Written Answers Nos. 41-60
41. Deputy Jennifer Whitmore asked the Minister for Finance the efforts his Department is carrying out to ensure a bank maintains communication with customers whose mortgages were due to be sold to a company but are now being sold to another company; if he will advise on the particular case of a person (details supplied); and if he will make a statement on the matter. [10649/21]
View answerAs the Deputy is aware, as Minister for Finance I have no role in the day to day operations of any bank operating within the State including banks in which the State has a shareholding. I'm precluded from intervening on behalf of any individual customer in any particular bank. Decisions in relation to commercial matters are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis. The independence of banks in which the state has a shareholding is protected by Relationship Frameworks which are legally binding documents that cannot be changed unilaterally. These frameworks, which are publicly available, were insisted upon by the European Commission to protect competition in the Irish market.
Non-performing exposures (NPEs) remain at an elevated level across the European banking system and addressing this issue is one of the key priorities for the European banking supervisor. In Ireland significant progress has been made across the banking sector in reducing the level of NPEs since the financial crisis mainly through loan by loan restructuring in addition to a number of loan disposals.
Despite this progress, the level of NPEs in the Irish system remains well above the European average and some time ago the supervisory authority tasked the management and board of each institution with developing and implementing a strategy to address this challenge. The banks have no choice but to respond.
You will recall that in 2018 my Department brought forward legislation to ensure that the contractual rights and obligations of a customer are not altered by the sale of a loan and customers will continue to benefit from, and fall under the scope of applicable regulations, whether with their bank or a third party servicing entity. In this regard - the Consumer Protection (Regulation of Credit Servicing Firms) Act ensures that relevant borrowers whose loans are sold are afforded the regulatory protections they had prior to the sale. All of the customer's rights under their existing terms and conditions will remain in place post transfer.
42. Deputy Niall Collins asked the Minister for Finance his views on matters raised in correspondence by a person (details supplied); and if he will make a statement on the matter. [10682/21]
View answerThe Home Renovation Incentive (HRI), the scheme was introduced by Section 477B of the Taxes Consolidation Act 1997 in 2014 and was terminated in accordance with its statutory sunset clause on 31 December 2018 having been extended twice before that and having been seen to have met its original objective viz. support for job creation in the construction sector in the wake of the financial crisis.
An ex-post analysis of the scheme found that in the context of a housing supply shortage, and the need at that time to deliver 25,000 additional housing units per annum over the period 2017-2021, the potential for displacement of labour from work on new builds to work on home renovations would create a high opportunity cost of labour associated with HRI which was not present at the inception of the scheme. Given the continued constraints on the construction sector’s ability to hire labour to deliver a supply of new housing units, similar issues may arise currently with regard to any re-introduction of the scheme.
Under my Department's Tax Expenditure Guidelines, the introduction of new tax incentive measures, or the continuation of measures which are due to terminate, should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention.
Having regard to these considerations, the case for re-introducing the HRI is not a strong one from my Department's perspective.
43. Deputy Michael Creed asked the Minister for Finance the reason a person (details supplied) who has recently returned to work and who was previously on the pandemic unemployment payment now appears to be paying an excessive amount of income tax. [10706/21]
View answerThe Pandemic Unemployment Payment (PUP) is a social welfare payment for workers who have become unemployed due to the COVID-19 pandemic. PUP payments are classified in legislation as income supports and are subject to income tax. The taxation arrangements for the PUP are provided for in Finance Act 2020 which reflects the standard approach to taxation of social welfare type payments, which means they are liable to income tax but exempt from the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI).
For 2021, the mechanism to tax the PUP, in common with other Department of Social Protection (DSP) payments, including Jobseekers’ Benefit and Illness Benefit, is by reducing the recipient’s tax credits and rate bands. In the case of jointly assessed couples, both of whom are receiving the PUP, the joint tax credits and rate bands are adjusted appropriately. Where one spouse returns to work, the personal tax credit of the remaining PUP recipient is not assigned to the working spouse in the usual manner. It is instead allocated to any excess PUP amount over and above the PUP recipient’s PAYE tax credit and rate band.
When a PUP recipient returns to work, he or she should immediately inform the Department of Social Protection (DSP) who will cease the PUP claim and notify Revenue that the claim has stopped. Revenue will then adjust the person’s tax credits and rate band as appropriate. Any delay in issuing the revised instruction to the employer will delay the employee receiving his or her full tax credit entitlements, so prompt notification by the employee to the DSP is very important.
Revenue has advised me that both the person in question and his spouse, have had their tax credit and rate band allocations reduced to collect the tax due on their 2021 PUP payments. Revenue has also confirmed that no notification has been received from DSP confirming that the person’s PUP claim has stopped, which is impacting on the amount of tax being deducted from his employment. Revenue has also assured me that, generally, there is no delay between receipt of DSP notifications that PUP payments have stopped, and the adjustment of the individual’s tax credits. Revenue will make direct contact with the person to advise him on how PUP payments are managed for tax purposes and to ensure that DSP has been notified of his return to work.
44. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which transactions, sale of loans and other activity have taken place in the past two years with reference to taking some investment funds outside the control of the Central Bank, notwithstanding the provisions of the 2018 amendment; if further legislative amendments will be considered to ensure that, notwithstanding the practice, all investment funds come within the remit of the Central Bank; and if he will make a statement on the matter. [10709/21]
View answer68. Deputy Bernard J. Durkan asked the Minister for Finance if investment funds all remain under the supervision of the Central Bank; if funds sold on to unregistered third parties are still subject to Central Bank rules; and if he will make a statement on the matter. [10885/21]
View answer69. Deputy Bernard J. Durkan asked the Minister for Finance the number and value of loan books currently in the hands of unregistered third parties having left institutions supervised by Central Bank rules; and if he will make a statement on the matter. [10886/21]
View answerI propose to take Questions Nos. 44, 68 and 69 together.
When loans are sold by Irish Banks, they are required to be sold to a Central Bank regulated entity.
Since the introduction of the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015, credit servicing firms have been subject to the provisions of Irish financial services law that apply to regulated financial services providers, including but not limited to:
- The Consumer Protection Code
- the CCMA
- the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015,
- the Fitness and Probity Regime,
- the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) Minimum Competency Regulations 2017, and
- the Minimum Competency Code 2017
The Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 (the 2018 Act) expanded the scope of ‘credit servicing’ to also bring the loan owners themselves directly under Central Bank regulation and supervision, and also within the scope of the Central Bank's Consumer Protection Code, Code of Conduct on Mortgage Arrears and its SME Regulations. The 2018 Act came into effect on 21 January 2019 and expanded the definition of ‘credit servicing’ in the 2015 Act to also include the following activities:
- holding the legal title to credit granted under the credit agreement;
- determination of the overall strategy for the management and administration of a portfolio of credit agreements; and
- maintenance of control over key decisions relating to such portfolio.
The Central Bank published Authorisation Requirements and Standards (the Standards) in December 2015. These Standards require that Credit Servicing Firms must be able to demonstrate that they are in a position to conduct their affairs in a manner that ensures the best interests of their customers are protected. The Standards were imposed on Credit Servicing Firms as a condition of authorisation and must be complied with on an on-going basis.
In advance of the 2018 legislation coming into effect on 21 January 2019, the Central Bank published and updated the Standards to reflect the fact that loan owners now fall to be directly regulated. The Standards provide that a Credit Servicing Firms must structure, organise and resource its business to ensure that it is in a position to demonstrate that it can comply with applicable regulatory requirements. This includes ensuring that adequate and effective control of the firm rests in the State, that all firm records are available to the Central Bank, and that the firm is not outsourcing activities to any extent that would impact on its ability to meet all applicable regulatory requirements.
The Standards also contain additional requirements for Credit Servicing Firms which hold the legal title to credit granted under a credit agreement and which engage in associated ownership activities. These requirements include that each Credit Servicing Firms must have effective processes for the development, implementation and oversight of the firm’s overall strategy for the management and administration of its portfolios of credit agreements and the maintenance of control over key decisions relating to those portfolios.
The Central Bank’s supervision strategy for the credit-servicing sector has a number of elements, including:
- Detailed data gathering and analysis, including mortgage arrears and repossession data, such as the pattern of arrears in the Irish mortgage market by entity type; mortgage arrears profile; restructuring activity in the Irish market; data on alternative repayment arrangements (ARAs) and complaints etc. Additionally, obtaining direct evidence from consumers to provide first-hand information about their experiences in dealing with the credit-servicing sector.
- Intensified risk and evidenced-based supervision, which includes both on-site and offsite inspections. The Central Bank will continue to assertively supervise credit servicing firms’ compliance with the CCMA, to ensure that a fair and transparent process is in place for all borrowers, including those whose loans have been sold.
- Use of its full suite of supervisory powers as appropriate.
The Central Bank’s approach to supervision of the credit-servicing sector is underpinned by an expectation of high standards and a professional and consumer-focused approach to compliance.
Beneficial owners were excluded from the scope of the 2018 Act as their inclusion could have had an impact on entities like passive securitisation vehicles. Irish and European banks use securitisation as a matter of course to raise funds for on-lending to the real economy, mortgage borrowers and SMEs who need access to credit. This is an important and ongoing aspect of the international financial system and passive securitisation vehicles do not have any implications for consumer protection.
If securitisation vehicles needed to be authorised and regulated, a number of unintended consequences may arise. For example, such vehicles could find it impossible to comply with the regulatory requirements of the Central Bank and therefore could be forced out of the market completely. Alternatively, they would have to take on staff and premises and adopt structures in order to meet these requirements and the costs of this would be factored in the price that buyers would be willing to pay for securitisations thereby reducing the liquidity available to the lenders originating securitisations and increasing costs that are likely to be passed to consumer.
As of Q3-2020, Retail Credit Firms and Credit Servicing Firms held 14% of all mortgage accounts, representing 120,341 accounts, with €20.9 billion outstanding.
Investment Funds
The Central Bank of Ireland is the competent authority for the authorisation and supervision of investment funds established in Ireland. There are two categories of investment funds in Ireland: Undertaking for Collective Investment in Transferable Securities (UCITs), and Alternative Investment Funds (AIFs) which may be sub divided into Retail and Qualifying Investor AIFs depending on the types of investors they will be marketed to.
Property funds domiciled in Ireland are typically established as Qualifying Investor AIFs. These fall under the Central Bank’s AIF Rulebook and are subject to the provisions of the EU’s Alternative Investment Fund Managers Directive. A Qualifying Investor AIF must appoint an Alternative Investment Fund Manager who will also be regulated under the Alternative Investment Fund Managers Directive.
Section 110 companies are not subject to Central Bank authorisation. There are a number of conditions which a company must meet in order to be regarded as a qualifying company for the purposes of section 110 of the Taxes Consolidation Act 1997 (“TCA 1997”).
One of those conditions is that the company notifies Revenue of their intention to be a qualifying company by completing a Form S.110 no later than 8 weeks from the date the company commences its business as a qualifying company for the purposes of section 110 TCA 1997. As it is a requirement of section 110 TCA 1997, it is appropriate that the Form S.110 be submitted to the Revenue Commissioners.
However, in addition to the Revenue reporting requirements, under section 18 of the Central Bank Act 1971, all Irish qualifying companies are obliged to report quarterly data to the Central Bank. This is in addition to the reporting obligation which many such companies already have, where they are “Financial Vehicle Corporations”, to report quarterly data to the Central Bank under Regulation ECB/2013/40. This information is then reported to the European Central Bank. The European Central Bank statistics provide harmonised information on the securitisation market and can also be broken down by country.
Further information on the reporting requirements of Special Purpose Vehicles and Financial Vehicle Corporations is available at the websites of the Central Bank of Ireland and the European Central Bank respectively.
45. Deputy Cian O'Callaghan asked the Minister for Finance if personal financial supports will be extended for airline workers; and if he will make a statement on the matter. [10722/21]
View answerI am aware of concerns that have been raised regarding the pace of recovery for the aviation sector, and that it has been suggested that the level of support be increased and/or that the application of some of the new State supports should be delineated on the basis of explicit sectoral qualification criteria. However, the reality of COVID-19 is that our whole economy and labour market have been rapidly transformed by this unprecedented shock and nearly all sectors have been negatively impacted either directly or indirectly.
The objective of the Employment Wage Subsidy Scheme (EWSS) is to support all employment and maintain the link between the employer and employee insofar as is possible. The EWSS has been a key component of the Government’s response to the continued Covid-19 crisis to support viable firms and encourage employment in the midst of these very challenging times. To date, subsidy payments of almost €2 billion have been made and PRSI relief worth over €341m granted to over 46,800 employers in respect of over 526,800 employees.
I have been clear that there will be no cliff-edge to the EWSS and, as the Deputy will be aware from announcements made on Tuesday 23 February, it has been decided that the scheme is now to be extended until the end of June 2021.
With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy. It is therefore appropriate that key business supports should remain in place until the end of the second quarter of 2021.
As the revised plan is implemented, the EWSS will play an important role in getting people back to work as public health restrictions are eased, thereby reducing the numbers dependent on social welfare payments over time, including the Pandemic Unemployment Payment (PUP).
Consideration is being given to the fact that continued support could be necessary out to the end of 2021 to help maintain viable businesses and employment and to provide businesses with certainty to the maximum extent possible. Decisions on the form of such support will take account of emerging circumstances and economic conditions as they become clearer.
For those businesses who may need additional support at this time, I would draw attention to the comprehensive package of other business and employer supports that have been made available since the July Stimulus Plan and Budget 2021 - including the Covid Restriction Support Scheme (CRSS), the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
The Government remains fully committed to supporting businesses and employers insofar as is possible at this time.
46. Deputy Cian O'Callaghan asked the Minister for Finance if the employment wage subsidy scheme will be extended past 31 March 2021; and if he will make a statement on the matter. [10723/21]
View answerThe objective of the Employment Wage Subsidy Scheme (EWSS) is to support all employment and maintain the link between the employer and employee insofar as is possible. The EWSS has been a key component of the Government’s response to the continued Covid-19 crisis to support viable firms and encourage employment in the midst of these very challenging times. To date, subsidy payments of almost €2 billion have been made and PRSI relief worth over €341m granted to over 46,800 employers in respect of over 526,800 employees.
I have been clear that there will be no cliff-edge to the EWSS and, as the Deputy will be aware from announcements made on Tuesday 23 February, it has been decided that the scheme is now to be extended until the end of June 2021.
With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy. It is therefore appropriate that key business supports should remain in place until the end of the second quarter of 2021.
As the revised plan is implemented, the EWSS will play an important role in getting people back to work as public health restrictions are eased, thereby reducing the numbers dependent on social welfare payments over time, including the Pandemic Unemployment Payment (PUP).
Consideration is being given to the fact that continued support could be necessary out to the end of 2021 to help maintain viable businesses and employment and to provide businesses with certainty to the maximum extent possible. Decisions on the form of such support will take account of emerging circumstances and economic conditions as they become clearer.
For those businesses who may need additional support at this time, I would draw attention to the comprehensive package of other business and employer supports that have been made available since the July Stimulus Plan and Budget 2021 - including the Covid Restriction Support Scheme (CRSS), the Credit Guarantee Scheme, the SBCI Working Capital Scheme, Sustaining Enterprise Fund, and the Covid-19 Business Loans Scheme.
The Government remains fully committed to supporting businesses and employers insofar as is possible at this time.
47. Deputy Colm Burke asked the Minister for Finance if he is considering extending the help to-buy-scheme beyond the end of 2021; and if he will make a statement on the matter. [10769/21]
View answerThe Help to Buy (HTB) incentive was introduced in 2017. The measure is currently scheduled to expire on 31 December 2021.
HTB gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. An increase in the supply of new housing remains a priority aim of Government policy.
The scheme is designed to stimulate the supply of new houses in the housing market and to assist first-time buyers in accumulating a deposit for a new home. In order to further help meet these goals, I announced an enhancement to the existing scheme with effect from 23 July last for the remainder of 2020 as part of the July Stimulus Package. The legislation that gives effect to this is set out in the Financial Provisions (Covid-19) (No.2) Act 2020. The Finance Act 2020 further extended the period of application of the enhanced levels of support until 31 December 2021.
The question of the future of HTB support beyond its current expiry date is a matter that will be considered in due course in the context of Budget 2022 and the subsequent Finance Bill.
48. Deputy Mairéad Farrell asked the Minister for Finance further to Parliamentary Question No. 53 of 25 November 2020, if further details of the social clauses in public procurement that the National Treasury Management Agency, NTMA, has used will be provided, in particular the value of these contracts; and the nature of the contract work and a description of the social clauses used therein in tabular form. [10789/21]
View answerIn relation to your question, it was not possible for the National Treasury Management Agency (NTMA) to respond to this information request in the time available, therefore, I will make arrangements to provide a response in line with Standing Orders.
The NTMA has indicated that given the number of contracts to which it is party, it proposes to confine its response to active contracts awarded since 2018 on foot of Official Journal of the European Union (OJEU) competitions.
49. Deputy Éamon Ó Cuív asked the Minister for Finance if boats sent for repair to the island of Great Britain, in which substantial work is carried out on them, are liable for tariffs and VAT on return to Ireland; if so, if they are the relevant rate and method of assessment for same; the details of the ongoing discussions to sort out such issues; and if he will make a statement on the matter. [10801/21]
View answerI am advised by Revenue that goods being sent to the UK for repair can avail of the Outward Processing procedure. Under the EU-UK Trade and Cooperation Agreement (Article GOODS 8), goods can be exported from Ireland to the UK for repair with no customs duty due when the goods are imported into the UK and when the goods are re-imported into Ireland. Similarly, no charge to VAT on import arises. The export declaration must state that the goods are for repair as provided for under the EU-UK Trade and Cooperation Agreement. When the goods are returned to Ireland after repair the import declaration must also state that the goods are returned repaired.
I am advised by Revenue that for the purposes of the procedure as outlined, repair means any processing operation undertaken to remedy operating defects or material damage. It must entail the re-establishment of the good to its original function or to ensure compliance with technical requirements for its use. Repair of a good includes restoration and maintenance, with a possible increase in the value of the good from restoring the original functionality of that good, but does not include an operation or process that:
- destroys the essential characteristics of a good, or creates a new or commercially different good;
- transforms an unfinished good into a finished good; or
- is used to improve or upgrade the technical performance of a good.
50. Deputy Denis Naughten asked the Minister for Finance the number of formal and informal Council of the European Union meetings that have been held since 27 June 2020 under the remit of his Department; and the number of formal and informal meetings, respectively held virtually. [10815/21]
View answerThere have been no formal Council of the European Union meetings of Economic and Finance Ministers (ECOFIN) - which falls under the remit of my Department - since 27 June 2020 due to Covid-19 Pandemic restrictions.
Seven Informal meetings of Ministers have taken place, from that date, as listed below and I have attended them all.
- 10 July 2020
- 11-12 September 2020
- 6 October 2020
- 4 November 2020
- 1 December 2020
- 19 January 2021
- 16 February 2021
The September 2020 meeting took place in a physical formation in Berlin and was hosted by the German Presidency. All others listed have taken place using video conferencing.
51. Deputy Éamon Ó Cuív asked the Minister for Finance the percentage of containers and heavy goods vehicles, HGVs, arriving into Ireland from the United Kingdom in February 2021 that had their paperwork in order and were allowed through the green channel; the percentage that went through the orange channel and the red channel; the percentage that were physically inspected; and if he will make a statement on the matter. [10838/21]
View answerThe Deputy will be aware that since 1 January 2021, the UK has been outside the EU Single Market and Customs Union, and the trading relationship between Ireland and Great Britain has changed considerably. Compliance with relevant customs and other regulatory controls such as sanitary and phytosanitary (SPS) measures are now an integral part of trade with Great Britain. I am advised by Revenue that in practical terms this means that there will never be a scenario where all goods (i.e.100%) arriving into Ireland from Great Britain will be green routed. There will always be a level of documentary or physical examination of goods movements required as part of Ireland’s obligation to protect the integrity of Single Market and the Customs Union.
The table below sets out the routing of movements from the Great Britain into Dublin Port and Rosslare Europort for February 2021 up to Tues 23rd.
|
Routing of Movements |
Dublin Port Number |
Dublin Port % |
Rosslare Number |
Rosslare % |
|
Green (free to leave the port) |
17,040 |
82% |
1,484 |
82% |
|
Orange (documentary checks) |
2,869 |
14% |
270 |
15% |
|
Red (physical inspections) |
917 |
4% |
63 |
3% |
I am advised by Revenue that it continues to work collaboratively with individual businesses and relevant trade and representative bodies to assist and support those businesses, where possible, in addressing challenges and difficulties arising from the operation of and compliance with the aforementioned customs and other regulatory requirements. Revenue has a 24/7 presence at Dublin and Rosslare ports and help is also available via the Customs 24/7 telephone helpline (01 738 3685) and via email helpline channels.
52. Deputy Denis Naughten asked the Minister for Finance the number of companies that have availed of the employment investment incentive scheme in each of the past five years; the funding invested in each year concerned; his plans to improve the uptake of this scheme; and if he will make a statement on the matter. [10845/21]
View answerThe Employment Investment Incentive (EII) provides for tax relief of up to 40% (previously 41%) in respect of investments made in certain corporate trades. The EII allows an individual investor to obtain Income Tax relief on investments for shares in certain companies up to a maximum of €150,000 per annum in each tax year for investments made up until 31 December 2019. For investments made after 31 December 2019, the maximum limit is raised to €250,000, or up to €500,000 in the case of those who invest for a minimum period of seven years.
The most up-to-date statistics regarding the EII are available on the Revenue website at the following link:
https://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/eii.aspx
The following table summarises the data on the number of companies availing of EII and the total funding invested during the period 2011-2018:
|
Year |
Qualifying companies |
Total amount invested (€m) |
|
2018 |
37 |
48 |
|
2017 |
121 |
82.6 |
|
2016 |
209 |
105.6 |
|
2015 |
269 |
93.2 |
|
2014 |
296 |
77.9 |
|
2013 |
248 |
57.6 |
|
2011/2012 |
232 |
52.2 |
In my Budget 2021 speech I committed that my Department would initiate an assessment of how the EII Scheme can be enhanced in light of the impact of the current crisis.
Conscious that the pandemic has affected private investor confidence, and, in turn, the flow of available private equity investment into Irish companies, it is appropriate that we take stock of how the EII might be further enhanced to take account of the changing business environment.
My officials initiated a public consultation at the end of 2020 and submissions were invited from interested parties on the following:
- Enhanced support for start-ups under EII.
- Broadening the eligible funds from Irrevocable Trusts/Designated Investment Funds by opening EII Funds to other relevant regulated fund structures.
- The relationship between the Renewable Energy Support Scheme (RESS) and EII.
- How EII might respond to the changing environment in which it operates.
- Any other matters considered relevant.
Some thirty submissions were received by my Department by the closing date of 12 February which indicates a high level of engagement in the process. The Department is currently reviewing the submissions with the intention of further direct engagement with stakeholders shortly. Following that, proposals for changes to the scheme which may be of benefit will be developed for my consideration.
However, I would also note that significant changes to the scheme were made in the Finance Act 2019 to increase the attractiveness and effectiveness of EII. We await Revenue data on the impact of those changes. In recent years, the intention has been to seek to ensure that the scheme operates in an efficient and effective manner in terms of provision of support to young companies and this principle continues to guide the present review and consultation process that is underway.
53. Deputy Mattie McGrath asked the Minister for Finance the current amount invested in the National Treasury Management Agency prize bonds; and the percentage of this amount that was invested in each of the years from 1957 to date. [10849/21]
View answerIt was not possible for the National Treasury Management Agency to provide the information sought in the time available and, therefore, I will make arrangements to provide the information to the Deputy in line with Standing Orders.
54. Deputy Mattie McGrath asked the Minister for Finance the breakdown of the €4,715,350 prize money paid out in 2020 on behalf of the National Treasury Management Agency to winning prize bonds purchased between 1957 and 2011, inclusive in monetary and percentage format in each of the years in question. [10850/21]
View answerIt was not possible for the National Treasury Management Agency to provide the information sought in the time available and, therefore, I will make arrangements to provide the information to the Deputy in line with Standing Orders.
55. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects to be in a position to offer continued support for those areas of the economy most affected by Covid-19; and if he will make a statement on the matter. [10871/21]
View answer56. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects Covid-19-related supports here to equal that of adjoining or competing jurisdictions; and if he will make a statement on the matter. [10872/21]
View answer60. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he has focused on various sectors in the economy with a view to boosting the restart; and if he will make a statement on the matter. [10876/21]
View answerI propose to take Questions Nos. 55, 56 and 60 together.
To-date, just under €38 billion or 18½ per cent of national income (GNI*) has been provided to maintain incomes, sustain businesses and support our health service.
Broadly speaking, Government intervention has occurred on three separate occasions: the initial policy response adopted in the spring, a subsequent set of measures presented during the summer and, finally, the suite of measures introduced in Budget 2021.
The Government has made use of all three avenues available: direct public expenditure, the taxation system and ‘below the line’ supports such as credit guarantees.
Of the support provided to date, some €6 billion has been spent on Pandemic Unemployment Payments, along with approximately €5 billion on the two wage subsidy schemes.
Business supports have included the Covid Restrictions Support Scheme (CRSS), commercial rates waivers and restart grants.
Health have received an additional €4 billion to assist in building capacity, and securing necessary equipment and PPE.
Contingent supports have included the Credit Guarantee Scheme, the Pandemic Stabilisation Fund, each worth €2 billion, along with a number of loan schemes worth a further €1 billion.
As you can see, the bulk of discretionary fiscal supports have involved ‘above-the-line’ measures: supports that directly improve the financial situation of the private sector, while directly worsening the financial situation of the public sector.
This contrasts with the situation in some other jurisdictions, where ‘below-the-line’ supports, such as loan guarantees, have been the main fiscal policy instrument. The scale of the direct supports means that the Irish fiscal response has been at the upper-end of the distribution of advanced economy responses.
Supports will continue for as long as they are needed. There will be no cliff-edge in their removal.
However, the domestic tax base is not sufficient to cope with this amount of spending beyond the very short-term. Therefore, once the vaccine rollout has progressed and the economy re-opened, we will need to begin to roll back the once-off and emergency measures that were put in place in order to ensure fiscal sustainability.
57. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects the economy to recover in any six-month period after the relaxation of Covid-19 restrictions; and if he will make a statement on the matter. [10873/21]
View answerThe economic projections underpinning Budget 2021 in October last, were based on a number of key assumptions, including that there would not be a widespread national lockdown this year and that vaccines for Covid-19 would not be widely available before the end of the year. For the purpose of prudent budgetary planning, it was also assumed that bilateral trade with the UK would take place on WTO terms from January. Based on these assumptions, my Department projected GDP growth of 1.7 per cent for the year. However, the public health and economic situation has evolved significantly since the Budget forecasts were published. The recent Trade and Cooperation Agreement between the EU and the UK and the earlier than anticipated rollout of vaccines are both positive developments that will improve the economic outlook for this year. On the other hand, the ongoing Level 5 restrictions will likely have a contractionary effect on the economy.
While the process of rolling out vaccines will undoubtedly take time and restrictions will be required in the near term, Covid related restrictions will gradually be eased and an economic recovery can then take hold. The speed of this recovery will depend on the pace at which we are able to safely re-open the economy and society. In the near-term after Covid-19 restrictions are relaxed, the recovery in the domestic economy should be supported by the release of pent-up demand financed by the unwinding of historically high levels of household savings. By continuing to support household incomes and thereby minimising the potential for longer lasting damage to the labour market, I am optimistic that a sustained economic recovery will take hold.
Nevertheless, there still remains considerable uncertainty surrounding the economic outlook as it will depend on many factors, including the speed at which Covid-19 vaccines can be rolled out and the time it takes to suppress the current wave of the virus. My Department will continue to closely monitor and analyse these economic and epidemiological developments and will publish updated forecasts as part of the Stability Programme Update in April.
58. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he has studied the effects of Brexit on all sectors of the economy; his plans to encourage recovery thereafter; and if he will make a statement on the matter. [10874/21]
View answer59. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the effects of Brexit have been felt throughout the economy; his plans for short or long-term proposals to address issues arising; and if he will make a statement on the matter. [10875/21]
View answerI propose to take Questions Nos. 58 and 59 together.
My Department has been to the fore in producing and funding a number of assessments of the extent of the economic impact of Brexit, identifying the most exposed sectors and looking at both the short and medium term impact of Brexit in different scenarios.
The studies undertaken by my Department, found that negative impacts will be most severely felt in those sectors with strong export ties to the UK market – such as the agri-food, traditional manufacturing and tourism sectors and also SMEs generally.
In terms of those exposed sectors; the recently concluded Trade and Cooperation Agreement between the EU and UK is a positive conclusion to the transition period. However, the new agreement still represents a break from the previously existing arrangements; i.e. a permanent shock to our economy.
Therefore, even with the new Trade and Cooperation Agreement, Brexit will still have a negative economic impact on the Irish economy - particularly in the most exposed sectors in comparison to the previous trading relationship with the UK.
Joint research published by my Department and the Economic Social Research Institute (ESRI) in March 2019 on the macroeconomic implications of Brexit, captured a range of possible future relationships between the EU and the UK. This research included a limited Free Trade Agreement (FTA) scenario (based on a zero-tariffs and zero-quotas goods-only agreement), which is broadly in line with the recently concluded Trade and Cooperation Agreement.
Under this Free Trade Agreement scenario the level of GDP would be around 2 per cent lower over the medium-term (i.e. 5 years) and 3 per cent lower over the long-term (i.e. 10 years), compared to a situation where the UK remained in the EU.
The Government is also cognisant that while the Trade and Cooperation Agreement will protect Irish exporters from the more significant impact of a ‘no-deal’ scenario, Irish firms will still be impacted by the change in trading arrangements.
However, to prepare our economy for the impact of Brexit, the Government in Budget 2021 allocated unprecedented resources to confronting the twin challenges of COVID-19 and Brexit, with €340 million to be spent on Brexit-related measures. When these measures are taken into account, Brexit related expenditure to date is over €1 billion.
In addition, the European Commission’s proposal to allocate €1 billion from the Brexit Adjustment Reserve to Ireland is welcome. The 25 per cent share of the fund initially allocated to Ireland reflects the research undertaken by my Department which shows the disproportionate impact of Brexit on Ireland.
Looking ahead, the Irish Government remains focused on protecting our economic and financial interests, and will continue to work to minimise the disruption that Brexit will have on the economy and peoples livelihood’s to the greatest extent possible.
