Written Answers Nos. 351-367
351. Deputy Michael McGrath asked the Minister for Finance if he has received a request from the Central Bank of Ireland to approve an increased levy on financial institutions to deal with a deficit in the Central Bank of Ireland pension scheme; and if he will make a statement on the matter. [31493/15]
View answer354. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the total levies collected by the Central Bank of Ireland from financial institutions in the past five years to cover its costs; and if he will make a statement on the matter. [31496/15]
View answer359. Deputy Dara Calleary asked the Minister for Finance if he will be approving the proposed increases in the 2015 industry levy; if he has considered the points raised by the Professional Insurance Brokers Association and the Irish Brokers Association regarding the impact of these increases on their members; and if he will make a statement on the matter. [31552/15]
View answer381. Deputy Michael McGrath asked the Minister for Finance his views on the proposed increase in the industry funding levy imposed by the Central Bank of Ireland; if he is aware of the impact the proposed increase will have on small independent brokers, intermediaries and financial advisers; his views that it is fair to increase the levy in order to contribute towards a deficit in the Central Bank of Ireland defined benefit pension scheme; and if he will make a statement on the matter. [32049/15]
View answer392. Deputy Finian McGrath asked the Minister for Finance the reason the Financial Regulator wants the small and often single operator broker to fund their pension shortfall in the context of concerns expressed about the banking sector (details supplied); and if he will make a statement on the matter. [32283/15]
View answerI propose to take Questions Nos. 351, 354, 359, 381 and 392 together.
Under Sections 32D and 32E of the Central Bank Act 1942, the Central Bank is required to seek my approval for the Regulations prescribing levies and fees to be paid by entities subject to regulation by the Central Bank.
I am aware that the Central Bank consulted industry on their proposed 2015 levies which I understand would in some cases amount to a significant increase on the 2014 levies. The Bank has attributed the proposed increase to both a proliferation of legislative regulation/regulatory activity and an increase in staff pension costs arising from Financial Reporting Standard 17 coupled with current low yields on the bond market.
There has been significant regulatory change since the economic crisis of 2008 in order to protect against future financial crises and also to protect consumers and taxpayers. Both the Central Bank and industry have responded to this new regulatory environment by increasing the level of resources devoted to regulatory and compliance matters. The Government priority is to ensure that the regulator is sufficiently resourced to fulfil its important role and staff costs (including pension costs) are a key component of this effective regulatory regime.
It is important to note that a robust regulatory environment benefits the financial services industry by promoting stability, a level playing field and facilitating prudent development and innovation. A well regulated financial services sector also benefits consumers, industry, and the economy at large. However, I have not yet made any decision under Sections 32D and 32E on the 2015 levies that will be applied by the Central Bank.
I am aware of the issues raised by the Professional Insurance Brokers' Association and the Irish Brokers' Association regarding the impact of any increase on their members and the linkage with the Central Bank pension scheme. I will be taking these matters into consideration in my deliberations on the matter.
As follows in tabular form are the total levies collected by the Central Bank from the financial services industry in the last five years to part fund the regulation of the industry.
|
- |
2010 |
2011 |
2012 |
2013 |
2014 |
|
Gross Annual levies excluding supplemental levies |
€40.0m |
€50.8m |
€61.5m |
€46.7m |
€50.0m |
|
Supplemental Levies* |
€1.6m |
€28.7m |
€13.1m |
€7.2m |
€21.8m |
|
Gross Amounts Levied |
€41.6m |
€79.5m |
€74.6m |
€53.9m |
€71.8m |
*Supplementary levies raised relating to the cost of professional fees associated with the appointment of third parties to carry out significant reviews of Credit institutions.
These costs were fully recovered from the Credit Institutions concerned.
352. Deputy Michael McGrath asked the Minister for Finance his views on the funding arrangements for the Central Bank of Ireland pension scheme; and if he will make a statement on the matter. [31494/15]
View answer364. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank of Ireland's defined benefit pension scheme is performing; if extra moneys will be allocated to the scheme; and if he will make a statement on the matter. [31577/15]
View answerI propose to take Questions Nos. 352 and 364 together.
The Central Bank pension scheme (The Central Bank & Financial Services Authority of Ireland Superannuation 2008) mirrors public service pensions both in terms of contribution and benefits. The public service covers the cost of pensions from current funds whereas the Central Bank funds pensions through a dedicated pension fund. As a consequence, the cost of the Bank's pension scheme is accounted for in accordance with the prevailing Financial Reporting Standards (FRS17 Retirement Benefits) which leads to higher pension charges in the current low bond yield environment. The Central Bank Superannuation Scheme fully satisfies the Pensions Authority's Funding Standard and has done so every year since it was established in 2008. It is also projected to satisfy the additional Funding Standard Reserve Requirement being introduced from 2016.
353. Deputy Michael McGrath asked the Minister for Finance his views on persons holding multiple directorships of financial institutions; his further views that a limit should apply; and if he will make a statement on the matter. [31495/15]
View answerAs Minister for Finance, I was actively involved in the negotiation and agreement of the Capital Requirements Division IV (CRD IV), which set limits on persons holding multiple directorships of financial institutions. Article 91(3) CRD IV establishes limits to the number and nature of directorships for members of the management bodies of financial institutions that are considered significant in terms of their size, internal organisation and the nature, scope and complexity of their activities. The European Union (Capital Requirements) Regulations 2014 (SI 158 of 2014) transpose the provisions of CRD IV into national law. Regulation 79(7) of those regulations provides that, from 1 July 2014, members of the management bodies of institutions designated as significant, must not hold directorships amounting to more than one of the following combinations: a) One executive directorship with two non-executive directorships; b) Four non-executive directorships.
Prior to these Regulations, the Government actively rotated the directors of the State owned financial institutions and also selected candidates with the abilities, experience and time to properly carry out their roles as non-executive directors of these institutions.
In terms of other financial institutions, I support the Central Bank's statutory Corporate Governance Code for Credit Institutions and Insurance Undertakings and Corporate Governance Code for Captive Insurance and Captive Reinsurance Undertakings that sets out the requirements in relation to the appointment of directors. For Credit Unions, the Credit Union Handbook contains governance expectations.
In addition, the Central Bank recently undertook a thematic review which examined directorships held by individuals on the boards of corporate investment funds, fund management companies and AIF management companies. The Central Bank subsequently published guidance to assist Chairs, boards and individual directors in assessing the time commitment required for individual directors to fulfil their roles. The Central Bank continues to keep this matter under review.
355. Deputy Thomas P. Broughan asked the Minister for Finance if he will report on the Revenue Commissioners' plans to tax income of Airbnb hosts; if an income threshold similar to the rent-a-room scheme will be introduced; and if he will make a statement on the matter. [31535/15]
View answerSection 216A of the Taxes Consolidation Act 1997 provides for the rent-a-room scheme. This scheme was introduced in Finance Act 2001 as an incentive to encourage individuals to let rooms in their principal private residence in order to bring about an increase in the availability of rental accommodation, particularly for the student sector.
The provision of guest accommodation has never qualified for relief under this scheme. The Revenue operational manual has clearly stated that income from the provision of accommodation to occasional visitors for short periods does not qualify, as visitors use the accommodation as guest accommodation rather than for residential purposes. Following the entry of AirBnB and others into the short-term accommodation market, Revenue issued an eBrief in February 2015 which amended the operational manual to further clarify that accommodation provided through online booking sites is considered to be guest accommodation. A copy of the operational manual can be accessed on the Revenue website at: http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf.
It is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters that might be the subject of Budget decisions.
357. Deputy Pearse Doherty asked the Minister for Finance the bodies or companies from which he received legal advice in relation to a company (details supplied) since January 2014; and in each case to list the fees paid to date. [31545/15]
View answerIn 2014, the Department of Finance jointly with the Department of Transport, Tourism and Sport, sought and received legal advice from the Attorney General on the question of the Motor Insurers' Bureau of Ireland's liability under the MIBI Agreement 2009 for claims made by policyholders of Setanta Insurance in circumstances where the company is in liquidation.
As Legal Advisor to the Government, the Office of the Attorney General has its own budget allocation which is voted annually by Dáil Éireann so no fee was charged to the Department of Finance.
The Department did not commission or incur fees in relation to any other external legal advices.
358. Deputy Michael McGrath asked the Minister for Finance the extent to which the €1.2 billion to €1.5 billion in fiscal space identified for 2016 is constrained by taxation commitments already entered into; and if he will make a statement on the matter. [31548/15]
View answerI assume that the Deputy is referring to the carryover effect of measures previously introduced or due to expire in 2016 and I can assure him that the estimated cost of this carryover was taken fully into account in the calculation of the estimated fiscal space for 2016 of €1.2 billion to €1.5 billion. The reference to the fiscal space in the Spring Economic Statement has a footnote which informs readers that details of the expenditure benchmark calculation will be set out in an annex to the Stability Programme Update (SPU). Line 8 of Table A10 in Annex 1 of the SPU estimated the impact of net discretionary revenue measures to be minus €340 million.
361. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form, for each year 2007 to 2014 inclusive, the headline and underlying general Government balance in nominal and percentage terms; the level of gross domestic product and gross national product showing the percentage movement from the previous year; and if he will make a statement on the matter. [31567/15]
View answerThe figures in relation to general government deficit, Gross Domestic Product (GDP), and Gross National Product (GNP) as requested by the Deputy are outlined in the following table:
|
- |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
|
General government balance (€m) |
536 |
-13,104 |
-23,440 |
-53,677 |
-21,803 |
-14,065 |
-10,320 |
-7,484 |
|
General government balance (%GDP) |
0.3 |
-7.0 |
-13.8 |
-32.3 |
-12.5 |
-8.0 |
-5.8 |
-4.0 |
|
Underlying general government balance (€m) |
536 |
-13,104 |
-19,440 |
-18,284 |
-14,979 |
-14,065 |
-10,127 |
-7,609 |
|
Underlying general government balance (%GDP) |
0.3 |
-7.0 |
-11.5 |
-11.0 |
-8.6 |
-8.0 |
-5.6 |
-4.0 |
|
GDP (€m) |
197,054 |
187,547 |
169,432 |
166,157 |
173,940 |
174,845 |
179,448 |
189,046 |
|
GDP % change from previous year |
7.2 |
-4.8 |
-9.7 |
-1.9 |
4.7 |
0.5 |
2.6 |
5.3 |
|
GNP (€m) |
169,770 |
161,710 |
140,915 |
139,732 |
141,813 |
143,331 |
152,042 |
162,877 |
|
GNP % change from previous year |
5.2 |
-4.7 |
-12.9 |
-0.8 |
1.5 |
1.1 |
6.1 |
7.1 |
Sources: Central Statistics Office (CSO), Department of Finance
The deficit figures included within this table are based on those submitted in the March 2015 EDP return and subsequently published in the Department's 'Stability Programme Update (SPU)' in April 2015. Where relevant these have been revised to account for any updates which have been included in the CSO's 'Government Finance Statistics Quarterly Results' for quarter 1 2015. The GDP and GNP figures are consistent with the National Income and Expenditure Annual Results published July 2014.
It should be noted that revised figures will be released by the CSO in mid-October following the September 2015 EDP return while my Department will publish updated forecasts as part of the 'Budget 2016' publication.
362. Deputy Michael McGrath asked the Minister for Finance if he will provide a breakdown of the sources of the amounts used to recapitalise Irish banks between funds from the National Pensions Reserve Fund, sovereign borrowing and the promissory notes; and if he will make a statement on the matter. [31568/15]
View answerAs requested by the Deputy, the sources of funds used to capitalise the banks are as follows:
|
Exchequer |
- |
|
- |
€bn |
|
- Promissory Notes |
30.9 |
|
- Other |
13.5 |
|
Total Exchequer |
44.4 |
|
NPRF |
19.7 |
|
Total |
64.1 |
363. Deputy Michael McGrath asked the Minister for Finance the amount of money received so far in respect of fees for the 2008 bank guarantee scheme and the eligible liabilities guarantee scheme, proceeds received from the sale of related banking asset; if he will confirm the current value of the various share holdings the State has in respect of banks; and if he will make a statement on the matter. [31569/15]
View answerAs requested by the Deputy, the tables below provide details of proceeds received from the sale of bank assets to date and the current valuation of our remaining bank assets:
1. Sale of bank assets
|
Date |
Bank |
Transaction |
Proceeds including accrued interest/dividend |
|
April 2010 |
Bank of Ireland |
Cancellation of preference share warrants |
€0.49bn |
|
December 2010 |
AIB |
Cancellation of preference share warrants |
€0.05bn |
|
August 2011 |
Bank of Ireland |
Sale of equity |
€0.24bn |
|
December 2011 |
Bank of Ireland |
Sale of equity |
€0.81bn |
|
January 2013 |
Bank of Ireland |
Sale of convertible capital notes |
€1.06bn |
|
July 2013 |
Permanent TSB |
Sale of Irish Life |
€1.34bn |
|
December 2013 |
Bank of Ireland |
Sale/redemption of preference shares |
€2.05bn |
|
May 2015 |
Permanent TSB |
Buy-back of convertible capital notes |
€0.44bn |
|
May 2015 |
Permanent TSB |
Sale of equity |
€0.10bn |
|
Total proceeds from sale of bank assets |
|
|
€6.58bn |
2. Current valuation of remaining bank assets
|
Bank |
Valuation |
Source of valuation |
|
AIB Equity/preference shares
Cocos |
€11.7bn €1.6bn €13.3bn |
Most recent ISIF valuation Valued at par |
|
BOI - equity |
€1.6bn |
ISE 16th September 2015 |
|
PTSB equity |
€1.6bn |
ISE 16th September 2015 |
|
Total value of bank assets |
€16.5bn |
|
Finally, I can confirm for the Deputy that the total fees received to date from CIFS and ELG is €4.4 billion.
365. Deputy Brendan Griffin asked the Minister for Finance if grant aided non-profit companies with charitable status are entitled to tax relief on income from commercial activities; and if he will make a statement on the matter. [31605/15]
View answerTo avail of a charitable tax exemption, a body or trust must be established for charitable purposes only and must apply all of its income to those purposes.
Section 208(2)(b) of the Taxes Consolidation Act 1997 provides for an exemption from income tax to be granted in respect of the profits of a trade carried on by any charity, if the profits are applied solely to the purposes of the charity and either:
1. the trade is exercised in the course of the actual carrying out of a primary purpose of the charity, or
2. the work in connection with the trade is mainly carried on by beneficiaries of the charity.
366. Deputy Paul Murphy asked the Minister for Finance if he will provide statistics on the national debt to gross national product ratio (details supplied) and the general Government debt to GNP ratio; if he will compare this to the ratios of the other EU countries and the EU-15 and EU-27 averages; and if he will provide projections for the estimated national debt to GNP ratio and the general Government debt to GNP ratio for each year to 2020. [31631/15]
View answerThe Deputy should note the standard for international debt comparisons is as a percentage of GDP and it is used in replies to PQs unless an alternative comparator is specified in the question.
It should also be noted that the Gross National Product (GNP) measure is no longer published by Eurostat. It is an outdated concept which continues to be retained nationally by the CSO because of its longstanding divergence from GDP. Internationally it has been replaced by Gross National Income (GNI) which is found by adjusting GNP for EU taxes and subsidies and is also the measure on which a large part of EU budget contributions are based. Currently on the Eurostat database, year 2014 data has only been reported by a handful of Member States but data is available for most in respect of year 2013.
National Debt is a presentation of the indebtedness of the Exchequer. It is calculated net of liquid assets and excludes certain liabilities recognised in the General Government Debt. There is no available set of data to compare measures on National Debt across the EU. The General Government Debt (GGD) is the standard measurement of gross indebtedness used for comparative purposes within the EU. It includes the debt of the Exchequer, the extra-budgetary funds, the non-commercial state-sponsored bodies, as well as the debt of local authorities.
Table 1 contains General Government Debt as a percentage of GNI for the EU area for years 2013 and 2014 (where available).
It should be noted that National Debt, General Government Debt and GNP projections for years to 2020 in Table 2 are consistent with the forecasts for Stability Programme Update published in April 2015. New projections of Debt measurement and GNP will be produced for Budget 2016.
Table 1 General Government Debt as % of GNI
|
- |
2013 |
2014 |
|
Ireland |
141% |
124% |
|
Euro area (19 countries) |
86% |
87% |
|
European Union (28 countries) |
91% |
92% |
|
Belgium |
105% |
n/a |
|
Bulgaria |
19% |
n/a |
|
Czech Republic |
45% |
46% |
|
Denmark |
43% |
44% |
|
Germany |
75% |
n/a |
|
Estonia |
10% |
n/a |
|
Greece |
n/a |
n/a |
|
Spain |
93% |
n/a |
|
France |
91% |
n/a |
|
Croatia |
82% |
n/a |
|
Italy |
129% |
132% |
|
Cyprus |
105% |
n/a |
|
Latvia |
38% |
n/a |
|
Lithuania |
40% |
n/a |
|
Luxembourg |
n/a |
n/a |
|
Hungary |
80% |
n/a |
|
Malta |
n/a |
n/a |
|
Netherlands |
66% |
67% |
|
Austria |
81% |
n/a |
|
Poland |
58% |
n/a |
|
Portugal |
131% |
132% |
|
Romania |
n/a |
n/a |
|
Slovenia |
71% |
n/a |
|
Slovakia |
56% |
n/a |
|
Finland |
55% |
59% |
|
Sweden |
37% |
41% |
|
United Kingdom |
90% |
n/a |
Source CSO, Eurostat
Table 2. Debt Projections as % of GNP
|
% of GNP |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
National Debt (Net) |
110% |
106% |
105% |
102% |
99% |
94% |
|
General Government Debt |
120% |
118% |
115% |
113% |
110% |
106% |
Source Department of Finance SPU 2015, NTMA
367. Deputy Paul Murphy asked the Minister for Finance the annual amounts spent on servicing the national debt since 2008, including a breakdown of interest and principal; and the projected spend annually from 2015 to 2020. [31632/15]
View answerThe NTMA advise that the annual cash cost of servicing the National Debt for each of the years 2008 to 2014 is as set out in Table 1 as follows. For those years, National Debt service expenditure comprised interest, a Sinking Fund payment as well debt management fees and expenses of the National Treasury Management Agency (NTMA).
The Deputy should note that this information is available in a number of published documents including the Annual Reports and Accounts of the NTMA as well as the Department of Finance's Budgetary and Economic Statistics publication.
Table 1: National Debt Service Expenditure 2008-2014
|
€ million |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
|
National Debt Service |
2,100 |
3,214 |
4,236 |
5,375 |
6,468 |
8,083 |
8,212 |
As noted above National Debt service cash expenditure in the years 2008 to 2014 included an annual Sinking Fund payment a technical charge on the Exchequer current account and credit to the capital account which had no impact on the overall Exchequer balance. The requirement to make an annual Sinking Fund payment was removed in the Finance Act 2014 and so no such payment is provided for in the National Debt Service expenditure projections for the years 2015 to 2020. This should be borne in mind when making year-on-year National Debt service expenditure comparisons.
The most recent forecasts of annual National Debt service cash expenditure for the period 2015 to 2020 are from the time of the April 2015 Stability Programme Update (SPU) and are set out in Table 2 as follows.
Table 2: National Debt Service Expenditure Projections 2015-2020
|
€ million |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
National Debt Service |
7,271 |
7,325 |
7,075 |
7,184 |
7,142 |
7,013 |
While principal debt repayments do not form part of National Debt service expenditure, Table 3 below sets out information in respect of the principal redemption amounts of Irish Government Fixed Rate Bonds on the date of maturity over the period 2008 to 2015. Government Bonds are the largest component of the National Debt.
Table 3: Irish Government Fixed Rate Bond Redemptions 2008 - 2015
|
€ million |
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
|
Irish Government Fixed Rate Bond Maturities |
31 |
5,072 |
793 |
4,390 |
5,563 |
4,616 |
2,746 |
2,237 |
Table 4 as follows sets out the maturity profile of Irish Government Fixed Rate Bonds outstanding at the end of August 2015 for the period 2016 to 2020.
Table 4: Maturity profile of Irish Government Fixed Rate Bonds 2016-2012
|
€ million |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Irish Government Fixed Rate Bond Maturities |
8,132 |
6,389 |
9,256 |
14,467 |
19,861 |
Note that the figures in the table are unaudited.
