Written Answers Nos. 143-155
143. Deputy Pearse Doherty asked the Minister for Finance the number of extra staff that have been added to each of the areas of banks, insurance and funds and asset management in the Central Bank or his Department since the vote on Brexit; and if he will make a statement on the matter. [38138/16]
View answerA new Brexit Unit within the EU and International Division of my Department was established in July 2016 to oversee and coordinate the Department's work in the area of Brexit. There are currently 3 staff employed in the Unit. In addition, the Department of Finance staff complement in the Irish Permanent Representation to the EU in Brussels has been strengthened. Resourcing for Brexit is being kept under review.
With regard to the Central Bank, within Financial Regulation, throughout 2016 there has been a focus on continuing to grow capability and capacity, with 66 new people joining across the financial regulation teams since June 2016. Approved headcount for Financial Regulation has also increased. However, this is against the backdrop of tightening labour markets, which has continued to impact on staff turnover. Consequently, real growth since June 2016 is 1.2% (5.7% since the start of the year). A significant focus on resourcing in recent months' estimates growth of 5% in FTE by the end of 2016 since the announcement of Brexit. Resourcing for Brexit related activity has been prioritised across the Bank.
Total Central Bank staff is expected to grow to 1,631 at end 2016, with planned expansion to 1,801 by end 2017. The 2017 expansion includes dedicated resources of +28 staff to address specific Brexit-related new business needs; the Bank also plans to assess on a regular basis the need for contingency-based extra Brexit-related hiring in response to additional business volumes.
144. Deputy Pearse Doherty asked the Minister for Finance if the Central Bank has experienced difficulty hiring in any of the areas of banks, insurance and funds and asset management; the reason for such difficulties since the vote on Brexit; and if he will make a statement on the matter. [38139/16]
View answerI am informed by the Central Bank that it can sometimes experience difficulties in hiring and retaining staff in certain areas simply because there is significant labour market competition for the types of skilled persons that it requires to effectively regulate and supervise financial services firms. The type of people and skills that the Bank requires are the same type of people and skills that regulated firms require to operate their businesses and this can present a challenge to the Bank.
However, the Governor has previously indicated that where further resources are necessary due to an expanded universe of regulated and supervised firms, the Bank has the ability to effectively re-prioritise where it needs to meet the increased level of demand and also to increase staff numbers as necessary.
145. Deputy Pearse Doherty asked the Minister for Finance the number of vacant homes in possession in each of the State-backed banks in each of the past ten months; his plans to use these homes to alleviate the housing crisis; and if he will make a statement on the matter. [38164/16]
View answerI am firmly of the view that the Irish banking system has an important role to play in the normalisation of the Irish housing sector through the speedy return of properties in their possession to the general market. I am also conscious that where a bank comes into possession of a property the institution has a fiduciary responsibility to dispose of the property in a manner that satisfies its independent, commercial mandate. However I welcome the fact that this is now also happening through interaction with the Housing Agency, local authorities or other means.
As the deputy is aware, the Minister for Housing, Planning, Community and Local Government this summer launched Rebuilding Ireland, the Action Plan for Housing and Homelessness. The Action plan represents a whole of government response to the issues in the housing market with actionable measures across a wide range areas, designed to stimulate housing supply and remove many of the barriers to a normally functioning market.
The Department does not have the information requested by the Deputy however I have received the following responses from the three banks in which the State has a shareholding:
AIB has advised that all disclosures in relation to AIB's residential mortgages and properties in possession can be found on page 53 of AIB's Half-Yearly Financial Report 2016. It is the bank's policy to sell all assets on a vacant possession basis. AIB has engaged directly with the Housing Agency to provide a list of more than 500 properties for consideration. As at end of November the Housing Agency has expressed an interest in over 200 of these properties. AIB also noted that the bank continues to work directly with the Housing Agency to ensure all suitable properties are made available for consideration.
Permanent TSB has advised me that the data requested by the deputy is not readily available for each of the past 10 months. However they indicate that on the latest practicable date (25 November 2016) the total possession stock was 466 units. The bank stated that, allowing for tenanted units, student accommodation and derelict units the number of vacant homes would be approximately 422 units.
According to Bank of Ireland, all regulatory required disclosures for Bank of Ireland, including those related to property, can be found in their annual report.
146. Deputy Michael McGrath asked the Minister for Finance the rules that apply to the taxation, VAT, excise duty and so on, of goods purchased online by persons here from abroad; the obligations that apply in respect of purchases from within the EU and outside the EU; the details of the Revenue Commissioners compliance activity in this area; and if he will make a statement on the matter. [38176/16]
View answerI am advised by Revenue that VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply. Under the VAT Consolidation Act, goods sold over the internet on behalf of a supplier in another Member State to a customer in Ireland are liable to VAT in the Member State of the supplier, provided the value of their total sales to customers in Ireland does not exceed the Irish registration threshold of €35,000 for distance sales. Where sales to customers in Ireland exceed this threshold the supplier must register and account for VAT in Ireland. Suppliers that do not exceed the Irish registration threshold can opt to register and account for VAT in Ireland on their distance sales.
Where the goods are excisable products, such as alcohol and tobacco, the excise duty must be paid by the supplier before the goods arrive in Ireland.
Goods purchased online by persons here from suppliers established outside the EU are subject to customs duty, VAT and excise duty, which is normally payable prior to the release of the goods. However, small consignments, below a value of €22, imported from outside the EU are exempt from VAT and such consignments, below a value of €150, are not subject to Customs Duty.
A Revenue publication notification PN 1882 - Ordering Goods for Personal Use over the Internet or from Mail Order Catalogues - that is available on their website, details the import taxes and duties that apply to goods supplied from EU and non-EU suppliers. It points out that internet shoppers need to be aware that the full price of the goods involved may exceed the price quoted since some websites do not make allowance for charges such as Customs Duty, Excise Duty or VAT.
In terms of compliance, Revenue staff are deployed at ports, airports and postal/courier depots to ensure compliance with customs and tax legislation. They are supported by equipment and resources such as scanners, x-ray machines and detector dogs, which are deployed to detect prohibited goods and high duty goods, such as tobacco and alcohol, and high value imports where VAT and Customs Duty may be evaded. These compliance activities are very successful and Revenue seizes considerable quantities of excisable and prohibited goods annually in the course of delivery through postal and other delivery channels.
Revenue inform me that they are very aware of the growth in business to consumer internet sales and of the risks this presents, both to tax revenues and domestic business, and that they are working continuously to strengthen their controls in this area. Revenue uses a range of measures to monitor internet retail activity directed at customers in Ireland and takes action to require suppliers in other EU Member States that have reached or are likely to reach the distance sales registration threshold to register and account for VAT in the Ireland. Enquiries into the activities of suppliers based in other EU Member States are undertaken through the relevant national tax administrations under EU Mutual Assistance provisions.
147. Deputy Michael McGrath asked the Minister for Finance the amount of money he expects the State to receive from the liquidation of IBRC; the timeframe he expects the State will receive it and the use the proceeds will be put to; and if he will make a statement on the matter. [38181/16]
View answerOfficials in my Department have advised me that Department of Finance related claims in the region of €1.1bn have been submitted to the Special Liquidators of IBRC. I am aware that other State related claims have also been submitted but these are a matter for those entities. The Special Liquidators have advised that the likely financial result for the State from the Special Liquidation of IBRC is not yet known as it will be dependent on the ultimate level of dividend available.
As per the IBRC Progress Update Report of May 2016, the Special Liquidators have previously advised that they will pay an interim dividend of 25% to all admitted unsecured creditors of the liquidation of IBRC before 31 December 2016.
As also previously advised in the IBRC Progress Update Report of May 2016, it is the expectation of the Special Liquidators, based on current information, that the eventual unsecured creditor dividend will be in the range of 75% - 100% of all eligible claims. This eventual dividend range is subject to change depending on future events which are outside the control of the Special Liquidators. The ultimate level of dividend paid 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.
As a result of The European System of National and Regional Accounts (ESA 2010), IBRC is classified in government. Any payment from the Special Liquidators of IBRC to the State would be considered an intra-government payment with no impact on the deficit. It would however improve the exchequer borrowing requirement as the cash received would increase the cash balances in the Central Fund and thereby reduce the required level of borrowing.
148. Deputy Michael McGrath asked the Minister for Finance the number of investment firms found to be unauthorised by the Central Bank in 2015 and 2016; the total value of assets involved; the penalties imposed; his views on whether the existing regulatory framework is sufficient for identifying unauthorised investment firms; and if he will make a statement on the matter. [38182/16]
View answerI am informed by the Central Bank that in cases where a firm is found to be operating an unauthorised investment firm, a warning notice is issued by the Bank pursuant to Section 53 of the Central Bank (Supervision and Enforcement) Act 2013.
Twenty-five such notices were published in total during 2015 and 2016. The full listing of warning notices published by the Central Bank is available from the Central Bank's website.
149. Deputy Michael McGrath asked the Minister for Finance the amount of legal fees paid by his Department in respect of tribunals of inquiry established by the State and any resulting legal actions, by tribunal for each of the years 2006 to 2016 to date, in tabular form; and if he will make a statement on the matter. [38183/16]
View answerThis question has been copy transferred to other Government Departments.
With regard only to legal fees paid by the Department of Finance in respect of tribunals of inquiry established by the State and any resulting legal actions for the years 2006 to 2016, it has not been possible in the time available to establish definitively the extent of any such legal fees which may have been incurred. No such legal fees have been identified at this point, but my investigations have not been completed. In the event that any such fees are identified following further investigation I will revert to the Deputy in writing, as soon as such information is to hand.
150. Deputy Michael McGrath asked the Minister for Finance his views on whether the combination of the Government's help-to-buy scheme and the change in the Central Bank's macro prudential mortgage rules will have an inflationary effect on new house prices; and if he will make a statement on the matter. [38184/16]
View answerSince their introduction in February 2015, the Central Bank macro prudential rules have served an important function by enhancing the resilience of the banks and of households and preserving the stability of the financial system as a whole. As part of this core function, the Central Bank committed itself to keeping the measures under review and making the necessary adjustments to reflect the evolving financial and economic situation. Following the conclusion of the first macro prudential review, the Central Bank decided to refine the rules to ensure the sustainability and effectiveness of the current framework.
Whilst the Central Bank is independent in terms of macro prudential policy, the decision to adjust the regulations is welcome. In particular the change to the ceiling on the loan to value (LTV) ratio for all first time buyers (FTB), should better support first-time buyers in accessing the required mortgage to buy a home. Changes to the rules should also support increased construction and transaction activity and help to alleviate some of the pent-up demand in the rental market. Following the adjustments to the regulations, which come into effect from 1 January 2017, the Central Bank will continue to monitor the effectiveness of the regulations taking into account evolving financial and economic circumstances.
With regards to the Help to Buy initiative, the fiscal measures announced in Budget 2017 to support the housing market form an important element in the broader package of measures announced as part of Rebuilding Ireland, The Action Plan for Housing and Homelessness. Rebuilding Ireland has been designed to address the key structural constraints which continue to inhibit supply. It is within this context that the Help-to-Buy initiative has been designed to provide immediate and targeted support for first-time buyers before the structural measures contained in the Action Plan start to yield results. The targeted nature of the initiative should provide support to first-time buyer in meeting their deposit requirements whilst also encouraging the construction of new housing units.
In terms of inflation in the housing market, I wish to assure the Deputy that my Department continues to monitor developments in the property market including property price inflation on an ongoing basis. With regards to Help to Buy initiative in particular, my Department will commission an independent impact assessment of the initiative to determine its general impact. This report will be completed by September 2017, prior to Budget 2018.
151. Deputy Michael McGrath asked the Minister for Finance the number of home owners exempt from property tax due to unfinished estates; if a review has been undertaken of the exemption system; if so, the details of the review; and if he will make a statement on the matter. [38185/16]
View answerRevenue has advised me that there are 3,257 residential properties availing of the Local Property Tax (LPT) 'unfinished housing estate' exemption as provided for by Section 10 of the Finance (Local Property Tax) Act 2012 (as amended).
To qualify for the exemption, a housing estate or a portion of a housing estate had to be prescribed (as unfinished) by the Minister for Housing, Planning, Community and Local Government in Statutory Instrument (SI) No. 91 of 2013.
The 'unfinished housing estate' exemption was examined by Dr Don Thornhill as part of his 2015 review of the LPT in which he recommended that it should not be renewed. My Department will be considering issues relating to the implementation of this and other recommendations made by Dr Thornhill in due course. Dr Thornhill's review report is published on my Department's website [www.budget.gov.ie/Budgets/2016/Documents/Review_of_Local_Property_Tax_pub.pdf].
152. Deputy Michael McGrath asked the Minister for Finance the expected annual cost of servicing the Government debt of €200 billion in 2017 to 2021, in tabular form; the assumptions used in arriving at this expected cost including assumed changes in bond yields; and if he will make a statement on the matter. [38187/16]
View answerThe most recent projections of the expected annual cost of servicing the government debt are detailed in table A3, General Government interest expenditure 2015 - 2021 in Annex 2 of the Budget 2017 document published in October of this year. These figures are republished below for the Deputy's convenience.
|
Year |
2017 |
2018 |
2019 |
2020 |
2021 |
|
General Government Interest Expenditure €bn |
6.1 |
6.0 |
5.7 |
5.4 |
5.0 |
|
Year-end General Government Debt €bn |
204.5 |
209.8 |
212.8 |
208.2 |
208.4 |
The forecast interest expenditure figures relate to General Government Debt (GGD). They are point-in-time estimates reflecting the outlook as at end-September 2016.
GGD is a measure of the total gross consolidated debt of the State compiled by the Central Statistics Office (CSO) and is the measure used for comparative purposes across the European Union.
As the issuer of Irish government bonds, the National Treasury Management Agency (NTMA) constantly monitors and evaluates bond market developments.
The NTMA does not disclose the assumptions regarding bond yields used in projecting interest expenditure as to do so could impact the Agency's ability to raise funds at the most competitive rates possible.
153. Deputy Niall Collins asked the Minister for Finance the action he is taking to increase the rate of credit lending to businesses via the Strategic Banking Corporation of Ireland; the level of take up from the fund by businesses to date; and if he will make a statement on the matter. [38270/16]
View answerThe Strategic Banking Corporation of Ireland (SBCI) began lending in March 2015. Its goal is to increase the availability of low cost, flexible funding to SMEs. The SBCI channels its funds through lending partners known as on-lenders. The SBCI currently has three bank and five non-bank on-lending partners.
The level of lending to SMEs is to a large degree driven by market demand, and the SBCI is engaged with a range of potential new on-lenders to broaden its distribution capability and market coverage. In doing so, the SBCI is seeking to deliver a wide variety of financing products to Irish SMEs. In this regard, it is encouraging to note that FEXCO Asset Finance were announced this week as the SBCI's newest on-lender and will provide leasing and hire purchase finance to Irish SMEs.
To the end of September 2016, over 10,600 SMEs, operating across all business and economic sectors of the Irish economy, have benefitted from €458 million of SBCI loans. There is a broad geographical spread of the SMEs supported with the majority of them based outside Dublin.
The SBCI is working on a number of projects, with the aim of increasing finance options for SMEs, and it is expected that announcements will be made in the coming months.
154. Deputy Clare Daly asked the Minister for Finance the semi-State companies which absorbed the private pension levy; and the semi-State companies which have passed the cost of the levy onto their pension funds. [38279/16]
View answerThe Pension Scheme Levy was introduced in 2011. For the years 2011, 2012 and 2013 the rate was 0.60% of the scheme assets. For the year 2014 the rate was 0.75% of the assets and for the year 2015, the final year of the levy, the rate was 0.15%. Under the legislation, the payment of the levy is treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, are entitled where needed to adjust current or prospective benefits payable under a scheme to take account of the levy. It is up to the trustees or insurer to decide whether, when and how the levy should be passed on and to what extent, given the particular circumstances of the pension schemes for which they are responsible.
However, the legislation also includes safeguards aimed at ensuring that should the option of reducing scheme benefits be taken, it must be applied in an equitable fashion across the different classes of scheme members that could include active, deferred and retired members. In no case may the reduction in an individual member's or class of member's benefits exceed the member's or class of member's share of the levy. Where pension scheme trustees or an insurer took the decision to treat the levy as an expense of the pension scheme, they would have adjusted current or prospective benefits payable to members under that scheme. The consequence of this treatment by the trustees or insurer could be a permanent reduction in members' benefits.
As Minister for Finance I do not have responsibility for Semi-State Companies in general and would not therefore have detailed information on how each operated the Pension Scheme Levy and can only deal with treatment of funded schemes of bodies within the aegis of my Department. I will write directly to the Deputy in respect of the treatment of funded schemes within the aegis of my Department as all the relevant material has not been made available in time to provide a complete response.
The referred reply under Standing Order 42A was forwarded to the Deputy.
155. Deputy Jan O'Sullivan asked the Minister for Education and Skills if the project regarding the Louth-Meath education and training board, ETB, Drogheda, County Louth is still going ahead; when the tendering for the project will be completed; the overall cost of the project; when he expects it to be finished; the number of ETB staff to be accommodated in the new facility; and if he will make a statement on the matter. [38112/16]
View answerTenders have been received for the project to which the Deputy refers.
The Deputy will be aware that construction funding is allocated to a project when it is approved to proceed to site. A decision is taken in this regard in the context of competing demands from other on-going capital projects. As we have not reached this stage and as, in particular, a contract has not yet been awarded, I am unable to comment on the value of the project, which is commercially sensitive pending the award of a contract. The accommodation planned will cater for 50 personnel.
