Wednesday, 8 Jun 2016

Written Answers Nos. 133-151

Banking Sector

Questions (133)

Pearse Doherty

Question:

133. Deputy Pearse Doherty asked the Minister for Finance the amount of annual management fees on apartments and the amount overdue by each State backed bank. [14307/16]

Written answers

Minister for Finance

As the deputy will be aware, I have no role in the day-to-day running of the banks in which the State is a shareholder. These institutions are run on an independent and commercial basis and the details of the formal relationship between my Department and these institutions are set out in the respective Relationship Framework Agreements, which can be found via the following links.

AIB: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf 

PTSB: http://finance.gov.ie/sites/default/files/Relationship%20Frameworks%20for%20the%20Irish%20Banks%20Irish%20Life%20and%20Permanent.pdf

BOI: http://www.finance.gov.ie/sites/default/files/Bank-of-Ireland1_0.pdf

However, my officials requested and received comment from each of the banks in which we have a stake, on the question raised by the deputy.

AIB have informed me that for commercial reasons they do not disclose the amount of management fees payable. However, they advise that it is AIB's policy to appoint managing agents to assets in the ownership of the bank, and all appointed agents are instructed to ensure all fees - including management fees - associated with the relevant properties are discharged in a timely and appropriate manner.

PTSB have advised that in the case of apartments in possession, the bank discharges management fees owing only on completion of any sale. On average in 2015 there was €6,353 due in the form of management fees per apartment sold. This includes fees owing from the original owner and from the bank which is responsible for management fees incurred from when possession occurs. PTSB have also advised that on taking possession of a property the bank will place the unit on the market for sale once clear marketable title is confirmed by the conveyancing solicitor and the selling agent has advised that the property is ready for marketing. Once an offer has been accepted the bank will seek to close the sale in a timely manner.

Bank of Ireland advise that the information requested is not disclosable, but that Table 5a on page 370 of Bank of Ireland's annual report for 2015 provides details of properties in possession at December 31 2015 from Bank of Ireland's Irish mortgage loan book.

Ministerial Briefing

Questions (134)

Michael McGrath

Question:

134. Deputy Michael McGrath asked the Minister for Finance if his Department has prepared a ministerial briefing paper; and if he will make a statement on the matter. [14324/16]

Written answers

Minister for Finance

In response to Deputy McGrath's question, I would like to inform him that a briefing document was prepared by officials in the Department of Finance and was presented to both myself and the Minister of State. This document has been published on the Department of Finance website with some content redacted in line with the Freedom of Information Act, 2014. I have included a link to the document for the Deputy's convenience: www.finance.gov.ie/news-centre/publications/minister-noonans-brief-2016.

Question No. 135 answered with Question No. 125.

Data Collection

Questions (136)

Peadar Tóibín

Question:

136. Deputy Peadar Tóibín asked the Minister for Finance if he is satisfied with the level of data that is collected on the issues which come under his Department's remit; the steps he will take to work with the administration in Northern Ireland to collect data under his aegis on a North-South basis; the budgets he will put in place to undertake this work (details supplied); and if he will make a statement on the matter. [14441/16]

Written answers

Minister for Finance

For my Department, this relates to statistics on the economy which, for the most part, are the responsibility of the CSO.  I understand that the Central Statistics Office (CSO) and the Northern Ireland Statistics and Research Agency (NISRA) work closely together on topics of common interest. This includes regular meetings and exchange of best practice on current methods for collection and processing of Census of Population, Business and Tourism statistics.

Joint publications by CSO and NISRA include "Census 2011: Ireland and Northern Ireland", "Visitors to Ireland and Northern Ireland 2014: A statistical profile of tourism", and the thematic report "Ireland North and South - A Statistical Profile".  The All-Island Tourism Statistics Liaison Group, which meets twice per year, is jointly chaired by CSO and NISRA and includes membership from the relevant agencies North and South. Both the CSO and NISRA work within standards and definitions set by EU statistical legislation and this helps to assure comparability of statistics in joint thematic publications and comparability between the regular statistics published by the two organisations.  

It is important to note that the CSO is an independent office under the aegis of the Department of Taoiseach which accordingly is responsible for all budgetary matters related to the CSO.

Capital Allowances

Questions (137)

Michael Fitzmaurice

Question:

137. Deputy Michael Fitzmaurice asked the Minister for Finance the number of residential units which have been the subject of applications for capital gains tax relief, which was introduced in budget 2012 and applied to property for the first seven years of ownership for properties bought between 7 December 2011 and the end of 2014, where the property is held for more than seven years. [14521/16]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that as this scheme was only introduced in Budget and Finance Act 2012, and to qualify for the relief an individual must hold the property for seven years, it is not yet possible for any application to be made for relief under the scheme, nor is it possible to estimate how many applications will be made in the future.

Strategic Banking Corporation of Ireland Data

Questions (138)

Pearse Doherty

Question:

138. Deputy Pearse Doherty asked the Minister for Finance to provide a breakdown by county of all Strategic Banking Corporation of Ireland funding drawn date to date. [14523/16]

Written answers

Minister for Finance

The Strategic Banking Corporation of Ireland (SBCI) began lending in March 2015. Its goal is to increase the provision of funding to SMEs at a lower cost and on more flexible terms than has been available in recent times in the Irish Market. The SBCI channels its funds through lending partners known as on-lenders. The SBCI currently has three bank and three non-bank on-lending partners.

The SBCI publishes results biannually. To the end of December 2015, The SBCI has lent just under €172 million to circa 4,600 SMEs. The average loan size was €37,000 and the loans were for a variety of purposes including investment, lease and hire purchase, working capital and refinancing. The SBCI will publish results for the first half of 2016 in July.

The SMEs who received SBCI loans were from a variety of business sectors. 85% of loans, by volume, were to SMEs based outside of Dublin.  (West 13%, Midlands 7%, Mid-West 14%, South West 19%, South East 11%, Mid-East 10%, Border Region 11%).

The following table contains a breakdown of SBCI lending, by value, for each region to end of December 2015:

	West	Midlands	Mid-West	South-West	Border	Mid-East	Dublin Region	South-East	Total
Total	15,472,929	7,929,896	18,548,522	32,488,184	17,081,333	15,982,072	44,191,367	20,305,427	171,999,730

Mortgage Lending

Questions (139)

Seán Haughey

Question:

139. Deputy Seán Haughey asked the Minister for Finance the measures he is taking to assist first-time buyers; if he is aware that some banks are insisting on a 20% deposit in the case of first-time buyers purchasing a one-bedroom apartment in the north Dublin area; and if he will make a statement on the matter. [14524/16]

Written answers

Minister for Finance

Primary responsibility for the broad scope of housing policy is a matter for my colleague Simon Coveney TD, Minister for Housing, Planning and Local Government.  He is developing an Action Plan for Housing and, having regard to the number of Departments and agencies which will have an involvement in that Plan, its formulation and implementation will be overseen by An Taoiseach and the new Government Committee on Housing.  As indicated in the Programme for a Partnership Government (PfPG), this Action Plan will be a collaborative process and will draw on the work of the Oireachtas Committee on Housing and Homelessness as well as the actions laid out in the PfPG itself.  

The Central Bank is independent in the formulation and implementation of macro prudential policy.  The existing macro prudential measures for residential mortgages lending, which were introduced last year, adopted a general 80% loan to value (LTV) mortgage threshold for primary dwelling residential lending purposes but they also had regard to the particular situation of first time buyers and provided for a 90% LTV threshold for such borrowers in respect of the value of a property up to €220,000.  Nevertheless, subject to compliance with the overall constraints of the macro prudential measures (and also other relevant regulatory requirements), it remains a commercial matter for individual lenders to set their own lending policies and to make their own individual lending decisions.  However, as the Deputy will be aware, the Central Bank will carry out a review of the current macro prudential rules later this year and that the Bank has indicated that the existing measures can be recalibrated if the evidence suggests that such an adjustment would be warranted.  It is recognised in the PfPG that some first time buyers may face difficulties in accessing mortgage finance to purchase a house and to that end the PfPG, as one of the range of measures in the area of housing, commits the Government to work with the Central Bank, as part of its up-coming review of its mortgage lending limits, to develop a new "Help to Buy" scheme to ensure availability of adequate, affordable mortgage finance or mortgage insurance for first time buyers as new housing output comes on-stream.      

From a taxation perspective, the PfPG also makes reference to a "temporary targeted reduction of the rate of VAT from 13.5% to 9% on new, affordable houses and apartments, both public and private, timed to generate the maximum impact on supply and to target principally the purchasers of affordable homes".  However, I understand that such a VAT amendment would be very complicated to implement and may not deliver the relief to the purchaser, but instead would be absorbed by the builder. As the proposal is aimed at targeting the affordability of homes from the position of the purchasers, I do not believe such a VAT amendment would be of assistance.  As an alternative, and as I stated at the Oireachtas Committee on Housing recently, I have asked my Department to examine an approach through the income tax system, perhaps similar to the Home Renovation Incentive, in which relief could be provided to home purchasers. 

It should also be noted that section 266A of the Taxes Consolidation Act 1997 provides for refunds of deposit interest retention tax (DIRT) to first-time buyers who purchase or self-build a property for occupation as their home. The property must be purchased or self-built between 14 October 2014 and 31 December 2017. A first-time buyer who has either individually or jointly with any other person previously purchased or built a property is not eligible for a DIRT refund. The amount of the refund is capped at the DIRT paid on savings of up to a maximum of 20% of the purchase price or, in the case of a self-built property, up to 20% of the market value of the completed property.

IBRC Liquidation

Questions (140)

Paul Murphy

Question:

140. Deputy Paul Murphy asked the Minister for Finance the steps he will take to ensure persons receive their agreed entitlements in respect of the non-payment of agreed redundancy pay to former IBRC staff; and if he will make a statement on the matter. [14529/16]

Written answers

Minister for Finance

I am advised by the Special Liquidators of IBRC that all of the preferential creditor payments to former employees of IBRC have been processed for payment.

I am advised that the unsecured creditor claims of former employees of IBRC are in the process of being adjudicated on by the Special Liquidators. Only valid and agreed unsecured creditor claims of former employees will rank for payment as an unsecured creditor of the liquidation.

Property Tax Exemptions

Questions (141)

Clare Daly

Question:

141. Deputy Clare Daly asked the Minister for Finance the reason a person (details supplied) has been informed that a property will only be exempt from local property tax with effect from 1 November 2016 and that the exemption will apply for the years 2017 to 2022, given that the person is in possession of certificates of damage dated 9 April 2014 and 30 January 2015. [14625/16]

Written answers

Minister for Finance

I am advised by Revenue that the property in question, in accordance with the Finance (Local Property Tax) (Amendment) Act 2015, qualifies for an exemption from Local Property Tax (LPT) on foot of pyritic damage. The property was accepted into the Pyrite Remediation Scheme on 1 April 2016 and is therefore eligible for the exemption for the next six years starting in 2017 and running until 2022.

The person concerned also applied for the exemption in respect of the years 2012-2016 (including arrears of Household Charge) but has not yet provided the necessary supporting documentation. When that documentation is provided to Revenue the matter will be considered further.

Banking Sector

Questions (142)

Michael McGrath

Question:

142. Deputy Michael McGrath asked the Minister for Finance the number of contracts a building society (details supplied) has terminated in respect of agents who were selling products on its behalf in towns and villages around the country in respect of each of the past six years; the selection criteria used by the society in respect of these decisions and the process involved; if this was as a result of a change in the business model of the society; and if he will make a statement on the matter. [14652/16]

Written answers

Minister for Finance

As the deputy is aware, EBS is a subsidiary of AIB, which it acquired in July 2011. Notwithstanding the State's shareholding in AIB, the deputy will understand that I have no role in the day-to-day to day management of either institution. All decisions on strategy or personnel are therefore solely a matter for the management teams of AIB and EBS. The arms-length relationship between the Minister and the bank are set out in the Relationship Framework Agreement, which can be found here: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf.

When AIB acquired EBS, it had 90 agency offices. The bank has confirmed to my officials that at December 2015 EBS had 71 agency offices. AIB advise that the reduction in the number of agency offices was a consequence of the rationalisation of the EBS distribution network in response to business needs and market demand. Moreover, AIB does not deem it appropriate to comment further at this time as there are a small number of former agents in litigation against the bank in respect of the termination of their agencies.

Tax Reliefs Costs

Questions (143)

Paul Murphy

Question:

143. Deputy Paul Murphy asked the Minister for Finance to consider allowing tax relief for dental procedures and if he has estimated the cost to the Exchequer should this be done; and if he will make a statement on the matter. [14664/16]

Written answers

Minister for Finance

A breakdown of the estimated cost of tax relief for dental expenses alone is not available. However, the cost of the claims for tax relief on health expenses, which includes medical and dental expenses, in 2014 (the most recent tax year for which data are currently available), is estimated to be in the order of €146 million. Figures in relation to previous tax years are available on the Revenue Commissioners' statistics webpage at  www.revenue.ie/en/about/statistics/index.html. This information can be found under the heading Cost of Tax Expenditures (Credits, Allowances and Reliefs), at www.revenue.ie/en/about/statistics/costs-expenditures.html. Updates will be published on Commissioners' website in due course.

As the Deputy is aware, routine dental treatment such as the extraction, scaling and filling of teeth and the provision and repairing of artificial teeth or dentures is currently excluded from the relief. As a result, information on expenses in relation to routine dental treatment is not required to be returned to Revenue. As Revenue have no data on the treatment cost or potential number of claims it is not possible to provide the estimated cost the Deputy requested.

The Deputy may however be aware that the State already provides some support to those who require dental treatment through the schemes detailed below:

(i) Treatment Benefits from the Department of Social Protection. It is my understanding that this scheme is available to insured workers and retired people who have the required number of PRSI contributions. The benefit under this scheme provides for an oral examination for a qualifying individual once per calendar year.

(ii) The Dental Treatment Services Scheme (DTSS) provides access to dental treatment for adult medical card holders (over 16 years of age). A free oral examination every calendar year and free emergency dental treatment for relief of pain and sepsis are available to all eligible patients. This includes 2 fillings per annum and all extractions.

The DTSS provides treatment for periodontal/gum disease in cases where care is especially warranted. This includes clients who are pregnant, have diabetes or immuno-compromising conditions, or require relevant surgical procedures such as cardiac surgery and joint replacements. Approval for periodontal treatment may be given by the local Principal Dental Surgeon for these and other high risk or special needs groups.

Further information in relation to these two schemes is available from my colleagues, the Minister for Social Protection and the Minister for Health respectively.

The restriction of the Treatment Benefit scheme as it relates to dental treatment in 2010 was expected to lead to savings of €37.5 million. To provide tax relief for routine dental treatment would serve to negate some of the savings achieved from that policy change. Given the existing supports available, particularly for those on low incomes through their access via the medical card, I am not predisposed to expanding the tax relief available for health expenses to include expenses associated with routine dental treatment. However, I will have the Deputy's suggestion examined and will consider it as part of my deliberations for the next Budget.

Mortgage Lending

Questions (144)

Pearse Doherty

Question:

144. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank intends to carry out any public consultation on the issue of high standard variable rates on mortgages; and if he will make a statement on the matter. [14685/16]

Written answers

Minister for Finance

The Central Bank has informed me that it does not have a statutory role to prescribe the rates that mortgage lenders charge on their loans and have expressed reservations previously on being granted such powers. Accordingly, the Central Bank does not intend carrying out any such public consultation as mentioned in the Deputy's question.

The Central Bank contend that a healthy commercial banking system that is in a position to provide finance to customers and is resilient to economic and financial market shocks, needs to be able to generate sustainable profits over the long term - for example, sufficient profit levels to absorb credit losses over the credit cycle while still generating capital.  The Central Bank believe that in Ireland, the mispricing of risks in historical lending continues to be a significant contributor to weak profitability, as evidenced  by the continued high level of non-performing loans (23% as at 31 December 2015), prevalence of very low  yielding tracker mortgages (50% of the value of all outstanding mortgage loans in Ireland), and low net interest margins.

Further, the Central Bank has pointed out that the residential mortgage market comprises, inter alia, fixed interest rate, loan to value managed variable rate mortgages, trackers, restructured mortgages of various types, etc. Therefore, the residential mortgage  market cannot be assessed by only looking at standard variable rate mortgages, and any assessment, would need to consider the large number of different factors that influence interest rate pricing. 

These legacy issues, together with other input costs to variable rate mortgage pricing were outlined in a paper which the Central Bank provided to me in May 2015. In this paper the Bank outlined that these include higher costs from credit losses; higher funding costs; higher levels of capital resulting from regulatory changes; higher required capital per euro of risk given the severe loss experience in the crisis; higher operating cost per euro of loans given falling balance sheets and the fixed cost base that comes with the infrastructure requirements of large retail banks.

The Central Bank has informed me that it does require that all mortgages are advertised and sold in accordance with the requirements of financial services legislation (including Central Bank Codes), and that consumers who choose a given mortgage product (or to switch to a new product) are treated in accordance with these requirements in the context of the product they have chosen. The related Central Bank work is evidenced most recently by the commencement of its examination of tracker related issues.

I have been advised by the Central Bank that it is also currently in the final stages of considering responses to a public consultation on a number of measures to increase the level of transparency of variable rate mortgages of the nature referenced in the question and, thereby, facilitating consumer choices (see "Protections for Variable Rate Mortgage Holders" (CP98) which is available at: www.centralbank.ie/regulation/poldocs/consultation-papers/Documents/CP98/CP98%20Consultation%20on%20Increased%20Protections%20for%20Variable%20Rate%20Mortgage%20Holders.pdf).

Finally, the Central Bank has carried out research, which showed the scope for borrowers to save money by switching mortgages and the Competition and Consumer Protection Commission has launched a mortgage switching tool for consumers to compare rates charged across institutions.  The Central Bank has advised that it plans further research on switching in 2016.

In the present environment, where we are seeing lenders reduce rates and introduce offers specifically targeted at the switcher market, I have encouraged borrowers to contact their bank to see what is available to them in their circumstances or consider moving to another bank, where possible, if the offer is not satisfactory.

Employment Investment Incentive Scheme

Questions (145)

Charlie McConalogue

Question:

145. Deputy Charlie McConalogue asked the Minister for Finance his plans to review the employment investment incentive scheme, EII, so as to ensure that any incentives it provides are at least equivalent to incentives available under the seed enterprise investment scheme, SEIS, in Britain; and if he will make a statement on the matter. [14689/16]

Written answers

Minister for Finance

The Deputy may be aware that a comprehensive review of the Employment and Investment Incentive (EII) and Seed Capital Scheme (SCS) was carried out by my Department in 2014. A public consultation was included as part of the process and a report of the review was published on the Department's website, which can be accessed at www.budget.gov.ie/Budgets/2015/Documents/EII_Report_pub.pdf.

As a result of the review, a number of changes to the EII were made, which following receipt of EU state aid approval, came into effect from 13 October 2015. These changes included an increase in the amount that can be raised by a company in a 12 month period from €2.5 million to €5 million and an increase in the lifetime limit per company from €10 million to €15 million. The EII is generally available to all micro, small and medium-sized companies. The maximum relief available to an investor is 40% (the top rate of income tax) of the amount invested, subject to a maximum investment amount of €150,000 per annum per investor.

In contrast, the UK Seed Enterprise Scheme (SEIS) is targeted specifically at Start-Ups and permits a company to raise a maximum of £150,000 in total. While an investor can claim tax relief at a rate of 50% on their investment, the maximum investment permitted per annum is £100,000. Relief from CGT on any increase in the value of the shares is also provided in certain circumstances.

Recent statistics provided to me by the Revenue Commissioners indicate that the level of investments made under EII has increased significantly in recent years. In 2015, companies raised over €80 million through EII and more than three quarters of that funding was raised by micro-enterprises. The overall level of funding raised increased by almost 30% in a single year. Therefore, I am not convinced that the provision of additional incentives would be appropriate at the current time. My officials will however, analyse the level of job creation among firms availing of EII in advance of Budget 2017. Should any change be warranted, it will be considered as part of my preparations for the Budget and the Finance Bill.

The Deputy may also be aware that as part of Budget 2016, I announced the introduction of a revised CGT entrepreneur relief, which allows for a reduced 20% rate of CGT to be paid on the disposal of qualifying business assets up to a lifetime limit of €1 million of qualifying gains with effect from 1 January 2016. This relief is not restricted to new businesses but to be eligible for the relief there is a requirement, among other conditions, that the person must have been working in the business as a director or employee.

Tax Reliefs Application

Questions (146)

Donnchadh Ó Laoghaire

Question:

146. Deputy Donnchadh Ó Laoghaire asked the Minister for Finance if it is possible to claim tax back under any scheme, such as the Med 1 scheme or otherwise, operated by his Department and the Revenue Commissioners, for counselling, psychiatric treatment or any other such forms of therapy; if not, if he will consider such an approach; and if he will make a statement on the matter. [14713/16]

Written answers

Minister for Finance

Tax relief in respect of health expenses is provided for in section 469 of the Taxes Consolidation Act 1997. Section 469 defines "health expenses" to mean "expenses in respect of the provision of health care [including] the services of a practitioner". 

A practitioner is defined in the section as "any person who is

(a) registered in the register established under section 43 of the Medical Practitioners Act 2007,

(b) registered in the register established under section 26 of the Dentists Act, 1985, or,

(c) in relation to health care provided outside the State, entitled under the laws of the country in which the care is provided to practice medicine or dentistry there".

In the case of counselling, psychiatric treatment or other forms of therapy, relief can only be allowed in circumstances where the practitioner administering the therapy is a qualified practitioner as defined above.

It is my understanding that there can be significant differences in the level of qualifications and/or clinical training undertaken by individuals who provide counselling services and who are not registered, as required by the legislation. I have requested that my officials, in liaison with officials in the Department of Health, explore whether the definition of "practitioner" could be amended in a way which could encompass individuals with relevant training and expertise in the field of psychotherapy and/or counselling.

Pension Provisions

Questions (147)

Brendan Ryan

Question:

147. Deputy Brendan Ryan asked the Minister for Finance if he is considering permitting those who have paid into private pension funds to release moneys from those funds in certain circumstances before they reach 65 years of age, particularly in the context of debt issues and difficulties experienced by the self-employed; and if he will make a statement on the matter. [14732/16]

Written answers

Minister for Finance

The State encourages individuals to put funds aside for their retirement by incentivising such savings through the tax system. Ongoing contributions to Revenue- approved pension schemes and personal pension plans are exempt from income tax (within limits) while the investment growth of such schemes and plans are also tax exempt. Retirement benefits are taxable at drawdown at normal retirement age with the exception of the permissible tax-free retirement lump sum. 

These concessionary tax treatments are not available to other savings arrangements. This is because pre-retirement access to the benefits from pension schemes or plans is generally not permitted, as these arrangements (and the associated tax reliefs on contributions and pension fund growth) are designed to facilitate long term savings based on the principle that the benefits will be locked away to help fund an adequate income in retirement.

The point at which pension savings can be accessed varies according to the type of savings vehicle and, in the case of occupational schemes, the schemes particular rules. It may be worth noting, however, that in many cases it is possible to access pension savings before the age of 65 and in some cases they can in fact be accessed from age 50. It can also be possible to access savings early on grounds of ill health. I do not currently have any plans to extend the range of circumstances in which pension savings can be accessed early.

International Bodies Membership

Questions (148, 149, 150, 151)

Pearse Doherty

Question:

148. Deputy Pearse Doherty asked the Minister for Finance the date Ireland applied to join the Asian Infrastructure Investment Bank and the process by which it was decided to apply; and if he will make a statement on the matter. [14763/16]

Pearse Doherty

Question:

149. Deputy Pearse Doherty asked the Minister for Finance to list the external advisers consulted and any remuneration paid to them for advice regarding the State's involvement in the Asian Infrastructure Investment Bank; and if he will make a statement on the matter. [14764/16]

Pearse Doherty

Question:

150. Deputy Pearse Doherty asked the Minister for Finance the share and voting rights Ireland will enjoy in the Asian Infrastructure Investment Bank; and if he will make a statement on the matter. [14765/16]

Pearse Doherty

Question:

151. Deputy Pearse Doherty asked the Minister for Finance the calculations that have been made as to what Ireland's initial and recurring contribution to the Asian Infrastructure Investment Bank will be; and if he will make a statement on the matter. [14766/16]

Written answers

Minister for Finance

I propose to take Questions Nos. 148 to 151, inclusive, together.

Following a Government Decision of 15 December, 2015, that gave approval for a formal membership application to be made to the Asian Infrastructure Investment Bank (AIIB), I wrote to the Bank at the end of December, 2015, to notify it of Ireland's application for membership.  This is the process required for the membership of any International Financial Institution such as the AIIB.  It was also the process advised by the AIIB to my officials. 

Ireland's interest in AIIB membership is primarily based on geopolitical, and economic considerations, including trade relations with China and the wider Asian economy. Over the past 15 years, Ireland has increased its engagement with Asia, and particularly China, the world's second largest economy, in a broad number of areas.  Bilateral trade has grown in significance and, in 2014, Ireland's total trade with China was worth over €8 billion. Ireland's priorities relate to bilateral trade and investment, particularly: higher education; agrifood; tourism; and aviation-financing sectors.

While there was extensive cross-departmental discussion between the Departments of Finance and Foreign Affairs and Trade regarding Ireland's interest in the AIIB, no external advisers were involved, consulted or paid.

As the process of Ireland's application for membership is still ongoing, Ireland's potential share and voting rights in the AIIB remain subject to future negotiations with the Bank following consideration between the existing founding members of the AIIB and the AIIB itself.  This is also the case for other applicant countries.  The potential share and voting rights which emerge out of the engagement with the AIIB will be subject to subsequent consideration by the Government.

Nevertheless, based on an assumption about the level and cost of a shareholding that might apply in Ireland's case, a provisional, initial calculation has been undertaken which estimates that Ireland's membership of the AIIB could result in a charge of some €50m on the Exchequer based on projected annual payments of €10m per annum for five years.  This estimate is based on an assumption that the shareholding costs would be calculated on the same basis as our IMF shareholding and it would be comparable to countries with a similar-sized economy.