Niamh Smyth
Question:243. Deputy Niamh Smyth asked the Minister for Finance to review a case (details supplied); and if he will make a statement on the matter. [54645/23]
View answerHousing Schemes
Questions (243)
Written answers
Help to Buy (HTB) is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive offers a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in Section 477C of the Taxes Consolidation Act 1997.
An increase in the supply of new housing remains a central and priority aim of Government policy. For this reason, HTB is specifically designed to encourage an increase in demand for new build homes in order to support the construction of an additional supply of such properties. For a property to qualify for HTB, it must be new or converted for use as a dwelling, having not previously been used as a dwelling.
Section 477C of the Taxes Consolidation Act 1997 (TCA) requires that HTB claimants must be first-time purchasers.
First-time purchaser, for the purposes of HTB is defined as:
"an individual who, at the time of a claim under subsection (3) has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling;"
I am advised by Revenue that there are no exceptions to the above definition of first-time purchaser for the purposes of HTB. This means that HTB is not available where one or more of the purchasers has previously purchased or built a property.
The intention behind this policy is to target the HTB relief on those who have not had the opportunity to build up equity in another property which could be used to purchase the second or subsequent property and those who could not have availed of HTB relief previously. While I understand the difficulties faced by individuals in saving for a deposit for a home, the HTB incentive was designed as a targeted response to the challenges facing first-time purchasers in particular.
As with all tax incentive schemes, there will always be individuals who do not meet the eligibility criteria. In designing tax reliefs, there is always a balance to be struck between providing support to as many people as possible, consistent with the overall policy intention behind the measure, and ensuring that there is an appropriate degree of control in the management of limited Exchequer resources.
In relation to taxation measures there are no other incentives or reliefs available in respect of the details provided. Queries in respect of the details of any additional housing supports should be directed to the Minister for Housing, Local Government and Heritage.
Primary Medical Certificates
Questions (244)
Niall Collins
Question:244. Deputy Niall Collins asked the Minister for Finance if and when changes will be made to the qualifying criteria for the primary medical certificate; and if he will make a statement on the matter. [54653/23]
View answerWritten answers
As the Deputy may be aware, the final report of the National Disability Inclusion Strategy (NDIS) Transport Working Group's (TWG) review of mobility and transport supports which included the Disabled Drivers and Disabled Passengers Scheme (DDS), endorsed proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the DDS, as it is no longer fit-for-purpose on any and all aspects. The proposals note this was a clear deliverable for the near future.
The NDIS TWG was chaired by Minister Anne Rabbitte and led by the Department of Children, Equality, Disability, Integration and Youth (DCEDIY).
Access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Under the aegis of the Department of Taoiseach officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report and to map a way forward. My officials are proactively engaging with this Senior Officials Group work as an important step in considering ways to replace the DDS, as one specific personal transport response, in the context of broader Government consideration of holistic, multifaceted and integrated transport and mobility supports for those with a disability. Three meetings have been held, in July, November and December. Department of Taoiseach officials are considering ways forward based on meeting inputs to date.
In the above context, any further changes to the existing DDS, I believe would run counter to NDIS proposals to entirely replace the scheme with a modern, fit-for-purpose vehicular adaptation scheme.
Departmental Policies
Questions (245)
Cormac Devlin
Question:245. Deputy Cormac Devlin asked the Minister for Finance the key policy achievements realised and new initiatives taken by his Department during 2023; and if he will make a statement on the matter. [54786/23]
View answerWritten answers
To date in 2023, key policy achievements and new initiatives taken by the Department of Finance include:
- Budget 2024
The distributional impact of Budget 2024 is progressive, with lower income deciles experiencing the largest gains from both the Cost of Living package and from the core Budget 2024 measures. The establishment of two new funds was announced in Budget 2024:
• the Future Ireland Fund will help to protect living standards and public services for current and future generations, and,
• the Infrastructure, Climate and Nature Fund which will allow for sustained levels of investment in infrastructure in the event of economic downturns and to support climate and nature related projects.
In line with the Department’ strategic goals of ‘balanced, sustainable and economic growth’ and ‘sound public finances’, in 2023 my Department continued to monitor emerging domestic and international trends. In managing the challenges presented by Brexit, the pandemic, the war in Ukraine and elevated rates of inflation, the economic position remains strong. This is most clearly evident in the labour market, where the number in employment has expanded to record highs.
- International Tax Reform
The agreement reached by Ireland with approximately 140 other jurisdictions in 2021 represents an important step towards resolving the issues brought about by the digitalisation of the economy and is intended to provide certainty for multinational enterprises whose business models are so important for the Irish economy. There are two pillars to this agreement. The EU Minimum Tax Directive will be implemented through the Finance (No.2) Bill 2023 making good on Ireland’s commitment to deliver Pillar Two of the OECD agreement. Ireland welcomed the publication of the Multilateral Convention (MLC) by the OECD, demonstrating the substantial progress made on all aspects of Pillar One. I look forward to the opening of the MLC for signature in due course.
- Retail Banking Review
Government approved the publication of the Retail Banking Review in 2022 and the implementation of its 34 recommendations, which are now Government policy. A key issue identified by the Retail Banking Review was access to cash, both the ability to withdraw and deposit cash, and a number of recommendations address this. There is a dedicated team in place working on this issue that is currently developing legislation and preparing heads of bill, which I expect to bring to Government for approval to draft shortly.
Another related issue was a recommendation for the Department to lead on the development of a National Payments Strategy (NPS) in 2024 that will take account of the changing landscape and determine how best to adapt to it as per the terms of reference I published in June this year. The NPS will also take account of the EU legislative landscape including the shortly to be adopted instant payments regulation and the proposals on payment services, the digital euro and legal tender. The NPS is also looking at how to tackle fraud domestically and the acceptance of cash by both the private and public sectors. A public consultation will be issued shortly.
Work is also well underway in my Department on the development of a national financial literacy strategy. The team, which has secondees from the Consumer Protection and Competition Commission, ran a very successful stakeholder event, which I attended recently. On foot of the survey of stakeholders, the next step is to publish a mapping report in Q1 2024 with the aim to publish the national financial literacy strategy later in the year.
- Funds Sector Review
A review of the Funds Sector commenced this year. “Funds Sector 2030: A Framework for Open, Resilient & Developing Markets ” is a wide ranging review of an important part of the financial services sector, both in Ireland and globally. A public consultation has been conducted and the review is due to report in Summer 2024.
- Ireland for Finance Strategy
Action Plan 2023, the first action plan under the Update to Ireland for Finance strategy, was launched in March 2023 and contains 12 priority action measures. Priority themes are sustainable finance and digital finance and fintech.
- Advancing the Government’s Legislative Agenda
• Regulation of Lobbying and Oireachtas (Allowances to Members) (Amendment) Act 2023
• Finance Act 2023
• Central Bank (Individual Accountability Framework) Act 2023
• Finance (No. 2) Bill 2023 - It is anticipated that the Finance (No. 2) Bill 2023, which gives legislative effect to a number of announcements made in Budget 2024 as well as a number of other tax-related changes, will be enacted by end December 2023. The Bill includes provisions to implement the Pillar Two of the OECD Agreement minimum effective tax rate for large groups and companies.
• Credit Union (Amendment) Bill 2022
• Financial Services and Pensions Ombudsman (Amendment) Bill 2023
• Finance (State Guarantees, International Financial Institution Funds and Miscellaneous Provisions) Bill 2023
• Motor Insurance Insolvency Compensation Bill 2023
- Gender Equity Network
The Programme for Government contains a number of commitments to improving gender equality, and the promotion of equality, diversity and inclusion is a key action in both Our Public Service 2020 and the Civil Service Renewal Strategy 2030. In pursuing a number of initiatives to foster and develop greater diversity, a Gender Equity Network (GEN) has been established in my Department. The GEN was launched in September and will provide access to a forum to share ideas, the Department’s best practice and making connections and building relationships. The purpose of the GEN is to be a community of support that will drive change, creating a better environment for staff to thrive, and be recognised, in their career. The GEN aims to ensure that everyone feels included, supported and can thrive in their existing roles too, regardless of their gender.
In addition to these highlights, the Department has worked collaboratively on achieving positive results across the Divisions on policies in Economics, Climate Finance, EU and International Affairs and Financial Services. More details on these achievements will be available in the Department’s annual report for 2023. The report will provide more information on initiatives such as Insurance Reform, the selling down of the State ownership in AIB and PTSB, and the Credit Union policy framework review as well as on events such as the National Economic Dialogue.
Work will shortly commence on the Department’s 2023 annual report which will be published and available on the gov.ie website Further detail on the strategic framework that underpins the policy achievements in 2023 is available in the Department of Finance Statement of Strategy 2023-2025 on the gov.ie site.
Financial Services
Questions (246)
Thomas Gould
Question:246. Deputy Thomas Gould asked the Minister for Finance the date of the last engagement he had with the Central Bank to discuss macro-prudential lending rules for mortgage applicants. [54816/23]
View answerWritten answers
The Central Bank of Ireland, as part of its independent mandate to preserve and protect financial stability in Ireland, has statutory responsibility for the regulation of mortgage lending by banks and other Central Bank regulated mortgage lending institutions operating in Ireland.
In line with this mandate, the Central Bank introduced macroprudential measures, which apply certain loan-to-value and loan-to-income restrictions to residential mortgage lending by such institutions. These measures are contained in regulations made by the Central Bank under section 48 of the Central Bank (Supervision and Enforcement) Act 2013. Pursuant to that Act, the Central Bank is required to formally consult the Minister before making such regulations.
The last formal consultation took place in October 2022 in relation to the changes to the mortgage lending rules which came into operation on 1 January 2023.
In November 2023 the Central Bank reviewed these measures and it judged that the refreshed mortgage measures framework has been operating in a manner that is consistent with their objectives.
Therefore, the Central Bank did not propose any further change to the residential mortgage lending measures and consequently there was no further formal consultation process about the mortgage lending measures.
Housing Schemes
Questions (247)
Jim O'Callaghan
Question:247. Deputy Jim O'Callaghan asked the Minister for Finance his views on a matter relating to help-to-buy and the Revenue Commissioners (details supplied). [54870/23]
View answerWritten answers
The Help to Buy (HTB) scheme, as legislated for by Section 477C of the Taxes Consolidation Act 1997 (TCA), is designed to assist first-time buyers with the deposit required to purchase or self-build a new house or apartment to live in as their home.
In accordance with Section 477C (1) of the legislation, the purchase value of the qualifying residence cannot exceed €500,000. In the case of a self-build residence, the purchase value is defined as the approved valuation, being ‘the valuation of the residence that, at the time the qualifying loan is entered into, is approved by the qualifying lender as being the valuation of the residence’.
Furthermore, Section 477C (11) requires that the minimum Loan to Value (LTV) ratio in respect of any claim be at least 70%.
I am advised by Revenue that the details supplied relate to a claim in respect of a self-build residence with an approved valuation of €550,000 which exceeds the maximum allowable purchase value for relief to apply. Additionally, the 70% LTV ratio has not been met.
Customs and Excise
Questions (248)
Joe Flaherty
Question:248. Deputy Joe Flaherty asked the Minister for Finance if he will examine the removal of excise from HVO or hydrogenated vegetable oil fuel, given it has 90% reduced emissions and would be transformative if used in fleet operations especially. [54874/23]
View answerWritten answers
Ireland’s taxation of fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. ETD provisions on mineral oils are transposed into national law in Finance Act 1999 (as amended). Finance Act 1999 provides for the application of excise duty, in the form of Mineral Oil Tax (MOT) to liquid fuels that are used as motor or heating fuels.
MOT is comprised of a carbon component and a non-carbon component. The carbon component is referred to in legislation as the carbon charge, but it is more commonly referred to as the carbon tax. The non-carbon component of MOT is often referred to as “excise”, “fuel excise”, “fuel tax” or “fuel duty”. It is important to note that both components of MOT are excise. In complying with ETD minimum rates, total MOT rates are taken into account.
MOT law defines a biofuel as being a fuel made from biomass, with biomass defined as the biodegradable fraction of products, waste, and residues from agriculture (including vegetable and animal substances), forestry and related industries, as well as the biodegradable fraction of industrial and municipal waste. Section 100(5) of Finance Act 1999, which has been in place since 2012, provides that biofuels, such as Hydrotreated/Hydrogenated Vegetable Oil (HVO), are fully relieved from the carbon component of MOT.
The table below summarises current MOT rates applicable to biofuels used in place of auto-diesel, petrol and for non-propellant purposes such as heating. For comparison, it also details the MOT rates on auto-diesel, petrol, and Marked Gas Oil.
MOT rates per 1,000 litres effective from 11 October 2023
|
Fuel type/use |
Non-carbon component |
Carbon component |
Total MOT |
|
Petrol |
€476.80 |
€129.59 |
€606.39 |
|
Biofuel used instead of petrol |
€476.80 |
Fully relieved |
€476.80 |
|
Auto-diesel |
€376.94 |
€149.89 |
€526.83 |
|
Biofuel used instead of auto-diesel |
€376.94 |
Fully relieved |
€376.94 |
|
Marked Gas Oil used for non-propellant (e.g. heating) purposes |
€17.62 |
€131.47 |
€149.09 |
|
Biofuel used for non-propellant (e.g. heating) purposes |
€17.62 |
Fully relieved |
€17.62 |
As the rates above indicate, biofuels such as HVO benefit from significantly lower MOT rates due to the carbon tax relief. For example, the MOT on a litre of auto-diesel with no biofuel content is 64.8 cents, inclusive of VAT. HVO used in place of auto-diesel is relieved of the carbon tax which, inclusive of VAT, equates to a relief of 18.4 cents per litre. This means that the MOT on a litre of HVO used in place of auto-diesel is 46.4 cents, inclusive of VAT. This favourable tax treatment is intended to promote a higher level of biofuel usage and supports the Government’s commitment to incentivising more environmentally friendly alternatives to fossil fuels. As the carbon component of MOT is fully relieved for biofuels, these fuels are not impacted by the ten-year trajectory of carbon tax increases which was introduced in Finance Act 2020. This means that, as annual increases in the carbon tax take effect, the differential in tax costs between biofuels and fossil fuels will continue to widen, further incentivising the uptake of biofuels such as HVO.
Tax Code
Questions (249)
Joe Flaherty
Question:249. Deputy Joe Flaherty asked the Minister for Finance if he will consider a tapered carbon tax which would reward companies that are earnestly reducing their carbon footprint (details supplied). [54875/23]
View answerWritten answers
Government policy with regard to greenhouse gas emissions and taxation is based on the polluter-pays principle, whereby high emission energy products, fuels or vehicles are subject to the highest levels of taxation. National taxation measures are reviewed and examined as part of the annual budgetary cycle and policy options are published in the Tax Strategy Group papers. As set out in the Budget 2023 Tax Strategy Group Paper on Climate Action and Tax, the policy challenge in addressing climate change involves striking the appropriate balance between incentivising uptake of cleaner fuels and technology whilst protecting the more vulnerable in society from energy and transport poverty.
National measures which address high emitting behaviours include the carbon tax, fuel excise and vehicles taxes, which operate on a polluter pays principal. Since 2020 additional revenue raised from increases in the carbon tax is allocated for expenditure measures which ensure a Just Transition including funding targeted social welfare interventions and community energy efficiency investment. Consistently, internal Government analysis using the SWITCH model has found that the increases in the carbon tax have been progressive as a result of the increased social protection payments funded by the carbon tax.
My Department is committed to its role in using taxation as one of the policy levers which can contribute to Ireland meeting our emission reduction targets. Tax policy with regard to behavioural change, and emissions, is kept under review as part of the Tax Strategy Group (TSG) and Budgetary cycle.
Primary Medical Certificates
Questions (250)
Rose Conway-Walsh
Question:250. Deputy Rose Conway-Walsh asked the Minister for Finance the reason registered blind persons are omitted from availing of the primary care certificate; his plans to include blind persons in the future; and if he will make a statement on the matter. [54879/23]
View answerWritten answers
The final report of the NDIS Transport Working Group's review of mobility and transport supports including the Disabled Drivers and Disabled Passengers Scheme (DDS), endorsed proposals for a modern, fit-for-purpose vehicle adaptation scheme in line with international best practice that would replace the DDS, as it is no longer fit-for-purpose on any and all aspects. The proposals note this was a clear deliverable for the near future.
The NDIS TWG was chaired by Minister Anne Rabbitte and led by the Department of Children, Equality, Disability, Integration and Youth (DCEDIY).
Access to transport for people with disabilities is a multifaceted issue that involves work carried out by multiple Government departments and agencies. Under the aegis of the Department of Taoiseach officials from relevant Departments and agencies are meeting to discuss the issues arising from the NDIS report and to map a way forward. My officials are proactively engaging with this Senior Officials Group work as an important step in considering ways to replace the DDS, as one specific personal transport response, in the context of broader Government consideration of holistic, multifaceted and integrated transport and mobility supports for those with a disability. This includes consideration of the broad range of needs with those with a disability, including those blind persons who need an appropriate means of transport to improve functional mobility. Three meetings of the SOG have been held, in July, November and December 2023.
In that context, any further changes to the existing DDS would run counter to NDIS proposals to entirely replace the scheme with a modern, fit-for-purpose vehicular adaptation scheme.
International Bodies
Questions (251)
Rose Conway-Walsh
Question:251. Deputy Rose Conway-Walsh asked the Minister for Finance to provide, in tabular form, Ireland’s contribution to the IMF each year in nominal terms and as a percentage of GNP; and if he will make a statement on the matter. [54882/23]
View answerWritten answers
The International Monetary Fund (IMF) promotes international monetary cooperation and provides policy advice, technical assistance and loans to help countries build and maintain strong economies. Ireland is a strong supporter of the work of the IMF and we value their role at the centre of the global financial safety net. The IMF has been in existence since 1944 and Ireland has been a member country since 1957.
The IMF is a quota-based institution with much of its funding resources coming from the capital subscription (or quota) which member countries pay when joining or as part of quota increases. The last quota increase occurred in 2016 when Ireland’s quota increased from circa €1.5 billion to circa €4.3 billion. A further quota increase is in the process of being agreed.
Ireland’s quota in the IMF is funded by the Central Bank of Ireland and does not require an exchequer contribution. At the end of 2022 circa 27% of Ireland’s quota had been paid to the IMF with the remaining 73% maintained with the Central Bank of Ireland. The IMF quota is reported on in the Central Bank of Ireland’s Annual Report.
The table below sets out non-quota contributions to the IMF over recent years. This includes contributions to the Poverty Reduction and Growth Trust (PRGT) and the Heavily Indebted Poor Countries (HIPC) initiative.
|
Year |
Purpose |
Amount |
|
2017 |
PRGT |
€16m |
|
2020/21 |
HIPC |
€8.3m |
|
2023 |
PRGT |
€23m |
The levels set out in the table above are all very low fractions of a percent of GNP.
It should be noted that the 2017 contribution of €16 million represents Ireland’s share of the windfall proceeds of gold sales by the IMF in 2009-2010.
It should be noted that the 2020/21 contribution to the HIPC relates to a transfer within the IMF of Ireland’s share of resources in IMF managed accounts to the IMF’s Administered Accounts for Somalia and Sudan in 2020 and 2021. In April 2022, the European Central Bank determined that a portion of this funding was attributable to the Central Bank of Ireland and so, in line with the EU prohibition on monetary financing, €6.55 million was refunded from the exchequer to the Central Bank of Ireland in 2022.
It should also be noted that the IMF provided a loan of circa €22.5bn as part of the EU-IMF Financial Assistance Programme to Ireland, which was repaid over the period 2014 to 2017.
Departmental Properties
Questions (252)
Ivana Bacik
Question:252. Deputy Ivana Bacik asked the Minister for Finance the number of vacant and derelict properties and sites that are owned by his Department; his plans to bring each of these properties and sites into use; where no plans are in place, the reasons why; and if he will make a statement on the matter. [55045/23]
View answerWritten answers
I wish to advise the Deputy that my Department does not own any properties. The OPW are responsible for all building related matters for my Department.
Departmental Schemes
Questions (253)
John Brady
Question:253. Deputy John Brady asked the Minister for Finance if a scheme will be implemented in the near future to allow homeowners to buy out their mortgage from a vulture fund; if so, to provide further information on the scheme, timeframe and the measures the Government is taking to assist homeowners whose mortgages have been transferred to a vulture fund; and if he will make a statement on the matter. [55195/23]
View answerWritten answers
The Government is acutely aware of recent events which are impacting on mortgage interest rates and the strain these increases place on households.
On 31 August 2023, I met with the mortgage industry including the Banking and Payments Federation Ireland (BPFI), CEOs and senior representatives of all the main mortgage lenders and servicers and I made it clear that banks and all other mortgage entities should be fully aware of the significant challenges that some of their customers are facing and that lenders and servicers should respond by assisting their customers who are experiencing difficulty.
I also highlighted that greater clarity should be provided to customers on the possibility of switching provider and that this option should be fully supported by all mortgage entities, including the existing mortgage creditor. Further, I supported the steps taken by the Central Bank to ensure that firms proactively deal with emerging difficulties for their customers since the increase in interest rates.
The Central Bank requires firms to enhance the range of supports available to borrowers in or facing arrears and to have sufficient operational capacity to manage applications by borrowers to switch their mortgage or mortgage provider.
Arising from that meeting, on 6 September the Banking and Payments Federation of Ireland announced a number of further initiatives by the mortgage industry. This included:
• a second phase of a ‘Dealing With Debt’ campaign to highlight new and existing supports for concerned mortgage customers;
• mortgage servicing firms and MABS to collaborate on an expansion of streamlined customer engagement framework; and
• the provision of initial eligibility criteria by the main lenders to provide clear guidelines for home mortgage customers of credit servicing firms who are seeking to switch their mortgage.
This means that, for the first time, there is now an agreed industry wide set of initial eligibility criteria to facilitate people to redeem an existing mortgage with a non-bank creditor and to refinance it with new credit from a credit institution or other lender. Credit servicing firms have committed to working with these criteria to support customers switching and to ensure they are aware that they may have options to switch their mortgage.
The main mortgage broker representative bodies, Brokers Ireland and the Association of Irish Mortgage Advisors, have also agreed to communicate these criteria to borrowers seeking to switch their home loans. In order to be eligible to switch under these guidelines, customers need to be making full capital and interest repayments on their mortgage. In addition, customers must have no arrears on their home mortgage or any other lending in the past two years.
Once customers meet these and other initial criteria, applications will be assessed on a case-by-case basis in line with individual lender credit policy.
Separately, Budget 2024 provided for a temporary one-year mortgage interest tax relief scheme for homeowners with an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 on 31 December 2022. Qualifying homeowners will be eligible for mortgage interest tax relief in respect of the increased interest paid on that loan between the calendar year 2022 compared to the calendar year 2023 at the standard rate of income tax (20%), capped at €1,250 per property.
It also important to note that there is a strong consumer protection framework in place for mortgage borrowers and this framework is in place regardless of the type of regulated entity with whom they are dealing, such as a bank, a retail credit firm or a credit servicing firm..
I would also like to indicate that if a customer is not satisfied with how a regulated firm is dealing with them in relation to the handling of their mortgage, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes (including the Code of Conduct on Mortgage Arrears which applies to any loan that is secured on a primary residence) and regulations or other financial services law, they should make a complaint directly to the regulated firm.
If they are still not satisfied with the response from the regulated firm, they can refer the complaint to the statutory Financial Services and Pensions Ombudsman. Furthermore, I would advise that any person who is experiencing difficulty in relation to their mortgage should seek the assistance of the Money Advice and Budgeting Service (MABS). This is a State funded service for people whose home is in mortgage arrears or in mortgage difficulty and it can provide free legal and financial advice.
A dedicated adviser can help borrowers to find the best solution for their situation and under the Abhaile Scheme operated by MABS they can if necessary have a free face-to-face meeting with an accountant or a solicitor, who will explain their financial or legal situation and advise them how best to proceed.
Departmental Priorities
Questions (254)
Cathal Crowe
Question:254. Deputy Cathal Crowe asked the Minister for Finance his main policy and legislative priorities for 2024; and if he will make a statement on the matter. [55207/23]
View answerWritten answers
Key objectives and priorities for the year ahead are currently being finalised as part of my Department’s 2024 business planning process. Key policy priorities will include:
Economic and Taxation
A key objective will be the preparation of economic and fiscal forecasts to inform the Government’s policy priorities, along with delivery of Budget 2025. Production and publication of the Stability Programme Update (SPU) 2024 and the Summer Economic Statement 2024 are key priorities next year. The SPU is a key part of the budgetary cycle and one of the first parts of the preparation for Budget 2025. The Summer Economic Statement will set out the government’s medium-term budgetary strategy and outline the fiscal parameters within which discussions will take place ahead of Budget 2025.
Key economic publications will include the Annual Taxation Report 2024 and the Annual Report on Public Debt in Ireland 2023, and the National Economic Dialogue will be jointly hosted by my Department and the Department of Public Expenditure, NDP Delivery and Reform.
Having due regard to the Programme for Government and within the EU Semester and Fiscal Rules Framework, my Department will develop tax options for Budget 2025. Tax Strategy Group papers on options for tax policy changes will be prepared and published and the 2024 Finance Bill will give legislative effect to announcements made in the Budget.
Work will continue on finalising and implementing the OECD Corporate Tax Agreement. The EU Minimum Tax Directive will be implemented through the Finance (No.2) Bill 2023 making good on Ireland’s commitment to deliver Pillar Two of the agreement. Ireland welcomed the publication of the Multilateral Convention (MLC) by the OECD, demonstrating the substantial progress made on all aspects of Pillar One. I look forward to the opening of the MLC for signature in due course.
Financial Services and Banking
Government approved the publication of the Retail Banking Review in 2022 and the implementation of its 34 recommendations, which are now Government policy. A key issue identified by the Retail Banking Review was access to cash, both the ability to withdraw and deposit cash, and a number of recommendations address this. There is a dedicated team in place working on this issue that is currently developing legislation and preparing heads of bill, which I expect to bring to Government for approval to draft shortly.
Another related issue was a recommendation for the Department to lead on the development of a National Payments Strategy (NPS) in 2024 that will take account of the changing landscape and determine how best to adapt to it as per the terms of reference I published in June this year. The NPS will also take account of the EU legislative landscape including the shortly to be adopted instant payments regulation and the proposals on payment services, the digital euro and legal tender. The NPS is also looking at how to tackle fraud domestically and the acceptance of cash by both the private and public sectors. A public consultation will be issued shortly.
Work is also well underway in my Department on the development of a national financial literacy strategy. The team, which has secondees from the Consumer Protection and Competition Commission, ran a very successful stakeholder event, which I attended recently. On foot of the survey of stakeholders, the next step is to publish a mapping report in Q1 2024 with the aim to publish the national financial literacy strategy later in the year.
A review of the Funds Sector commenced this year. “Funds Sector 2030: A Framework for Open, Resilient & Developing Markets ” is a wide ranging review of an important part of the financial services sector, both in Ireland and globally. A public consultation has been conducted and the review is due to report in Summer 2024.
The Department will continue work on establishing and implementing policy and legislative frameworks to support a well-regulated, effectively supervised insurance sector taking account of a range of EU developments focussing on consumer & industry protection. Transposition of the Motor Insurance Directive through the Motor Insurance Insolvency Compensation Bill 2023 is a key priority in 2024.
My Department will continue to contribute to the Government’s climate action agenda and will work collaboratively to pursue Ireland’s priorities on sustainable and climate finance. This will include engagement with, and input to, relevant EU level negotiations and legislative proposals.
Following the announcement in Budget 2024, two new funds will be established. The Future Ireland Fund will help to protect living standards and public services for current and future generations, and the Infrastructure, Climate and Nature Fund which will allow for sustained levels of investment in infrastructure in the event of economic downturns and to support climate and nature related projects.
The 10th Progress Update Report on the special liquidation of IBRC was published in September 2023. As set out in the Report, the timeline for completion of the liquidation remains forecast to be by the end of 2024.
On foot of a review of the policy framework for credit unions, the Credit Union (Amendment) Bill 2022 will be completed and enacted in 2024. The Bill contains a number of targeted amendments to the legislative framework, including the following:
• Credit Unions are free to choose the option most suited to their member’s needs, including:
• Referral of members to another Credit Union with a wider product offering;
• Option of loan participation and syndication;
• Corporate credit unions can now be formed. These are Credit Unions whose members are other credit unions.
EU and International
At EU and international levels, priorities will include:
- Advancing Ireland’s interests at relevant EU Council formations
- Management of Ireland’s interests in regards to the Recovery and Resilience Facility at a European level
- Managing international and EU outreach and alliance-building in support of advancing national objectives, including with the UK in the context of post-Brexit developments and related agreements
- Managing the State’s investment relationship with the European Investment Bank.
Further detail on the strategic framework that underpins my Department’s policy objectives in 2024 is available in the “Department of Finance Statement of Strategy 2023-2025” on the gov.ie website.
In advancing the Government’s legislative agenda, my Department’s priorities will include:
- Future Ireland Fund and Infrastructure, Climate and Nature Fund Bill
- Motor Insurance Insolvency Compensation Bill 2023
- Financial Services and Pensions Ombudsman (Amendment) Bill
- Credit Review Service Bill
- Finance (Tax Appeals) Bill
- Access to Cash Bill 2024
- Finance Bill 2024
Banking Sector
Questions (255, 257, 258)
Niall Collins
Question:255. Deputy Niall Collins asked the Minister for Finance if he is aware of a practice and approach by a bank (details supplied) in dealing with a mortgage offset facility; if he approves of this practice and approach; and if he will make a statement on the matter. [55219/23]
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Steven Matthews
Question:257. Deputy Steven Matthews asked the Minister for Finance if his attention has been drawn to the concerns of a bank's customers (details supplied) regarding the planned sale of their offset mortgages due to the bank’s departure from the Irish market; to offer assurances that his Department will engage with the bank to ensure fairness is applied to all those impacted; and if he will make a statement on the matter. [55241/23]
View answerNiall Collins
Question:258. Deputy Niall Collins asked the Minister for Finance if he is aware of a practice and approach of a bank in dealing with a mortgage offset facility (details supplied); if he approves of this practice; and if he will make a statement on the matter. [55254/23]
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I propose to take Questions Nos. 255, 257 and 258 together.
I understand that on the 27 November 2023 Ulster Bank of Ireland (UBI) announced they were writing to customers with offset mortgage products to advise them of changes necessitated by UBI’s withdrawal from the Irish market. UBI has announced that customers are being given six months’ notice to close the savings and current accounts that have been linked to their offset mortgage by 23 May 2024. UBI has also informed offset customers that their mortgages will remain with UBI for now but are likely to be included in a future loan sale.
The provision of banking services and/or the transfer or sale of a creditor's benefits and rights under a credit agreement is a commercial decision for an individual firm. While decisions related to the strategic direction and business model of regulated firms are for the boards of those firms, they are obliged to consider all of the relevant risks and to ensure compliance with applicable regulatory requirements at all times.
It is regrettable that UBI is exiting the Irish market, but this is a commercial decision of that bank and, as Minister for Finance, I have no function or role in the commercial decision-making matters by regulated entities.
However, I would like to inform the Deputy that there is a strong consumer protection framework in place for mortgage borrowers and this framework will continue to remain in place following any decision by an existing regulated entity to sell or assign the benefits and rights it has under a credit agreement to another entity.
Therefore, the framework provides the same protections for borrowers regardless of the type of regulated entity with whom they are dealing, such as a bank, a retail credit firm or a credit servicing firm.
For example, under Provision 3.11 of the Consumer Protection Code 2012, a regulated firm that intends to cease operating, merge with another, or to transfer all or part of its regulated activities to another regulated firm, must:
• provide affected consumers with at least two months’ notice to enable them to make alternative arrangements if they so wish;
• ensure all outstanding business is properly completed prior to any transfer, merger or cessation of operations; or, in the case of a transfer or merger, inform customers as to how continuity of service will be provided following a transfer or merger; and
• in the case of a merger or transfer of regulated activities, inform customers that their details are being transferred to the other regulated entity, if that is the case.
I would also like to inform the Deputy that if a customer is not satisfied with how a regulated firm is dealing with them in relation to the handling of their mortgage or other banking services, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes (including the Code of Conduct on Mortgage Arrears which applies to any loan that is secured on a primary residence) and regulations or other financial services law, they should make a complaint directly to the regulated firm.
If they are still not satisfied with the response from the regulated firm, they can refer the complaint to the statutory Financial Services and Pensions Ombudsman (FSPO). The FSPO can be contacted on 01 567 7000 or at info@fspo.ie and their website is: www.fspo.ie/.
International Bodies
Questions (256)
Darren O'Rourke
Question:256. Deputy Darren O'Rourke asked the Minister for Finance if he will report on the appraisal of the potential for Ireland to channel SDRs to IMF funds; and if he will make a statement on the matter. [55222/23]
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Special Drawing Rights (SDRs) are an international reserve asset that was created by the International Monetary Fund (IMF) in 1969. Under the IMF’s Articles of Agreement, the IMF has the authority to create liquidity through allocations of SDRs to its member countries. Allocations are made in proportion to each country’s shareholding in the IMF, which is broadly reflective of that countries position in the world economy. SDRs are not a currency but their value is based on a basket of five currencies with one SDR currently equivalent to approximately €1.22.
The IMF has allocated SDRs to its member countries in the 1970s (in response to a marked decline in world reserves, concern about increasing trade restrictions and to deal with changes in the international monetary system), in 2009 (in the context of the global financial crisis) and in 2021 (in response to the unprecedented global health and economic crisis).
A disadvantage of IMF SDR allocations is that they are made to each member country in proportion to its shareholding in the IMF and therefore, allocation amounts do not necessarily reflect the needs of each country. In an effort to address concerns about the untargeted nature of the SDR allocations, the IMF has encouraged countries with strong external positions to reallocate part of their 2021 general SDR allocation, on a voluntary basis, for the benefit of low-income countries. This would be achieved by lending (or “channelling”) a portion of the SDRs in order to provide financing to these countries.
Countries can channel SDRs to IMF funds such as the Resilience and Sustainability Trust, which provides longer-term affordable financing to low-income and vulnerable middle-income countries, or the Poverty Reduction and Growth Trust, which provides concessional loans to low-income counties. My Department is currently in the process of appraising the potential for Ireland to channel SDRs to these IMF funds.
It should be noted that is not possible for Ireland to channel SDRs to multilateral development banks, such as the World Bank or African Development Bank, as to do so would not be compatible with the EU’s prohibition on monetary financing under Article 123(1) of the Treaty of the Functioning of the EU.
Question No. 257 answered with Question No. 255.