Written Answers Nos. 117 - 136
117. Deputy Pearse Doherty asked the Minister for Finance the reason the national economic dialogue will operate in such a narrow way, as per his letter of invitation which, for example, states that the fiscal space will be shared on a 50:50 basis, between expenditure and tax measures. [24535/15]
View answerFirstly, I would point out that the Government is not of the view that the National Economic Dialogue will operate in a narrow way. As was stated in the invitation letter, the objective of the dialogue is to facilitate an open and inclusive exchange on the competing and social priorities facing the Government as we prepare for Budget 2016. It will be informed by the macro-economic and fiscal parameters, including the EU budgetary framework, which were set out in the SES.
As stated in the Stability Programme Update (SPU) and the Spring Economic Statement (SES) the 2016 forecast provides for a budgetary package of around €1.2 billion to €1.5 billion. The Government decided at the time of the SPU/SES that the strategy should be to allocate the fiscal space evenly between revenue and expenditure measures.
I believe that it is important to provide clarity and a structure that is consistent with the fiscal strategy for 2016. It is anticipated that such an approach will maximise and deliver a more genuine and robust dialogue which the Government will reflect on in deciding on Budget 2016. We also hope that the discussions will assist participants in preparing their pre-Budget submissions.
118. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that the lending institutions are taking sufficient steps to accommodate the needs of borrowers, with particular reference to the requirements of small and medium sized enterprises and homeowners whose mortgages may be in arrears for a variety of reasons, but where the borrowers have consistently made payments to the maximum of their ability; if third party loan book purchasers have been adequately acquainted with the necessity to make particular efforts to accommodate such persons, in view of the fact that in the course of the purchase of their respective loan books provision was made for such tolerances; and if he will make a statement on the matter. [24595/15]
View answerThe Deputy will be aware that in their statements to the Joint Oireachtas Committee on Finance and Public Expenditure Reform, in April and May, the four main banks (AIB, BOI, Ulster Bank and PTSB) outlined their strategies for dealing with customers in mortgage arrears. All lenders indicated to the Committee their willingness to work with all borrowers who engage with them with a view to arriving at a negotiated solution that is acceptable to both parties.
The recent Central Bank of Ireland Residential Mortgage Arrears and Repossessions statistics for quarter one of this year indicates that over 117,000 restructure arrangements have been put in place on primary dwelling homes (PDH) to the end of March and that over 85% of these are deemed to be meeting the terms of their arrangement. This data indicates that lending institutions are complying with the Code of Conduct on Mortgage Arrears (CCMA) and they are accommodating the needs of borrowers who engage with them and that such engagement is key to arriving at a sustainable mutually acceptable restructure arrangement.
The lending institutions, including those which have acquired loan books, are independent commercial entities. The Deputy will be aware, however, that the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 was passed by the Dáil on 17th June and I look forward to further discussion of the Bill at Second Stage, which will be taken in the Seanad tomorrow(24th June). The purpose of this legislation is to protect consumers whose loans are sold by regulated financial service providers to unregulated firms. It will address concerns surrounding the continued applicability of the Central Bank's codes and access for borrowers to the Financial Services Ombudsman after loan books are sold. This legislation will ensure that borrowers retain their existing protections when their loan is sold. A key element of this is the protection of distressed borrowers. The CCMA, which the Deputy will be aware is a statutory Code issued under Section 117 of the Central Bank Act 1989, was revised in 2013 to strengthen consumer protections where necessary, and to ensure that the Code is facilitating the resolution of each case in a fair, sustainable and transparent manner.
119. Deputy Richard Boyd Barrett asked the Minister for Finance in the context of the Siteserv issue and the serious questions raised regarding the disposal of assets, debt write-downs and the management of large loans in the Irish Bank Resolution Corporation, his views that there is a need for a review or an investigation of the same issues in the National Asset Management Agency, in Allied Irish Banks and in other publicly owned banks and institutions; and if he will make a statement on the matter. [24598/15]
View answerIn response to significant public concerns, and to focus the review on the transactions that have led to the significant public concerns, a Commission of Investigation into certain decisions, transactions and activities entered into by IBRC has now been established.
As the Deputy will be aware, the Terms of Reference of the Commission of Investigation into IBRC were debated in Dáil Éireann on Tuesday 9 June 2015 and Wednesday 10 June 2015. Both Houses of the Oireachtas have approved these terms of reference. An Taoiseach, as the Specified Minister for the Purposes of the Commissions of Investigation Act 2004, would have the statutory power to amend the terms of reference of the existing Commission of Investigation.
In my view, the establishment of the Commission of Investigation into certain transactions in IBRC that have been the cause of significant public concern, does not necessitate a review into transactions in NAMA, AIB and the other publicly owned banks and institutions
When it comes to NAMA, for example, it is important to point out that NAMA is already subject to a high level of public accountability compared to other commercial bodies, including commercial bodies in the State sector.
Importantly, NAMA's accounts are comprehensively audited by the Comptroller and Auditor General (C&AG), who has a permanent team of officers based in the Agency with unrestricted access to all its records and files, including all records and files relating to transactions. If there is concern about a specific aspect of NAMA's work, it is within the power of the Comptroller and Auditor General to scrutinise any aspect of it. The Comptroller and Auditor General has already produced three special reports on NAMA's activities and they have been broadly positive in their assessment of how NAMA is managing its complex business.
NAMA is also subject to scrutiny by the Oireachtas, including the Public Accounts Committee.
In addition, NAMA's clear and well stated policy is that properties and loans that are for sale are openly marketed. This ensures a competitive and transparent sales process and the best possible financial return for the taxpayer.
In relation to AIB, BOI and PTSB, which are publically listed companies, no basis has been established for their inclusion in the Investigation. Each of these banks have an independent board and management teams with independent powers of decision which operate at arm's length to the State. The board of each of these banks retains full responsibility and necessary authority for all of the operations and business of the banks in accordance with its legal, fiduciary and prudential duties to all stakeholders and for ensuring strict compliance with the regulatory and legal obligations of the bank.
Finally, it is important that I do not interfere with or prejudice the important work to be conducted by the Commission of Investigation, therefore, in these circumstances it would be inappropriate for me to comment further in respect of the Terms of Reference already approved by both Houses of the Oireachtas.
120. Deputy John Halligan asked the Minister for Finance if he and his Department have any immediate plans to restore the National Pensions Reserve Fund; the estimated cost of this restoration, and over what period of time; and if he will make a statement on the matter. [18266/15]
View answerFollowing the commencement of the relevant section of the NTMA (Amendment) Act 2014 on 22 December 2014 the assets of the National Pensions Reserve Fund (NPRF) became the assets of the Ireland Strategic Investment Fund (ISIF).
I should make clear that the NPRF was never expected to meet the full cost of providing social welfare and public service pensions. The NPRF was a supplementary investment fund intended to support the Exchequer when budgetary pressures increased as a result of mounting pension costs.
While the need for the State to provide for the cost of social welfare and public service pensions has not abated, the Government decided that fostering economic activity and employment through the establishment of the ISIF was the immediate priority. This support for economic activity and employment puts the State in a better position to meet its pensions obligations in the longer-term.
In relation to public sector pension costs, the steps this Government has taken in terms of introducing the Single Pensions Scheme will produce significant savings in the longer term. In addition, there is expected to be a significant reduction in public sector pensions following the pay and pension cuts since 2009 and the freeze in pay and pension rates until after the Haddington Road Agreement.
The most recent actuarial valuation of Public Service occupational pensions carried out by the Department of Public Expenditure and Reform estimated the total accrued liability at €98bn as at December 2012. This compares with the previous estimate of €116bn for 2009 which was arrived at by the Comptroller and Auditor General (C&AG). Therefore, over the three years from 2009 to 2012 the liability fell by €18bn or by 16%.
At the time of the transition to the ISIF (end 2014) the total value of the NPRF including the Directed portfolio was €22.2 billion. As well as the issue of a broad restoration of the NPRF it must also be noted that under the provisions of the NPRF Act 2000 1% of GNP was payable from the Exchequer to the NPRF each year. This would have meant a payment in the order of €1.6 billion to the NPRF for 2014 requiring compensating fiscal adjustments elsewhere.
121. Deputy Clare Daly asked the Minister for Finance as the representative of Allied Irish Banks' principal shareholder, if he will oppose any plans to outsource work and staff from that bank's application and development management teams within its information technology division to a third-party service provider. [24523/15]
View answerAs the Deputy will be aware under the Relationship Frameworks the State does not intervene in the day to day operations of the banks in which it holds investments or their management decisions regarding commercial matters and hence any discussions around matters such as outsourcing are a matter for the bank, the relevant staff and their union representatives. Notwithstanding this position, my officials do take an active interest in how the bank's cost base evolves to ensure that the State's interests as shareholder are protected and to ensure that the Government's remuneration policy is enforced.
The bank has previously indicated that as part of its restructuring plan to reduce costs and increase efficiencies, outsourcing of certain functions would be considered in consultation with unions and affected staff. I have also been informed by the bank that there have been no compulsory redundancies as a result of its recent outsourcing activities. Any staff who transfer under outsourcing arrangements transfer under the TUPE regulations.
I have been informed that AIB has not at this stage confirmed any agreement to outsource some of its technology services in Application and Development Management teams to a third party provider. Should any such decision be confirmed, then affected staff will be informed immediately and AIB will enter into a full process of information and consultation with employee representatives, as required both by law and under engagement principles agreed with the Irish Bank Officials Association (IBOA).
122. Deputy Helen McEntee asked the Minister for Finance if he will provide an update on the property tax exemption for homes with pyrite, especially for families who are categorised as grade 1 and who have been advised against the expense of having a core test done, which will be carried out by the Pyrite Resolution Board when the home is accepted into the scheme. [24602/15]
View answerThe Deputy will be aware that I have initiated a review of the operation of Local Property Tax (LPT). The review is being conducted by Dr Don Thornhill and is due to be presented to me no later than summer 2015.
The review will primarily have regard to recent residential property price developments, the overall yield from LPT and the desirability of achieving relative stability in LPT payments. It will however also address a number of matters relating to the administration of LPT, including the operation of the pyrite exemption provisions. Once I receive the review recommendations from that group I will make a decision on the matter and I will inform the house in that regard.
A resolution to the pyrite issues may necessitate a change in the relevant provisions of the Finance (Local Property Tax) Act 2012 (as amended) and/or the Finance (Local Property Tax) (Pyrite Exemption) Regulations. If it is the case that legislative change is required, then I will examine with the Revenue Commissioners the possibilities for its advance application on an administrative basis.
Pending any decisions in relation to the statutory provisions, Revenue has an obligation to act in accordance with section 10A of the Finance (Local Property Tax) Act 2012 (as amended) which requires that an LPT exemption can only apply where the residential property has been assessed and a certificate confirming "significant pyritic damage" has been issued to the property owner.
This is the only type of certificate that is relevant under current legislation and a homeowner cannot claim the exemption until it has been issued. For the Deputy's information "significant pyritic damage" includes properties that are certified as having a Damage Condition Rating of '2' or a Damage Condition Rating of '1' with progression.
Finally, while I am anxious to resolve the issue as quickly as possible, it is important that any changes that may be made do not go beyond the objectives of providing a temporary LPT exemption for homes with "significant pyritic damage" only.
123. Deputy Michael McGrath asked the Minister for Finance the status of plans for a United Kingdom based charity (details supplied) to provide assistance to bank customers in mortgage arrears; and if he will make a statement on the matter. [24579/15]
View answerWith regard to the status of the UK Charity, to provide assistance to bank customers in mortgage arrears, I understand that talks are continuing and well advanced between the organisation and Irish banks regarding the proposition that this charity would operate an advice service to help people struggling with the burden of debt to find a solution to their problems.
I would also draw attention to the other supports available to people struggling with the burden of debt and I would urge anybody in this position to access www.keepingyourhome.ie to find the contact details of the organisation closest to them with a view to getting the help and advice they need to resolve their debt situation. The Money Advice and Budgeting Service (www.mabs.ie) and the Insolvency Service of Ireland (www.isi.gov.ie) in particular are experienced in debt advice services.
124. Deputy Michael McGrath asked the Minister for Finance his views on the operation of a voluntary redress scheme for persons who were missold payment protection insurance on their credit card; if this will allow these persons to claim compensation, even if the product was purchased more than six years ago; the maximum amount of compensation available; if similar schemes are intended in respect of purchasers of other products, who are also outside the six-year time period for compensation claims; and if he will make a statement on the matter. [24580/15]
View answerI believe that the Deputy is referring to card protection insurance. In that context, I have been advised by the Central Bank that at their request a voluntary redress scheme has been put in place in relation to card protection insurance provided by Homecare Insurance Ltd (HIL) and purchased through a number of credit card providers.
Customers who purchased or renewed a card protection policy, on or after 1 August 2006, provided by Homecare Insurance Ltd (HIL) and purchased through credit card providers, Bank of Ireland, MBNA Limited or Ulster Bank Ireland Limited may claim redress. The Central Bank intervened in this issue as information provided to customers, at point of sale, advertised some card protection benefits which were not needed i.e. liability for unauthorised use if a card was lost/stolen was covered by the card scheme and therefore, customers did not need additional insurance for this.
The scheme commenced on 30 March 2015. The credit card providers have been contacting impacted customers who should have received an explanatory letter and a claim form at this stage. Policyholders are required to sign and return the claim form to be considered for a refund of premiums paid since 1 August 2006 less any amounts paid to customer in respect of a previous claim. The policyholder is not required to demonstrate or articulate why they feel the policy was mis-sold to them but rather to sign and return the claim form. Regardless of when customers purchased this product, they are entitled to claim redress for premiums paid on or after 1 August 2006, the date from which the Consumer Protection Code came into effect. The maximum amount of compensation available equates to all premiums paid since 1 August 2006. For those customers choosing to make a claim, their policy will be cancelled.
As the Deputy may be aware, my Department is currently progressing the amalgamation of the Offices of the Financial Services Ombudsman and the Pensions Ombudsman. The question of the timeframe under which complaints can be reviewed is a policy matter which will be considered as the legislation to effect the amalgamation is being developed. The issues in this regard are complex involving a range of considerations including the interface with the Statute of Limitations, existing consumer protection laws, complaints mechanisms and the availability of records.
125. Deputy Paul Murphy asked the Minister for Finance his plans to publish the details of the number of tax opinions provided by the Revenue Commissioners, including the amount provided to multinational corporations and those based outside the State; and if he will make a statement on the matter. [24574/15]
View answerI am advised by the Revenue Commissioners that, as statistics are not currently compiled on the number of tax opinions issued by Revenue each year, they are not in a position to publish details of the number of such opinions or the number provided to multinational companies and companies based outside the State.
In providing an opinion on the tax implications of a particular transaction or situation of a taxpayer, Revenue's role is to interpret and apply the tax law correctly so that taxpayers can comply with their obligations under the law.
Revenue tries to minimise the need for taxpayers to require opinions by making a wide range of taxation information available on the Revenue website. Accordingly, the circumstances in which a taxpayer should require an opinion are relatively limited. Revenue will issue an opinion where the issues are complex, information is not readily available or there is genuine uncertainty in regard to the applicable rules under the relevant tax law.
Statistics are not compiled on the total number of opinions issued by Revenue. However, in responding to the European Commission's State aid enquiries in relation to tax ruling practice in EU Member States, Revenue identified that in the period 2010 to 2012 the number of advance opinions issued to companies on matters relating to corporation tax was as follows:
|
Year |
Total |
|
2010 |
99 |
|
2011 |
128 |
|
2012 |
108 |
Opinions on corporation tax will typically deal with issues such as company restructurings, classification of activities as trading, deductible expenditure, capital allowances and application of tax reliefs (e.g. loss relief).
In the light of the discussions currently taking place at EU Council on the Commission's proposal to amend the Council Directive on administrative cooperation to provide for automatic exchange of information on cross-border tax rulings, Revenue will be reviewing its procedures for recording and collating tax opinions that are issued to companies, with a view to fully implementing the requirements of the Directive as and when adopted by the Council. I am advised by the Revenue Commissioners that they will consider the question of publishing data on the number of such opinions within this context.
126. Deputy Pearse Doherty asked the Minister for Finance his views on the future role of the Irish Fiscal Advisory Council; and if he envisages a purpose in its ongoing existence. [24538/15]
View answerThe Irish Fiscal Advisory Council was established in 2011 as part of a wider agenda of reform of Ireland's budgetary architecture as envisaged in the Programme for Government. Following approval of the Fiscal Compact Treaty by referendum in 2012, the Irish Fiscal Advisory Council was placed on a statutory basis to fulfil the role of monitoring compliance with the fiscal rules under the Stability and Growth Pact and, following further EU reforms, subsequently given the endorsement role for the macroeconomic forecasts which underpin the Budget.
In its recent Fiscal Assessment Report, the Council have again asserted their independence and produced some interesting pieces of analysis. While it is the case that I do not always agree with the outcome of the Council's analysis, I very much value their expertise and their input as an independent voice in helping the Government to adhere to its own fiscal targets.
With regard to the future role, the Fiscal Council have a very specific remit. Any additional responsibilities which have been suggested by some recently, would interfere with or dilute its primary mandate to monitor compliance with fiscal rules and comment publicly on the Government's fiscal stance. Also, it should be noted that the expertise of the Council Members is in macroeconomic and fiscal policy which enables the Council to fulfil its role specifically as a watchdog for budgetary planning and execution.
127. Deputy Mick Wallace asked the Minister for Finance his views on plans to sell Allied Irish Banks; and if he will make a statement on the matter. [24600/15]
View answerAIB is well on the road to recovery and officials in my department are working with AIB on reconfiguring its capital structure and setting out a path for the bank to begin to return capital to the State. Given the scale of the State's investment some €20.8 billion and the different financial instruments this money is invested in, there are a range of options available to recoup value from the bank and it is critical that we get these decisions right. As a result Goldman Sachs International and William Fry are assisting the Department with this work by providing financial and legal advice respectively.
Reconfiguring the bank's capital structure, which is no longer fit for purpose given the new regulatory regime, is just the start of the process, but it is an essential first step on the road to recovering value for the taxpayer. Discussions commenced recently with the SSM (Single Supervisory Mechanism) and the Central Bank, AIB's regulators, regarding AIB's capital structure and this process is expected to take a number of months.
No decision has been made by the Government to sell any of our investments in AIB. All options remain on the table and while I have said previously that an Initial Public Offering or IPO on the stock market, looks like the most likely exit route for the State, it is too early to specify what steps will be taken or to put a timeline on decisions. Any sale will involve selling shares held by the ISIF.
As I have previously stated on numerous occasions, Government policy is that we will not remain a holder of our banking investments in the long term. Given our high debt to GDP ratio, we do not have the luxury of holding all of these investments indefinitely and I envisage receipts from the gradual sale of these investments helping to play their part in reducing the State's overall debt burden in the coming years.
128. Deputy Ruth Coppinger asked the Minister for Finance his views on the outsourcing of application and development management services by Allied Irish Banks; his views regarding outsourcing of these services, in view of the central role the bank's payment services and information technology play in the Irish economy; and if he will make a statement on the matter. [24508/15]
View answerAs the Deputy will be aware under the Relationship Frameworks the State does not intervene in the day to day operations of the banks in which it holds investments or their management decisions regarding commercial matters and hence any discussions around matters such as outsourcing are a matter for the bank, the relevant staff and their union representatives. Notwithstanding this position, my officials do take an active interest in how the bank's cost base evolves to ensure that the State's interests as shareholder are protected and to ensure that the Government's remuneration policy is enforced.
The bank has previously indicated that as part of its restructuring plan to reduce costs and increase efficiencies, outsourcing of certain functions would be considered in consultation with unions and affected staff. I have also been informed by the bank that there have been no compulsory redundancies as a result of its recent outsourcing activities. Any staff who transfer under outsourcing arrangements transfer under the TUPE regulations.
I have been informed that AIB has not at this stage confirmed any agreement to outsource some of its technology services in Application and Development Management teams to a third party provider. Should any such decision be confirmed, then affected staff will be informed immediately and AIB will enter into a full process of information and consultation with employee representatives, as required both by law and under engagement principles agreed with the Irish Bank Officials Association (IBOA).
129. Deputy Pearse Doherty asked the Minister for Finance if he will direct the Central Bank of Ireland to no longer accept the repossession or voluntary surrender of the family home as a sustainable solution under the mortgage arrears resolution targets. [24537/15]
View answerAs the Deputy will be aware, the Central Bank is independent in carrying out its functions and it would be inappropriate for me to seek to undermine its regulatory or supervisory authority.
In respect of Mortgage Arrears Resolution Targets, I am informed by the Central Bank that it has determined that relying on common quarterly solution targets across all banks is no longer appropriate. The Central Bank has written to each bank setting out new requirements that, inter alia,:
- concluded sustainable solutions are in place for the vast majority of distressed borrowers by the end of 2015;
- they meet the 'terms being met' target of 75 per cent of concluded solutions to the end of 2015 and beyond;
- they continue to comply with the Code of Conduct on Mortgage Arrears;
- where they take legal action that may result in loss of ownership for a borrower, they should be prepared to re-engage with the borrower and explore alternative solutions if the borrower re-engages; and
- they engage fully and appropriately in the process set out in the Personal Insolvency Act 2012.
I strongly believe that early constructive engagement by borrowers with their lender is the most effective way to avoid family home repossession. This is borne out by the most recent Residential Mortgage Arrears and Repossessions statistical release for Q1 2015, which indicates that over 117,000 restructure arrangements have been put in place on primary dwelling homes (PDH) to the end of March and that over 85% of these are deemed to be meeting the terms of their arrangement.
130. Deputy Thomas P. Broughan asked the Minister for Finance his plans to change the operation of the relevant contracts tax system in the construction sector in order to maximise the collection of income tax due to the State. [24509/15]
View answerI have no plans to change the operation of the RCT system. Up to 1 January 2012, principal contractors in the construction, meat processing and forestry sectors were obliged to submit to the Revenue Commissioners the details of relevant contracts entered into by those principals and their sub-contractors on a Form RCT1. Under the eRCT system, which came into effect as and from 1st January 2012, the Form RCT1 is no longer used but the same obligation on principal contractors remains albeit the information is now supplied electronically rather than in paper format.
Revenue's policing of the RCT regime has been significantly improved through a number of risk mitigation initiatives. Firstly, the old RCT regime provided for the making of RCT repayments to sub-contractors on foot of a claim made by the sub-contractor. This particular feature of the old regime was open to abuse and consequently the current RCT regime no longer provides for the making of repayments except in very exceptional cases. Secondly, a VAT Reverse Charge mechanism introduced in 2008 places the responsibility for accounting for VAT on construction contracts on the principal contractor, thereby removing the risk of VAT non-compliance by the sub-contractor.
I know that Revenue commits significant resources to compliance interventions in the construction sector. There were over 15,000 tax compliance risk interventions in the Construction Sector in 2013 and nearly 17,000 such interventions in 2014. In addition, Revenue works closely with the Department of Social Protection and the National Employment Rights Agency including conducting joint operations in the construction sector with both bodies.
131. Deputy Paul Murphy asked the Minister for Finance his views on the reported plans by his Department to make €200 million available to property developers from the National Pensions Reserve Fund. [24575/15]
View answerAs you are aware on the 22 December 2014, the National Pensions Reserve Fund transitioned to the Ireland Strategic Investment Fund (ISIF) which has a statutory mandate to invest on a commercial basis to support economic activity and employment in Ireland.
The investment strategy of the ISIF has been adopted by the Board of the National Treasury Management Agency (NTMA) following the appropriate consultation with both myself and my colleague the Minister for Public Expenditure and Reform. I can advise that the ISIF will develop a broad based portfolio across a number of sectors including, but not limited to, infrastructure, energy, water, real estate, housing, tourism, food & agriculture, technology, healthcare and finance.
While the ISIF's investment strategy is consistent with Government's policy objectives, the NTMA are responsible for the management of the ISIF and pursuant to the National Treasury Management Agency (Amendment) Act 2014, an Investment Committee has been established that has discretion to make investment and disposal decisions in accordance with the ISIF investment strategy.
It is important that the ISIF has a commercial mandate and operates at arm's-length in terms of specific investment decisions in order for ISIF to be successful in leveraging its resources by attracting private sector co-investment. This is essential to maximise the resources in the funds, to create jobs and to recycle the funds for future generations.
The ISIF have advised me that they do not comment on their pipeline of proposed investments but that they are ready to invest on a commercial basis across the economy in accordance with their mandate, including in the real estate sector. ISIF will make announcements in relation to investment decisions at the appropriate time.
132. Deputy Maureen O'Sullivan asked the Minister for Finance the basis the SPR's special regeneration areas were chosen for the living city initiative; the reason locations (details supplied) were omitted from the living city initiative; and if he will make a statement on the matter. [24576/15]
View answerThe Special Regeneration Areas for the Living City Initiative were designated following consultation with the relevant city councils and an independent review by a third party advisor. Specific criteria were set down in respect of the areas which should be included within the remit of the Living City Initiative which were required to be taken into account by the relevant city councils when putting forward the proposed Special Regeneration Areas for each city.
As the Living City Initiative is a very targeted urban regeneration incentive, the criteria to be met for the inclusion of an area in the scheme are more stringent than simply being located in the relevant city and constructed pre 1915. In particular, it was stated that the Special Regeneration Areas should be inner city areas which are largely comprised of dwellings built before 1915, where there is above average unemployment and which demonstrate clear evidence of neglect, dereliction and under-use. It was specified that areas which are generally regarded as affluent, have high occupancy rates and which do not require regeneration should not be included in the Special Regeneration Areas.
It is important to note that I do not see this as a wide-spread Initiative, as it is targeted at those areas which are most in need of attention. However, as is the case with all tax reliefs, the scheme will be kept under review.
133. Deputy Terence Flanagan asked the Minister for Finance his plans for making the National Asset Management Agency more accountable, and for eventually winding it down; and if he will make a statement on the matter. [24522/15]
View answerAs previously outlined in my response to Dail Question 26 on 7th May 2015, I am advised that the NAMA Chief Executive, in his opening address to the Public Accounts Committee on 18 December 2014, stated that NAMA is aiming to redeem a cumulative 80% (€24 billion) of its Senior Bonds by the end of 2016 and that it hopes that it will have redeemed all of its Senior Bonds by the end of 2018. He stated that these targets are predicated on conditions in the Irish market remaining favourable and on NAMA being in a position to retain sufficient specialist staff to enable it to generate the optimal financial return from the realisation of its residual loan portfolio. NAMA has, to date, redeemed €19.35bn, that is 64% of the €30.2bn Senior Bonds issued. The current breakdown of the €10.84bn outstanding NAMA Senior Bonds by holding institution is available on NAMA's website, www.nama.ie.
The Deputy may be aware that the NAMA Board has also undertaken to facilitate the timely and coherent delivery of key Grade A office space, retail and residential space within the Dublin Docklands strategic development zone and Dublin's Central Business District and to maximise the delivery of residential housing units in areas of most need. Given that these commitments were agreed with NAMA only in July 2014, it is too early to speculate on what date in the future NAMA will have made sufficient progress on its objectives as to warrant consideration of its dissolution.
As regards accountability, it is important to point out that NAMA is already subject to a high level of public accountability compared to other commercial bodies, including commercial bodies in the State sector.
In carrying out its functions the Board of NAMA must comply with its obligations under the NAMA Act. The NAMA Board comprises seven members, five of whom, including the Chairman, were Ministerial appointments. The Chief Executive of NAMA and the Chief Executive of the National Treasury Management Agency (NTMA) are ex-officio members of the Board. The terms of office of Board members range between three and five years and no appointed member is eligible to serve more than two consecutive terms.
The NAMA Act (Section 18) sets out the principal responsibilities of the Board, which are
- to ensure that NAMA discharges its functions efficiently and effectively;
- to set strategic objectives and targets for NAMA;
- to ensure that the appropriate systems and procedures are in place to achieve the strategic targets and objectives;
- to take all reasonable steps available to it to achieve those targets and objectives.
The Board has also established four statutory committees, under Section 32 of the Act, to assist in the discharge of its responsibilities and obligations: Audit Committee, Credit Committee, Finance and Operating Committee, Risk Management Committee.
NAMA's Annual Report and Financial Statements are laid before the Houses of the Oireachtas. The level of disclosure in NAMA's Annual Report and Financial Statements is comprehensive and professional. I would encourage anyone interested in the workings and performance of NAMA who have not yet read these reports to take the time to do so as they are a rich source of information regarding NAMA's performance.
In addition, under Section 53 of the NAMA Act, NAMA is also required to submit to me an Annual Statement by 30 September each year setting out its proposed objectives for the following financial year, the scope of activities to be undertaken, its strategies and policies and its proposed use of resources. I am obliged to lay these statements before the Oireachtas and I endeavour to do so on a timely basis.
NAMA is also required to report to me on a quarterly basis giving detailed information about its loans, its financing arrangements and its income and expenditure. These reports, which also include other information specified under Section 55 of the NAMA Act, track NAMA's progress on a quarterly basis. I am obliged to lay these reports before the Oireachtas and I endeavour to do so on a timely basis.
The Chairman and Chief Executive are also accountable to the Committee of Public Accounts (PAC) and other Oireachtas committees and to give evidence to those committees whenever required to do so. Furthermore, there have been numerous Parliamentary Questions addressed to me on NAMA-related issues and the associated replies are on the Oireachtas record.
NAMA's accounts are comprehensively audited by the Comptroller and Auditor General, who has a permanent team of officers based in the Agency with unrestricted access to all its records and files. If there is concern about a specific aspect of NAMA's work, it is within the power of the Comptroller and Auditor General to scrutinise any aspect of it. The Comptroller and Auditor General has already produced three special reports on NAMA's activities and they have been broadly positive in their assessment of how NAMA is managing its complex business.
In mid 2014, my officials also produced a special report on NAMA's activities in compliance with Section 227 of the Act. This report assessed the extent to which NAMA has made progress toward achieving its overall objectives and whether the continuation of NAMA is necessary having regard to the purposes of the Act. This report concluded that NAMA has made significant progress in achieving its overall objectives; and based on its performance and financial projections in light of the strength of current investor interest in Ireland, NAMA is well positioned to achieve its overall objectives and so continues to be necessary.
NAMA also recently became subject to the Freedom of Information (FOI) Act, 2014 on 14th April 2015. As you will be aware, the FOI Act provides that every person has the following rights:
- right to access records held by FOI bodies listed in the Act;
- right to have personal information amended or deleted where such information is incomplete, incorrect or misleading; and
- right for a person to be given reasons for a decision taken by FOI bodies that affects that person.
Finally, as the Deputy may be aware, NAMA operates a dedicated email address, oir@nama.ie, to enable TDs and Senators to raise any matter directly with the Agency. I would encourage the Deputy, and indeed any member of the Oireachtas with a NAMA-related query, to avail of the email service. I am assured by NAMA that all matters which are brought to its attention via this forum are fully, and promptly, responded to.
Against this backdrop, I do not accept that there is a need to make NAMA more accountable than is already the case.
134. Deputy Thomas P. Broughan asked the Minister for Finance the contribution, per capita, per annum, of income tax by workers in each of the key sectors of the economy, for each of the years 2012 to 2014; and if he will make a statement on the matter. [24510/15]
View answerI am informed by the Revenue Commissioners that, on the basis of information derived from income tax returns filed for the years in question, the annual income tax contribution per capita, broken down by economic sectors, for the years 2012 and 2013 is as set out in the following table. The per capita amount is calculated on the basis of taxpayer units, which includes jointly assessed taxpayers as one unit. The figures include all income earners (both Schedule D and PAYE).
Income Tax per taxpayer unit by trade Sector for 2012 and 2013
|
Sector |
2012 € per unit |
2013 € per unit |
|
A Agriculture, forestry & fishing |
6,189 |
6,320 |
|
B Mining & quarrying |
9,235 |
9,594 |
|
C Manufacturing |
7,266 |
7,333 |
|
D Electricity, gas, steam & air conditioning supply |
16,609 |
15,059 |
|
E Water supply, sewerage & waste management |
4,170 |
4,206 |
|
F Construction |
5,437 |
5,596 |
|
G Wholesale & retail trade; repair of motor vehicles & motorcycles |
5,891 |
5,764 |
|
H Transportation & Storage |
5,749 |
5,763 |
|
I Accommodation & food services |
3,314 |
3,375 |
|
J Information & communication |
10,532 |
10,811 |
|
K Financial & insurance activities |
11,738 |
12,129 |
|
L Real estate activities |
16,700 |
16,897 |
|
M Professional, scientific & technical activities |
14,375 |
14,726 |
|
N Administrative & support service activities |
4,958 |
5,158 |
|
O Public administration & defence |
9,035 |
9,701 |
|
P Education |
8,020 |
7,795 |
|
Q Human health & social work activities |
10,306 |
9,878 |
|
R Arts, entertainment & recreation |
6,578 |
6,686 |
|
S Other services activities |
5,143 |
5,148 |
|
Other |
17,827 |
18,551 |
I am informed that the figures for 2014 are not yet available.
135. Deputy Ruth Coppinger asked the Minister for Finance his views on the planned outsourcing of the application and development management section of the information technology division in Allied Irish Banks; if he is concerned regarding the outsourcing of a key sector of this and regarding the erosion of job security and working conditions in the banking sector; and if he will make a statement on the matter. [24603/15]
View answerAs the Deputy will be aware under the Relationship Frameworks the State does not intervene in the day to day operations of the banks in which it holds investments or their management decisions regarding commercial matters and hence any discussions around matters such as outsourcing are a matter for the bank, the relevant staff and their union representatives. Notwithstanding this position, my officials do take an active interest in how the bank's cost base evolves to ensure that the State's interests as shareholder are protected and to ensure that the Government's remuneration policy is enforced.
The bank has previously indicated that as part of its restructuring plan to reduce costs and increase efficiencies, outsourcing of certain functions would be considered in consultation with unions and affected staff. I have also been informed by the bank that there have been no compulsory redundancies as a result of its recent outsourcing activities. Any staff who transfer under outsourcing arrangements transfer under the TUPE regulations.
I have been informed that AIB has not at this stage confirmed any agreement to outsource some of its technology services in Application and Development Management teams to a third party provider. Should any such decision be confirmed, then affected staff will be informed immediately and AIB will enter into a full process of information and consultation with employee representatives, as required both by law and under engagement principles agreed with the Irish Bank Officials Association (IBOA).
136. Deputy Dara Calleary asked the Minister for Finance considering he is the lead Minister for the Action Plan for Jobs, the steps he will take following the latest National Competitiveness Council report entitled Costs of Doing Business in Ireland 2015 which outlines that new business interest rates for non-financial corporations are up to 81% higher here than elsewhere in the euro area; and if he will make a statement on the matter. [18356/15]
View answerThe Deputy should note that my colleague the Minister for Jobs, Enterprise and Innovation is the lead Minister in relation to the annual Action Plan for Jobs.
I assume the Deputy is referring to the "Credit and Financial Costs" chapter of the National Competitiveness Council report Costs of Doing Business in Ireland 2015, which actually states that "in November 2014, loans of up to €1 million (often used as a proxy for the rate applying to SME loans) are 60% more expensive in Ireland compared to the euro area."
The Deputy will be aware however that I, in my role as Minister for Finance, have no direct function in the relationship between the banks and their customers. I have no statutory function in relation to the banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution. This includes decisions in relation to product interest rates as determined by the banks from time to time.
I would draw the Deputy's attention to the Central Bank publication "Retail Interest Rate Statistics: April 2015", available at http://www.centralbank.ie/polstats/stats/cmab/Documents/2015m04_ie_retail_interest_rate_statistics.pdf
The publication notes that "new business rates in excess of 6 per cent are observed in sectors such as construction and financial intermediation, while rates as low as 3.18 per cent are applicable to the Electricity & Gas sector. Rates applicable to financial intermediation sector can be diverse owing to the nature of the entities involved. In general, SME lending rates are consistently higher for new business when compared to outstanding amounts. This variance is most notable in the construction and financial intermediation sectors."
However, it should be noted that in the most recent SME credit demand survey covering the six month period to March 2015, only 1% of SMEs that did not demand credit thought that it was too expensive to borrow. The same survey notes that, among those SMEs with outstanding loans, the average cost of credit across all outstanding loans is 3.9%. This is down slightly from 4% in September 2014. 36% of SMEs with outstanding loans report a very low cost of credit between 0-2%, while the majority (61%) have an average cost of credit of between 3-10%.
In addition, the lower cost funding by the Strategic Banking Corporation of Ireland (SBCI) should act as a catalyst for downward pressure on interest rates by fostering greater competition in the marketplace. The establishment of the SBCI is a further important step to help Irish businesses, and the crucial SME sector in particular, to grow and contribute further to our economic recovery.
This creates positive competitive pressure in the banking infrastructure, encouraging new entrants while also pushing existing financial providers to better meet the needs of their clients.
