Written Answers Nos. 219-241
219. Deputy Pearse Doherty asked the Minister for Finance if his Department has made an estimate of the revenue forgone each year as a result of lenders claiming mortgage interest relief on interest charges rather than paid prior to the changes in January 2014; and if he will make a statement on the matter. [24622/16]
View answerI am advised by the Revenue Commissioners that they do not have the data necessary to estimate the revenue foregone as a result of lenders claiming mortgage interest relief on interest charges rather than actually paid prior to January 2014.
The statutory position in relation to mortgage interest relief entitlement is that individuals can avail of the relief in respect of qualifying interest paid in a tax year, as provided for in Section 244 of the Taxes Consolidation Act 1997. Since the introduction of Tax Relief at Source (TRS) in respect of mortgage interest payments in 2002, 'interest charged' and 'interest paid' figures generally reconciled in the vast majority of cases over any 12 month period. In such circumstances, Revenue agreed with lenders to allow the relief on the basis of both 'interest charged' and 'interest paid' for ease of administration. A key part of the agreement required the lenders to inform Revenue of the exceptional cases where cumulative arrears had built up over an 18 month period. All such cases were reviewed on a case by case basis and the relief was withdrawn where appropriate. The 18 month 'review period' was reduced to 6 months in September 2012 in response to the increasing numbers of mortgage arrears cases.
As the number of arrears cases being reported by the lenders increased, Revenue further reviewed the practice of allowing the relief on both 'interest charged' and 'interest paid' and on the basis of the review, instructed all lenders to only allow TRS in line with the requirements of the legislation with effect from 1 January 2014, i.e. interest paid by the borrower.
220. Deputy Pearse Doherty asked the Minister for Finance the number of insurers that will take part in the EIOPA stress tests in 2016; the percentage of the market the partaking companies account for and the sectors of the market, life or non-life, they represent; and if he will make a statement on the matter. [24624/16]
View answerThe 2016 EIOPA Stress Test Exercise is tailored to assess the insurance sector's vulnerabilities to a combination of market risk adverse scenarios, focussing on two major market risks: a prolonged low-yield environment and a 'double-hit' scenario where a sudden drop in asset prices is combined with a low risk free rate. EIOPA launched the exercise in May and aims to publish the results by December.
The Central Bank of Ireland has informed me that in April, it was mandated by EIOPA to identify a relevant sample of the most relevant insurance undertakings from a low yield perspective (i.e. life insurance undertakings offering any type of interest guarantee products).
This sample was to be representative of the national market, including features like varying type and size of the undertakings, i.e. also including an adequate number of medium and smaller solo undertakings. The sample of participants was to include a coverage of a minimum of 75% of the national market share in terms of gross life technical provisions (excluding health and index-linked and unit-linked).
A sample of 14 participants was selected by the Central Bank. Participants were informed of their requirement to participate in the exercise by the Central Bank on the 5th May and the project was launched on the 24th May. The submissions have been received and a multiphase data validation process is underway.
This exercise is still in its execution phase and has yet to be finalised and parameters may change at any stage prior to publication of the final report in December.
221. Deputy Pearse Doherty asked the Minister for Finance the analysis his Department or the Central Bank carried out following the EIOPA stress tests in 2014; and the results of this analysis and the follow up regulatory action taken as a result. [24625/16]
View answerThe stated aim of the EIOPA 2014 Stress Test was to test the overall resilience of the European insurance sector and to identify any vulnerabilities.
The Central Bank of Ireland has provided me with the following details of the 2014 Stress Test.
The exercise had two main elements involving two different samples:
i) A Core Stress module primarily focused on Group level undertakings to examine financial resilience based on market stress-scenarios and a number of single-factor insurance stresses.
ii) A Low Yield module run entirely at individual/solo level and focusing specifically on the impact of prolonged low interest rates.
In order to produce representative results for the entire insurance industry for the Core Stress module, EIOPA's requirement was to achieve at least 50% coverage for life and non-life business (in terms of Gross Written Premium). In order to meet the market coverage requirements, 3 Irish participants (one life, one non-life and one composite undertaking) had their results submitted to EIOPA. A further 13 undertakings submitted results for local supervisory purposes. In total, 16 Irish companies (8 life, 6 non-life and 2 composite undertakings) reported their results to the Central Bank for the Core Module.
For the Low-Yield module, 11 companies (4 life, 5 non-life and 2 composite undertakings) participated in the low yield exercise and had their results submitted to EIOPA to meet the relevant market coverage requirement for this exercise (50% Market Coverage in terms of Gross Life Technical Provisions).
The approach taken by EIOPA was to carry out an exercise that focused on impacts and vulnerabilities rather than pass/fail of individual participants. While 100% Solvency Capital Requirement (SCR) cover on a Standard Formula basis was used as a benchmark, it was not a target level of capital and companies did not "fail" if they did not hold this level of capital before or after stresses
For the market stress scenarios, Irish participants found the EU equity market stress more severe than the non-financial corporate bond market stress. This is in line with results from the wider European sample.
The most severe non-life Single Factor Insurance Stress was the provisioning deficiency stress of 3% (participants were asked to calculate the shortfall for all liability claims reserves based on the assumption of a 3% increase in the inflation rate). In this respect, the Irish results were also in line with results of the wider European sample. While longevity and mass lapse stresses were the most severe life stresses across Europe, in Ireland, this depended heavily on the type of business written and no single stress was obviously the most severe.
For the low yield scenario exercise, it was found that the Irish sample was not particular vulnerable to either of the low-yield stresses.
Analysis of the 2014 exercise fed into the Central Bank of Ireland's normal supervisory functions and issues identified in the exercise were used to guide a number of firm specific engagements by them in 2015.
222. Deputy Pearse Doherty asked the Minister for Finance his views on whether lenders here that offer standard variable rate mortgages are complying with the letter and spirit of the directive on credit agreements for consumers relating to residential immovable property as implemented by SI 142 of 2016; and if he will make a statement on the matter. [24634/16]
View answerThe Mortgage Credit Directive ("the Directive") was transposed into Irish law by the European Union (Consumer Mortgage Credit Agreements) Regulations 2016 ("the Regulations"). The primary purpose of the Directive and the Regulations is to increase the level of information and protection available to prospective and actual consumer mortgage borrowers and all relevant creditors and mortgage credit intermediaries must comply with the provisions set out in the Regulations in respect of relevant credit agreements from 21 March 2016. The Central Bank is the independent competent authority for the enforcement of the Regulations and it has the power to initiate legal proceedings or pursue alleged contraventions through the Administrative Sanctions Procedure for alleged breaches of the Regulations if considered appropriate.
The Regulations also complement the Central Bank's existing consumer protection framework which includes the Consumer Protection Code 2012, the Code of Conduct on Mortgage Arrears and the Minimum Competency Code. Therefore, if a consumer is concerned or unhappy with how they have been dealt with by a firm regulated by the Central Bank, there are clear processes in place in the Consumer Protection Code 2012 for handling complaints and complaints resolution. In addition, where a consumer is not happy with the response received from the regulated firm he/she can, provided the conduct complained of occurred within the last six years, escalate his/her complaint to the Financial Services Ombudsman (FSO). The FSO has the statutory powers to investigate complaints against financial services providers.
223. Deputy Róisín Shortall asked the Minister for Finance the reason the Revenue Commissioners did not include the various provisions of section 110 in the published list of tax expenditures published on their website when the section clearly provides various extraordinary and unusual forms of relief (details supplied); if he will now provide the tax cost of the tax expenditures granted under section 110; and if, in future, the Revenue Commissioners' statistics unit will provide a complete and comprehensive list of tax expenditures and their costings. [24645/16]
View answerThe Revenue website provides a review of the main tax expenditures; however it is not an exhaustive list.
For information to be analysed by Revenue, it must first be provided separately on a tax return form. This is not currently the case with section 110 companies and therefore tax costings cannot be provided at this time.
The tax return is designed to capture the information necessary to correctly determine a taxpayer's liability to tax. Certain reliefs are available for taxpayers to claim, and those claims are generally made through a tax return. Efforts to simplify tax returns has led to some tax reliefs being required in aggregate form on tax returns. Where it is not necessary to officially 'claim' a relief, it will not generally feature in the tax return. In the last decade the CT1 form has more than doubled in length to accommodate the myriad scenarios of tax affairs possible. Continued expansion of the complexity of the CT1 return is not seen as sustainable.
A number of concerns have been raised recently about the possible use of aggressive tax practices by some section 110 companies to avoid paying tax on Irish property transactions. In light of these concerns, and due to the highly technical and complex nature of the legislation, I recently proposed an amendment to section 110 Taxes Consolidation Act 1997. This amendment targets the issues that have been raised and will ensure that the Irish tax base is appropriately protected. Further targeted proposals in relation to the use of funds in the Irish property market are also being considered.
224. Deputy Niamh Smyth asked the Minister for Finance if the Central Bank has a policy on whether bank ATM machines should dispense €50 notes to customers instead of the €20 note; the practice of retail banks here in relation to dispensing notes; the breakdown of actual notes dispensed in counties Cavan and Monaghan; and if he will make a statement on the matter. [24648/16]
View answerI am informed by the Central Bank that a recommendation contained in the National Payments Plan targeted a significant increase in the number of €10 notes dispensed from Irish ATMs. Targets were designed in order to increase the proportion of €10 notes in circulation with a view to making lower denomination notes available.
The specific targets contained in the National Payments Plan were for a minimum of 4% of all notes by volume distributed from non-retailer ATMs to be €10 notes from Q3 2013; and 5% of all notes by volume to be €10 notes from Q3 2014. This second target represented an increase of around 150% in the number of €10 notes dispensed from ATMs previously. These targets were met by the banks on the dates set, as part of their commitment to the broader goal of improving the efficiency of payments in the National Payments Plan.
Building on the recommendations in the National Payments Plan, the Central Bank has now set targets for the banks to achieve in terms of issuance of €10, €20 and €50 notes from ATMs by 2018. These targets were calculated following a study of the requirements of consumers given patterns of cash usage.
The targets are that 6-10% of all notes by volume are to be €10 notes by the end of 2018, 40-45% of all notes by volume are to be €20 notes and 45-50% of all notes by volume are to be €50 notes. The Central Bank is working, in co-operation with the commercial banks, towards these targets. The latest available data, for Q2 2016, on amounts actually dispensed shows that 7% of all notes are €10 notes, 35% of all notes are €20 notes and 58% of all notes are €50 notes. I am informed that this data is collected on a national basis and that it is not possible to provide data on a county-by-county basis.
By way of additional information, I am also informed by the Central Bank that the commercial banks are in the process of rolling out amended algorithms for their ATM fleet which will provide more choice for customers in relation to the denomination mix of their withdrawals.
225. Deputy Mattie McGrath asked the Minister for Finance if he will amend the excise and licensing regime for cider, including removing the upper excise band for cider sales and distribution; and if he will make a statement on the matter. [24691/16]
View answerEU Directive 92/83/EEC sets out the structure of the taxation of cider and perry. The tax is based on the bands of alcohol content of the product not the alcohol by volume (ABV) as is the case with beer. As a result excise on cider must be applied in a series of bands. The bands and rates applicable in Ireland are set out in a table.
|
Cider & Perry |
|
|
Still and sparkling, not exceeding 2.8% volume |
€47.23 per hectolitre |
|
Still and sparkling, exceeding 2.8% volume but not exceeding 6% volume |
€94.46 per hectolitre |
|
Still and sparkling, exceeding 6.0% volume but not exceeding 8.5% volume |
€218.44 per hectolitre |
|
Still, exceeding 8.5% volume |
€309.84 per hectolitre |
|
Sparkling, exceeding 8.5% volume |
€619.70 per hectolitre |
The rationale behind these bands is that similar, substitutable alcohol products will have the similar levels of excise on the same volume of consumption. Therefore, under the current system a pint of cider and a pint of beer have an equivalent excise rate of €0.54.
I understand that the Deputy is requesting that the band between 6.0% and 8.5% be removed so that there is one band from 2.8% to 8.5% at rate of €94.46 per hectolitre. If this band was removed, cider with a strength of 8.5% would only attract excise of €0.54 a pint, while beer of a similar strength would be charged double that amount, €1.09 per pint. As well as failing to account for the negative health externalities caused by consumption of the products with a higher alcohol content, the price differential would offer an unfair competitive advantage to cider over beer.
It is recognised however that taxation of cider does not have an ideal structure. I would inform the Deputy that the European Commission intends to review the Alcohol Tax Products Directive with a view to making any necessary amendments in 2017. My officials will engage will this review with the intention of securing similar alcohol taxation structures for similar and substitutable alcohol products.
227. Deputy Seán Barrett asked the Minister for Finance if he has examined the third illicit trade report produced by Grant Thornton; and his views on the findings regarding alcohol, fuel, pharmaceuticals, tobacco and digital piracy. [24729/16]
View answerI am aware of the report on "Illicit Trade in Ireland 2013-2015", published recently by Grant Thornton, which addresses illicit trade in the sectors referred in the Deputy's Question.
I understand that the report looks at the costs associated with illicit trade in those sectors. I would point out, however, that estimating the extent of any illicit activity is inherently problematic and must, therefore, be approached with caution. It follows that, unless a clear and credible methodology is specified for particular estimates of illicit trade and the resulting tax loss, they must be regarded as speculative. I am advised that the Grant Thornton report itself expressly recognises the difficulties involved in estimating reliably the extent of losses incurred as a result of illicit trade in certain of the sectors which it addresses, or provides only very broad estimations of possible loss.
I understand also that the report refers to a number of estimates of the loss to the Exchequer arising from the illicit trade in tobacco products. The extent of this illicit trade is estimated through annual surveys that are carried out for the Revenue Commissioners and the Health Services Executive by Ipsos MRBI. Assuming that the illegal cigarettes consumed displace the equivalent full tax paid quantity of cigarettes, the results of the survey for 2015 indicate that the loss to the Exchequer in excise duty and VAT was in the order of € 192 million. Revenue advise me that they are satisfied that this survey is the best indicator of the extent of the market in illicit cigarettes. This is because of the methodology used and the consistent way in which the survey has been undertaken over a number of years. It is geographically representative and surveys population samples that are statistically robust. In addition, this methodology, in contrast to others such as empty pack surveys, is capable of distinguishing between illicit cigarettes and legal personal imports.
It is, however, accepted by all interested parties that illicit trade in the sectors addressed by the report, and shadow economy activities in general, pose a threat to legitimate and compliant businesses and to consumers, as well as depriving the Government of tax revenues. Tackling the illegal activities in those sectors, and broader shadow economy activities, is therefore a key priority.
Revenue's actions against the illicit tobacco trade include a range of measures to identity and target those who are involved in the supply or sale of illicit products, with a view to seizing those products and prosecuting the persons involved. This multifaceted strategy also includes ongoing analysis of the nature and extent of the problem, development and sharing of intelligence on a national, EU and international basis, use of analytics and deployment of detection technologies.
Revenue has also implemented a comprehensive strategy to tackle the illegal fuel trade, based on the introduction of stringent new supply chain controls, the very successful implementation from April 2015, here and in the UK, of a new fuel marker developed in cooperation with the UK authorities, and rigorous enforcement action.
In the case of alcohol, Revenue's action against illicit trade encompasses the full supply chain for alcohol products and includes measures to combat smuggling, the illicit production of alcohol and the sale or supply of illicit products.
Revenue also acts to detain or seize, at the point of entry to the State, products that are suspected to be illegal or counterfeit medicines. Products detained by Revenue are passed to the Health Products Regulatory Authority, which is the competent authority for such matters, for analysis, identification and any necessary further action.
Revenue works closely, as well, with other agencies in the State, including An Garda Síochána, in acting against illegal activities related to illicit trade. The relevant authorities in the State also work closely with their counterparts in Northern Ireland to target the organised crime groups that are involved in a range of criminal activities, including the kinds of illicit trade addressed in the Grant Thornton report. I believe that this work to tackle cross-jurisdictional organised crime is being supported and facilitated by the establishment, in the framework of "A Fresh Start: the Stormont Agreement and Implementation Plan" of the Joint Agency Task Force, which includes Revenue. There is close cooperation also with the relevant authorities in other jurisdictions, the European Anti-Fraud Office and other international bodies and agencies in the ongoing programmes of action at international level to combat illicit trade.
I am assured by Revenue that action against illicit trade is, and will continue to be, a central element of their work. For my part, I have taken action through the Finance Acts over recent years to ensure that Revenue has all the necessary powers to act against these forms of criminal activity and I am satisfied that there is a robust legal framework in place that allows effective action to be taken against those responsible for such crimes.
Matters relating to digital piracy fall within the remit of my colleague the Minister for Jobs, Enterprise and Innovation.
228. Deputy Dara Calleary asked the Minister for Finance the number of credit cards issued to Ministers and officials working in his Department; the amount spent on credit cards by his Department in 2014 and in 2015; the amount of bank interest paid on credit cards in 2014 and 2015; the controls in place to monitor the issuing of and the expenditure on these cards; the controls in place in each agency to monitor expenditure on personally held credit card bills that are subsequently used to recoup work-related expenses; if these controls are being reviewed in view of recent events in agencies funded by the HSE; and if he will make a statement on the matter. [24742/16]
View answerThere were seven credit cards in use by the Minister for Finance and his officials in 2014 and six credit cards in use by the Minister for Finance and his officials in 2015. The amount spent in respect of all these credit cards in 2014 was €13,123.19 inclusive of €13.23 bank interest and €16,927.43 in 2015 inclusive of €1.36 bank interest.
There are guidelines in place to ensure the appropriate use of credit cards in my Department. These make it clear to staff that the use of the Departmental credit cards is strictly for business purposes.
Requests for cards must be sanctioned at senior management level (Assistant Secretary level or above), and a statement outlining the necessity for the card must be provided in relation to any request for the provision of an official credit card. All cards that are no longer required must be returned to Facilities Management Unit of my Department who arrange the issuing of credit cards and organising payment of monthly bills in respect of official credit cards.
Each officer who hold an official credit card receives a copy of their monthly statement and is required to certify that all charges incurred are correct and are of an official nature and they need to certify that the appropriate approval had been obtained for the expenditure. In cases where approval is required by a senior officer, the statement should be countersigned by the relevant senior officer and include receipts, in all cases. In the event that a receipt cannot be provided, the officer in question is required to provide a detailed explanation of the charge. A hard copy of the statement, certified as being in order for payment, must be returned to the Facilities Management Unit in order that payment can be made.
In the case of official entertainment, an entertainment claim form must be completed and approved in accordance with the official guideline governing the amount that may be spent on official entertainment. A copy of this form must be forwarded to the Facilities Management Unit.
Occasionally there are requests to use the credit card held specifically by the Facilities Management Unit for purchases of work related goods or services. The relevant officer needs to complete a credit card application form giving details as to the item being purchased. The form must be signed off by a senior officer in the section and receipts if available or explanation in respect of the item required and cost must be forwarded to the Facilities Management Unit.
The rules also cover personal purchases made by an individual officer and require the making of a payment and an explanation as to the reason for the specific purchase. Significant use of a departmental credit card for personal purposes can result in it being withdrawn.
Officers may use their personal credit cards for official purposes. These are more often for travel or accommodation costs incurred as part of official business inside and outside Ireland. Travel and accommodation costs are reclaimed via the core portal system where the expenditure is subject to checking and confirmation by a more senior officer. Invoices are required to be provided and retained to support any such expenses claims.
Finally I would also point out that expenditure on departmental credit cards are subject to audit by the Comptroller and Auditor General to ensure that correct procedures are being followed in relation to the issue and use of Departmental credit cards.
Given the small number of credit cards in use and the oversight and controls exercised by my Department I am satisfied that there are appropriate processes and procedures in place to manage expenditure on departmental credit cards.
229. Deputy Dara Calleary asked the Minister for Finance the number of credit cards issued to staff working in each State agency funded by his Department, in tabular form; the number of cards per funded agency; the amount spent by credit card in 2014 and 2015 by each agency; the amount of bank interest paid on credit cards in 2014 and 2015; the controls in place to monitor the issuing of and the expenditure on these cards; the controls in place in each agency to monitor expenditure on personally held credit card bills that are subsequently used to recoup work-related expenses; if these controls are being reviewed in view of recent events in agencies funded by the HSE; and if he will make a statement on the matter. [24757/16]
View answerThe Disabled Drivers Medical Board of Appeal (DDMBA) is the only State agency funded by this Department. In response to the Deputy's question, the Deputy should note that the DDMBA issues no credit cards to staff or board members. The need to monitor and control expenses incurred should always be a priority when dealing with public monies. In relation to the controls in place to monitor expenditure on personally held credit cards, when board members travel to sit on the board they may incur expenses, which can be paid for on their personal credit cards. They are then reimbursed upon provision of a receipt, as vouched expenses. The finance section of the National Rehabilitation Hospital (NRH) reimburses these expenses. Payments to board members are recorded on the NRH financial system under a file for each doctor, and these records are maintained for 6 years. There is no current review, or planned review, of the DDMBA in relation to the means by which expenses are claimed by the Board.
230. Deputy Dara Calleary asked the Minister for Finance the number of credit cards issued to staff working in any third party agency funded by his Department, in tabular form; the number of cards per funded agency; the amount spent by credit card in 2014 and 2015 by each agency; the controls in place to monitor the issuing of and the expenditure on these cards; the controls in place in each agency to monitor expenditure on credit card bills that are subsequently used to recoup work-related expense; if these controls are being reviewed in view of recent events in agencies funded by the HSE; and if he will make a statement on the matter. [24772/16]
View answerThe Disabled Drivers Medical Board of Appeal is the only third-party agency funded by this Department. The Deputy should note that the Disabled Drivers Medical Board of Appeal (DDMBA) issues no credit cards to staff or board members. The need to monitor and control expenses incurred should always be a priority when dealing with public monies. In relation to controls in place to monitor credit card bills that are subsequently used to recoup work-related expenses, I am advised that when board members travel to sit on the board they may incur expenses, which can be paid for on their personal credit cards. They are then reimbursed upon provision of a receipt, as vouched expenses. The finance section of the National Rehabilitation Hospital (NRH) reimburses these expenses. Payments to board members are recorded on the NRH financial system under a file for each doctor, and these records are maintained for 6 years. There is no current review, or planned review, of the DDMBA in relation to the means by which expenses are claimed by the Board.
231. Deputy Róisín Shortall asked the Minister for Finance if he has yet made a decision to amend section 54BX(3)(b) of the Central Bank and Financial Services Authority of Ireland Act 2004 in order that customers who were missold financial products, such as endowment mortgages, are in a position to pursue claims against the sellers of such products within a reasonable period of identifying this misselling; and if he will make a statement on the matter. [24842/16]
View answerI understand that the Deputy may be referring to the time limits that applies for complaints to the Financial Services Ombudsman.
The Financial Services Ombudsman's Bureau was established under the Central Bank and Financial Services Authority of Ireland Act 2004. The legislation provides for an independent, impartial investigation and resolution of disputes between consumers and financial service providers.
This legislation also provides the Financial Services Ombudsman with various powers in order to determine jurisdiction on a complaint. Included in this is a statutory timeframe, Section 57BX (3)(b) of the Act provides:-
"A consumer is not entitled to make a complaint if the conduct complained of - occurred more than 6 years before the complaint is made."
The current legislation thus prohibits the Financial Services Ombudsman from examining any aspect of a complaint where the conduct being complained of occurred more than 6 years from receipt of the Complaint in his Office. The Financial Services Ombudsman has no discretion in relation to the 6 years rule.
As the Deputy may be aware, the Department is progressing the development of the legislation to underpin the amalgamation of the Financial Service Ombudsman and the Pensions Ombudsman. The Government agreed outline Heads of a Bill to provide for the amalgamation of offices in 2015 and both offices have been physically merged in one location. Recent legislative changes have enabled the appointment of the Financial Services Ombudsman as Pensions Ombudsman.
The question of the timeframe under which complaints can be reviewed, including complaints regarding the mis-selling financial products, such as endowment mortgages, is a policy matter which will be considered as the legislation to effect the amalgamation is being developed further. I am of course mindful of the need to provide the necessary protection to the consumer over the longer term. However, 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.
This piece of legislation is currently on the 'second list' of the current legislative programme set out by the Office of the Government Chief Whip that is, Bills that are expected to undergo Pre-Legislative Scrutiny this session. We hope to conclude the legislation shortly.
232. Deputy Pearse Doherty asked the Minister for Finance the reason credit servicing firms do not contribute via the industry funding levy; and if he will make a statement on the matter. [24857/16]
View answerCredit Servicing Firms have only fallen within the supervisory remit of the Central Bank since 8 July 2015 on the commencement date of the Consumer Protection (Regulation of Credit Servicing) Act 2015. Prior to this, credit servicing firms were unregulated and did not hold banking licences and therefore such firms fell outside the scope of the Industry Funding Levy.
At present there are 14 credit servicing firms active in the State, each of which has notified the Central Bank that they wish to avail of the transitional provisions provided for under Section 34F of the Central Bank Act, 1997, to become authorised firms. These firms are deemed authorised to carry on that business until such time that they are either granted or refused authorisation by the Bank.
The Central Bank proposes to levy all Credit Servicing Firms in 2016, whether authorised or deemed authorised.
233. Deputy Pearse Doherty asked the Minister for Finance the number of persons who paid and the amount of revenue raised regarding the 5% USC surcharge on property reliefs in each year since its introduction; and if he will make a statement on the matter. [24884/16]
View answerThe Universal Social Charge (property relief surcharge) of 5% is applicable to individuals with income of €100,000 or more, on that part of an individual's taxable income which is sheltered by any of the property or area based incentive reliefs. I am informed by Revenue that the yield for the years 2012 to 2014, the latest year for which returns are available, is as set out in a table.
|
Year |
Number of Persons |
Yield €m |
|
2012 |
3,387 |
10.7 |
|
2013 |
3,448 |
11.4 |
|
2014 |
3,345 |
9 |
234. Deputy Paul Kehoe asked the Minister for Finance the position regarding underpayment of tax and arrangements for collection for a person (details supplied); and if he will make a statement on the matter. [24917/16]
View answerI am advised by Revenue the person concerned received illness benefit, tax free. When he resumed employment his tax credits were reduced to allow for collection of the tax properly due on the illness benefit. In effect the tax on the illness benefit is reflected in the reduced net salary to the person concerned from his employer.
As the reduction in tax credits arises from illness benefit paid in the current year, a balancing statement would not issue to the person concerned. However, I understand that the position has been explained directly to the person concerned by Revenue.
In the context of discussions with Revenue I am also advised that the person concerned has arranged to forward some additional information to Revenue so that it can be confirmed that he is receiving the correct tax credit entitlements.
235. Deputy Niamh Smyth asked the Minister for Finance further to Parliamentary Question No. 94 of 21 July 2016, his plans to lower the VAT rate on specifically organic products (details supplied) that have no added sugar and are free of pesticides and fertilisers; and his further plans to differentiate between this product and others which contain sugar. [24920/16]
View answerAll fruit juices, soft drinks and bottled water have been subject to the standard rate with effect from November 1992. The standard rate is the VAT rate applied to such products in the majority of EU Member States.
Some years ago, the Revenue Commissioners Appeal Commissioner ruled in relation to a specific vegetable juice product, that the product in question was food/drink but not a beverage and accordingly should not be excluded from the zero-rate. The ruling led to uncertainty in relation to the VAT treatment of other drinkable products made from fruit and vegetables. In this regard, it should be noted that fruit and vegetables are also the main ingredients of most soft drinks which are also subject to the standard VAT rate.
In order to clarify this position, Finance Act 2007 provided that the supply of fruit juices and vegetable juices would continue to be taxable at the standard VAT rate of 21% (now 23%). Not ensuring that the supply of fruit and vegetable juices continued to be taxable at the standard VAT rate would have resulted in a possible distortion of competition between producers of what could be considered similar products. It was necessary to re-establish a level playing field in this market to ensure that a more favourable tax treatment does not apply to one product.
236. Deputy Pearse Doherty asked the Minister for Finance the number of vacancies at assistant principal level or higher that have existed in each of the past five years or are currently vacant in his Department; the time taken to fill each vacancy; and if he will make a statement on the matter. [24970/16]
View answerAs the Deputy is aware, there has been significant restructuring in my Department during the years 2011-2016.
In 2011 the Department of Public Expenditure & Reform was established resulting in a significant proportion of my staff and functions transferring to that Department. In addition, following recommendations of the report of the Independent Review Panel on Strengthening the Capacity of the Department of Finance (The Wright Report) being implemented, additional resources were added to expand the skill set of the Department. 2014 and 2015 also saw the formation of a Shared Services model for the Civil Service whereby a number of my staff and functions were transferred out of my Department. All of these circumstances have led to a significant evolution in the structure of my Department.
This period therefore has seen my Department adapt, realign and enhance our resources in order to achieve our goals, facilitated by the development of an integrated business planning process, which ensures that resources are directed towards key priorities. The period has also seen continued investment in the roll-out of our ICT strategy as a key enabler to introduce innovation to and transform the way in which we work.
Furthermore, my Department is committed to the Civil Service Workforce Planning process, has a robust Recruitment and Selection policy which feeds into an ongoing Resource Review managed by HR and directed by the Executive Board. This process identifies on a case by case basis, both current and upcoming resource requirements in my Department in order to ensure my Department reaches its objectives and resources are fully maximised. The KPI for the time to fill an open vacancy at AP level agreed with PAS (Public Appointments Service) for open recruitment competitions is 12 weeks from the date the position is advertised, internally run competitions in the Department are generally less than this.
The following tables represent the appointments made at AP level and above in the years 2012 to date (the staff in DOF and DPER were managed as a pooled/shared resource until March 2012), as well as other movements at these grades.
AP vacancies filled by appointments:
|
Year |
Number of appointments made via Internal Competitions |
Number of appointments made via External Competitions |
TOTAL |
|
2012 |
27[1] |
1 |
28 |
|
2013 |
0 |
2 |
2 |
|
2014 |
0 |
1 |
1 |
|
2015 |
0 |
10 |
10 |
|
2016 |
9 |
3 |
12 |
|
Total |
36 |
17 |
53 |
PO vacancies filled by appointments:
|
Year |
Number of appointments made via Internal Competitions |
Number of appointments made via External Competitions |
TOTAL |
|
2012 |
1 |
1 |
2 |
|
2013 |
0 |
0 |
0 |
|
2014 |
0 |
2 |
2 |
|
2015 |
0 |
2 |
2 |
|
2016 |
3 |
1 |
4 |
|
Total |
4 |
6 |
10 |
Senior positions such as Secretaries General and Assistant Secretaries are filled by a process involving the Top Level Appointments Committee. The Top Level Appointments Committee is responsible for selecting the successful candidate at final interview stage from a shortlist of candidates put forward by the PAS for consideration following a competitive preliminary process.
Assistant Secretary and Secretary General vacancies filled by appointments:
|
Year |
Posts filled at Assistant Secretary level |
Posts filled at Secretary General level |
|
2012 |
1 |
1 |
|
2013 |
2 |
0 |
|
2014 |
2 |
1 |
|
2015 |
0 |
0 |
|
2016 |
0 |
0 |
|
Total |
5 |
2 |
Other staff mobility activities (e.g. individuals seconded in, transferred in or redeployed in; reassignments within the Department; staff returning from secondment/career break/ special leave)
|
Year |
AP |
PO |
|
2012 |
16 |
3 |
|
2013 |
3 |
3 |
|
2014 |
12 |
4 |
|
2015 |
3 |
1 |
|
2016 |
8 |
6 |
|
Total |
42 |
17 |
[1] Pooled resources with DPER until March 2012
237. Deputy David Cullinane asked the Minister for Finance the figures for total government income for each year from 2000 to 2015; the figures for general government debt for each year from 2000 to 2015; the figures for interest repayment on general government debt for each year from 2000 to 2015; if he will provide details of the interest repayment on general government debt expressed as a percentage of general government income for each year from 2000 to 2015; if Ireland is currently an outlier internationally in terms of interest repayment on general government debt expressed as a percentage of general government income; and if he will make a statement on the matter. [24981/16]
View answer238. Deputy David Cullinane asked the Minister for Finance the projected figures for total government income for each year from 2016 to 2021; the projected figures for general government debt for each year from 2016 to 2021; the projected figures for interest repayment on general government debt for each year from 2016 to 2021; if he will provide the detail of the projected interest repayment on general government debt expressed as a percentage of projected general government income for each year from 2016 to 2021; if Ireland is currently an outlier internationally in terms of projected interest repayment on projected general government debt expressed as a percentage of general government income; and if he will make a statement on the matter. [24982/16]
View answerI propose to take Questions Nos. 237 and 238 together.
The figures requested by the Deputy are in set out in the table. General Government revenue is used as the income measure:
Table 1
|
Year |
General Government Revenue €bn |
General Government Debt €bn |
General Government Interest €bn |
GG Interest as a % of GG Revenue |
|
2000 |
38.7 |
39.1 |
2.1 |
5.4% |
|
2001 |
40.8 |
40.5 |
1.8 |
4.3% |
|
2002 |
44.5 |
41.5 |
1.8 |
4.0% |
|
2003 |
48.6 |
43.6 |
1.8 |
3.6% |
|
2004 |
53.9 |
44.1 |
1.7 |
3.2% |
|
2005 |
59.5 |
44.4 |
1.7 |
2.9% |
|
2006 |
67.8 |
43.7 |
1.8 |
2.7% |
|
2007 |
71.3 |
47.1 |
2.0 |
2.8% |
|
2008 |
65.4 |
79.6 |
2.4 |
3.7% |
|
2009 |
56.5 |
104.7 |
3.4 |
6.0% |
|
2010 |
55.4 |
144.2 |
4.7 |
8.6% |
|
2011 |
57.7 |
189.7 |
5.7 |
9.9% |
|
2012 |
59.5 |
210.0 |
7.2 |
12.1% |
|
2013 |
61.5 |
215.3 |
7.6 |
12.4% |
|
2014 |
65.8 |
203.3 |
7.4 |
11.3% |
|
2015 |
70.6 |
201.3 |
6.7 |
9.5% |
|
2016 |
72.4
|
203.6 |
6.3 |
8.6% |
|
2017 |
74.9 |
207.8 |
6.2 |
8.3% |
|
2018 |
78.1 |
209.0 |
6.1 |
7.8% |
|
2019 |
81.1 |
212.7 |
6.0 |
7.4% |
|
2020 |
84.0 |
214.6 |
6.0 |
7.1% |
|
2021 |
86.9 |
217.1 |
5.8 |
6.7% |
Source: Central Statistics Office, National Treasury Management Agency (National Debt and interest data provider) and the Summer Economic Statement 2016
For the purpose of international comparison figures provided for interest expenditure as a percentage of general government revenue are in the most recent European Economic Forecast - Spring 2016 published by the European Commission. These forecasts going out to 2017 concentrate on the EU but also include the outlook for some of the world's other major economies. This data is detailed in Table 2
Table 2 GG Interest as a % of GG Revenue
|
|
2015 |
2016 |
2017 |
|
Ireland* |
9.5% |
8.6% |
8.3% |
|
Belgium |
5.7% |
5.3% |
5.1% |
|
Germany |
3.6% |
3.1% |
2.9% |
|
Estonia |
0.3% |
0.2% |
0.3% |
|
Greece |
7.9% |
8.2% |
7.9% |
|
Spain |
8.1% |
7.6% |
7.0% |
|
France |
3.8% |
3.6% |
3.6% |
|
Italy |
8.8% |
8.5% |
8.1% |
|
Cyprus |
7.2% |
6.8% |
6.3% |
|
Latvia |
3.6% |
3.1% |
2.7% |
|
Lithuania |
4.3% |
4.4% |
4.1% |
|
Luxembourg |
0.9% |
0.9% |
0.7% |
|
Malta |
6.2% |
6.1% |
5.8% |
|
Netherlands |
2.8% |
2.8% |
2.6% |
|
Austria |
4.7% |
4.6% |
4.7% |
|
Portugal |
10.5% |
10.2% |
9.9% |
|
Slovenia |
6.7% |
6.5% |
6.0% |
|
Slovakia |
4.2% |
3.9% |
3.9% |
|
Finland |
2.2% |
2.0% |
2.0% |
|
United Kingdom |
5.9% |
5.6% |
5.6% |
|
USA** |
10.4% |
10.7% |
11.3% |
|
Euro Area |
5.2% |
5.0% |
4.8% |
|
EU |
5.1% |
4.9% |
4.7% |
*Figures for Ireland are Department of Finance estimates ; ** USA on SNA2008 basis
It can be seen in table 2 that 2015 interest expenditure as a percentage of general government revenue ranged from 0.2% in Estonia to 10.4% in the United States. Portugal was the highest in the Euro area at 10.5%. Ireland's figure of 9.5%, though above the Euro average of 5.2% is within this range, albeit towards the upper end.
Moving forward to 2017 forecasts, the Euro area average for this period is expected to be 4.7%, a decrease of 0.5% compared to 2015, Ireland's forecast for 2017 is 8.3% which represents a drop of 1.2% over the same period. The 2017 forecast for Portugal is 9.9%, the highest in the euro area.
There is no recognised forecast data for international comparison beyond 2017. However, as the Deputy can see from table 1 above, Ireland's interest as a percentage of general government revenue in 2021 is forecast at 6.7% down from 12.4% in 2013. It should also be noted that these forecasts do not take account of potential future sales of banking assets.
Budget 2017 to be published next month will include updated projections of debt, revenue and interest, taking account of developments up to that time, including both the United Kingdom's vote to leave the European Union and the recent revisions to GDP published by the CSO in the National Income and Expenditure accounts for 2015.
239. Deputy David Cullinane asked the Minister for Finance the other indicators that investors are looking at in terms of the Irish economy, as highlighted by a person (details supplied) when appearing before the Committee of Public Accounts on 21 July 2016. [24983/16]
View answerThe Central Statistics Office (CSO) published the National Income and Expenditure results for 2015 in July. These figures suggest that the economy grew by 26.3 per cent last year. This is significantly stronger than their previous estimate of 7.8 per cent.
The exceptional figure is largely related to the activities of multinationals across a small number of sectors including the tech, pharmaceutical and aircraft leasing sectors. In particular, corporate restructuring and a number of balance sheet reclassifications had a substantial impact.
These factors have little, if any, impact on actual output and income developments in Ireland and greatly exaggerate the size of our economy. In view of this, a number of other indicators are also examined such as consumer spending, taxation trends and employment growth. An assessment of these indicators shows that the economy is performing very strongly.
For instance, recent data published indicate that:
- The volume of retail sales increased by 6.3 per cent year-on-year in July 2016.
- New cars licensed for the first time were up 20 per cent to end-July year-on-year.
- While consumer sentiment has moderated somewhat it still remains well above the long-run average.
- Purchasing Managers Indices show continued expansion in the manufacturing, services and construction sector.
- Tax receipts are up 6.2% to end-August year-on-year.
- Employment grew by 2.9 per cent over the year to Q2 2016, equivalent to an increase of over 56,000 jobs. As a result, there are now over 2 million people in employment for the first time since early 2009.
- The unemployment rate fell to 8.3 per cent in August, down from a peak of over 15 per cent in early 2012.
These are some of the most important indicators that my Department and investors currently monitor when assessing the strength of the Irish economy.
It is important to note that the Central Statistics Office has put together a group of experts to provide guidance on how more relevant indicators could be produced and published alongside the GDP figures in the future. My Department will be represented on this group. It is expected that this group will publish a report detailing their findings later this year.
I must also highlight that, given the exceptional nature of these growth figures, the Government will not formulate policy on the basis of these inflated figures. Rather, policy will continue to be designed on the basis of more normal growth rates such as those recently indicated by my Department, which are in the region of 3½ to 4 per cent growth over the coming years.
240. Deputy David Cullinane asked the Minister for Finance the up to 40 different economic indicators that the NTMA has in the investor pack it uses in its roadshows; the rationale behind the inclusion of those indicators; and if he will provide the up to 30 indicators that investment managers look to when deciding whether to invest in Government debt, as highlighted by a person (details supplied) when appearing before the Committee of Public Accounts on 21 July 2016. [24984/16]
View answerThe National Treasury Management Agency (NTMA) advise me that their presentation for institutional investors contains a wide range of information relating to the Irish economy and public finances. Generally speaking, the content of the presentation reflects questions asked of the NTMA by investors. The content is refreshed following investor roadshows undertaken by the NTMA. It is also constantly updated for the latest available information.
While I do not propose to list every indicator here, the presentation includes a wide range of macro-economic and fiscal indicators, such as:
- GDP and GNP
- Employment and unemployment
- Consumption, including retail sales
- Exports
- Investment
- Debt and deficit levels
- Funding developments including bond issuance details
- Credit ratings
The presentation also contains sections on the property market, on the National Asset Management Agency (NAMA) and on the banking sector.
The more recent versions of the presentation have added a separate section on BREXIT.
The most recent version of the presentation was published on the NTMA website on 4 August last and can be accessed via the following link: http://www.ntma.ie/news/ntma-investor-presentation-2/.
241. Deputy David Cullinane asked the Minister for Finance the criteria used by the NTMA when deciding to fund projects via the Strategic Innovation Fund; the peer comparisons used by the NTMA when reaching its decision; the similar investment opportunities used for comparison purposes by the NTMA when reaching its decision; the criteria used by the NTMA in reaching its conclusion that a particular project would have a demonstrable economic impact and a commercial return that is risk adjusted and proportionate, as stated by a person (details supplied) when appearing before the Committee of Public Accounts on 21 June 2016; the similarities and differences in the NTMA’s approach to adjudicating a potential project for the Strategic Investment Fund when compared with its peers within the EU; and if he will make a statement on the matter. [24985/16]
View answerThe Ireland Strategic Investment Fund (ISIF) was established with a "double bottom line" mandate to invest on a commercial basis in a manner designed to support economic activity and employment in Ireland.
In accordance with this double bottom line objective, ISIF investments are assessed by reference to both risk-adjusted investment return and economic impact. Investing on a risk-adjusted commercial basis means that, in respect of each and every investment, there is an expected return for the ISIF from the investment and this expected return is commensurate with the risk involved.
As a means of validating the commerciality of potential investments, ISIF seeks co-investment by private sector investors. In cases where ISIF may be the only investor, the ISIF seeks to have the proposed transaction pricing benchmarked against market indicators to establish that the investment is on a commercial basis.
In terms of economic impact, the key principle underpinning ISIF's investments is "additionality" ISIF is seeking to invest where its money can make a difference and help to generate economic activity that would otherwise not occur. ISIF's key differentiating features of flexibility, long-term timeframe and being a sovereign partner means that it can fill investment gaps and respond to strategic imperatives in the Irish economy in a way that conventional market financiers may be unable or reluctant to finance.
In the context of ISIF's investment focus on promoting economic additionality (benefits to GDP which arise as a result of the investment) it seeks to avoid deadweight (where the economic impacts would have been achieved in any event in the absence of the investment) and displacement (where the investment will simply substitute for existing economic activity).
Copies of ISIF's Economic Impact Reports for the period to end-December 2015 are available on the ISIF website at http://www.isif.ie/news/publications/. These reports identify the metrics used to measure the economic impact of ISIF investments which include measures such as employment, turnover, exports and Gross Value Added.
Further detail on ISIF's investment criteria is set out in the Executive Summary of the Fund's Investment Strategy, which is available on the ISIF website at http://www.isif.ie/wp-content/uploads/2016/03/ISIFInvestmentStrategyExecutiveSummaryJuly2015.pdf. The National Treasury Management Agency (Amendment) Act 2014, which established the ISIF on a statutory basis, provides that the ISIF shall review its investment strategy after 18 months of operation. This review will be conducted in the second half of 2016.
The Deputy will note that the mandate given to ISIF by the Oireachtas at inception had the effect of making ISIF one of the world's first sovereign development funds with an explicit mandate to assist in the development of its local economy. This so-called "sovereign development fund" concept is new, which means there is no comparable precedent for operation of such an investment fund and, as a result, ISIF's strategy and approach can be regarded as pioneering. However, the concept has proven to have significant appeal and many other countries continue to express interest in learning about how ISIF is managing its double bottom line mandate.
