Written Answers Nos. 39-58
39. Deputy Niall Collins asked the Tánaiste and Minister for Foreign Affairs and Trade the number of officials and advisers who travelled from his Department to the launch of the NDP, NPF in County Sligo; the cost of same; and if he will make a statement on the matter. [9150/18]
View answerOne adviser and one official travelled from my Department to the launch of the National Development Plan 2018 – 2027 and National Planning Framework in County Sligo. To date no related travel costs have been incurred by my Department. In line with relevant circulars issued by the Department of Public Expenditure and Reform, officers are entitled to claim travel and subsistence expenses associated with their attendance.
40. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade the recent discussions he has had with authorities in the United States of America on the appointment of a special envoy to Northern Ireland; and if he will make a statement on the matter. [9197/18]
View answerSuccessive US Administrations have provided immensely valuable support to the peace process over the last three decades, and this support continues to be provided by the current US Administration, as well as by our many friends in Congress. The Government strongly appreciates the sustained engagement by the current US Administration, including by the US State Department, in relation to Northern Ireland and we look forward to this continuing into the future. In this regard, the Government would very much welcome the appointment of a Special Envoy for Northern Ireland by the current Administration, as part of its continuing support for the Peace Process. I will be meeting with members of the US Administration in Washington tomorrow.
With regard to the Peace Process and the current situation in Northern Ireland, I will be emphasising the importance of continued support and engagement by the US Administration and Congress as efforts continue to get the devolved, power-sharing institutions of the Agreement operating again as quickly as possible.
I will also be underlining that, notwithstanding the current challenges, the twentieth anniversary in April of the signing of the Good Friday Agreement will be a very important moment to recognise and affirm the achievement of lasting peace in Northern Ireland, as well as the transformation in political relationships which the Agreement has enabled.
This has been achieved with the constant and immensely valuable support and friendship of the United States Government and people, every step of the way over the last three decades. To protect and further this historic collective achievement, all of us with responsibilities, interest and influence should continue to work to advance peace and reconciliation, with the Good Friday Agreement as the unshakeable foundation of the Peace Process.
41. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade the proposals there are to have talks resumed in relation to the need to have the Northern Ireland Assembly and Executive restored; and if he will make a statement on the matter. [9198/18]
View answerAs co-guarantor of the Good Friday Agreement, the Government, working with the British Government, has spared no effort in supporting and facilitating talks on the formation of a new Executive, over many months. Fully functioning, devolved, power-sharing Institutions are the only way forward for Northern Ireland, and are urgently required. Last week’s developments in Stormont are of serious concern to all of us who want to see the establishment of a functioning, power-sharing Executive in Northern Ireland, and the other Institutions of the Good Friday Agreement.
The Government is working with the British Government to see if there is any prospect of re-engagement with the parties in the period ahead.
The Taoiseach spoke with Prime Minister May on Monday and emphasised the Government's full commitment to the Good Friday Agreement, and its determination to secure the effective operation of all its institutions.
I spoke with the Secretary of State for Northern Ireland on the same day as part of our regular engagement, as we work to seek a way forward from the current impasse in the discussions to secure the formation of a new Executive.
As co-guarantor of the Agreement, the Government will continue to engage with the British Government and the political parties in Northern Ireland to support the urgent formation of a new Executive by the mandated political parties. The Taoiseach and I met with Sinn Féin on Monday and we are also keeping in contact with the other parties.
The Government’s firm position is that the Good Friday Agreement and subsequent Agreements must be implemented in full, and in this context the Taoiseach and I have been clear that the Government does not want to see the introduction of direct rule in Northern Ireland.
As co-guarantors of the Good Friday Agreement, the British and Irish Governments have an obligation to uphold and protect the letter and spirit of that Agreement, and we will also be considering how best to do so in the current situation.
42. Deputy Brendan Smith asked the Minister for Finance his plans to improve the criteria for persons wishing to avail of the primary medical certificate; and if he will make a statement on the matter. [9204/18]
View answerThe Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, payment of a fuel grant, and an exemption from Motor Tax.
To qualify for the Scheme an applicant must be in possession of a Primary Medical Certificate. To qualify for a Primary Medical Certificate, an applicant must satisfy one of the following conditions:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg; or
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The Scheme represents a significant tax expenditure costing €65 million in each of 2016 and 2017 (excluding motor tax foregone). From time to time I receive representations on behalf of individuals who believe they would benefit from the scheme but do not qualify under the criteria. While I have sympathy for such cases, given the scale and scope of the scheme, there are no plans to review the medical criteria eligibility at this time.
Finally, I would like to point out that the Government's legislative programme for 2018 includes the Health (Transport Support) Bill which provides for a scheme to make individual payments as a contribution towards transport costs to persons with severe disabilities on a low income who cannot access public transport. The legislation is being brought forward by my colleague the Minister for Health. Persons who do not meet the medical criteria for the Disabled Drivers and Disabled Passengers Scheme may qualify for the proposed Transport Support Scheme.
43. Deputy Róisín Shortall asked the Minister for Finance the number of tenancies in which a 100% interest relief deduction was claimed under section 97(2K) of the Taxes Consolidation Act 1997 as inserted by section 15 of the Finance Act 2015 in each of the years since the inception of this provision; and the cost to the Exchequer in each of these years. [9211/18]
View answerFinance Act 2015 introduced a new relief for landlords who commit to let their property to tenants in receipt of social housing supports for a minimum period of three years. It allows landlords to claim an increased expense deduction for mortgage interest in their rental accounts – they will be able to claim 100% of relevant mortgage interest, in place of the 85% generally allowed at present in respect of rented residential property (increased from 80% in 2017 and 75% in 2016).
I am advised by Revenue that data on the number of taxpayer units availing of the 100% interest relief reduction on residential property, and the number of tenancies that this relates to, is not yet available. The provisions under section 97(2K) of the Taxes Consolidation Act 1997 came into effect from 1 January 2016 and, as part of the eligibility criteria, the length of the tenancy must be three years. Therefore, the earliest date on which a benefit may accrue is 1 January 2019. Information on the numbers or cost will not available until tax returns for 2019 are filed, which will be in late 2019 or 2020 depending on the relevant Income Tax or Corporation Tax periods.
However, the Deputy may be aware that one of the criteria to avail of the relief is that a commitment must be registered with the Residential Tenancies Board (RTB) at the commencement of the three-year period. Data from the RTB indicate that uptake of the scheme to date has been positive, with over 2,991 tenancy commitments registered to date. Qualifying tenancies have been registered in all 26 counties and the numbers are set out in the table below:
|
County |
Number of Statutory Declarations up to February 2018 |
% of Total |
|
Dublin |
1006 |
33.6% |
|
Cork |
314 |
10.5% |
|
Galway |
145 |
4.8% |
|
Donegal |
114 |
3.8% |
|
Kildare |
146 |
4.9% |
|
Mayo |
85 |
2.8% |
|
Limerick |
107 |
3.6% |
|
Waterford |
93 |
3.1% |
|
Wexford |
101 |
3.4% |
|
Tipperary |
95 |
3.2% |
|
Meath |
98 |
3.3% |
|
Louth |
96 |
3.2% |
|
Kerry |
59 |
2.0% |
|
Carlow |
69 |
2.3% |
|
Wicklow |
59 |
2.0% |
|
Clare |
44 |
1.5% |
|
Sligo |
45 |
1.5% |
|
Kilkenny |
44 |
1.5% |
|
Roscommon |
33 |
1.1% |
|
Offaly |
31 |
1.0% |
|
Westmeath |
57 |
1.9% |
|
Longford |
32 |
1.1% |
|
Laois |
45 |
1.5% |
|
Leitrim |
24 |
0.8% |
|
Cavan |
32 |
1.1% |
|
Monaghan |
17 |
0.6% |
|
Total |
2991 |
|
44. Deputy Pearse Doherty asked the Minister for Finance the reason his Department is failing to release two freedom of information requests (details supplied) that were requested in August 2017; and if he will make a statement on the matter. [9046/18]
View answerMy Department endeavours to comply with the decision deadlines set out in the Freedom of Information Act 2014. However, the scope of work of the Department, especially in preparing the Budget, the Finance Bill, and associated Oireachtas briefings, sometimes delays the processing of freedom of information requests.
In relation to the two freedom of information requests referred to by the Deputy, I can confirm that the requests concerned are under active consideration, and replies are expected to issue in relation to them shortly.
45. Deputy Pat Deering asked the Minister for Finance if HRI tax relief can be claimed for work carried out five years ago in circumstances in which the person was unemployed at the time and not paying income tax but returned to work in 2017 and is paying tax again. [9050/18]
View answerAs the Deputy will be aware, the Home Renovation Incentive (HRI) provides a tax relief by way of an income tax credit in respect of repair, renovation or improvements works on principal private residences or rental properties where the works are carried out by tax compliant contractors. The repair, renovation or improvement works must have been carried out on or after 25 October 2013 and on or before 31 December 2018. If works were in progress on 25 October 2013, only the portion of the works carried out and paid for on or after 25 October 2013 qualifies for the relief.
I am advised by Revenue that where all conditions of the incentive are satisfied, the relief is given by way of a tax credit split evenly over the two years following the year in which the works are paid for. Where a claimant does not have sufficient income tax liability to utilise the tax credit in full over the two years following the year in which the works were paid for, then the credit is carried forward to subsequent years until it has been used in full. The amount of the credit used in any tax year cannot be greater than the amount which reduces the income tax charged on the claimant in that tax year to nil.
46. Deputy Thomas Byrne asked the Minister for Finance the number of claims for a VAT refund under the Value Added Tax (Refund of Tax) (No. 15) Order 1981 in each of the past four years. [9065/18]
View answer47. Deputy Thomas Byrne asked the Minister for Finance the amount in money terms of VAT refunds granted by the Revenue Commissioners under the Value Added Tax (Refund of Tax) (No. 15) Order 1981 in each of the past four years. [9066/18]
View answerI propose to take Questions Nos. 46 and 47 together.
The Value Added Tax (Refund of Tax) (No. 15) Order 1981 provides for the refund of VAT on certain aids and appliances used by disabled persons. I am advised by the Revenue Commissioners that the following table sets out the number of VAT claims and amounts refunded in accordance with the Order for the years 2014 to 2017 (inclusive).
|
|
No of Claims |
VAT Amount Refunded |
|
2014 |
4,315 |
€2,979,405.11 |
|
2015 |
3,949 |
€3,949,169.27 |
|
2016 |
5,065 |
€4,191,468.18 |
|
2017 |
5,813 |
€4,803,852.96 |
48. Deputy Thomas Byrne asked the Minister for Finance the reason motor vehicles are excluded from the Value Added Tax (Refund of Tax) (No. 15) Order 1981. [9067/18]
View answerThe Value-Added Tax (Refund of Tax) (No. 15) Order, 1981 enables VAT paid on qualifying goods, such as aids and appliances constructed or adapted for use by a disabled person, to be refunded where the goods are purchased for the exclusive use of disabled persons suffering a specified degree of disablement. I am advised by The Revenue Commissioners that motor vehicles are excluded from the Order because the qualifying provisions for the Disabled Drivers and Passengers Scheme (contained in Statutory Instrument No. 353 of 1994 Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994) provide for a refund of VAT and residual vehicle registration tax for disabled drivers, passengers and organisations.
49. Deputy Michael McGrath asked the Minister for Finance if the Exchequer borrowing requirement will be revised in each of the years 2018 to 2027, further to the announcement of the national development plan 2018 to 2027; the general debt developments (details supplied), in tabular form; the amount by which the Exchequer borrowing requirement will be revised in each of the years; and if he will make a statement on the matter. [9084/18]
View answer50. Deputy Michael McGrath asked the Minister for Finance the net fiscal space for 2019, 2020 and 2021 accounting for the national development plan 2018 to 2027; and if he will make a statement on the matter. [9085/18]
View answerI propose to take Questions Nos. 49 and 50 together.
There are two specific changes to the Exchequer Borrowing Requirement (EBR) as published in the Economic and Fiscal Outlook for Budget 2018. These forecasts cover the period to 2021.
The first relates to the passing of the Water Services Bill 2017 into law. As explained in the Economic and Fiscal Outlook, Chapter 7 'Budgetary Reform', Irish Water’s current and capital funding requirements for domestic water services will come from the Vote of the Department of Housing, Planning and Local Government. The Revised Estimates Volume for Public Services 2018 (REV) sets out the impacts in voted expenditure for 2018.
As these are simply reallocations between expenditure of a general government body and the Exchequer, this has no impact on the general government balance. The general government debt impact has already been included in the calculations.
Gross voted capital expenditure for 2018 in the National Development Plan (NDP) is consistent with the REV.
Secondly, the NDP announced four funds which will begin operating from 2019. These are the Rural, Urban, Innovation and Climate Action Funds.
The funds will be partly covered by an unallocated capital reserve in the first instance, leaving an additional cost, which will both pre-commit unallocated fiscal space and worsen the EBR.
The EBR and general government debt developments table will be updated in the draft Stability Programme Update for 2018 to be published in mid-April.
The net nominal EBR increase resulting from the three funds is set out in the last row of the table below:
|
New Funds |
2019 |
2020 |
2021 |
|
Rural |
€55 m |
€80 m |
€80 m |
|
Urban |
€100 m |
€20 m |
€150 m |
|
Innovation |
€20 m |
€30 m |
€40 m |
|
TOTAL |
€175 m |
€230 m |
€270 m |
|
Less Capital Reserve |
€-98 m |
€-136 m |
€-94 m |
|
Net Increase |
€77 m |
€94 m |
€176 m |
As the Climate Action Fund, set out in the table below, will be funded from the National Oil Reserves Agency (NORA) levy, it will have no impact on Voted Expenditure or the EBR.
|
2019 |
2020 |
2021 |
|
|
Climate Action Fund |
€20 m |
€30 m |
€40 m |
In calculating the impact on net fiscal space under the Expenditure Benchmark, it is assumed that both the Urban and Rural Funds will be recorded as gross fixed capital formation (i.e. subject to ‘capital smoothing’ over four years) and that the Innovation and Climate Action Funds will be treated as capital grants (i.e. not smoothed). A further assumption is that the funding from the capital reserve will offset the Rural and Urban Funds.
Should the operation of the funds change these assumptions then the following figures will need to be amended. The cost, in fiscal space terms, of the four funds is therefore:
|
2019 |
2020 |
2021 |
|
|
Fiscal Space Used |
€54 m |
€36 m |
€54 m |
Updated calculations of fiscal space will be published in the Summer Economic Statement 2018 following the publication by the European Commission of the required inputs to the calculation in conjunction with its Spring Economic Forecast.
51. Deputy Michael McGrath asked the Minister for Finance his plans to address inflation in view of the investment announced in the national development plan 2018 to 2027; and if he will make a statement on the matter. [9086/18]
View answerInflation in Ireland and other developed economies has been subdued for a prolonged period. While inflation picked up elsewhere last year, inflation in Ireland remained close to zero. Overall HICP inflation averaged just 0.3 per cent last year, the fifth consecutive year of inflation below 1 per cent. By contrast, inflation in the euro area as a whole, on a HICP basis, averaged 1.5 per cent last year.
Inflation is not, therefore, a short-term risk at present. However, over the medium term as temporary exchange rate shocks, which have been a significant contributing factor to low inflation in Ireland over the past couple of years, subside, and the economy approaches full employment, price pressures may emerge. The increased investment announced in the national development plan 2018 – 2027 (NDP 2018 - 2027) could potentially contribute to this. However, the NDP 2018 – 2027 recognises the importance of ensuring the affordability and sustainability of capital spending plans to minimise the risk of overheating, and as a consequence, the risk of contributing to price pressures.
A further mitigating factor is that public investment has an important role to play in boosting the capacity of the economy, which would tend to reduce price pressures. In addition, the NDP 2018 – 2027 is focused on targeting bottle-necks of particular concern such as in housing. Addressing the housing shortage would alleviate price pressures in the rental market.
I have emphasised, on a number of occasions the importance of ensuring that Budgetary policy does not contribute to overheating pressures in the economy and the pro-cyclical polices of the past are not repeated and this is reflected in the NDP 2018 – 2027. My Department will continue to closely monitor price developments as we seek to ensure that the competitiveness gains over the past few years do not unwind. To this end, the Government will continue to manage the public finances in a prudent manner and maintain competiveness-orientated policies.
52. Deputy Michael McGrath asked the Minister for Finance the risk of overheating the economy as a result of the national development plan 2018 to 2027; the inflation forecasts for each year up to 2027; if investment in major capital projects will be held back if the economy is overheating; and if he will make a statement on the matter. [9089/18]
View answerAlthough the economic recovery has been much faster than anticipated, developments in the labour market, which is probably the best barometer of the Irish economy given distortions to GDP and GNP, suggest that the economy is not yet operating at full capacity. While unemployment has fallen rapidly to 6.1 per cent in January, from a peak of 16 per cent in 2012, this is still above the level considered to represent full employment in Ireland. Further, price pressures in Ireland remain subdued, with overall annual inflation as measured by the Harmonised Index of Consumer Prices (HICP) averaging just 0.3 per cent last year, the fifth consecutive year of inflation below 1 per cent.
Forecasts published with Budget 2018 envisage the HICP reaching 2 per cent per year by the end of the forecast horizon in 2021, broadly consistent with the ECB’s target. The Budget 2018 forecasts do not extend beyond 2021. However, the National Development Plan 2018 – 2027 (NDP 2018 - 2027) assumed 2 per cent inflation (GNI* deflator) over the period 2018 – 2027 which is consistent with long term growth forecasts for the Irish economy produced by international organisations.
Notwithstanding the current slack in the economy, with the labour market approaching full employment, stronger than assumed growth could lead to overheating pressures. While increased public investment through the NDP 2018 - 2027 could potentially contribute to this, it is important to recognise that the plan is focused on rectifying the relatively low levels of public capital investment in Ireland following the recent recession.
In fact, the NDP 2018 - 2027 is targeted at reducing overheating risks by increasing the economy’s potential growth rate and alleviating capacity constraints. Notwithstanding this, the NDP 2018 – 2027 recognises the dangers that increased public investment could contribute to overheating if the pace of implementation was inappropriate for the cyclical position of the economy. However, the NDP 2018 – 2027 adopts a prudent and measured approach to increasing public capital spending. Under the NDP 2018 – 2027 it is projected that public capital investment will reach 3.8% of national income (GNI*) in 2021 and 4% by 2024, with sustained investment averaging 4% on an annual basis over the period 2022 to 2027.
In addition, there are a number of other steps that will be taken to mitigate overheating risks and negate the possible need to defer major capital projects owing to overheating risks:
- The increase in public capital spending will be consistent with overall fiscal objectives.
- The growth in public capital spending will be at a planned and moderate rate which does not outstrip the pace of the supply response feasible from the broad construction sector.
- Increased public capital spending will be aligned with sustainable growth in public expenditure overall by ensuring the continuation of moderate and prudent growth in current spending.
- There will be a renewed strategic focus on supporting the strengthening of the capacity, capability and degree of competition of the domestic construction sector in Ireland as well as on encouraging and promoting market entry from abroad by confirming and highlighting the planned scale of Ireland’s public capital investment plans.
- As detailed in the National Development Plan, a Construction Sector Working Group will be established to ensure regular and open dialogue between Government and the construction sector.
The NDP 2018-2027 will be implemented in the context of broader government fiscal policy, which is to maintain a fiscal stance which is appropriate to the cyclical position of the economy, while targeting a continuing reduction in our debt burden.
I have emphasised on a number of occasions the importance of ensuring that Budgetary policy does not contribute to overheating pressures in the economy and that the pro-cyclical polices of the past are not repeated and this is reflected in the NDP 2018 – 2027.
53. Deputy Michael McGrath asked the Minister for Finance the expectation of the structural balance under the Stability and Growth Pact for 2018 in view of the announcement of the national development plan 2018 to 2027; the amount by which the structural balance is set to meet the State's medium-term objective; and if he will make a statement on the matter. [9090/18]
View answer54. Deputy Michael McGrath asked the Minister for Finance if the expenditure benchmark under the Stability and Growth Pact will be met in 2018 in view of the announcement of the national development plan 2018 to 2027; and if he will make a statement on the matter. [9091/18]
View answerI propose to take Questions Nos. 53 and 54 together.
The level of gross voted capital expenditure for 2018 of €5.8 billion set out in Table 3.1 of the National Development Plan, which is the same as the level set out in the 2018 Revised Estimates Volume, is consistent with the general government expenditure forecasts included in Budget 2018.
Therefore, the forecasts for both general government expenditure and the general government balance for 2018 are unchanged. As a result, the forecast compliance, in 2018, with the fiscal rules, as set out on Budget day in relation to both the expenditure benchmark and the improvement in the structural balance is unchanged.
The Deputy should note that updated economic and fiscal forecasts will be published in the draft Stability Programme Update in mid-April.
55. Deputy Willie Penrose asked the Minister for Finance his plans to amend the Credit Union and Co-operation with Overseas Regulation Act 2012 to allow the credit unions lend to affordable housing bodies and local authorities; and if he will make a statement on the matter. [9092/18]
View answerThe Credit Union and Co-Operation with Overseas Regulators Act 2012 introduced changes to the Credit Union Act, 1997 (the 1997 Act). Since 1 January 2016, section 43 of the 1997 Act provides that the Central Bank may prescribe investments in which a credit union may invest its funds.
Following engagement with the credit union sector on proposals for credit unions to provide funding for the provision of social housing, the Central Bank undertook a review of the investment framework for credit unions in 2017. This review resulted in the publication of Consultation Paper 109 (CP109) which consulted on potential changes to the investment framework for credit unions. One of the proposals in CP109 was that credit unions be permitted to provide funding for the provision of social housing to Tier 3 Approved Housing Bodies (AHBs).
Submissions to CP109 were broadly supportive of credit unions providing funding to Tier 3 AHBs with a significant number of those in favour citing the alignment of the social goals of both the credit union movement and the AHB sector as the principal rationale for permitting this type of investment.
Taking account of the feedback provided to CP109, on 1 February 2018 the Central Bank outlined that it intends to proceed with the addition of investment in Tier 3 AHBs as a permitted investment class for credit unions. Regulations giving effect to this change, will be commenced on 1 March 2018. From this date, credit unions will be permitted to provide funding to Tier 3 AHBs for the provision of social housing. The maximum permitted investment amount per credit union is 50% of regulatory reserves where a credit union has total assets of at least €100 million and 25% of regulatory reserves for all other credit unions. These limits may facilitate a combined sector investment in Tier 3 AHBs of close to €700 million.
The Central Bank is open to considering further investment proposals. As was the case with proposals around credit unions investing in social housing, where the Central Bank receives detailed proposals which can demonstrate that an investment could fall within the appropriate risk profile for credit union investments, it will consider further amendments to the investment regulations to facilitate such investments in the future.
The Central Bank has committed to undertaking and publishing analysis of credit union sector investments, two years post commencement of the amending investment regulations for credit unions, to assess and analyse the actual impact which the changes to the investment regulations have had.
56. Deputy Catherine Martin asked the Minister for Finance his plans to extend the cycle-to-work scheme to self-employed persons and those who self-assess their taxes; the estimated cost of an extension; and if he will make a statement on the matter. [9103/18]
View answer57. Deputy Catherine Martin asked the Minister for Finance his plans to increase the allowance under the cycle-to-work scheme for people who purchase e-bikes; the estimated cost of an extension; and if he will make a statement on the matter. [9104/18]
View answerI propose to take Questions Nos. 56 and 57 together.
The Cycle to Work Scheme exempts (from income tax, employee PRSI and USC) the benefit-in-kind (BIK) arising from the provision of a bicycle / cycle safety equipment by an employer to an employee (or director), where the bicycle is used by the employee to cycle to and from work or between workplaces.
I have no plans to amend the Scheme as suggested since the concept of BIK does not arise in the case of the self-employed. For self-employed persons all expenses “wholly and exclusively” incurred for the purpose of their trade or profession are allowable for tax purposes. There is no tax deduction for self-employed persons in respect of costs incurred by them in relation to travelling to and from their place of business.
While schemes of this nature are kept under review by my officials, at present I do not have any specific plans to change the maximum value exempted.
58. Deputy Thomas P. Broughan asked the Minister for Finance his views on the reported sale of a €4 billion portfolio of home loans and mortgages by a bank (details supplied) to subprime lenders and vulture funds; and if he will make a statement on the matter. [9136/18]
View answerAddressing high NPL ratios is one of the key priorities of the Single Supervisory Mechanism (SSM). PTSB’s latest published NPL ratio of 28% is one of the highest in the Eurozone. It is over five times the European average. Therefore, PTSB must deliver a significant reduction in its NPL ratio, and within a timeframe, that meets the expectations of the SSM.
Given the volume of borrowers who have refused to engage with the bank to date, and the number of cases where treatments have failed, achieving an acceptable NPL ratio will not be possible without loan sales.
It is important to highlight that the contractual terms of borrowers remain in place post a loan sale. In addition, all the protection enjoyed by borrowers under the CCMA is unaffected.
Under the terms of the Relationship Framework, which is a legally binding agreement between myself, as Minister for Finance and the bank, loan sales do not require my consent. However, the bank is required to consult with me when a loan sale reaches an advanced stage and is of a significant scale. Although I have been briefed on the matter, the formal consultation has not yet taken place but will do so in due course.
While loan sales are regrettable, I am also conscious of the need for the bank to continue on its path to recovery such that it can support our citizens through its deposit and lending activity. PTSB is a very important part of the Irish banking sector with over 1 million customers, €21bn of mortgage loans and €17bn of customer deposits. The bank also employs c. 2,500 staff.
