf of all customers. 16 major categories of expenditure have been identified that make up over 95% of Public Sector procurement spend (excluding Construction) in Ireland. Construction spend is currently out of scope for OGP operations, but the Office covers the policy aspects. The categories are as follows.
1. Professional Services
2. Facilities Management
3. Utilities
4. ICT & Office Equipment
5. Marketing, Print, Stationery
6. Travel & HR Services
7. Fleet & Plant
8. Managed Services
9. Plant Hire
10. Minor Builds & Civil's
11. Med. Professional Services
12. Med. Equip & Supplies
13. Med. Devices & Diagnostics
14. Laboratory Diagnostics & Library
15. Farming
16. Defence
The first eight categories in this list (1-8) are common, that is categories of goods or services required by all PSBs. Most of the goods and services contracts that fall into these categories are increasingly procured by the OGP on behalf of all PSBs via national, regional or sectoral frameworks. The next two categories, namely Plant Hire and Minor Works & Civil's (9 & 10), are primarily purchased by Local Authorities, so the sourcing of these are now led by the Local Government Operational Procurement Centre (LGOPC) hosted by Kerry County Council.
The next three medical categories on the list (11-13) are led by the HSE, Lab Diagnostics and Library and Farming (14 & 15) are led by the Education Procurement Service and Defence (16) will be led by the Department of Defence.
The transition to this new model has commenced. The OGP is increasingly delivering contractual arrangements for common goods and services on behalf of Local Government which, in turn, is delivering contractual arrangements on minor works, civil's and plant hire on behalf of other public bodies, such as HSE, Education, etc.
The frameworks the OGP is putting in place typically breakdown customer requirements by lots against which suppliers can bid. This is required by Circular 10/14 which sets out measures that will be taken by all public bodies to facilitate SMEs in bidding for Government contracts. Lots may be based on goods or services descriptions, usage patterns, size and nature of customer demand and/or geographical location. The lotting arrangements will be determined by the sourcing strategy and consider customer requirements and market supply factors. Many services require local delivery and the reformed model will meet those needs.
Transition to the new model is under way and customer requirements are still being gathered. A timeframe for completion of the transition will be established when the full workload has been gathered and assessed, and the delivery model gains more experience in operation at scale. There is no breakdown at a county by county level of the work transitioning in the model, however data from 2012 for Local Government indicated an expenditure on all goods and services of €1,080 million. Expenditure now in Irish Water is included in the figures. The estimated expenditure on Local Government led categories for 2014 was €805 million under the reformed model, excluding expenditure now in Irish Water.
The reform of public procurement in Ireland is being carried out in a manner that recognises the clear importance of small and medium-sized enterprises in this country's economic recovery. The recently published report by the Office of Government Procurement (OGP) "Public Service Spend and Tendering Analysis for 2013" indicates that 93% of public service procurement expenditure was with businesses in the Republic of Ireland and that 66% was with SMEs. This was based on an analysis of €2.742 billion expenditure across 64 large public service bodies involving over 35,000 suppliers.
Office of Public Works Properties
Questions (317)
Paul Murphy
Question:317. Deputy Paul Murphy asked the Minister for Public Expenditure and Reform if a building (details supplied) in Dublin 2 is being rented by the Office of Public Works; if so, if the property is in use; and his plans for the property. [20135/15]
View answerWritten answers
The Commissioners of Public Works do not hold any leasehold interest in the building "Marine House", Clanwilliam Terrace, Dublin 2.