Pearse Doherty
Question:146. Deputy Pearse Doherty asked the Minister for Finance the estimated impact on the 2018 fiscal space of abolishing the help to buy scheme. [32543/17]
View answerHelp-To-Buy Scheme
Questions (146)
Written answers
At the time of Budget 2017, it was estimated that the Help-to-Buy incentive cost €50 million in 2017 and €40 million in a full year. Therefore, it would be expected that approximately €40 million in fiscal space per annum will accrue when the scheme ends.
My predecessor agreed to commission an independent impact assessment on the effects of the Help to Buy incentive for completion prior to Budget 2018. Following a competitive tender process, Indecon Economic Consultants were appointed in April to undertake this assessment.
This purpose of the project, in general, is to assess whether the policy objectives on the supply of new homes are being met, what impact (if any) the scheme is having on new and second-hand house prices, and what impact the scheme is having on the residential property market generally.
Once received from Indecon, the contents and findings of the report will be considered and I will decide on any appropriate action(s) to take in relation to its findings, in the context of my deliberations as part of the annual budgetary process.
Finally, I would like to reassure members of the public who may be in the process of applying for the Help to Buy incentive, or those who currently have applications pending, that speculation concerning its abolition will not impact negatively on their applications. I would propose to signal well in advance, any proposed changes to the incentive following my consideration of the Indecon report.
Tax Data
Questions (147, 149)
Pearse Doherty
Question:147. Deputy Pearse Doherty asked the Minister for Finance the expected revenue from ending the capital gains tax exemption from the sale of property held within REITs. [32544/17]
View answerPearse Doherty
Question:149. Deputy Pearse Doherty asked the Minister for Finance the expected revenue from introducing a minimum DWT rate of 25% on all dividends paid by REITs. [32546/17]
View answerWritten answers
I propose to take Questions Nos. 147 and 149 together.
I am informed by Revenue that as a result of the low number of REITs established under Irish Law (part 25A of TCA 1997, as amended), they are unable to provide this information due to their obligation to preserve the confidentiality of taxpayer information.
Additionally, information in respect of potential future capital gains from the sale of property of REITs is not available to enable an accurate estimate of the potential gain from the ending of the exemption to be provided. It is also worth noting that REITs are specifically designed to focus on the long-term holding of income producing property. They are not designed to hold development activities, or as a vehicle for short term speculative gains.
Tax Data
Questions (148, 150)
Pearse Doherty
Question:148. Deputy Pearse Doherty asked the Minister for Finance the expected revenue from ending the DWT exemption for non-resident IREF shareholders from dividends related to the sale of property held within an IREF for five years. [32545/17]
View answerPearse Doherty
Question:150. Deputy Pearse Doherty asked the Minister for Finance the expected revenue from introducing a minimum DWT rate of 25% on all dividends paid by IREFs. [32547/17]
View answerWritten answers
I propose to take Questions Nos. 148 and 150 together.
Section 23 of the 2016 Finance Act introduced the Irish Real Estate Fund legislation(IREF) to address concerns regarding the use of funds in Irish property based transactions.
The IREF legislation was the subject of lengthy discussions at both Committee and Report stages of Finance Bill 2016, during which it was emphasised that the IREF legislation will trigger behavioural changes which cannot be predicted.
This position still stands and therefore data in respect of potential revenue related to ending the exemption from IREF withholding tax for non resident IREF shareholders, from dividends related to the sale of property held within an IREF for five years, is not available.
Furthermore, to estimate the yield from this amendment into the future requires predicting changes in property prices. That, coupled with the behavioural changes, mean it would be premature for the Department or Revenue to predict the expected revenue from introducing a minimum rate of 25% IREF withholding tax at this point.
Question No. 149 answered with Question No. 147.
Question No. 150 answered with Question No. 148.
Questions Nos. 151 to 153, inclusive, answered with Question No. 140.
Living Wage Expenditure
Questions (154)
Niall Collins
Question:154. Deputy Niall Collins asked the Minister for Finance the cost of implementing a living wage of €11.70 for all employees directly employed or in agencies funded by his Department; and if he will make a statement on the matter. [32562/17]
View answerWritten answers
I wish to inform the Deputy that the cost of implementing a living wage of €11.70 per hour for all employees directly employed by my Department would be €20,133.89 annually.
With regard to the cost of implementing a living wage of €11.70 per hour for all employees in agencies funded by my department, the Disabled Drivers Medical Board of Appeal is the only body funded by my Department and there would be no additional cost to that organisation if they implemented a living wage of €11.70 per hour for all employees.
Illicit Trade in Fuel and Tobacco Products
Questions (155, 156)
Brendan Smith
Question:155. Deputy Brendan Smith asked the Minister for Finance his plans to introduce new measures to deal with the smuggling of illicit fuel and tobacco products; and if he will make a statement on the matter. [32570/17]
View answerBrendan Smith
Question:156. Deputy Brendan Smith asked the Minister for Finance his plans to introduce additional measures in co-operation with the authorities in Northern Ireland and Britain to deal with the illegal trade in some fuel and tobacco products; and if he will make a statement on the matter. [32571/17]
View answerWritten answers
I propose to take Questions Nos. 155 and 156 together.
The serious threat that fuel fraud and the illicit tobacco trade pose to legitimate business, to consumers and the Exchequer is recognised and I am advised by the Revenue Commissioners that tackling this criminal activity has been one of their priorities over recent years.
Revenue’s comprehensive strategy for combatting the illegal fuel trade has included the introduction of stringent supply chain controls and reporting requirements for fuel transactions, to minimise the scope for fraud. It also included a rigorous programme of enforcement action, underpinned by legislative changes that have been introduced over a number of Finance Acts to strengthen Revenue’s powers for dealing with this kind of fraud. In addition, Revenue and HM Revenue and Customs in the United Kingdom undertook a joint initiative to find a new fiscal marker for use in marked fuels, which was introduced in Ireland and the United Kingdom from the beginning of April 2015.
I understand that the industry view is that the measures implemented to date have been successful in significantly curtailing fuel fraud in Ireland. This view is supported by a significant increase in tax revenues from road diesel over the past three years of the order of €230m. I am also advised that Revenue conducted a National Random Sampling Programme in January 2016, with a view to obtaining an updated picture of the extent of the fuel laundering problem. The programme involved selecting a random sample comprising nearly one in every ten of the 2,500 holders of Auto Fuel Trader Licences (any trader that produces, sells, deals in, or keeps for sale or delivery road diesel is legally obliged to hold such a licence). Road diesel samples were taken from all traders in the programme and tested for the presence of the new marker. No evidence of the new marker was found in any of the samples tested. The random sampling programme was repeated in January 2017 and, again, no evidence of the marker was found. This provides very persuasive evidence that the strategy undertaken in recent years has been successful in addressing and significantly curtailing the laundering problem.
Action is taken against all aspects of the illegal tobacco trade and includes a range of measures to identify and target persons engaged in the supply or sale of illicit products, with a view to seizing the illicit products and prosecuting those involved. Revenue’s multifaceted strategy encompasses ongoing analysis of the nature and extent of the problem, extensive cooperation (including the development and sharing of intelligence) on a national, EU and international basis, use of analytics and detection technologies and optimising the deployment of resources.
A combination of risk analysis, profiling and intelligence and the risk based screening of cargo, vehicles, baggage and postal packages contribute to the effectiveness of Revenue’s goal of intercepting the supply of illicit tobacco products. Revenue also targets the illicit trade in tobacco at post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises.
In addition, and as in the case of fuel, action has been taken through Finance Acts over recent years to ensure that Revenue has the statutory powers necessary for undertaking its important work against the illegal tobacco trade.
In assessing the overall effectiveness in tackling the illegal tobacco trade, a reliable measure is provided by the annual surveys of illegal tobacco products carried out by IPSOS/MRBI for Revenue and the National Tobacco Control Office of the Health Services Executive. The survey in 2016 found that 10% of cigarette packs encountered in the course of the project were illicit down from the levels of 15% and 13% found in 2011 and 2102 respectively.
Revenue works closely with an An Garda Síochána in acting against fuel and tobacco fraud, and the relevant authorities in the State also work closely with their counterparts in Northern Ireland, through cross-border enforcement groups, to target the organised crime groups responsible for a large proportion of this criminal activity. This work is being supported and facilitated by the setting up in 2016, in the framework of “A Fresh Start: the Stormont Agreement and Implementation Plan”, of a Joint Agency Task Force, which includes Revenue as well as An Garda Síochána and their Northern Ireland counterparts. Revenue also works in close cooperation with the relevant authorities in other jurisdictions, the European Anti-Fraud Office and other international bodies and agencies in the ongoing programmes of action at international level to combat both the illicit fuel and tobacco trades.
I am satisfied that Revenue’s work against fuel fraud and the illicit tobacco trade has achieved a considerable level of success, and I am assured that action in these areas will continue to be a high priority. In addition, I can say to the Deputy that I will give careful consideration to any further proposals for legislative change that may be brought forward by Revenue to enhance the capacity to deal effectively with fraud and criminality in these areas.
Banking Sector Regulation
Questions (157)
Aindrias Moynihan
Question:157. Deputy Aindrias Moynihan asked the Minister for Finance the process in place to prevent a monopoly by one or two Irish banks in the retail banking sector. [32584/17]
View answerWritten answers
The Programme for Partnership Government places consumers at the centre of the Government’s banking sector policies by focusing on the strengthening of consumers’ rights and knowledge, and fostering greater competition in credit provision through supporting non-bank credit providers and reducing the State's ownership of the banking system.
Statutory bodies play an important role in achieving these Government objectives. The Competition and Consumer Protection Commission (CCPC) has a dual mandate to enforce competition and consumer protection law in Ireland. Its mission is to make markets work better for consumers and businesses. A key aspect of consumer protection in relation to retail banking is ensuring that institutions are not abusing their market power and that competition is protected and enhanced in the long term interests of consumers. In that context, the CCPC recently published an in depth review of the residential mortgage market and set out a number of short, medium and long term options which could allow for greater competition from new entrants in the mortgage market, and could also encourage lenders to compete more vigorously on price, quality and innovation.
Furthermore, commercial banks are not the only option available to retail consumers. For example, the credit union sector offers sources of credit for the mutual benefit of its members at a fair and reasonable rate of interest.
The State is also promoting alternative 'non-bank' financing solutions in order to encourage competition in the banking sector. While this is initially focused on the SME sector, the increased competition will lead to improvements in the financial sector overall. In this regard, the Strategic Banking Corporation of Ireland (SBCI) is Ireland’s National Promotional Institution for SMEs, with a strategic mission to deliver effective financial supports to Irish SMEs that address failures in the Irish credit market.
The SBCI began lending in March 2015. To the end of March 2017, the SBCI has lent out €657 million to nearly 15,300 SMEs supporting the employment of over 67,000 people. SMEs in all sectors of the Irish economy benefit from SBCI finance through has three bank and five non-bank on-lenders. Most of the SMEs supported by the SBCI are based in all regions of the country, with 85% of them outside Dublin.
The SBCI is working to develop a more diverse range of on-lenders and innovative products to meet the evolving requirements of the SME finance market and contribute to a sustainable and competitive economy.
Moreover, the recent disposal by the State of 28.8% of its shareholding in AIB will not only help reduce our elevated national debt but, I believe, can also foster further competition in the Irish banking market, by removing any perception of State interference that might dissuade new entrants. This is a view that has also been highlighted by the CCPC in their recent ‘Options for Ireland’s Mortgage Market’ paper, in which they highlighted that the clear policy position as regards the sale of the State’s shareholdings in AIB has, “…also given a large degree of confidence to international investors and potential new entrants, who might otherwise have viewed State ownership as a real barrier to entry.”
The Central Bank is also playing an important role in protecting consumers, as identified in the Bank’s mission statement of ‘Safeguard Stability, Protect Consumers’. Since the widespread reforms that took place following the financial crisis, Ireland is now widely recognised as having a well regulated financial services sector, an important pillar underpinning the soundness of the banking sector and which is necessary to foster greater competition.
The Consumer Protection Directorate aims to deliver on its consumer protection mandate in the context of three important desired consumer protection outcomes:
- a positive consumer-focused culture that is embedded and demonstrated within all firms;
- a consumer protection framework that is fit for purpose and ensures that consumers’ best interests are protected; and
- regulated firms that are fully compliant with their obligations and are treating their customers, existing and new, in a fair and transparent way.
This framework puts the consumer at its centre, where the focus of firms must be on delivering positive consumer outcomes within a regulatory framework that is fit for purpose.
Banking Sector Data
Questions (158)
Aindrias Moynihan
Question:158. Deputy Aindrias Moynihan asked the Minister for Finance the percentage of annual turnover nationally transacted by a bank (details supplied). [32585/17]
View answerWritten answers
All information in relation to AIB's financial performance is contained within the bank's annual report. The AIB annual report for 2016 can be found at the following link:
https://aib.ie/content/dam/aib/investorrelations/docs/resultscentre/annualreport/annual-financial-report-2016.pdf
I would draw the Deputy's attention to page 24 in particular which sets out the bank's Summary Income Statement for 2016 with a 2015 comparative.
Banking Sector Data
Questions (159)
Aindrias Moynihan
Question:159. Deputy Aindrias Moynihan asked the Minister for Finance the percentage of annual turnover nationally transacted by a bank (details supplied). [32586/17]
View answerWritten answers
All information in relation to Bank of Ireland's financial performance is contained within the bank's annual report. The Bank of Ireland annual report for 2016 can be found at the following link:
https://investorrelations.bankofireland.com//wp-content/assets/BOI-Annual-Report-2016.pdf
I would draw the Deputy's attention to page 187 in particular which sets out the bank's income statement for 2016 with a 2015 comparative.
Official Engagements
Questions (160)
Thomas P. Broughan
Question:160. Deputy Thomas P. Broughan asked the Minister for Finance his plans to meet the US Treasury Secretary, Mr. Steven Mnuchin; and if he will make a statement on the matter. [32593/17]
View answerWritten answers
My predecessor as Minister for Finance, Mr Michael Noonan T.D., had planned to meet with US Treasury Secretary Mnuchin in April 2017 during his visit to Washington, D.C. for the Spring Meetings of the World Bank Group and the International Monetary Fund. Unfortunately, it was not possible to schedule a bilateral meeting with Secretary Mnuchin on that occasion.
In my new role as Minister for Finance, I intend to engage in a programme of working visits overseas. This will include a visit to the United States during which I hope to schedule a meeting with my counterpart, Secretary Mnuchin.