Tuesday, 11 Jun 2019

Written Answers Nos. 176-191

Departmental Staff

Questions (176)

Billy Kelleher

Question:

176. Deputy Billy Kelleher asked the Minister for Finance the estimated full-year cost of recruiting 20 additional tax specialists at assistant principal officer level. [24122/19]

Written answers

Minister for Finance

It is estimated that the full year cost of recruiting 20 additional tax specialists at Assistant Principal Officer level would be approximately €2.2 million.

This figure is calculated based on the mid-point of the current Assistant Principal Officer salary scale, which is €74,397 per annum; and in line with guidance on the calculation of staff costs including the estimation of attributable overheads, as outlined in ‘The Public Spending Code: E. Technical References: E-01’, prepared by the Central Expenditure Evaluation Unit of the Department of Public Expenditure and Reform, which can be viewed at the following link: https://publicspendingcode.per.gov.ie/e-01-calculation-of-staff-costs/.

State Banking Sector Regulation

Questions (177)

Seán Haughey

Question:

177. Deputy Seán Haughey asked the Minister for Finance if the Central Bank informs his Department about the sale of loans by the commercial banks; if his attention has been drawn to the fact that performing loans in which there is no negative equity are being sold against the wishes of mortgage-holders who then have to take out new mortgage protection and household insurance policies; his views on these practices; and if he will make a statement on the matter. [24145/19]

Written answers

Minister for Finance

As the Deputy will be aware, Relationship Frameworks are in place between the Minister for Finance and the banks in which the State has a shareholding. Under these Relationship Frameworks, the relevant banks are required to consult with the Minister as part of any loan sale being proposed. This consultation process does not require input from the Central Bank of Ireland.

I have been advised by the Central Bank of Ireland that Provision 3.11 of the Central Bank’s Consumer Protection Code 2012 (“the Code”) requires that, where a regulated lender intends to transfer all or part of its ‘regulated activities’ to another regulated entity, it must provide advance notification to both the Central Bank and affected consumers. Specifically, a lender must provide a consumer with at least 2 months’ notice before transferring all or part of its loan book covered by the Code to another person.

Most loan agreements include a clause that allows the original lender to sell the loan on to another firm, regardless of whether the loan is classified as performing or non-performing.

When a loan is sold on to another regulated entity, the relevant Irish and EU consumer protections continue to apply. Under the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, which came into effect on 21 January 2019, if a loan is transferred, the holder of the legal title to the credit must now be authorised by the Central Bank as a credit servicing firm. Such credit servicing firms must act in accordance with Irish financial services law that applies to ‘regulated financial service providers’.

If a borrowers’ mortgage protection policy and/or home insurance policy was obtained through the original lender, and is thus part of the lender’s group insurance scheme, such policies may be impacted if the mortgage is transferred to a new loan owner, either as a result of switching mortgage providers or a loan sale.

EU Issues

Questions (178)

Pearse Doherty

Question:

178. Deputy Pearse Doherty asked the Minister for Finance his views on the statement of the EU Commission in COM(2019) 507 final (details supplied); his plans to remedy the issue; and if he will make a statement on the matter. [24190/19]

Written answers

Minister for Finance

Last week, the European Commission published its Country Specific Recommendations for all EU Member States, which are an integral part of the European Semester cycle of economic governance. The overall objective is to encourage the Member States to increase their growth potential by continuing to improve their economies and further strengthening their economic resilience. It is important that Member States should prioritise investment needs and address bottlenecks and reforms with the aim of improving sustainable and inclusive growth.

In this regard I welcome the publication of the European Commission’s Country Specific Recommendations for Ireland. While one of these recommendations calls on Ireland to continue to take action on addressing aggressive tax planning, it is notable that Commissioner Moscovici has publically acknowledged that we are on the right track and encouraged us to continue in this direction.

Ireland's actions in recent years have demonstrated our clear commitment to taking action to address aggressive tax planning. Ireland’s Corporation Tax Roadmap, which was published last September, set out a clear range of actions which Ireland is taking on corporate tax reform. Significant actions have already been taken on foot on the Roadmap including the introduction of Controlled Foreign Company rules, amendments to Ireland’s exit tax rules, and the prompt ratification of the BEPS Multilateral Instrument.

As set out in the Roadmap, further actions will be taken in Finance Bill 2019 including the amendment of Ireland’s transfer pricing rules and the introduction of anti-hybrid rules. 

As a very open economy which serves as a key European base for a significant number of non-EU headquartered multinational companies, it is to be fully expected that Ireland would have a higher percentage of outbound royalty payments than other Member States. Concerns about outbound payments are justified in circumstances where the relevant profits should in fact be taxed in the EU or where the profits are ultimately being untaxed (either in the recipient or parent jurisdiction). It is my belief that neither of these concerns should arise in respect of outbound payments from Ireland.

The international consensus reached during the BEPS project is that profits should be taxed where the ‘DEMPE’ functions occur. To the extent where DEMPE functions occur within the EU, Member States have the ability to tax the profits attributable to those functions within their jurisdiction under the international corporation tax framework.

Furthermore, the overwhelming majority of the outbound payments made from Ireland are made by companies which are ultimately owned by companies resident and taxable in the United States. It is my understanding that reforms introduced by the US in the Tax Cuts and Jobs Act in 2017 should make it impossible for any such royalties to avoid tax in the US even if they are not paid to the US directly and are not taxed in the recipient jurisdiction.

For these reasons I believe that the actions set out in the Roadmap are appropriate with regard to addressing aggressive tax planning but, as always, I will continue to keep the situation under review and shall act accordingly as circumstances demand.

Ireland is fully committed to addressing the challenges that have arisen from the digitalisation of the world economy and we will continue to contribute positively to the discussion at both EU and OECD level in pursuit of a stable, and globally agreed international tax framework which is vital to facilitate cross border trade and investment.

Excise Duties Reliefs

Questions (179, 180)

Pearse Doherty

Question:

179. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be accrued if the excise duty exemption on aviation fuel was ended; and if he will make a statement on the matter. [24215/19]

Pearse Doherty

Question:

180. Deputy Pearse Doherty asked the Minister for Finance the estimated revenue that would be accrued if the excise duty exemption on aviation fuel was ended with an exception for domestic flights; and if he will make a statement on the matter. [24216/19]

Written answers

Minister for Finance

I propose to take Questions Nos. 179 and 180 together.

Ireland's excise duty treatment of fuel used for air navigation is based on European law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the Energy Tax Directive. Under this Directive, Member States are obliged to exempt certain fuels used for commercial aviation purposes from excise duty. The scope of this exemption must include jet fuel (which is the most commonly used heavy oil in air navigation) and must encompass such fuel used for intra-Community and international air transport purposes. A Member State may waive this exemption where it has entered into a bilateral agreement with another Member State to tax fuel for intra-community flights. With regard to fuel for international transport, the scope for a Member State to take a unilateral approach to taxation is limited by international law and a range of bilateral and multilateral agreements that operate under 1944 Convention on International Civil Aviation (known as the Chicago Convention).

Member States may opt to exempt or partially exempt other fuels used for commercial air navigation from excise duty and may also opt to fully or partially exempt fuels used for domestic commercial aviation.

In line with Article 14 of the Energy Tax Directive, Ireland’s Mineral Oil Tax (MOT) legislation, set out in Finance Act 1999, provides for jet fuel used for commercial aviation purposes to be exempted from excise duty. This exemption covers both domestic and international commercial aviation. In addition, Finance Act 1999 provides for a partial relief from excise duty for light oil (aviation gasoline) used for commercial aviation. Again, there is no distinction in national legislation between domestic and international commercial aviation in the operation of the partial relief.

The following table summarises the mandatory exemptions and excise duty measures for aviation fuels required under Article 14 of the Energy Tax Directive. It also summarises the MOT treatment of such fuels used for air navigation as set out in national legislation.

Aviation Fuel/Use	Energy Tax   Directive	Finance Act 1999
Light oil (aviation gasoline) used for domestic commercial aviation	No mandatory tax exemption, Member States may opt to exempt or partially exempt	Partial relief from MOT, effective rate of €355.44 per 1,000 litres (section 97B Finance Act 1999)
Light oil (aviation gasoline) used for   intra-Community/international commercial aviation	No mandatory tax exemption, Member States may opt to   exempt or partially exempt	Partial relief from MOT, effective rate of €355.44 per 1,000 litres    (section 97B Finance Act 1999)
Light oil (aviation gasoline) used for private pleasure flying	Mandatory taxation	Full MOT rate of €587.71 per 1,000 litres (section 96   Finance Act 1999)
Heavy oil (jet fuel) used for domestic commercial aviation	No mandatory tax exemption, Member States may opt to   exempt or partially exempt	Full exemption (section 100(2)(b) Finance Act 1999)
Heavy oil (jet fuel) used for used for   intra-Community/international commercial aviation	Mandatory tax exemption, except where bilateral arrangement entered into with another Member State	Full exemption (section 100(2)(b) Finance Act 1999)
Heavy oil (jet fuel) used for private pleasure flying	Mandatory taxation	Full MOT rate of €479.02 per 1,000 litres (section 100(2)(b) Finance Act 1999)

It is important to note that the tax exemption for heavy oil (jet fuel) used for air navigation for international and intra-Community transport purposes is mandatory, except where a bilateral arrangement to tax fuel for intra-community air navigation is entered into with another Member State. This option has not been taken up by Member States to date as any such bilateral agreement would raise significant legal and competition issues in the event that aircraft operators registered in a non EU country also operated on a route between the Member States which were a party to the bilateral agreement. As such, any material changes to the current tax regime would likely require a major revision of the Energy Tax Directive in order to deliver the necessary legal certainty and to ensure a level playing field between airline operators and between Member States. This would be contingent on developments at international level as the EU regime on taxation of aviation fuels is based on the provisions of the Chicago Convention.

I am advised that consumption data required to estimate revenue that would be accrued if excise duty on aviation fuel was ended is not readily available.  Revenue will examine the issues further and will contact the Deputy directly in that regard.

Stability Programme Data

Questions (181)

Michael McGrath

Question:

181. Deputy Michael McGrath asked the Minister for Finance if the total expenditure figure in Table A10 of the stability programme update 2019 includes allocations from the national development plan; and if he will make a statement on the matter. [24217/19]

Written answers

Minister for Finance

I can advise the Deputy that the total general government expenditure figures as published in Table A10 of the Stability Programme Update 2019 encompass Exchequer expenditure as well as expenditure from general government bodies.

Thus this takes into account the voted capital allocations under the National Development Plan.

Tax Code

Questions (182)

Michael McGrath

Question:

182. Deputy Michael McGrath asked the Minister for Finance the estimated yield or cost to the taxpayer from the non-indexation of the tax system each year to 2024, according to current projections; and if he will make a statement on the matter. [24218/19]

Written answers

Minister for Finance

As part of the preparations for Budget 2019, it was estimated that the Exchequer yield from non-indexation of the income tax system would be in the region of €0.6 billion on a full year basis. In light of the publication of the Revenue Commissioners Post-Budget 2019 Income Tax Ready Reckoner this estimate has not changed materially.

The projected yield from non-indexation for Budget 2020, will not be finalised until the Office of the Revenue Commissioners has completed and published its Pre-Budget 2020 Income Tax Ready Reckoner, which is expected to be published in Quarter 3 2019. This sets out the cost to the Exchequer of indexing various income tax components by 1 per cent.

In addition, the updated Budget 2020 macroeconomic drivers used in preparing these calculations will need to be endorsed by the Irish Fiscal Advisory Council in early October 2019, which is a normal part of the budgetary process.

For the years 2021-2024 the estimated yield from non-indexation will be calculated in a similar manner, in Quarter 3 of the year of the respective Budget's publication.

Central Bank of Ireland Staff

Questions (183, 184)

Pearse Doherty

Question:

183. Deputy Pearse Doherty asked the Minister for Finance the fees paid to the recruiters appointed to run the selection process for the role of Governor of the Central Bank; the cost of the process; and if he will make a statement on the matter. [24291/19]

Pearse Doherty

Question:

184. Deputy Pearse Doherty asked the Minister for Finance the composition of the interview panel used in the interview process for the role of Governor of the Central Bank; and if he will make a statement on the matter. [24292/19]

Written answers

Minister for Finance

I propose to take Questions Nos. 183 and 184 together.

The appointment of the Governor of the Central Bank is provided for under section 19 (1) of the Central Bank Act 1942 (as amended). The Government recommended the appointment of Mr. Makhlouf as Governor of the Central Bank to the President following a comprehensive, open, and international process.  

The process included a public call for expressions of interest, a comprehensive search using independent executive search firm Merc Partners, a rigorous shortlisting of applicants, psychometric testing of final interview candidates, and a final interview of five candidates.

Mr. Makhlouf was the recommendation of the independent interview panel.  

Merc Partners were engaged to undertake the executive search on behalf of the Department of Finance following a tender process. An invitation to submit a proposal to assist the Department of Finance in the nomination process for the role of Governor of the Central Bank was issued to selected firms under the Public Appointments Service Framework Agreement.

The overall cost of the process was €70,236 (including VAT), which included expenses for a number of candidates and interview panel members. For comparison, the cost of the process to select Governor Lane in 2015 was €63,748 (including VAT).

The interview board comprised:

- Derek Moran, Secretary General of the Department of Finance as Chair of the Board;

- Patricia Byron, a sitting member of the Central Bank Commission;

- Nick MacPherson, the Former Permanent Secretary to HM Treasury; and,

- Josephine Feehily, Chairperson of the Policing Authority.

Garda Station Refurbishment

Questions (185)

Fiona O'Loughlin

Question:

185. Deputy Fiona O'Loughlin asked the Minister for Public Expenditure and Reform the extent to which refurbishment plans are in hand in respect of existing Garda stations throughout County Kildare or replacement in lieu thereof; and if he will make a statement on the matter. [23662/19]

Written answers

Minister of State at the Department of Public Expenditure and Reform

The Office of Public Works has no plans for any new Garda Station in County Kildare.

I can confirm the Office of Public Works have works relating to refurbishment, renovation or updating of facilities, undergoing or planned, in seven Garda Stations in County Kildare. Details are included as follows and incorporate works funded by both the Office of Public Works and An Garda Síochána.

Garda Station	Description of current/planned works.
Clane GS	Minor fabric repairs  to floor and walls
Naas GS	New Property Evidence Management Store; Upgrade of Kitchen facilities;, new floor covering in the Public Office; Work to the Communications Room, External maintenance works.
Kilcock GS	Power and data supply to the Public office, Toilet refurbishment works
Kildare GS	Boiler Upgrade, External maintenance works
Leixlip GS	Canteen refurbishments works, Works to the  Public Office
Monasterevin GS	External maintenance works
Newbridge GS	Security work at the Air Support Unit

Public Parks

Questions (186)

Clare Daly

Question:

186. Deputy Clare Daly asked the Minister for Public Expenditure and Reform the timetable for the level of public funds expended by Fáilte Ireland on the strategic vision for the Phoenix Park exercise in view of the way in which it was publicised and the fact that the full report was not online to facilitate consideration by the public, resulting in the perception that citizens were disenfranchised and excluded from the consultation; and if he will make a statement on the matter. [23699/19]

Written answers

Minister of State at the Department of Public Expenditure and Reform

In April 2017, Fáilte Ireland announced €11.5m in funding from its Capital Grants budget for ten key OPW projects in Dublin and within the Ireland’s Ancient East region. The funding was provided in the context of Fáilte Ireland’s strategic partnership with the OPW and the Department of Culture, Heritage and the Gaeltacht to assist in the refurbishment and enhancement of key visitor attractions at major heritage sites. Fáilte Ireland’s strategic partnership is one of a number of partnerships the tourism body has entered into with other State agencies such as Coillte and the National Parks and Wildlife Service (NPWS) to work together to grow tourism.

The Draft Phoenix Park Visitor Experience Strategic Review was commissioned by the OPW with grant funding of €300,000 from Fáilte Ireland (accounting for 75% of the cost of the project). To date, €286,176 has been expended on the project.

The review document does not represent a vision for the Phoenix Park or a development plan. Nor is it part of a statutory public consultation process of any kind. The OPW considered it appropriate to bring the key findings and ideas in the Review into the public domain so that the public could engage with the recommendations and offer their observations. As part of this process local representatives, stakeholders, community groups, and the press were informed about the Review and the public display. A comprehensive Executive Summary of the full draft review was developed in order to assist the public in engaging with the core findings and ideas presented by the independent consultants and placed on line. Indeed if any party wishes to see the full draft Report this can be arranged. A hard copy of the full 202-page review with case studies and visitor research was available for the public to view at the Phoenix Park Visitor Centre. The OPW remains open, and indeed welcomes, any further comments or observations from any party in relation to the Review.

Government Expenditure

Questions (187)

Michael McGrath

Question:

187. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform the amount to be allocated to demographics each year to 2024; and if he will make a statement on the matter. [24219/19]

Written answers

Minister for Public Expenditure and Reform

Estimates of certain demographic pressures in the areas of Health, Social Protection and Education are set out in Expenditure Report 2019 as pre-committed elements of the current expenditure baseline for the period to 2021. These are primary areas of current expenditure which are particularly impacted by demographic changes. For 2020 and 2021, an allocation of €0.45 billion is set out to meet demographic pressures. These allocations are informed by the paper ‘Budgetary Impacts of Changing Demographics 2017 – 2027’, published by the Irish Government Economic and Evaluation Service (IGEES). The paper can be found on the IGEES website here: https://igees.gov.ie/budgetary-impact-of-changing-demographics-2017-to-2027/. This paper covers a number of areas of expenditure, including pensions, child benefit, education provision and health schemes such as the Nursing Home Support Scheme. These pure demographic costs are factored in to Ministerial Expenditure Ceilings for Health, Social Protection and Education.

The paper suggests demographic costs of approximately €0.15 billion in 2022, and approximately €0.4 billion per annum out to 2027. However, as part of the 2019 Spending Review process, an update of this paper is due to be published in the coming months. This forthcoming paper will again look at the key areas of Health, Social Protection and Education and will examine demographic pressures in these areas over a ten year period.

There are also some Department of Finance publications which may be useful in examining the area of demographics. This includes 'Population Ageing and the Public Finances in Ireland' published in 2018, which can be found on the gov.ie website here https://www.gov.ie/en/publication/2e8463-population-ageing-and-the-public-finances/. There is also some demographic information presented in the recently published Stability Programme Update, such as Table 24 in chapter 8, which outlines long-term spending projections of age-related expenditure as a share of GNI*.

Departmental Properties

Questions (188)

Michael Healy-Rae

Question:

188. Deputy Michael Healy-Rae asked the Minister for Public Expenditure and Reform if he will address a matter regarding an application by a group (details supplied); and if he will make a statement on the matter. [23198/19]

Written answers

Minister of State at the Department of Public Expenditure and Reform

As part of the Programme for a Partnership Government, the Office of Public Works (OPW) was requested not to dispose of any closed Garda stations pending the outcome of two reviews of closed Garda stations.

The first review identified six closed Garda stations for reopening and the second review, published on the 21 December 2018, did not identify any further closed Garda stations for reopening.

An Garda Síochána has recently advised the OPW that they no longer have an interest in the former Garda station at Moyvane and the Commissioners of Public Works have now recommenced the process of identifying alternative State use for the property, in line with OPW's disposal policy on surplus vacant property.

The OPW policy with regard to non-operational (vacant) State property, including the former Garda station at Moyvane is to:

1. Identify if the property is required/suitable for alternative State use by either Government Departments or the wider public sector.

2. If there is no other State use identified for a property, the OPW will then consider disposing of the property on the open market if and when conditions prevail, in order to generate revenue for the Exchequer.

3. If no State requirement is identified or if a decision is taken not to dispose of a particular property, the OPW may consider community involvement (subject to a detailed written submission, which would indicate that the community/voluntary group has the means to insure, maintain and manage the property and that there are no ongoing costs for the Exchequer).

If it is established that there is no alternative State use for the property, the Commissioners of Public Works will then consider the future use of the property and, in that regard, consideration will be given to the business plan submitted by the community group in Moyvane, Co. Kerry.

Departmental Properties

Questions (189)

Catherine Murphy

Question:

189. Deputy Catherine Murphy asked the Minister for Public Expenditure and Reform the number, location and value of lands acquired by his Department and the OPW by way of compulsory purchase order, CPO, in the past three years to date; and if he will make a statement on the matter. [23241/19]

Written answers

Minister for Public Expenditure and Reform

Neither my Department nor the Office of Public Works have acquired any lands by way of CPO in the past three years.

Flood Risk Management

Questions (190)

Eamon Ryan

Question:

190. Deputy Eamon Ryan asked the Minister for Public Expenditure and Reform if he will provide a copy of each Natura impact statement and each appropriate assessment screening carried out by or for the Office of Public Works in respect of proposed flood-related works since January 2014. [23270/19]

Written answers

Minister of State at the Department of Public Expenditure and Reform

The following table sets out the capital projects in the Flood Risk Management area where Appropriate Assessment Screening Reports and Natura Impact Statements, where appropriate, have been carried out in the timeframe set out by the Deputy.

Flood Relief Project	Available from:
Ashbourne, Co Meath	Currently   not available online but will be issued directly to the Deputy
Athlone, Co Westmeath	www.athlonefas.ie
Bandon, Co Cork	www.bandonfrs.ie
Blackpool, Cork	www.blackpoolfrs.ie
Clonakilty, Co Cork	www.clonakiltyfrs.ie
Crossmolina, Co Mayo	https://www.opw.ie/en/flood-risk-management/operations/flooddefenceschemes/crossmolinafloodreliefscheme/
Douglas, Cork	www.douglasfrs.ie
Dunkellin, Co Galway	http://www.galway.ie/en/services/roads/dunkellindrainagedistrict/
Ennis Lower (Bank Place), Co Clare	Currently   not available online but will be issued directly to the Deputy
Enniscorthy, Co Wexford	www.enniscorthyfds.ie
Glashaboy, Co Cork	www.glashaboyfrs.ie
Lower Lee, Cork City	www.lowerleefrs.ie
Lower Morell, Co Kildare	www.morellfms.ie
Templemore, Co Tipperary	https://www.opw.ie/en/templemore/

As part of the National Catchment-based Flood Risk Assessment and Management (CFRAM) Programme, AA Screening Reports and, where necessary, Natura Impact Statements were carried out on all 29 Plans arising from the programme. These reports are all available online at the following website address: https://www.floodinfo.ie/publications/?t=24.

Appropriate Assessments are also carried out on an ongoing basis for Arterial Drainage Maintenance operations. These operations have been sub-divided in thirty one catchments nationally and the Appropriate Assessments are carried out through a national framework of five year assessments for these catchments. This is a rolling programme, including AA Screening for each catchment and an associated Natura Impact Statement as required, updated on a five yearly basis. All reports are shortly to be made available online to the public. Details on where they can be accessed will be provided to the Deputy as soon as they are available.

Coastal Erosion

Questions (191)

Tom Neville

Question:

191. Deputy Tom Neville asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 163 of 11 December 2018, when funding will be provided for a matter (details supplied). [23358/19]

Written answers

Minister of State at the Department of Public Expenditure and Reform

I have been advised by the Office of Public Works (OPW) that an application has been submitted by Limerick City and County Council under the Minor Flood Mitigation Works and Coastal Protection Scheme for a project at the location mentioned in the Deputy’s question.

This application is currently being assessed and the Council will be advised of the outcome shortly.