Noel Rock
Question:143. Deputy Noel Rock asked the Minister for Finance his views on the European Commission's report on the economy, which criticised the help-to-buy scheme; and if he will make a statement on the matter. [11876/17]
View answerHelp-To-Buy Scheme
Questions (143)
Written answers
I assume the Deputy is referring to the 2017 European Semester Country Report on Ireland, which was published on 22 February. In that document the European Commission acknowledged the work undertaken by the Government in addressing the current shortage of housing, including 'Rebuilding Ireland: Action Plan for Housing and Homelessness'. This comprehensive Action Plan takes a holistic approach in addressing the many interacting structural constraints affecting the housing market in areas such as planning and land use, as well as regulation and skills deficits in the construction sector. While the primary focus of the Action Plan is to tackle structural constraints, fiscal supports can play a supporting and time-bound role in addressing the current problems in the housing sector. In my view the wording used by the Commission in relation to the help to buy scheme is not definitive, and merely points to the possibility that it could act to increase prices. However, the impact of the Help to Buy incentive on the property market generally cannot be considered in isolation from the impact of other measures contained in the Action Plan, which are primarily designed to increase supply.
It should be noted that the Help to Buy incentive is not a broad based relief available for the purchase of any home by any buyer. Rather, it is a targeted response that is aimed solely at first-time buyers, buying (or building) new residences. This targeting is designed to help encourage the building of new homes, thereby increasing supply, by turning notional demand into real demand. By restricting this initiative solely to new dwellings and new self builds, it is anticipated that the resulting increase in demand for affordable new build homes should encourage the construction industry to provide for an additional supply of such properties.
I wish to assure the Deputy that my Department continues to monitor developments in the property market on an ongoing basis. I have also committed to commissioning an independent economic impact assessment of the Help to Buy incentive which will look at a variety of issues relating to the scheme's impact on the property market.
Tax Reliefs Availability
Questions (144)
Fiona O'Loughlin
Question:144. Deputy Fiona O'Loughlin asked the Minister for Finance the tax incentives and reliefs that will be available to owners of properties in rural towns and villages following on from the Government's launch of the Action Plan for Rural Development; and if he will make a statement on the matter. [11935/17]
View answerWritten answers
The recently launched "Realising our Rural Potential: Action Plan for Rural Development" by the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs contains a detailed list of actions and priorities with a view to revitalising rural Ireland generally. This effort is being led by the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs in conjunction with Ministers and officials from other Departments, as well as the Local Authorities and a range of other stakeholders. A variety of actions included in this plan aim to assist in improving rural towns and making rural Ireland a better place to live. These include the Town and Village Renewal Scheme, under which funding of up to €12 million per annum is available to revitalise rural towns and villages, while there is also a commitment to develop and pilot an initiative to encourage increased residential occupancy in town and village centres.
My Department is engaged in a range of actions relating to the action plan including tax related measures for the farming and fisheries sectors. However, the action plan does not provide for additional tax incentive schemes targeted specifically at the owners of property in rural towns and villages. However, the Deputy may be aware of a number of tax incentives that are already available to the owners of residential property in all areas, including rural towns and villages.
The Home Renovation Incentive provides for an income tax credit for homeowners or landlords of residential property, who carry out repair, renovation or improvement works on their property. It provides for tax relief by way of an income tax credit of 13.5% of qualifying expenditure. Qualifying work must cost a minimum of €5,000 (including VAT). The maximum qualifying cost for the purpose of the incentive is (€30,000 including VAT), which equates to a maximum credit of €4,050. The tax credit is payable over two years following the year in which the work is paid for and I have extended the scheme for a further two years in the recent Budget.
In addition, (limited) relief is available for expenditure on approved gardens and buildings in the State in accordance with Section 482 of the Taxes Consolidation Act 1997. To qualify for this relief the relevant building must be determined by the Minister for Arts, Heritage and the Gaeltacht to be of significant scientific, historical, architectural or aesthetic interest and the Revenue Commissioners must be satisfied that reasonable access to the building is afforded to the public.
Help-To-Buy Scheme Administration
Questions (145)
Niamh Smyth
Question:145. Deputy Niamh Smyth asked the Minister for Finance if he will review various scenarios (details supplied) with regard to the help-to-buy scheme; if he will address the disadvantages for those planning to build, particularly in the constituency of Cavan-Monaghan; and if he will make a statement on the matter. [11181/17]
View answerWritten answers
The commencement date for the Help to Buy scheme of 19 July 2016 was chosen as it was the date of the launch of 'Rebuilding Ireland - Action Plan for Housing and Homelessness', in which the development of such a scheme for inclusion in the Budget was initially announced. The intention to backdate the scheme to this date was announced at that time with a view to avoiding any potential interruption in house sales, by purchasers who may otherwise have deferred purchases, pending the commencement of the incentive.
One of the primary policy aims of the incentive is to assist those struggling to save for the deposit required in purchasing a house. Individuals who contracted to purchase new homes before the announcement of the incentive, did not need the assistance of the State to fund the required deposit. Such individuals made their purchasing decisions on the basis of the information available to them at the time of purchase, and could not have expected a subsequently introduced tax relief to also be available to them. Similarly, those who commenced the drawdown of agreed mortgages in respect of self built properties before 19 July 2016, could also not have expected a subsequently introduced tax relief to be available to them. It is not clear from the example provided by the Deputy, whether the couple purchasing off plans entered into a contract to purchase on 17 July, or merely put down a booking deposit. If it was the former then the couple would not be eligible for a tax refund under the Help to Buy incentive, as the contract would have been entered into before 19 July 2016.
Furthermore, I do not believe that having separate criteria for applicants that are purchasing a new build, or those undertaking a self build, means that either group are disadvantaged in the manner suggested by the Deputy. The scheme aims to assist a first-time purchaser with funding a deposit at the outset of the purchase or self building process. However, there are inherent differences in the relevant processes. For a purchaser buying a new build, the first major expenditure is the point at which they enter into a contract to purchase and pay over the deposit, which is usually 10% of the value of the home. This is usually some time before a mortgage is drawn down or a purchase is completed. For a self-build property, the first major expenditure usually coincides with the draw down of the first tranche of the relevant mortgage, and thus the refund is payable at this point in respect of self builds.
Excise Duties Yield
Questions (146)
Catherine Murphy
Question:146. Deputy Catherine Murphy asked the Minister for Finance the amount of excise duty collected, by amount and fuel category, on light oil, heavy oil, liquified petroleum gas and substitute fuels in each of the past three years, in tabular form; and if he will make a statement on the matter. [11205/17]
View answerWritten answers
I am informed by Revenue that the amount of Excise Duty and Carbon Tax collected on Light Oil, Heavy Oil, Liquefied Petroleum Gas (LPG) and Substitute Fuels for the years 2014 to 2016 is as outlined in the table that follows. Please note that 2016 data are provisional and may be subject to revision.
|
Excise/Carbon |
2014 €m |
2015 €m |
2016 €m |
|||
|
Light Oil |
Excise |
Carbon |
Excise |
Carbon |
Excise |
Carbon |
|
Petrol |
799.1 |
65.7 |
767.9 |
62.3 |
720.4 |
58.5 |
|
Aviation Gasoline |
0.5 |
0.02 |
0.5 |
0.05 |
0.6 |
0.04 |
|
Substitute Fuels |
0.02 |
0.002 |
0.02 |
0.002 |
0.01 |
0.001 |
|
Heavy Oil |
|
|
|
|||
|
Auto-Diesel |
1,181.6 |
144.9 |
1,307.5 |
158.1 |
1,408.4 |
171.4 |
|
Fuel Oil |
1.0 |
1.8 |
0.9 |
2.0 |
0.8 |
2.2 |
|
Marked Gas Oil |
36.0 |
54.2 |
37.3 |
55.0 |
38.0 |
56.1 |
|
Kerosene |
- |
42.3 |
- |
52.8 |
- |
52.8 |
|
Auto LPG |
0.2 |
0.1 |
0.3 |
0.1 |
0.3 |
0.1 |
|
Other LPG |
- |
7.5 |
- |
8.4 |
- |
8.8 |
|
Substitute Fuels |
0.20 |
0.12 |
0.12 |
0.09 |
0.16 |
0.12 |
I am also informed by Revenue that a wide range of additional statistical information on Excise receipts from 2003 to 2015 is available on the Revenue's Statistics webpage at http://www.revenue.ie/en/about/statistics/excise.html .
Mortgage Interest Rates
Questions (147)
Ruth Coppinger
Question:147. Deputy Ruth Coppinger asked the Minister for Finance the measures he will take to reduce the interest rates being charged by the so-called subprime mortgage lenders; and if he will make a statement on the matter. [11218/17]
View answerWritten answers
The issue of mortgage rates is a significant one for this Government. The Programme for a Partnership Government sets out a number of important and practical measures which can be taken to improve the position of mortgagors and in particular variable rate mortgage holders. Firstly, it wishes to promote competition in the supply of mortgage finance. To that end, the Competition and Consumer Protection Commission (CCPC) has been asked to work with the Central Bank to set out options for Government in terms of market structure, legislation and regulation to lower the cost of secured mortgage lending and to improve the degree of competition and consumer protection. The CCPC has now commenced this work, with a public consultation phase closing on 20 March 2017 and the CCPC will then produce a final report by the end of May 2017.
Secondly, the Government considers that measures to encourage and promote a greater level of switching in the mortgage market would also help boost the level of competition in the market for existing mortgages. In particular, the Programme for Government considers that the development of a code of conduct for switching mortgage provider would be a useful and practical initiative which would have the potential to deliver savings to many existing mortgage holders. To that end, the Central Bank has commenced a programme of further research on this topic and the Bank has indicated that the output of this work will be used to inform its consideration of the need for any future work in the area of mortgage switching and specifically around the need for a mortgage switching code. However, Central Bank research has already shown the scope for borrowers to save money by switching mortgages and the CCPC has launched a mortgage switching tool to assist consumers (which itself notes the findings of the Central Bank research of cases where borrowers could make savings). In conjunction with this, my Department has also launched a media campaign to raise awareness and promote consumer switching in the retail financial product area, including mortgages. This initiative was funded in its entirety by AIB and Permanenttsb as was agreed in the context of both banks restructuring plans. The campaign website www.switchyourbank.ie provides straightforward practical information and support on switching and I would strongly encourage people to visit it.
While the Central Bank does not have a statutory role in relation to prescribing the rates that mortgage lenders charge on their loans, the Bank 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. Also, it could be noted that when it appeared before the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach on 8 December last, the Central Bank indicated that it had not seen any sign of interest rates on mortgages being increased by entities which acquired loans from lenders which initially provided the mortgage.
In overall terms, the Government is of the opinion that increased competition rather than administrative controls is the best way to ensure that retail lending rates are driven down in a sustainable way for the market as a whole but without giving rise to potentially undesirable consequences for the provision of new mortgage lending. This is a policy area that the Government will keep under active review in its ongoing engagement with mortgage lenders and in implementing the Programme for Government commitments to help deliver on a long term basis better outcomes for all mortgage borrowers.
Credit Availability
Questions (148)
Niall Collins
Question:148. Deputy Niall Collins asked the Minister for Finance his views on correspondence (details supplied) regarding financing; and if he will make a statement on the matter. [11222/17]
View answerWritten answers
As the Deputy is aware, small and medium sized businesses (SMEs), such as the construction sector firm in the details provided, play a central role in the sustainable recovery of the Irish economy. Government policy is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. Section 3.5 (Ensuring Finance for Growth) of the Action Plan for Jobs 2017 (APJ) sets out a range of commitments to ensure viable SME's can access appropriate finance at a reasonable cost from both bank and non-bank sources.
The Deputy will be aware that in my role as Minister for Finance I have no direct function in the relationship between the banks and their customers. I have no statutory function in relation to the banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution. This includes decisions in relation to products and lending as determined by the banks.
There are a number of initiatives that have been introduced to assist SMEs with access to credit. I would particularly recommend that the firm set out in the details supplied make contact with the Credit Review Office (further information below):
In 2014, I launched an SME online-tool, a website which makes it easier for small businesses to find information on over 170 Government business supports from 30 Departments and Agencies. On answering eight quick and simple questions, businesses are returned a list of all available Government business supports tailored to their business requirements, with further information on each support and contact details for follow-up. I would encourage all SMEs, at any stage of their development, to check which supports are available. The Supporting SMEs online tool can be found at www.supportingsmes.ie.
The Credit Review Office helps SME or Farm borrowers who have had an application for credit of up to €3 million declined or reduced by participating banks, and who feel that they have a viable business proposition. They also look at cases where borrowers feel that the terms and conditions of their existing loan, or a new loan offer, are unfairly onerous or have been unreasonably changed to their detriment. This is a strictly confidential process between the business, the Credit Review Office and the bank. Further details on this process are available at www.creditreview.ie.
The Government remains committed to the SME sector, as reflected in the Programme for a Partnership Government, and sees it as a key engine of ongoing economic growth. Consequently, my Department and the Credit Review Office, working with the other relevant Departments and Agencies, will continue to monitor the availability of both bank and non-bank credit on both a macro and sectoral basis in order to ensure that sufficient access to finance is available to facilitate indigenous viable SMEs, including those in the construction sector, to reach their full potential in terms of growth and employment generation.
Credit Availability
Questions (149)
Pearse Doherty
Question:149. Deputy Pearse Doherty asked the Minister for Finance his views on whether the banking sector is playing a full role in lending to builders in order that housing construction can reach the levels required to meet the need; the engagements he or his officials have had with the banking sector on this issue; and if he will make a statement on the matter. [11223/17]
View answerWritten answers
As the Deputy is aware, small and medium sized businesses (SMEs), including those in the construction sector, play a central role in the sustainable recovery of the Irish economy. Government policy is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources.
The Deputy will also be aware that in my role as Minister for Finance I have no direct function in the relationship between the banks and their customers. I have no statutory function in relation to the banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution. This includes decisions in relation to products and lending as determined by the banks.
The Government is committed to ensuring that all viable businesses operating in Ireland have the opportunity to access sufficient finance to meet their enterprise needs in a manner that supports growth and employment in the economy. As the Deputy will be aware, Section 3.5 (Ensuring Finance for Growth) of the Action Plan for Jobs 2017 (APJ) sets out a range of commitments to ensure viable SME's can access appropriate finance at a reasonable cost from both bank and non-bank sources.
In line with Action 62 of the APJ 2017, officials from my Department collate and examine data from AIB and Bank of Ireland on a monthly basis, including data pertaining to the various sectors. Furthermore, my officials meet the banks on a quarterly basis to ensure an informed understanding of the wider SME bank lending environment which assists the development and implementation of policies aimed at ensuring SME access to finance and increased competition in the SME lending sector.
It should be noted that the results of the most recent Department of Finance SME Credit Demand Survey, covering the period April to September 2016, show that, when pending applications are excluded, 84% of credit applications to banks were approved or partially approved. Demand for credit remains subdued and the latest survey shows only 39% of SMEs in the construction sector requested bank finance in the previous six months a decrease of 9% from September 2015. Furthermore, the main reason for not applying for bank finance is that SMEs do not need it (86%). Further results from the survey can be found atwww.finance.gov.ie/what-we-do/banking-financial-services/sme-credit-lending.
I note that the data recently published by the Central Bank of Ireland for Credit Advanced to Irish Resident Small and Medium Sized Enterprises shows that new lending to the Construction sector (construction of buildings carried out on contract) for Q1 to Q3 2016 totalled €59 million compared to €50 million for Q1 to Q3 2015. New lending to Property Investment / Development enterprises for Q1 to Q3 2016 totalled €961 million a growth of €582 million (c. 154%) when compared to the same period in 2015. This data can be found in Table A.14.1 Credit Advanced to Irish Resident Small and Medium Sized Enterprises published on the Central Bank's website.
Separately, the Deputy may also wish to note that the Ireland Strategic Investment Fund (ISIF) has been actively involved in a number of important initiatives which enhance the availability of finance to the construction sector in line with the terms of the Fund's mandate. This includes its investments in:
- Activate Capital - which is an innovative non-bank financing platform that has the potential to provide funding for substantial numbers of new homes in Dublin and the other major urban centres in which demand is most pronounced;
- Ardstone Residential Partnership - which is a residential equity investment fund that is focused on delivering residential units to the market over the short-to medium-term; and
- Wilbur Ross Cardinal Commercial Real Estate Mezzanine Debt Fund - which has funded a number of residential developments in recent months.
The Government remains committed to the SME sector, including those involved in the construction sector, and sees it as the key engine of ongoing economic growth. I can assure the Deputy that my Department, working with other relevant Departments, Bodies and Agencies, such as the Credit Review Office, will continue to advance policies to ensure the availability of both bank and non-bank credit so as to ensure that viable Irish SMEs have sufficient access to finance.
Tax Exemptions
Questions (150, 151)
James Browne
Question:150. Deputy James Browne asked the Minister for Finance when an application for VRT by a person (details supplied) will be approved; and if he will make a statement on the matter. [11310/17]
View answerJames Browne
Question:151. Deputy James Browne asked the Minister for Finance when an application for VRT exemption by a person (details supplied) will be approved; and if he will make a statement on the matter. [11311/17]
View answerWritten answers
I propose to take Questions Nos. 150 and 151 together.
I am advised by Revenue that initially an incomplete application under the Disabled Drivers and Passengers Scheme was received from the person concerned on 8 February 2017. The required information has since been received and processing of the application is expected to be completed within the next week.
Public Relations Contracts Expenditure
Questions (152)
John Brady
Question:152. Deputy John Brady asked the Minister for Finance the amount his Department spent on public relations consultants and all matters relating to public relations costs in 2016; and if he will make a statement on the matter. [11429/17]
View answerWritten answers
I take it that the Deputy is referring solely to external public relations and not to advertising that would be incurred by my Department in the normal course of business, such as entries into telephone directories, the placing of advertisements in national newspapers, recruitment advertising, etc.
The use of external Public Relations consultants in respect of my Department in 2016 is outlined in the following table:
|
Details of service provided |
Public Relations Firm |
|
Following the Government decision of 13 May 2015 on mortgage arrears, my Department was asked to coordinate the development and implementation of a communications strategy around the Government-funded and other available supports for borrowers in arrears. The duration of the contract was from October 2015 until June 2016. Responsibility for the mortgage arrears publicity campaign now rests with the Abhaile Mortgage Arrears Resolution Service. The amount spent on this campaign in 2016 was €73,135.76 |
Carr Communications was the successful tenderer following a public procurement exercise advertised on eTenders. |
|
Under the Action Plan for Jobs 2015, Action 110 required an "advertising campaign to leverage support for and drive utilisation of the Supporting SMEs Online Tool and increase awareness of the existence of State supports for business." This advertising campaign was co-ordinated by the SME Communications Group a sub-group of the SME State Bodies Group which is chaired by my Department. The second phase of this advertising campaign took place in March 2016 at a cost of €14,314.74. |
ICAN was the successful tenderer following a public procurement exercise. |
|
As part of a range of competition measures agreed with the European Commission under their respective EU-Restructuring plans, AIB and Permanent TSB are required to provide funding to a public awareness campaign (such campaign to be facilitated by Ireland through an appropriate state body) to raise awareness and promote customer switching. As such my Department is currently managing a contract for the provision of Research, Design and Media Buy Services (Public awareness and customer switching campaign) in retail banking markets. The media campaign went live on a variety of media channels from 27th February 2017 and the campaign website, www.switchyourbank.ie, is also currently live. The amount spent on this public awareness campaign in 2016 was €24,682.00. It is important to note that this campaign is being funded by the two banks in its entirety. |
Language Communications Ltd was appointed as Prime Contractor for this campaign following a public procurement competition advertised on eTenders and the Official Journal of the EU. |
The Department's policy regarding employing external groups is to follow the relevant public procurement rules and procedures.
Help-To-Buy Scheme
Questions (153, 159, 160, 161, 162)
Mattie McGrath
Question:153. Deputy Mattie McGrath asked the Minister for Finance the number of applications received for the help-to-buy scheme in the Tipperary revenue district; the number of applications processed and approved to date; the current processing time for applications; and if he will make a statement on the matter. [11444/17]
View answerPearse Doherty
Question:159. Deputy Pearse Doherty asked the Minister for Finance the number of applications to date for the help-to-buy scheme as announced in budget 2017; and if he will make a statement on the matter. [11631/17]
View answerPearse Doherty
Question:160. Deputy Pearse Doherty asked the Minister for Finance the number of applications for the help-to-buy scheme that have been deemed valid to date; and if he will make a statement on the matter. [11632/17]
View answerPearse Doherty
Question:161. Deputy Pearse Doherty asked the Minister for Finance the number of successful or pending applications for the help-to-buy scheme with in each categories (details supplied) in tabular form; and the total potential cost of the scheme in each catagory. [11633/17]
View answerPearse Doherty
Question:162. Deputy Pearse Doherty asked the Minister for Finance the total anticipated cost of the help-to-buy scheme based on the applications to date; and if he will make a statement on the matter. [11634/17]
View answerWritten answers
I propose to take Questions Nos. 153 and 159 to 162, inclusive, together.
The Deputies will be aware that a two-stage process is employed for the Help To Buy (HTB) incentive, under which individuals submit an application for the incentive to receive an indication of the level of tax relief that may be available to them, and subsequently submit a claim for a tax refund.
I am advised by Revenue that the number of HTB applications received up to the end of February 2017 was:
|
No. of Applications |
Successful applications |
Pending |
|
3,449 |
1,218 |
2,231 |
The data indicates that around one-third of applications received are approved automatically, while the remainder are generally allocated a status of pending. Pending means that the applicants either have to file an outstanding return or address a compliance issue, the application is to be reviewed by a Revenue caseworker, or the applicant needs to finalise his or her application.
The processing time for pending applications depends on the time it takes an applicant to resolve any outstanding matters and Revenue is encouraging prospective applicants to file any necessary tax returns and resolve any outstanding issues before making the HTB application. The bulk of applicants to date are PAYE taxpayers and if a Form 12 tax return is outstanding it can be filed online very quickly by using "PAYE Services" in myAccount. If there is a tax liability outstanding it can be paid using the 'Payments' facility in myAccount. A HTB application can be approved automatically, and very quickly, on the online system where there are no outstanding issues.
Once an application is successful, the time taken for the claim to be submitted depends on the claimant. If he or she has the necessary evidence, which is a signed contract, mortgage agreement, deposit details, details of the property for first-time purchasers or, in the case of first-time self-build claimants evidence of drawdown of the first tranche of the mortgage, the claim can be submitted. More detailed information and guidance regarding these requirements is available on the Revenue website.
Information about the loan-to-value ratios is not available at the application stage, as such figures are not usually finalised at that stage of the process. However, this information is required from successful applicants to finalise their claims. I am advised that the categorisation of claims by the requested loan-to-value ratios as of end February 2017 was:
|
Loan-to-value (LTV) |
90% |
85% to 90% |
80% to 85% |
Below 80% (and above 70% minimum LTV) |
|
Total (449) |
120 |
175 |
83 |
71 |
The purpose of the application stage of the HTB process is such that would-be first-time buyers can determine whether, and to what extent, they qualify for the incentive. As the data from the application stage are only an indicator as to possible take-up of the incentive, for example, an applicant may not proceed to claim stage or may not get mortgage approval, the application statistics are not collated by County.
Successful applicants are required to provide information on the location of the qualifying residence in finalising their claims, and therefore Revenue is in a position to provide certain details on the location of HTB claims made. However, to protect the confidentiality of taxpayer information, I can only provide a breakdown based on properties situated in Dublin and in provincial locations. Up to the end of February 2017, Revenue has processed 449 claims and the relevant breakdown is as follows:
|
Location |
Connacht/ Ulster |
Dublin |
Leinster (outside Dublin) |
Munster |
|
Number (449) |
31 |
179 |
157 |
82 |
The number of applications and claims for the incentive continue to be too small to materially affect the previously estimated cost of the scheme. In this regard, the Deputy may wish to note that at Budget time, it was estimated that the Help to Buy incentive would cost €40m per annum, but €50m in 2017 due to the backdating of the relief in respect of properties which became eligible for the scheme since 19 July 2016.
Brexit Issues
Questions (154, 155)
Darragh O'Brien
Question:154. Deputy Darragh O'Brien asked the Minister for Finance if his Department has conducted any analysis of the potential impact of cross-Border smuggling on the economy as a result of Brexit; and if he will make a statement on the matter. [11474/17]
View answerDarragh O'Brien
Question:155. Deputy Darragh O'Brien asked the Minister for Finance the discussions he has had on the issue of cross-Border smuggling and its potential impact on the economy with his EU counterparts; and if he will make a statement on the matter. [11475/17]
View answerWritten answers
I propose to take Questions Nos. 154 and 155 together.
I am advised by the Revenue Commissioners, who are responsible for combating smuggling, that action against this criminal activity is, and will continue to be, a central element of their work, including in the context of Brexit.
The Government priorities for Brexit are clear: minimising the impact on trade and the economy, protecting the Northern Ireland Peace Process, maintaining the Common Travel Area and influencing the future of the European Union. A programme of intense engagement at political and official level is continuing to ensuring that our priorities are heard and understood across Europe, and that the EU's position for the forthcoming negotiations reflects our priorities.
Construction Industry
Questions (156)
Joan Burton
Question:156. Deputy Joan Burton asked the Minister for Finance the level of construction inflation that has been experienced by his Department in each of the past six years and to date in 2017 in respect of construction projects and other capital projects; the way in which he monitors construction inflation and the mechanisms he employs to establish this; and if he will make a statement on the matter. [11536/17]
View answerWritten answers
My Department monitors inflation across the economy on an ongoing basis, including in the construction sector. For example, the National House Construction Cost Index, published by the Department of Housing, Planning, Community and Local Government, provides an indication of labour and material cost developments within the construction industry. The latest available figures suggest annual house construction cost inflation of 0.1 per cent on average between 2010 and 2016. A number of construction sector organisations also conduct periodic assessments of construction costs in Ireland. For example, in May of last year, the Society of Chartered Surveyors Ireland (SCSI) published a report The Real Cost of New House Delivery which examined the component costs of housing delivery in the Dublin region.
As part of Rebuilding Ireland, the Action Plan for Housing and Homelessness, detailed studies into construction costs are currently ongoing. A Working Group, chaired by the Department of Housing, Planning, Community and Local Government, has been established to work with industry representatives in order to benchmark housing delivery input costs in Ireland. It is my understanding that the Housing Agency is also coordinating an independent review and analysis of delivery costs in Ireland. Both of these studies are due to be completed during the first half of 2017.
With regards to the construction projects undertaken by my Department over the past six years, a project to update fire and electrical systems has recently been completed in offices shared by my Department and the Department of Public Expenditure and Reform. The programme was managed by the Office of Public Works. My Department made a fixed contribution to the total cost of the project.
Insurance Industry Regulation
Questions (157)
Michael McGrath
Question:157. Deputy Michael McGrath asked the Minister for Finance the countries which have compensation schemes in place for collapsed insurance companies; if these schemes would compensate Irish claimants in the event of a motor insurance company collapsing (details supplied); and if he will make a statement on the matter. [11579/17]
View answerWritten answers
Insurance guarantee schemes provide last-resort protection to policyholders and beneficiaries when insurers are unable to fulfil their contractual commitments. They protect against the risk that claims will not be met in the event of a failure of an insurance undertaking. Such schemes can offer protection by paying compensation to policyholders or beneficiaries, or by securing the continuation of insurance contracts.
There is no common EU framework in the insurance sector in relation to insolvencies, as exists in other sectors, e.g. bank deposits. As part of the recent review of motor insurance compensation in Ireland, my Department established that there are a wide variety of insurance guarantee schemes in other jurisdictions. Comparing these arrangements to the Irish compensation framework was difficult as there were significant differences between the schemes established. For example, these differences relate to eligibility restrictions, protection limits, the nature of intervention, the funding arrangements and the corresponding financial capacity of the schemes. The Deputy will appreciate therefore that, in the absence of a common EU insurance guarantee scheme, it is difficult to provide the information sought given the differences outlined above. The provision of such a list may create an incorrect impression that each of the schemes is directly comparable.
The European Commission undertook a review in 2010 of the insurance compensation issue. My Department responded at the time and indicated that Ireland was in broad agreement with the objectives of the White Paper and supported most of the specific proposals contained therein. In particular, it sought the inclusion of motor insurance business in any proposal from the Commission as its inclusion would ensure appropriate harmonised treatment of all claims of a particular insurance undertaking in the event of an insolvency. The European Commission has not subsequently advanced their work in this area , and I am not aware of any imminent developments on this front.
Finally, I have attached a link to a 2007 Oxera Report titled "Insurance guarantee schemes in the EU Comparative analysis of existing schemes, analysis of problems and evaluation of options" which should provide some greater insight into the complexity of the matter.
http://ec.europa.eu/internal_market/insurance/docs/guarantee_schemes_en.pdf.