Written Answers Nos 54-73
54. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Justice and Equality her plans regarding a proposed deportation order in the case of a person (details supplied); and if she will make a statement on the matter. [23853/17]
View answerI am informed by the Irish Naturalisation and Immigration Service (INIS) of my Department that the person concerned is the subject of a Deportation Order signed on 28 April 2017. This Order requires the person concerned to remove themselves from the State and remain outside the State. The enforcement of the Deportation Order is a matter for the Garda National Immigration Bureau.
Queries in relation to the status of individual immigration cases may be made directly to the INIS of my Department by e-mail using the Oireachtas Mail facility which has been specifically established for this purpose. This service enables up to date information on such cases to be obtained without the need to seek information by way of the Parliamentary Questions process. The Deputy may consider using the e-mail service except in cases where the response from the INIS is, in the Deputy’s view, inadequate or too long awaited.
55. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Justice and Equality her plans regarding the proposed deportation order in the case of a person (details supplied); and if she will make a statement on the matter. [23854/17]
View answerI am informed by the Irish Naturalisation and Immigration Service (INIS) of my Department that the person concerned is the subject of a Deportation Order signed on 28 April 2017. This Order requires the person concerned to remove themselves from the State and remain outside the State. The enforcement of the Deportation Order is a matter for the Garda National Immigration Bureau.
Queries in relation to the status of individual immigration cases may be made directly to the INIS of my Department by e-mail using the Oireachtas Mail facility which has been specifically established for this purpose. This service enables up to date information on such cases to be obtained without the need to seek information by way of the Parliamentary Questions process. The Deputy may consider using the e-mail service except in cases where the response from the INIS is, in the Deputy’s view, inadequate or too long awaited.
56. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Justice and Equality the status of residency in the case of a person (details supplied); and if she will make a statement on the matter. [23855/17]
View answerI am advised by the Irish Naturalisation and Immigration Service (INIS) of my Department that in accordance with Section 3 of the Immigration Act 1999 (as amended), the person concerned was notified, by letter dated 9 May 2017, that the Minister proposed to make a Deportation Order in respect of them. They were given the options, to be exercised within 15 working days, of leaving the State voluntarily, of consenting to the making of a Deportation Order or of making representations to the Minister setting out the reasons why they should not have a Deportation Order made against them.
The position in the State of the person concerned will now be decided by reference to the provisions of Section 3 (6) of the Immigration Act 1999 (as amended) and all other applicable legislation. All representations submitted will be considered before a final decision is made.
Queries in relation to the status of individual immigration cases may be made directly to the INIS of my Department by e-mail using the Oireachtas Mail facility which has been specifically established for this purpose. This service enables up to date information on such cases to be obtained without the need to seek information by way of the Parliamentary Questions process. The Deputy may consider using the e-mail service except in cases where the response from the INIS is, in the Deputy’s view, inadequate or too long awaited.
57. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Justice and Equality the status of residency in the case of a person (details supplied); and if she will make a statement on the matter. [23857/17]
View answerI am advised by the Irish Naturalisation and Immigration Service (INIS) of my Department that this person's request for immigration permission is currently under consideration and INIS will be writing to the person concerned shortly.
Might I remind the Deputy, that queries in relation to individual cases may be made directly to INIS by e-mail using the Oireachtas Mail facility which has been established for this purpose. This service enables up to date information on such cases to be obtained without the need to seek information by way of Parliamentary Question process. The Deputy may consider using the e-mail service except in cases where the response from INIS is, in the Deputy's view, inadequate or too long awaited.
58. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Justice and Equality the position regarding the approval of stamp 4 status in the case of a person (details supplied); and if she will make a statement on the matter. [23862/17]
View answerI am informed by the Irish Naturalisation and Immigration Service (INIS) of my Department that the first and second named persons were granted permission to remain in the State in August 2007, for an initial three year period, valid to 14th August 2010. This permission to remain was renewed for a further three year period valid to 14th August 2013. These renewal decision letters were dated 4th August 2010.
The renewal decision letters referred to advised the persons concerned of the requirement that they apply for further renewal of their permission to remain one month before their existing permission expired. Given that there is no record of any such renewal applications having been lodged to date, it is recommended that the persons concerned would proceed to do so without further delay.
The onus is on the persons concerned to apply for the renewal of their respective permission to remain. Such renewal applications must be made in the first instance in order for them to be considered by the immigration authorities.
The INIS has no record of the third named dependant of the person concerned.
Queries in relation to the status of individual immigration cases may be made directly to the INIS of my Department by e-mail using the Oireachtas Mail facility which has been specifically established for this purpose. This service enables up to date information on such cases to be obtained without the need to seek information by way of the Parliamentary Questions process. The Deputy may consider using the e-mail service except in cases where the response from the INIS is, in the Deputy’s view, inadequate or too long awaited.
59. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Justice and Equality the status of a deportation order in the case of a person (details supplied); and if she will make a statement on the matter. [23863/17]
View answerI am advised by the Irish Naturalisation and Immigration Service (INIS) of my Department that the person concerned is the subject of a Deportation Order made on 3rd February 2010.
Representations were received from the persons' legal representative, pursuant to Section 3 (11) of the Immigration Act 1999 (as amended), to revoke the Deportation Order. All relevant aspects of the case will be carefully considered before a decision is made. The Deputy might wish to note that any such decision will be to 'affirm' or to 'revoke' the existing Deportation Order. In the mean-time, the Deportation Order remains valid and in place.
The Deputy may wish to note that queries in relation to the status of individual immigration cases may be made directly to the INIS of my Department by e-mail using the Oireachtas Mail facility which has been specifically established for this purpose. This service enables up to date information on such cases to be obtained without the need to seek information by way of the Parliamentary Questions process. The Deputy may consider using the e-mail service except in cases where the response from the INIS is, in the Deputy’s view, inadequate or too long awaited.
60. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Justice and Equality the status of the upgrade of residency status in the case of a person (details supplied); and if she will make a statement on the matter. [23864/17]
View answerI am advised by the Irish Naturalisation and Immigration Service (INIS) of my Department that a letter granting an immigration permission (Stamp 3) issued to the person mentioned by the Deputy on 20 March 2017.
If this person meets the criteria for permission under the De Facto partnership scheme, as published on our website, www.inis.gov.ie, it is open to this person to make such an application. The application form and relevant information is available on our website.
Might I remind the Deputy that queries in relation to the status of individual immigration cases may be made directly to the INIS of my Department by e-mail using the Oireachtas Mail facility which has been specifically established for this purpose. This service enables up to date information on such cases to be obtained without the need to seek information by way of the Parliamentary Questions process. The Deputy may consider using the e-mail service except in cases where the response from the INIS is, in the Deputy’s view, inadequate or too long awaited.
61. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Justice and Equality the reason for selecting a device (details supplied) as the roadside kit for drug testing drivers; if An Garda Síochána has been advised that it cannot be used in temperatures under five degrees celsius; the measures which will be taken to ensure accurate testing can occur at night during colder months; and if she will make a statement on the matter. [23882/17]
View answerThe Department of Transport, Tourism and Sport has advised that the Medical Bureau of Road Safety (MBRS) has statutory responsibility for the approval, supply and testing of the Draeger DrugTest 5000 and is providing training to An Garda Síochána in the use of these devices. As such, I have referred your question to the MBRS for direct reply.
62. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Justice and Equality further to Parliamentary Questions Nos. 75 and 76 of 30 March 2017, if she will provide a breakdown of the additional €20.7 million spend on a site (details supplied) since the initial purchase in 2005; the annual cost of maintaining and running the site; and if she will make a statement on the matter. [23883/17]
View answerThe €20.7 million spend refers to costs incurred up to May, 2015 on the Thornton Hall site over and above the land purchase costs of €29,900,000 in 2005 mentioned in my response to Dáil question numbers 75 and 76 of 30 March 2017. A detailed breakdown of this sum of €20.7 million is contained in Chapter 9 of the Comptroller & Auditor General's Report on the Accounts of the Public Services in 2014 (No. 9 Development of Prison Accommodation in Dublin). This C&AG Report, which explains in further detail the background to the Thornton project, is available on its website - www.audgen.gov.ie. The Public Accounts Committee subsequently examined this issue in November 2015.
In relation to ongoing maintenance and other costs, the information is currently being collated and I will respond to the Deputy directly as soon as the information is to hand.
The following deferred reply was received under Standing Order 42A.
I refer to Parliamentary Question Nos. 97 and 62 for answer on 16 May 2017 and 18 May 2017 respectively, in which you requested the levels of maintenance and key ongoing works on the Thornton Hall site, the annual cost of same over the past 12 years and to date in 2017 and the annual cost of maintaining and running the site.
The table outlines the total costs incurred since 2005 in respect of maintenance, repairs and utilities which are the main costs in terms of ongoing maintenance of the site.
Ongoing Maintenance, Repairs & Utilities
|
2013 |
€181,280 |
|
2014 |
€248,190 |
|
2015 |
€117,930 |
|
2016 |
€ 62,001 |
|
2017 (to 15 June |
€ 51,514 |
I hope this information is of assistance.
63. Deputy Joan Burton asked the Minister for Finance when he expects the partial sale of a bank (details supplied) to be realised; if he will use the funds generated from the sale towards essential capital investment in the event of a shortage of capital investment here; and if he will make a statement on the matter. [23595/17]
View answerThe Program for a Partnership Government allows for the sale of not more than 25% of any bank before the end of 2018 (plus any over-allotment option). I have not yet made any decision to proceed with a sale of shares in AIB. In order to proceed with an IPO I would need to be satisfied that the market is prepared to put a fair and reasonable value on the banks equity, bearing in mind the bank's current performance, its future prospects and the outlook for the Irish economy. I would do so on the advice of my officials in my department and our financial advisors.
As I have outlined previously, the sale of financial assets, such as bank shares are transactions which do not result in a beneficial impact to the General Government Balance (GGB) under EUROSTAT rules. This is due to the fact that this type of disposal is classified as a financial transaction whereby it is essentially the exchange of one form of asset (such as shares, equities, loans) for another kind (cash). Consequently, the sale of any shareholding in AIB would not count as general government revenue. Therefore, there would not be increased capacity to spend on capital projects as a result of the sale of shares in AIB without affecting the general government balance.
While not improving the deficit, cash proceeds arising from any sale of shares would result in a reduced requirement for Exchequer borrowing which ultimately results in lower debt. A lower debt level is not only beneficial in terms of the fiscal sustainability of the State but would also lead to reduced interest payments in future years.
As public indebtedness rose partly due to the recapitalisation of the Banks, the appropriate way of treating one-off revenue from divesting the State of its banking assets is to use these proceeds towards debt reduction. These disposals would also help contain contingent liabilities for the State.
As a further comment, though unrelated to banking policy, I have previously acknowledged the need for increased public investment. The current Capital Plan sets a baseline from which this Government intends to increase investment in critical infrastructure, and in areas such as housing and health, as the Deputy has identified, into the future. As outlined in the 2017 Estimates, gross voted capital expenditure will increase to €4.5 billion in 2017. This represents an increase of almost €400 million in comparison to the 2016 outturn. By 2021 it is envisaged that Gross Voted Capital Expenditure will reach €7.3 billion, an increase of over 100 per cent in comparison to its level in 2014. Based on my Department’s GNP forecasts, Ireland's Exchequer public investment will reach 2.7% of GNP by 2021. These increases in investment over the coming years will be allocated to identified priorities on the basis of the outcome of the review of the Capital Plan currently underway.
64. Deputy Joan Burton asked the Minister for Finance if the Central Bank's order to lending banks to return affected customers to an appropriate tracker rate of interest has been undertaken; if his attention has been drawn to the fact that banks are free to come up with their own offers of compensation and that many banks are not offering customers effective redress; and if he will make a statement on the matter. [23596/17]
View answerAs the Deputy will be aware, the Central Bank of Ireland published a report providing an update on the Tracker Examination on 23 March.
As the Central Bank has set out in the report:
- approximately 9,900 customer accounts had been identified as impacted by lenders, as part of the Examination, as at end February 2017;
- lenders had commenced contacting impacted customers identified as at end February 2017 and had rectified the interest rates applied to such impacted customers’ accounts, thus stopping further detriment; as at the date of the Report, interest rates had been rectified on more than 90% of the accounts that require such rectification;
- to end February 2017, approximately €78m had been paid in redress and compensation to approximately 2,600 impacted customers identified as part of the Examination.
The Central Bank invoked its powers under Section 22 of the Central Bank (Supervision and Enforcement) Act 2013 to set specific timelines for lenders to complete Phase 2 of the Examination, the last of which will be completed no later than end September 2017.
Regarding compensation, the Central Bank does not have the statutory power to set compensation levels or to compel lenders to implement redress and compensation programmes in respect of failures that occurred prior to the introduction of the Central Bank (Supervision and Enforcement) Act 2013 (the “2013 Act”). However, as part of the Examination framework, where customer detriment is identified, the Central Bank has clearly articulated its expectations of lenders to provide appropriate redress and compensation to impacted customers in line with prescribed Principles for Redress. The Principles for Redress are designed to ensure that impacted customers receive appropriate redress and compensation in a timely manner.
Key elements of the Central Bank’s expectations in respect of redress and compensation for impacted customers include:
- any harm is stopped at the earliest possible time after each group of impacted customers is identified;
- the interest rates applied to impacted customers’ accounts revert to the appropriate tracker interest rate or impacted customers are given the opportunity to revert to such a rate where relevant;
- redress will be provided to impacted customers to return them to the position they would have been in had lenders’ failures not occurred;
- reasonable compensation, that reflects the detriment suffered by individual customers, is provided;
- redress and compensation is to be paid to impacted customers up front at the point of offer and compensation cannot be reduced by virtue of a customer lodging an appeal; and
- an additional payment is to be provided to impacted customers at the point of offer to enable them to take independent professional advice regarding the redress and compensation offers made to them;
As the Examination continues to progress, the Central Bank will continue to challenge the position a lender has taken in relation to particular groups of customers to ensure the fair treatment of tracker mortgage customers.
The framework of the Examination also provides that lenders should establish an independent appeals process to deal with customers who are dissatisfied with any aspect of the redress and compensation offers that they receive from lenders in respect of these matters. As the Central Bank Principles for Redress provide that all redress and compensation payments are made to customers on an upfront basis, customers can accept the redress and compensation offered and still make an appeal. In addition, the impacted customer has the option of bringing a complaint to the Financial Services Ombudsman or initiating court proceedings.
65. Deputy Joan Burton asked the Minister for Finance his plans to provide financial support to companies and SMEs that may be adversely effected by Brexit; and if he will make a statement on the matter. [23597/17]
View answerBrexit and its aftermath will lead to challenges for SMEs. The exact nature of the impact of Brexit on SMEs is not clear or definitive at present, given the uncertainty surrounding the post Brexit relationship between the UK and the EU. However, SMEs will require support to diversify their exports to reduce their exposure to the UK, re-price their products and services as well as restructuring their cost bases so they can continue trading with the UK even with sterling at a weaker level. The Deputy may rest assured that it is a key Government strategy to ensure State supports enable the growth of Irish SMEs by facilitating access to credit and promoting investment in SMEs. Advisory supports in relation to business planning, such as those provided by the Local Enterprise Offices and Enterprise Ireland, will be particularly vital for assisting SMEs that may be adversely affected by Brexit and will help raise awareness of both private market financial supports and existing State supports that are available.
As the Deputy will be aware there are already significant Government measures to support the financing needs of SMEs and these will be available to assist SMEs deal with the effects of Brexit. SMEs can access lower cost, flexible finance from the Strategic Banking Corporation of Ireland (SBCI). To the end of December 2016, the SBCI has lent €544 million to 12,593 SMEs. The SBCI’s goal is to increase the availability of funding to SMEs at a lower cost and on more flexible terms than has been available in recent times on the Irish market. The SBCI uses an on-lending model; this means it does not lend directly to SMEs. At present, the SBCI has 3 bank and 5 non-bank on-lenders. The SMEs who received SBCI finance are from a variety of business and economic sectors. More than 80% of loans are for investment purposes and the average loan size is €43,200. There is a broad regional spread of the SMEs supported, with 84.8% of them based outside Dublin. As well as the SBCI, there is the Supporting SMEs Online Tool, the Credit Guarantee Scheme, the Microenterprise Loan Fund, Local Enterprise Offices and the Credit Review Office.
The Supporting SMEs Online Tool is a cross-government initiative. By answering eight simple questions, SMEs will receive a tailored list of available Government supports to suit their needs. The Supporting SMEs Online Tool is available at www.supportingsmes.ie.
The Credit Guarantee Scheme encourages additional lending to small businesses by offering a partial Government guarantee to banks against losses on qualifying loans to eligible SMEs. Further information is available on the Department of Jobs, Enterprise and Innovation website.
The Microenterprise Loan Fund, administered by Microfinance Ireland, is an additional source of credit that provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing less than 10 people. Microfinance Ireland works in partnership with the Local Enterprise Offices nationally to administer this fund - (www.microfinanceireland.ie).
The Credit Review Office (CRO) is another government initiative that helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review Office and the bank. The CRO overturns the decision of the bank in more than 50% of the appeals it receives. Further details are available at www.creditreview.ie
My Department is currently working with the Department of Jobs, Enterprise and Innovation, Enterprise Ireland and the Strategic Banking Corporation of Ireland to examine additional policy measures that may be required to assist SMEs deal with the impact of Brexit.
66. Deputy Joan Burton asked the Minister for Finance his plans to ensure that mortgage holders, tenants and SMEs that have loans or credit from non-bank lenders or vulture funds are fully protected; if he will consider extending the provisions of the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 in this regard; and if he will make a statement on the matter. [23598/17]
View answerThere is no agreement on the precise meaning of the term “vulture funds” and it has come to have pejorative connotations. I presume that the Deputy intends referring to private equity funds. The Deputy will be aware that international private equity funds invested much needed capital in our economy during a period of high risk and uncertainty.
The Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted in July 2015. It was introduced by the previous Government to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'.
Under the Act, purchasers of loan books must either be regulated by the Central Bank themselves or else the loans must be serviced by a credit servicing firm that is regulated by the Central Bank. The significant point is that the regulation is focussed at the point of contact with the customer. Therefore relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which came into operation in July 2016. It is also important to highlight that the transfer of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.
As the Deputy will be aware, the Central Bank is now the competent authority for the authorisation and supervision of credit servicing firms. Credit servicing firms must comply with all relevant requirements of financial services legislation, including the various codes and Regulations mentioned already and Fitness and Probity Standards (including minimum competency requirements).
In addition to compliance with Central Bank codes of conduct, credit servicing firms will have to demonstrate to the Central Bank that they have:
- Robust governance and adequate resources to ensure compliance;
- Agreements with loan owners that enable the credit servicing firm to fully comply with its obligations under Irish financial services legislation; and
- Adequate and effective control of loan servicing in the State to enable Central Bank oversight.
In addition, the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 ensures that a regulated credit servicing firm cannot do something, or fail to do something, which would be a prescribed contravention if performed, or not performed, by a retail credit firm. The legislation also prevents the owner of credit from instructing a regulated credit servicing firm to perform such an action. Therefore the borrower is protected because the owner cannot give an instruction that would breach the rules but also the instruction cannot be implemented by the regulated credit servicer, over whom the Central Bank has oversight as a regulated entity.
Nonetheless, my Department will continue to keep all relevant legislation under review in order to ensure that borrowers whose loans have been sold are properly protected and do not lose any protections that they previously enjoyed. In addition, the Department of Finance expects that the Central Bank, as regulator of credit servicing firms, will be vigilant in this area and raise any specific instances where they have found consumers have not had their protections upheld or that their positions have been disadvantaged.
67. Deputy Joan Burton asked the Minister for Finance the amount of funding which has been made available through the Ireland Strategic Investment Fund for social and affordable housing provision; if he is satisfied with the current rates of interest being charged to borrowers through the fund; if he will review the operation of the mechanisms through which credit is accessed from the fund; and if he will make a statement on the matter. [23599/17]
View answerIn line with Rebuilding Ireland commitments, the Ireland Strategic Investment Fund (ISIF) and a number of key Government Departments are examining the feasibility of establishing a funding vehicle, in conjunction with the private sector, which could facilitate investment in social and affordable housing.
Key factors which must be addressed to facilitate ISIF involvement in such projects include: the commercial viability of proposals; Eurostat treatment of fund structures which receive a substantial proportion of their revenue from Government sources; and the ability to create off-balance sheet vehicles outside of the existing PPP model. Engagement with the other stakeholders in both the public and private sector, including with Eurostat, is ongoing.
ISIF informs me that whilst it has made progress in conjunction with the other stakeholders in the public and private sectors in respect of this opportunity, as well as other potential social housing investment opportunities, there are still considerable hurdles including commerciality and balance sheet treatment as identified in Rebuilding Ireland. These hurdles must be overcome before any such proposals can be brought to a successful conclusion.
Separately, ISIF is making a very substantial contribution to new private housing supply which is critical in terms of meeting the pent up demand for housing across all sectors of the market. In line with its double bottom line mandate, ISIF has already invested in a number of significant financing platforms and projects in the construction sector, and is actively examining other investment opportunities.
ISIF has total investment commitments to housing investment vehicles of €404m comprising €325m in Activate Capital, €25m in the Ardstone Residential Partnership and €54m to student accommodation in DCU. In addition ISIF has committed €125m in total to more general real estate investment vehicles, including €75m to the Wilbur Ross Cardinal Commercial Real Estate Mezzanine Debt Fund and €50m to Quadrant Real Estate Advisors, both of which to date have completed some investment in housing. Through these ISIF-supported projects, a total of 8,400 housing units is expected to be delivered in the near term (a small portion of which has already been delivered).
In addition, ISIF's current near term pipeline of potential housing projects, including in the build-to-rent sector and off-campus student accommodation as well as a smaller project that may have the ability to deliver some affordable housing, indicates potential to deliver a further 8,700 units in total.
ISIF is working with local authorities and private developers on the financing of housing-enabling infrastructure. Its pipeline includes one private sector pilot housing infrastructure project (totalling approximately 3,000 units) which is actively being progressed. Public sector projects (also totalling approximately 3,000 units) are currently being considered – the extent to which these projects can be progressed will in part depend on whether Local Infrastructure Housing Activation Fund (LIHAF) or other forms of financing can be leveraged to complement ISIF financing.
ISIF is also currently engaging with a range of Higher Education Institutions ("HEIs") in respect of the provision by them of on-campus student accommodation.
ISIF invests on a risk adjusted basis in the various housing financing platforms and these platforms, in turn, provide finance, also on a risk adjusted basis, to developers, which can be equity or debt according to the business model of each platform. The interest rate applied to any individual debt financing arrangement is related to the level of risk and other investment factors in the specific underlying housing development proposal.
68. Deputy Joan Burton asked the Minister for Finance the preparations and contingency plans his Department has put in place in the event of Brexit; and if he will make a statement on the matter. [23600/17]
View answerThe Department of Finance has been assessing and preparing for the impact of a British exit from the European Union since well before the referendum on 23 June 2016. Work was carried out in the Department to assess the potential economic and financial sector implications arising, including through the ESRI-Department of Finance research programme study published in November 2015 titled 'Scoping the Possible Economic Implications of Brexit on Ireland'. This work was undertaken within the whole-of-Government framework established by the Department of the Taoiseach.
Following the result of the UK referendum and to prepare for the forthcoming negotiations, work has been intensified across the whole of Government level including in my own Department. A Brexit Unit within the EU and International Division was established in July 2016 to oversee and coordinate this work and to act as a key liaison point with the Department of the Taoiseach, in particular. In addition, the Department of Finance staff complement in the Irish Permanent Representation to the EU in Brussels has been strengthened. The challenges which we face as a result of Brexit is mainstreamed across all divisions of my Department and this is reflected in business planning.
As part of Budget 2017, the Department of Finance published the Economic and Fiscal outlook which presented a full macroeconomic projection including updated estimates of economic growth, the public finances and the fiscal space, taking account inter alia of the impact of Brexit. In addition, the Department published detailed analysis of sectoral exposure to Brexit across the economy. Utilising the Department of Finance sectoral exposure analysis, Budget 2017 included a number of measures to respond to the challenges of Brexit, to mitigate future risks, and to support any opportunities that might arise. These include measures to support SMEs, entrepreneurship, agri-food and Irish exporters.
More recently, the Department has worked with the ESRI to deepen the macroeconomic analysis and a report titled 'Modelling the Medium to Long Term Potential Macroeconomic Impact of Brexit on Ireland' was published in November 2016. In April 2017, updated macroeconomic forecasts were published by my Department, as part of the Stability Programme Update.
We know from our own published research that the potential impact on the Irish economy is significant. It is important to recognise that the full impact of the UK's exit is only expected to materialise over time. As we cannot control the international environment, we will need to continue to improve our competitiveness, including by focussing on costs we can control, by boosting our productivity and ensuring sustainable public finances.
The best and most immediate policy under the Government's control to counter the likely negative economic impacts of Brexit is to prudently manage the public finances in order to ensure that Ireland's economy continues to remain competitive in the face of future economic headwinds.
In this context, in Budget 2017, I signalled a lower debt target of 45 per cent of GDP for the mid-to-late 2020s. This will help to provide an additional fiscal 'shock absorber' capacity to the public finances to help withstand any shock including that of the impact of Brexit. It will also complement the contingency or 'rainy day' fund which will be established following the achievement of a balanced budget in 2018 and will help provide a further counter-cyclical buffer.
Continued prudent management of the public finances is a critical aspect of the Government’s overall strategy to mitigate the economic challenges associated with Brexit, as outlined in the Government’s Position paper published on 2 May. In that regard, as the Deputy will be aware now that the EU’s initial negotiating position is clear, the Government will intensify its focus on the economic implications of Brexit, including on domestic policy measures to reinforce the competitiveness of the Irish economy, to protect it from potential negative impacts of Brexit.
Separately, Brexit will provide opportunities for Ireland to increase its share of financial services based inward investment. Minister of State Eoghan Murphy T.D. has responsibility for Financial Services, including the implementation of the IFS2020 Strategy. The IFS2020 Strategy is a dynamic and evolving strategy. Brexit both underpins the IFS2020 Action Plan for 2017 and also features in the individual measures to achieve the strategic priorities of IFS2020. We will continue to leverage our IFS2020 Strategy to maximise any opportunities.
The work being done by the Department will be an important input to ensuring that Ireland will be in a position to counter any negative economic impact arising from Brexit and to ensure that Ireland's interests are protected in the upcoming negotiations at EU level.
The Department will continue to monitor the economic impacts, to carry out relevant analysis and to frame budgetary policy advice in this new context.
69. Deputy Joan Burton asked the Minister for Finance the discussions his Department has had with the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs regarding the investigation of the establishment of a local public bank network as committed to in the programme for Government; and if he will make a statement on the matter. [23601/17]
View answerAs the Deputy will be aware, the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs is the lead Department in respect of the Programme for Government commitment to thoroughly investigate the Sparkassen model of local public banks that operate within well-defined regions.
The Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs, with the assistance of officials from my Department, undertook a consultation process, engaging with stakeholders. This consultation was completed at the end of March and it involved meetings with interested parties including Sparkassen, Irish Rural Link and the Public Banking Forum of Ireland, who put forward proposals for local public banking in Ireland.
Officials from both Departments are now working to prepare a report for the Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs and myself. The report will outline the findings and conclusions of the investigation into the Sparkassen model of local public banking. It is anticipated that it will be completed by the end of the first half of this year. This work will form the basis for an informed policy consideration of local public banking.
70. Deputy Joan Burton asked the Minister for Finance the discussions his Department has had with the European Investment Bank, EIB, and other Government Departments to establish an off balance sheet special purpose vehicle to draw down funding from the EIB to facilitate large scale mixed social and private residential development; and if he will make a statement on the matter. [23602/17]
View answerISIF and the wider NTMA is examining the feasibility of establishing, in conjunction with the private sector, a Housing Investment Fund, in a way that is both off-balance sheet and is commercially viable. This vehicle should be capable of funding the delivery of substantial new mixed-tenure residential developments, comprising social and private housing.
Whilst a major objective of any such funding vehicle is to leverage additionality in terms of social housing supply, it is envisaged that a substantial portion of the overall supply of new units may need to be for private housing to meet the commerciality test and to satisfy the requirements of an off-balance sheet investment model.
Although there have been a number of recent proposals in this space from private sector residential investors and developers, none have proven to be either commercial or likely to pass the requirements for an off-balance sheet model.
Engagement with a wide array of key stakeholders in both the public and private sector is ongoing and involves the input of relevant Government departments, the CSO and others. There is ongoing engagement, also, with the European authorities, including Eurostat, and the European Commission.
Initial discussions with the EIB have taken place, and these have explored possible EIB participation in funding the housing model. These discussions follow recent interaction between this Department and ISIF with the EIB regarding EIB support for housing projects in other Member States. Initial discussions and soundings indicate that the EIB is interested in supporting a housing model. Attention is now focused on developing a model which meets the off-balance sheet requirements, and one in which the EIB might participate.
On the occasion of the formal launch of the EIB Group office in Ireland on 9 December 2016, I chaired the first meeting of the EIB-Ireland Financing Group, comprising relevant Government Ministers, heads of agencies and EIB senior management. One of the purposes of the Group is to examine opportunities for using EIB financing and technical assistance to address housing, transport and other infrastructure investment requirements. The Group is supported by three sub-groups of officials and agency representatives, one of which is tasked with addressing issues in the area of Social Infrastructure, including housing.
71. Deputy Joan Burton asked the Minister for Finance the position regarding the EUROSTAT investigation into the establishment by the Government of a bond to finance social housing investment suitable for credit unions to invest their surplus funds in; and if he will make a statement on the matter. [23603/17]
View answerAs previously referred to in Parliamentary Question numbers 191 of 4 April 2017 and 208 of 28 February 2017, the Government has been exploring potential mechanisms that would facilitate investment in social housing, including the off-balance sheet potential of private institutional investment. Ireland Strategic Investment Fund (ISIF) led engagement on the Housing Fund mentioned in Rebuilding Ireland is currently ongoing, with a number of actors including both the Central Statistics Office (CSO) and Eurostat.
The agreed Programme for a Partnership Government recognises the potential role that credit unions can play in housing finance. Officials from both my Department and the Department of Housing, Planning, Community and Local Government have met with credit union representative bodies on a number of occasions to examine how credit unions can assist in the area of social housing. Officials from both Departments have also met with the Central Bank. Separately, communication is ongoing between the Department of Housing, Planning, Community and Local Government and my Department.
On 1 January 2016, I commenced the final sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 (2012 Act) following discussions with credit union representative bodies. Following this commencement the Central Bank introduced the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016, regarding a number of areas including savings, borrowing, lending, investments and liquidity.
The Central Bank has informed me that it has received information regarding proposals for credit unions to provide funding for social housing and is currently engaging with the sector on those proposals. It further stated that while it does not comment on specific proposals, such investments could be facilitated by future regulations made by the Central Bank, where appropriate. Ultimately, any funding mechanisms will have to be put in place in the first instance by the credit unions themselves, with the support of their members, and with agreement of the Central Bank. The Central Bank also stated that it is willing to consider the type of regulations that would be required to facilitate such proposals. However, the Central Bank's key consideration in evaluating such proposals is its statutory mandate to ensure the protection of members' savings by credit unions and to ensure the wellbeing of the sector generally.
Investment regulations made specific reference to section 43 of the Act and to further classes of investments in which a credit union may invest its funds. The regulations provide that investments in projects of a public nature include, but are not limited to, investments in social housing projects. The Central Bank is currently reviewing the investment regulations for credit unions and have published a consultation paper CP109 – Consultation on Potential Changes to the Investment Framework for Credit Unions on 11 May 2017. This consultation paper sets out potential additional investment classes that credit unions may be permitted to invest in, including certain investments in social housing. The Central Bank welcomes views on the appropriateness of these potential investment classes for credit unions and whether there may be additional investment classes which would fit within the appropriate risk profile for credit union investments. The consultation will close on 28 June 2017.
Notwithstanding any potential changes that may be made to the regulations, the legislative requirement for credit unions to ensure investments do not involve undue risk to members' savings will remain the overriding factor which must inform all credit union investment decisions.
72. Deputy Joan Burton asked the Minister for Finance the steps the Revenue Commissioners have taken to identify possible customs posts on the Border; the locations that have been examined for these posts; and if he will make a statement on the matter. [23604/17]
View answerThe Government has published a comprehensive document on ‘Ireland and the negotiations on the UK’s withdrawal from the European Union under Article 50 of the Treaty on European Union’ on 2 May.
The Governments position in relation to the border with Northern Ireland in the context of Brexit is very clear - continued freedom of movement, absence of a hard border, and minimal impact on business and trade are key objectives. Clearly in this regard the closer the trading relationship between the UK and EU is more generally the better.
I would point out that the guidelines for the EU 27 Article 50 negotiation framework, agreed by the Heads of State and Government on 29 April, specifically refer to the need to support and protect the achievements, benefits and commitments of the Peace Process.
In this regard the guidelines recognise the unique circumstances on the island of Ireland, outlining the need for flexible and imaginative solutions, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order.
The Government has welcomed the EU’s negotiating guidelines as reflecting Ireland’s unique concerns and priorities. They express the EU’s continued support for the Peace Process and the need to protect the Good Friday Agreement. They acknowledge the need for flexible and imaginative solutions to avoid a hard border on the island of Ireland. They agree to the recognition of existing bilateral agreements and arrangements between the UK and Ireland, which are compatible with EU law, such as the Common Travel Area.
Ireland has also secured the agreement of its EU counterparts on the need to recognise the unique constitutional status of Northern Ireland and the need to ensure that – should a united Ireland be brought about in accordance with the Good Friday Agreement - the entire territory of such a united Ireland would be part of the European Union.
This is a positive outcome, showing that the Government’s extensive political, diplomatic and official campaign of recent months has been effective in ensuring understanding and recognition of our unique circumstances and specific issues.
Like all Government agencies, the Revenue Commissioners are actively engaged in examining a range of scenarios in order to support Ireland's objectives. The precise arrangements that will apply after Brexit will depend on the outcome of negotiations which will now take place between the EU and UK.
73. Deputy Joan Burton asked the Minister for Finance the discussions he has had with his ECOFIN colleagues in view of the recent developments in respect of the common consolidated tax base; the steps he will take to protect tax sovereignty; and if he will make a statement on the matter. [23605/17]
View answerThe European Commission's proposal for a Common Consolidated Corporate Tax Base (CCCTB) was published in October 2016 and discussed at the November 2016 ECOFIN meeting. During the discussion, which was held in public session, a number of my fellow Ministers gave some initial impressions of the proposal.
At the December 2016 ECOFIN, Council Conclusions were approved in respect of the Commission's wider package which includes the CCCTB proposal but there was no specific discussion of the proposals at that meeting. There remains the possibility of further discussion at ECOFIN on CCCTB under the Maltese Presidency.
The CCCTB is a complex and detailed proposal and Member States need to analyse fully its potential impact on national tax systems. Member States have begun to discuss and debate the various aspects of the proposal in the relevant tax working parties. Ireland is engaging constructively in these discussions while continuing to assess whether it is in line with our long-term interests.
Member States maintain full sovereignty on tax matters and unanimity is required before any proposal can be agreed.
