Written Answers Nos. 221-234
221. Deputy Michael McGrath asked the Minister for Finance the proceeds from the disposal of investments in the State supported banks, by institution, in each year since 2010, in tabular form; and if he will make a statement on the matter. [1067/16]
View answer222. Deputy Michael McGrath asked the Minister for Finance the dividends the State received from investments in the State supported banks, including interest on contingent capital notes, by institution, in each year since 2010, in tabular form; and if he will make a statement on the matter. [1068/16]
View answerI propose to take Questions Nos. 221 and 222 together.
As requested by the Deputy, the tables below provide details of proceeds received from the disposal of bank assets and dividends received to date:
1. Disposal proceeds including accrued interest and dividend
|
Date |
Transaction |
AIB |
BOI |
PTSB |
Total |
|
2010 |
|||||
|
April |
Cancellation of preference share warrants |
- |
€0.49bn |
- |
|
|
December |
Cancellation of preference share warrants |
€0.05bn |
- |
- |
|
|
2011 |
|||||
|
August |
Sale of equity |
- |
€0.24bn |
- |
|
|
December |
Sale of equity |
- |
€0.81bn |
- |
|
|
2013 |
|||||
|
January |
Sale of convertible capital notes |
- |
€1.06bn |
- |
|
|
July |
Sale of Irish Life |
- |
- |
€1.34bn |
|
|
December |
Sale/redemption of preference shares |
- |
€2.05bn |
- |
|
|
2015 |
|||||
|
May |
Redemption of convertible capital notes |
- |
- |
€0.44bn |
|
|
May |
Sale of equity |
- |
- |
€0.1bn |
|
|
December |
Part redemption of preference shares* |
€1.64bn |
|||
|
Total |
€1.69bn |
€4.65bn |
€1.88bn |
€8.22bn |
*Gross proceeds from the redemption of the preference shares (including accrued interest) amounted to €1.87bn of which €0.23bn was used to settle the remaining balance of the EBS promissory notes.
2. Dividends received**
|
Year |
AIB |
BOI |
PTSB |
Total |
|
2011 |
||||
|
Preference shares |
- |
€215m |
- |
€215m |
|
2012 |
||||
|
Preference shares |
- |
€188m |
- |
€188m |
|
CoCo |
€160m |
€100m |
€40m |
€300m |
|
2013 |
||||
|
Preference shares |
- |
€188m |
- |
€188m |
|
CoCo |
€160m |
- |
€40m |
€200m |
|
2014 |
|
|||
|
CoCo |
€160m |
- |
€40m |
€200m |
|
2015 |
||||
|
Preference shares |
€280m |
- |
- |
€280m |
|
CoCo |
€160m |
- |
- |
€160m |
|
Total |
€920m |
€691m |
€120m |
€1,731m |
** Dividends/coupons accrued in the year of a disposal are included in disposal proceeds
223. Deputy Michael McGrath asked the Minister for Finance the fees received under the credit institutions (financial support) scheme and the eligible liabilities guarantee scheme in each year since their inception, in tabular form; and if he will make a statement on the matter. [1069/16]
View answerThe ELG Scheme closed for new liabilities at midnight on 28 March 2013. Eligible liabilities covered under the Scheme which were incurred up to midnight on 28 March 2013 continue to be covered up to their maturity date which could be up to 5 years maximum from the date the liability was incurred. This means that covered liabilities will wind down over the period from midnight on 28 March 2013 until 28 March 2018 at the latest.
Fees paid by the covered institutions in respect of the ELG Scheme guarantee are paid quarterly in arrears and therefore there is a time lag before the fees are paid into the Exchequer (i.e. fees received as cash in Q1 of 2014 are in respect of fees accrued for Q4 of 2013). The figures below are presented on an accruals basis.
The total fees received to Q3 2015 from the covered banks in respect of both the CIFS and ELG Schemes amount in total to €4.4bn which does not include interest accrued. This amount comprises €758.4m in respect of CIFS and €3,660.25m to Q3 2015 in respect of the ELG Scheme, as shown in the tables below.
CIFS Scheme fees paid to date by Covered Institutions
|
€millions |
IL&P |
BoI |
AIB |
Anglo |
EBS |
INBS |
Postbank |
Total |
|
2008 |
- |
32.3 |
- |
37.9 |
- |
- |
0.004 |
70.20 |
|
2009 |
35.4 |
138.1 |
174.7 |
94.8 |
9.7 |
23.8 |
0.020 |
476.52 |
|
2010 |
14.8 |
68.3 |
58.3 |
54.9 |
5.9 |
8.8 |
0.015 |
211.01 |
|
2011 |
- |
- |
- |
0.7 |
- |
- |
- |
.70 |
|
Total |
50.2 |
238.7 |
233.0 |
188.3 |
15.6 |
32.6 |
0.039 |
758.43 |
ELG fees paid to Q3 2015 by Participating Institutions
|
€millions |
IL&P |
BoI |
AIB |
IBRC |
EBS |
Total |
|
2010 |
95.9 |
275.5 |
299.3 |
149.9 |
34.2 |
854.8 |
|
2011 |
172.9 |
448.7 |
464.9 |
85.5 |
62.6 |
1234.6 |
|
2012 |
165.2 |
375.4 |
332 |
23.9 |
54.7 |
951.2 |
|
2013 |
105.4 |
142.3 |
126.8 |
0 |
46.8 |
421.3 |
|
2014 |
59.4 |
36.8 |
36.1 |
0 |
22.9 |
155.2 |
|
2015* |
11.8 |
7.6 |
13.8 |
0 |
9.9 |
43.15 |
|
Total |
610.6 |
1286.3 |
1272.9 |
259.3 |
231.1 |
3660.25 |
*The 2015 figures pertain to Q1, Q2 and Q3 fees only
224. Deputy Michael McGrath asked the Minister for Finance the profit the National Asset Management Agency expects to make by the time of its wind-up; and if he will make a statement on the matter. [1070/16]
View answerIt is difficult to indicate definitively what the surplus position will be when NAMA completes its work. As the Deputy may be aware, the NAMA Chairman and Chief Executive appeared before the Joint Oireachtas Committee on Finance, Public Expenditure and Reform on 16 December 2015. At that appearance, the NAMA Chairman provided an updated estimate to the Committee when he stated that, assuming current market conditions prevail, NAMA "will have generated [an upper-range] surplus of the order of €2 billion to hand over to the Exchequer". I am advised that NAMA is currently conducting its end-2015 impairment review and, when that has been completed and approved by the NAMA Board, NAMA will formally update its projection for its terminal surplus position.
It is worth noting that NAMA estimates its projected terminal surplus on the basis of a range and that the projected €2 billion, which is at the upper end of that range, assumes that market conditions will remain favourable. However, even in an adverse scenario, where market conditions deteriorate, NAMA advises that it anticipates a surplus to the State, with a lower-range projection of approx. €0.5 billion.
225. Deputy Michael McGrath asked the Minister for Finance the estimate of the surplus the Irish Bank Resolution Corporation special liquidator expects the IBRC to make by the time of its wind-up; and if he will make a statement on the matter. [1071/16]
View answerI am advised by the Special Liquidators that they currently have a cash balance in excess of €2.1bn on hand which will be available for distribution to creditors.
The ultimate level of dividend paid, if any, to each creditor cannot be known until such time as all loan assets are sold, the total level of adjudicated creditors is finalised and the other contingent creditor claims which may crystallise, including those from litigation, are known.
The Special Liquidators intend to provide an update on the winding up of Irish Bank Resolution Corporation Limited (in Special Liquidation) by way of their third progress update report in the first quarter of 2016.
226. Deputy Ruth Coppinger asked the Minister for Finance his views on the 8.5% increase in house prices, as indicated in a report (details supplied) published on 4 January 2016; and if he will make a statement on the matter. [1104/16]
View answerAccording to the latest Daft.ie House Price Report, the average asking price for residential property increased by 8.5% in the year to the fourth quarter of 2015. However, significant regional differences exist particularly as between the Dublin region and the rest of the country. Outside of Dublin, asking prices grew by 13% on an annual basis while the rate of growth in Dublin has continued to moderate, falling from almost 25% in mid-2014 to below 3% by the end of 2015.
Changes in property prices reflect a range of interrelated factors on both the demand and supply side of the property market. The strong economic recovery and in particular the increase in employment has brought about a strong increase in the demand for housing. However, owing to a number of constraining factors, the supply response has been sluggish to date, in turn contributing to recent price developments.
The Government has taken an active role in addressing the ongoing issues in the housing and rental market. Most recently, Minister Kelly and I announced the Rent Certainty and Housing Supply package, agreed by Government, which is designed to stabilise the rental market in the short run and support the sustainable growth in the housing market over the long term. In terms of specific measures intended to increase housing supply, the package includes changes to planning guidelines and standards, support for housing-enabling infrastructure and a targeted rebate of development contributions for housing supplied below certain price levels in Dublin and Cork where supply constraints are most binding.
This package builds upon Construction 2020 Strategy: A Strategy for A Renewed Construction Sector which sets out the Government's overall strategic approach to increasing housing supply. Under this Strategy, important progress have been made to date in addressing issues including the planning system, development finance, industry capacity and skill constraints and construction costs. The actions taken under Construction 2020 are complemented by the ongoing implementation of the Social Housing Strategy and the plans by NAMA for the construction of 20,000 residential units by 2020.
227. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is exempt from the universal social charge; and if he will make a statement on the matter. [1116/16]
View answerI am advised by the Revenue Commissioners that they have written to the person concerned to clarify her personal circumstances and following receipt of a response to that letter, Revenue will review and confirm the position to her as regards exemption from the Universal Social Charge (USC).
228. Deputy Mick Wallace asked the Minister for Finance the guidelines or rules he has in place for mortgage lending institutions regarding the methods of calculation of tax relief at source for individual mortgage holders, or if it is the case that lending institutions can use their own discretion in this regard; if he is satisfied that the current procedures in place regarding the repayment of mortgages adequately takes the best interests of the borrower into account; and if he will make a statement on the matter. [1170/16]
View answer229. Deputy Mick Wallace asked the Minister for Finance the measures he has in place to assist members of the public in being made aware of their entitlements and rights under the tax relief at source scheme; and if he will make a statement on the matter. [1171/16]
View answerI propose to take Questions Nos. 228 and 229 together.
As the Deputy is aware, mortgage interest relief, which is administered by Revenue through the Tax Relief at Source (TRS) system, does not apply to loans taken out after 31 December 2012. However, qualifying loans taken out between 1 January 2004 and 31 December 2012 are eligible for the relief up to and including 31 December 2017.
In regard to the Deputy's question on the operation of TRS by mortgage lending institutions, I am advised that Revenue issues detailed instructions to each lending institution setting out the criteria to be used in calculating the correct amount of mortgage interest relief applicable to the various qualifying loans. The lending institutions then apply the criteria to the interest payments received from borrowers to calculate the correct amount of relief. Revenue also carries out regular assurance checks to ensure the lending institutions are applying the relief in line with the instructions.
In regard to the Deputy's question on making the public aware of the relief, Revenue has confirmed to me that it has published very comprehensive notes and guidelines in relation to Tax Relief at Source (TRS) entitlements on its website at http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html and that it also operates a telephone helpline service on 1890 46 36 26 to assist borrowers in correctly claiming their entitlements.
I am satisfied that the measures already in place by Revenue are sufficient to ensure that mortgage interest relief is applied in accordance with the legislation.
230. Deputy Micheál Martin asked the Minister for Finance the baseline employment and unemployment figures he has used for each of the next five years in preparing his fiscal and economic projections; and if he will make a statement on the matter. [1230/16]
View answerIn line with Budget 2016, the employment and unemployment forecasts, along with the underlying totals, produced on the basis of available data at the time are set out in the table below.
|
- |
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
Employment, aged 15 and over |
per cent growth |
2.4 |
2.0 |
1.9 |
1.8 |
1.7 |
|
Employment, aged 15 and over |
persons (000s) |
2,014 |
2,054 |
2,094 |
2,131 |
2,167 |
|
Unemployment, aged 15-74 |
per cent growth |
8.3 |
7.7 |
7.2 |
6.8 |
6.4 |
|
Unemployment, aged 15-74 |
persons (000s) |
182 |
171 |
161 |
155 |
149 |
These forecasts will be updated in the context of the 2016 Stability Programme Update.
231. Deputy Eoghan Murphy asked the Minister for Finance the latest general Government debt and deficit projections between now and 2020, given the recently announced Exchequer update for 2015. [1234/16]
View answerThe most recent projections in relation to both government deficit and debt figures were included as part of the Budget 2016 publication and are displayed in the table below.
|
|
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
|
Deficit as % GDP |
-2.1 |
-1.2 |
-0.5 |
0.2 |
1.0 |
1.8 |
2.5 |
|
Debt as % GDP |
97.0 |
92.8 |
90.3 |
86.7 |
83.5 |
79.8 |
75.7 |
Source: Department of Finance
The impact of the 2015 Exchequer returns, which indicated that tax revenue was €3.3 billion ahead of expectation and expenditure was c.€270 million below the net estimates adopted by the Dáil (i.e. including the supplementary estimates), should be to improve the general government balance for 2015 by about 0.6% of GDP and bring it close to 1.5% of GDP overall. However, aside from tax revenue there are several other elements which impact the overall deficit figure. The first official estimates for 2015 general government balance and debt will be produced by the Central Statistics Office for the end March 2016 EDP transmission to Eurostat.
The improvement in the 2015 outturn will have a base effect and it will carry through to subsequent years. The deficit and debt projections for 2016 to 2021 will be updated in the stability programme update next April.
232. Deputy Finian McGrath asked the Minister for Finance to support a matter, including the options that are available to the person (details supplied) in Dublin 9. [1276/16]
View answerI appreciate the difficult position many people find themselves in with respect to their personal indebtedness situation. While it would not be appropriate for me to intervene directly in individual cases, there are a number of supports available that should be of assistance. I would strongly advise the person referred to by you to immediately seek financial and legal advice on the circumstances of her specific case to assess whether a solution can be found that would facilitate her remaining in her home. As an immediate first step, I would recommend that she contact the Money Advice & Budgeting Service (MABS) and ask to speak to their dedicated mortgage arrears advisory service. The MABS helpline is 0761 07 2000.
It is my understanding that the 2013 Land and Conveyancing Law Reform Act has provided a new statutory avenue to borrowers in a repossession case involving a primary dwelling to seek an adjournment of the repossession case to allow the borrower the opportunity to consider and, if so decided, to propose a Personal Insolvency Arrangement (PIA) to creditors in order to resolve an unsustainable debt position.
There is an onus on personal insolvency practitioners to, insofar as is reasonably practicable when formulating a PIA, formulate a proposal on terms that will not require the debtor to dispose of an interest in, or cease to occupy, a private principal residence.
Even if such a PIA proposal is rejected by creditors, the Personal Insolvency Act has now been amended to provide that the proposal can then be submitted to a Court for adjudication. The Deputy may be aware that this new Court Review of PIAs rejected by creditors commenced just last November and his constituent should certainly seek independent legal advice on its applicability to her specific situation.
233. Deputy Pearse Doherty asked the Minister for Finance the effect of abolishing the universal social charge on the fiscal space available over the next five years, including how its abolition will benefit in absolute terms a worker on the minimum wage, the average industrial wage and an income of €100,000. [1352/16]
View answer234. Deputy Pearse Doherty asked the Minister for Finance the projected revenue that will be generated by the universal social charge for each of the next five years on the basis of a no policy change. [1353/16]
View answerI propose to take Questions Nos. 233 and 234 together.
The table below sets out the broad projected revenues that will be generated by the Universal Social Charge for each of the next five years on a no policy change basis. These approximate figures are on an Exchequer receipts basis. It should be noted for 2017 Exchequer receipts are reduced due to the carryover effect of Budget 2016 changes and SEPA-related timing effects. However, it should be noted, were the USC abolished, the full year impact incorporating recent changes to the USC, would cost approximately €3.7 billion.
|
Forecast for USC |
€ billion |
|
2016 |
c. €4.0 |
|
2017 |
c. €3.8 |
|
2018 |
c. €4.5 |
|
2019 |
c. €4.4 |
|
2020 |
c. €4.6 |
The indicative gross fiscal space over the 2017 to 2021 period is some €10.9 billion in cumulative terms (as outlined in Budget Table A.9). A decision not to index the tax system would add a further €2.0 billion to the level of space available over the period, of which some €500 million relates to the USC, bringing the total potential fiscal space to €12.9 billion.
It should be noted that the indicative fiscal space highlighted in these budgetary annexes require a number of assumptions, including in relation to reference rates for potential growth, deflators and certain other variables used in the calculation. These inputs are based on current projections and are likely to change over time.
The table indicates that in 2016, the Universal Social Charge is projected to raise approximately €4 billion in Exchequer receipt terms, with this level expected to increase as employment and wage growth continue in the years thereafter. Were the USC abolished, the full year impact, incorporating recent changes to the USC, would cost approximately €3.7 billion. It should be noted these USC projections assumed some indexation of the USC, which increase the cost of abolition. In terms of broad order of magnitude, were the USC abolished over the medium term, this would absorb one third of the currently available gross fiscal space.
Since coming into Government, I have already made several significant changes to the Universal Social Charge to increase its fairness. As a result of a Review of USC by my Department, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. This removed an estimated 330,000 individuals from the charge in that year. Further increases in Budgets 2015 and 2016 brought the exemption threshold to €13,000, resulting in a situation in which an estimated 29 per cent of income earners being outside the scope of USC in 2016.
Furthermore, I also reduced the three lower rates at which USC is charged and increased the thresholds for these rates. These measures, together with the introduction of a new 8 per cent rate on income over €70,044, further enhanced the existing progressive nature of the USC.
I have committed, if given the opportunity, to continue to progressively abolish the Universal Social Charge as part of a wider reform of the income tax system to reward work and reduce the marginal rate to no more than 50 per cent for all workers to make Ireland more attractive for mobile foreign investment and skills, including for our returning emigrants. As in the previous two budgets, in which the benefits of USC and income tax cuts have been capped at €70,000 in earnings, it is my intention should I be given the opportunity to present further budgets to claw back some of the benefits of USC abolition for the highest earners. I will be setting out the details of my party's position on this issue in due course.
The Deputy requested that I provide details of the gain which would accrue on the abolition of the Universal Social Charge for an employee or self-employed worker at specified income levels. These details are outlined in the table below. For this purpose, the average industrial wage is taken from the Central Statistics Office average weekly earnings statistics for the "Industry" economic sector in Q3, 2015 of €833. Average weekly earnings across all economic sectors in the same period were €689.
|
Income |
Annual USC payable (employee) |
Annual USC payable (self-employed) |
|
Minimum wage - €9.15 x 39 hours - €18,556 |
€316 per annum* |
€316 per annum* |
|
Average Industrial Wage - CSO Q3 2015 Industry (Sectors B-E) - €43,307 (€833 per week) |
€1,675 per annum* |
€1,675 per annum* |
|
€100,000 |
€5,542 per annum* |
€5,542 per annum* |
*It is important to highlight that the above figures are based on hypothetical gains from a complete abolition of the Universal Social Charge only as requested by the Deputy. As I have stated already in my reply, as in the previous two budgets, in which the benefits of USC and income tax cuts have been capped at €70,000 in earnings, it is my intention- should I be given the opportunity to present further budgets- to claw back some of the benefits of USC abolition for the highest earners. I will be setting out the details of my party's position on this issue in due course.
