Other Questions.
6 Ms B. Moynihan-Cronin asked the Minister for Finance the number of persons, companies and trusts being investigated by the Revenue Commissioners arising from the Clerical Medical Insurance-NIB inquiry at the latest date for which figures are available; the number of cases in which settlements have been agreed; the amount paid; the number of cases outstanding; and if he will make a statement on the matter. [7187/05]
Amharc ar fhreagraI am informed by the Revenue Commissioners that arising from the Clerical Medical Insurance-NIB inquiry, 466 cases have been targeted for investigation. To date, 297 cases have been settled on payment of tax, interest and penalties amounting to a total of €49.51 million. A further 116 cases have been finalised with no additional liability arising. The remaining 53 cases are the subject of ongoing investigation, in respect of which €4.38 million has been paid on account.
In the course of 2003, three cases were prosecuted, with fines being imposed in two cases and a suspended sentence imposed in the other. The individuals concerned have also settled their tax affairs and paid the outstanding tax together with interest and penalties. A further case is under investigation with a view to prosecution.
Aggregate results of the ongoing investigations have been published each year since 1998 in the annual reports of the Revenue Commissioners. Individual details of settlements have also been published where the provisions of section 1086 of the Taxes Consolidation Act 1997 applied.
Given the increase in cases identified compared with previous answers — it now stands at 466 as opposed to 452 and there are now 53 cases not yet dealt with — will the Minister reconsider his proposal in yesterday's discussion on the Finance Bill effectively to dilute the provisions that he promised to introduce in the Bill regarding those who aid and abet tax evasion? In particular, does the Minister agree with statements by Mr. Daly, the Chairman of the Revenue Commissioners, that not only is a tightening up of the aiding and abetting offence required, we should also have a clear reference to putting money offshore? That is the net point where the Revenue cannot successfully prosecute. The Minister has himself stated that in 2003 only three prosecutions took place, two of which resulted in fines. Compare that with a person who defrauds social welfare, is prosecuted and receives a sentence or suspended sentence. Will the Minister reconsider his proposed amendment on Report Stage to dilute the aiding and abetting offence in this year's Finance Bill?
I find that most unfortunate, and I ask people and the press to check the record of the House yesterday regarding the Committee Stage of the Finance Bill. In an effort to make some sort of political point, presumably in the context of the by-election campaign, the Deputy has continually misrepresented my position. That is the second successive such question from the Deputy. She was listening to me very intently yesterday in committee, but she has sought to misrepresent my position, and I find it most unfortunate. The purpose of Question Time is to clarify matters and provide factual information to the House on any matter that any Deputy wishes to raise with me, something that I gladly do. I find it unfortunate to have to come back with a reply that has to retrieve a situation after inaccurate and untrue assertions made by the Deputy in her question.
There is no question of diluting the aiding and abetting section. What is involved, as is the normal course in such matters, is ensuring that we have sufficient clarity and understanding on the part of everyone involved, including the Revenue Commissioners, the taxpayers, tax advisers, the Law Society and accountancy bodies, and that they all understand precisely what the extension of section 1078 of the Taxes Consolidation Act 1997 involves. The problem hitherto has been that one could prosecute only on the basis of providing or assisting in providing incorrect information on a tax return. We are broadening that to try to ensure that in future — prospectively, since to do so retrospectively is unconstitutional — where there has been a direction, policy or practice not by those on the front line and accountable but by others higher up in management, they will be amenable to prosecution through the creation of the new offence created by the Finance Bill 2005.
I made it very clear on the basis of legitimate questions asked by Deputy Bruton that there was no question of any dilution involved. It was a matter of clarifying the extent and extension of the existing range of offences available. I also made it clear in our discussion with Deputy Burton in committee that the wording being used covers the specific situation raised by the Chairman of the Revenue Commissioners and that the facilitating of fraudulent tax evasion covers the specifics that she mentioned, recognising that putting money offshore is not in itself an offence. Doing so without notifying the Revenue is the offence. I made it very clear in our discussions on what I did in section 133 of the Finance Bill that the issue in question is covered.
I have no problem, and the Deputy is quite entitled to put her point of view if it is different. However, I ask her, in the interests of fairness and accuracy, to desist from seeking to misrepresent my position, which is quite clear.
In light of the recent takeover of National Irish Bank by Danske Bank, is the Minister confident, with the change of ownership and whatever alteration in management might have taken place since, that corporate responsibility for the malfeasance that occurred in that bank will be properly prosecuted and that individuals in the new company will not slip through the net?
As is normal regarding the law on mergers or takeovers, existing liabilities of the bank remain current. People can still sue in the event of malfeasance against them under the auspices of the National Irish Bank. People buy both the assets and the concurrent liabilities of businesses when they acquire them. As I understand it there is no question of a person's right to sue or to claim recompense for any wrongdoing regarding any of these matters being put at risk as a result of the acquisition taking place.
May I ask a brief supplementary?
We are over time. The Deputy must be very brief.
Will the Minister explain the reason for the increase in the number of cases under investigation from 452, the number he gave me on 1 February, to 466, an increase of 14? Will he explain also the increase from 40 to 53 of the unsettled cases he indicated in earlier replies are likely to be the ones which involved tax evasion and the possible commission of offences?
I understand from my note that the number of cases under investigation has increased from 452 to 466, an increase of 14, as a result of some supplementary information provided by NIB during the final clean-up phase of the investigation.
7 Mr. Crawford asked the Minister for Finance the total tax generated from the motor sector in 2002, 2003 and 2004; the main components of tax raised from that sector; and if he will make a statement on the matter. [7172/05]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the relevant information available is the amount of tax revenues collected as VAT, excise and VRT in respect of motor vehicles. As regards VAT, all figures are estimates as the information to be furnished on VAT returns does not require the yield from particular sectors of trade to be identified. It is not possible to quantify corporation tax or income tax data separately for the motor industry.
In 2004, the provisional tax revenue was €3,752 million. This was comprised of VAT on a range of commodities including mineral oils, vehicle sales, other motor-related products and services of €962 million; mineral oil tax in respect of petrol, diesel and LPG of €1,845 million; and VRT of €946 million. In 2003, the tax revenue in respect of the motor sector was €3,256 million comprising VAT of €880 million; mineral oil tax of €1,557 million; and VRT of €819 million. In 2002, the tax revenue was €3,167 million comprising VAT of €860 million; mineral oil tax of €1,514 million; and VRT of €793 million.
In respect of annual motor tax, I am advised by the Department of the Environment, Heritage and Local Government that revenue from motor tax was €747 million in 2004, €680 million in 2003 and €539 million in 2002. As the figures illustrate, the tax raised from the motor sector is an important component of the overall tax take. It is a matter for Government as to how taxes across the different tax heads are raised. The Government has prioritised tax reductions on income earned by employees, in preference to other areas, and this policy has helped create record employment levels. The Deputy might wish to note that I did not increase VRT, VAT or excise rates on petrol or diesel in this year's budget. Consequently, increasing tax revenues arising from car sales to date in 2005 is a function of increased sales and, in some cases, higher prices but not higher tax rates.
Will the Minister agree that motorists have become something of a soft target? To put a car on the road now, the average tax contribution is over €2,500 and as the Minister's reply has revealed, that contribution is growing rapidly. Will the Minister accept it is time to reassess the extent to which we depend on this type of expenditure tax on what is for many people a necessity in terms of their livelihood? Does he sense that this huge growth in tax in this area, which the Minister seldom adverts to — the concentration is exclusively on what I believe he said yesterday was a €4 a week reduction in income tax that he secured——
No, it is not. The Deputy is not telling the whole story.
The amount a person has to pay on his or her motor tax is far more than the €4 a week reduction of which the Minister is so proud. The real issue for the Minister is that tax in this area has doubled in the past seven years, and spending has doubled to match, but what frustrates many people is that they do not see the delivery in the health service and the quality of footpaths, roads or public transport. There is a serious issue in that there are soft targets in the Minister's tax approach and he is not delivering value for money. People are getting frustrated with that combination, as frustrated as the Minister's predecessor who must have thought there was a boiler in the Custom House burning money it was absorbing so much.
I am glad to have the opportunity to record the achievement of which I am so proud because Deputy Bruton likes to hear only the first part of the sentence and shout down the second part. A total of €220 less in tax is being paid by the average industrial wage earner this year compared with 1997, while his or her wage has increased by €11,000. Instead of an average industrial wage of €19,000 when the coalition Government was in office, the average industrial wage now is over €30,000. Despite the fact that his or her wages have risen by €11,000 per year, they are actually paying €220 less in income tax. That is what I am proud of and that is not a difference of €4 per week. I am glad to clarify that point so that we do not continue with the misapprehension that I am proud of a change of just €4.
The second point made by the Deputy relates to this basic choice. The Deputy wants to be a friend to the motorist and seek to review this area with a view to indicating to the public that he will reduce these taxes, despite the fact that a function of these increases has been the buoyancy in vehicle sales. We know all about that from our own experience in terms of the numbers of cars on the road over the past ten years and what is estimated to continue to rise. The level of car ownership in this country is very high. If the Deputy wants to do that he will have to ask the public from where will we get our taxes.
By taking the decision to keep taxes low on income we have far better prospects of increasing job creation and the numbers of wage earners who will contribute to the buoyant revenues of the economy. We believe the model of taxation under the various tax heads is probably the best one as we see it. Others might disagree but if they want to change it, they should tell the public the full story. If they reduce it in one phase, where will they increase it because we cannot try to be a friend to everybody and leave things as they are?
I do not accept that we are not seeing an improvement. The national development plan is being rolled out. For example, if one travels on the N2 today one can see the amount of work taking place on the Ashbourne Road, which happens to be in Meath — with the by-election we might as well be topical.
There are no buses on the road. The Minister should try to get a bus or ask his colleague, the Minister for Transport, if he can get one. He might not suffer from car sickness then.
I knew that would prompt Deputy Burton to seek to shout me down. There are about 17 machines on the road and another 20 or 30 are due to come on to it. As soon as that road is completed, we will move on to the N3. The chambers of commerce in the Meath constituency made it clear in committees — I hope members of the press were in a position to attend — who they regard as the strongest proponents of the necessity for the N3 to go ahead. They were thankful of the consistent position of the Fianna Fáil Deputies in their constituencies as distinct from manoeuvres being made by others who have now finally recognised that over 80% of the constituents of Meath want to see that road go ahead as quickly as possible.
8 Mr. Coveney asked the Minister for Finance if he is satisfied with the effectiveness of the process whereby different funding options are being assessed for capital projects; and if he will make a statement on the matter. [7134/05]
Amharc ar fhreagraThe responsibility for capital project selection and choosing the optimal means of funding such projects rests with the agencies sponsoring and sanctioning such projects. Normally the sanctioning authority will be a Department. I am determined to ensure that value for money for the taxpayer is maximised in the exercise of this responsibility. Accordingly, Departments and implementing agencies, in deciding projects and funding, must operate within the financial framework of the five-year multi-annual capital envelopes as approved by the Government in the context of the annual budget and within the appraisal and procurement framework as set out in my Department's capital appraisal guidelines, interim PPP guidance and procurement guidance.
Under the general conditions of sanction for the multi-annual capital envelopes introduced in budget 2004, Departments are required to comply in all cases with my Department's guidelines for the appraisal and management of capital projects, the interim PPP guidance from my Department and observe the rules on procurement. Revised Department of Finance guidelines for the appraisal and management of capital expenditure proposals in the public sector were published in February and circulated to Departments and agencies for implementation.
To assist State authorities in determining the optimal means of financing public investment projects, the Government established the National Development Finance Agency, NDFA, on 1 January 2003. Its role includes advising on the financing and risk evaluation of Ireland's public private partnership procurement projects and raising or arranging finance for appropriate capital projects. In this respect it provides a centralised expert service to Departments and certain other State authorities. The PPP procurement option should be available to Departments and State authorities for application to appropriate projects where there is the right scale, risk and operational profile to harness the benefits of this approach.
As the Deputy will be aware, there are also reforms planned in the area of public sector contracts for construction and construction related services. The reforms will involve the amendment and introduction of new standard forms of construction contracts which will transfer appropriate risks to contractors where they are best placed to manage them. These initiatives seek to reduce the potential for project cost overruns and provide better value for money for the State. Consultation with the construction industry on the contract-related material will commence shortly.
The Minister stated that the Departments sponsoring these projects follow his Department's guidelines. The Comptroller and Auditor General has indicated, in the case of the roads programme, that an overrun of €4 billion was due to underestimates of items that should have been correctly estimated when projects were originally put forward. He also indicated that there was an additional overrun of €2 billion on the programme as a result of altered works. Is the Minister stating that in the case of the projects which generated such a massive overrun, the sponsoring Departments applied the guidelines set down by his Department? The Comptroller and Auditor General strongly criticised those involved for not applying the guidelines. He also indicated that proper reassessments were not carried out when changes were made and that items which should have been costed were not properly costed.
Is the Minister living in cloud cuckoo land? He is failing to recognise what Accounting Officers are telling us, namely, that the rules to which he refers are not being applied. That is why there have been so many overruns and why so many projects have not been delivered on time. The Government needs to get to grips with the situation. If the Minister continues to read replies of the sort he has just read into the record of the House, he will not get to grips with it.
There has been a great improvement in this area and major projects are now coming in not only on time but before time and on budget. The learning curve relating to this process was not sufficiently steep and we did not come to grips quickly enough with certain problems that arose. Some of these problems came about as a result of judicial reviews which arose on foot of people exercising their right under the existing system to delay matters. As a result of the opposition that was organised by people who had difficulties with particular issues — many of these have been well publicised — huge costs were incurred on behalf of the taxpayer. Perhaps that matter should be highlighted, particularly to those who state that we have the luxury to wait two, three or four years for judicial reviews etc. to be completed.
Delays do not always occur as a result of what the Deputy would portray as internal institutional incompetence but are rather caused by actions taken by people. We are trying to roll out a capital programme of a greater magnitude than any seen in the past. In that context, we must ensure that the statutory and legislative framework is such that it compares favourably with those that apply in other countries on the Continent which do not appear to experience the same level of problems as Ireland in this area.
We have updated the guidelines — which were originally drafted in 1994 — to take account of the factors to which I refer. It is not, as the Deputy suggested, all down to internal incompetence. As he is aware, a number of delays occurred which were outside the control of those managing the projects. Perhaps everyone would be better served if the costs involved in dealing with such delays were highlighted rather than suggesting that they are a luxury we can afford and a price worth paying.
What sanctions are imposed if a Department does not meet the guidelines? Let us move away from roads and consider the position vis-à-vis hospital projects. In some instances, Ministers have approved projects, investments have been made and then the new facilities could not be opened. Deputy Burton will be aware of a notable example of such a project in her constituency. Surely someone must take the rap for not properly planning a project and ensuring that it could be opened when taxpayers money has been spent. What sanctions does the Department apply where the guidelines are manifestly not having an effect in terms of the way projects are planned?
I previously served as Minister for Health and Children and am aware it can be the case that when a capital project — for which there have been many calls and in respect of which everyone is agreed — is proceeded with, industrial relations issues begin to arise on the current side in terms of staffing levels etc. People seek leverage and this can cause problems in respect of attempts to open a facility. This happened in my constituency on one occasion during an election campaign. When else would it happen? It did not have the desired result for some of those involved, however, because Fine Gael, not Fianna Fáil, lost a seat.
One may be providing much better facilities, both in terms of work and care environments — I refer here, in particular, to geriatric and other care environments — and one may discover that further negotiations need to be undertaken because those facilities have been improved.
Is the Minister saying that these problems are always caused by someone who is exploiting the situation?
No. I am saying that there are reasons other than those to which the Deputy referred. There are real problems that arise.
There have been breaches of the guidelines with which the Minister has failed to come to grips.
I have brought forward new guidelines. I have circulated these and I want them to be implemented. That is where I stand and I will be accountable for what I do.
The Minister said that he was preparing guidelines.
I have circulated guidelines relating to contracts for implementation. I will also be engaging in detailed discussions with the construction industry in respect of other aspects of this matter.
There has been an improvement in the way the system operates. Deputy Bruton, in his position as an Opposition spokesperson, is trying to suggest that nothing has been done and that they money has been wasted or has disappeared into thin air. That is not the case and there have been improvements.
I am not pretending that it is the case.
The Deputy never made that clear.
9 Mr. M. Higgins asked the Minister for Finance the position regarding the planned sale of State property announced; if he will list the property sold and the amount raised; the way in which the money raised has been used; the properties it is planned to sell during 2005; and if he will make a statement on the matter. [7155/05]
Amharc ar fhreagraThe list of property sold by the Office of Public Works to date in 2005 and the amounts raised are as follows:
|
Building |
Title |
Price |
Closing Date of Sale |
|
€ |
|||
|
2 Church St., Dungarvan, Co. Waterford. |
Fee Simple |
337,000 |
12 May 2004. |
|
Lad Lane, Dublin 2. |
Leasehold — 92 years. |
22,500,000 |
5 May 2004. |
|
Blacklion Customs Frontier Post Site, Cavan. |
21,586.23 |
16 March 2004. |
|
|
72-76 St. Stephen’s Green, Dublin 2. |
Fee Simple |
52,300,000 |
15 Sept. 2004. |
|
Kilmacthomas Garda Station, Co. Waterford. |
Fee Simple |
100,000 |
13 August 2004. |
|
14-16 Lord Edward St., Dublin 8. |
Fee Simple |
8,780,140.48 |
30 August 2004. |
|
Thomastown Garda Station, Co. Kilkenny. |
Fee Simple |
450,000 |
7 Dec. 2004. |
|
Total 2004: |
84,488,726.71 |
Two sites were also made available to the Department of the Environment, Heritage and Local Government for affordable housing, one at Jamestown Road, Inchicore, and the other at Infirmary Road.
The bulk of the proceeds of these sales will go to finance the decentralisation programme, while €10 million has been applied to priority projects, mainly in the Garda area. Identification of properties surplus to requirements evolves continuously and it is not possible to confirm what properties will be disposed of in 2005. Premature release of disposal information and timescales would also affect the potential income from such disposals.
What is the position regarding the current proposals for decentralisation? The Minister of State indicated that the bulk of the money raised will go to finance the decentralisation programme but no progress is being made on that programme at present.
Even in Tullamore, in the constituency of the Minister and the Minister of State, FÁS has run into severe problems. The Minister of State may recall he suggested that one sell old properties at a high price and buy new sites cheaper for decentralisation, as in Tullamore. However, the board of FÁS has reported that the price at which the site in Tullamore is now being offered is double or triple that originally suggested and, as such, is unacceptable.
What is the impact on the decentralisation proposals of the resignation of Mr. Philip Flynn?
The Deputy is going way outside the remit of Question No. 9. That matter does not arise. I am allowing the Deputy's question on properties.
He is the chairman of the Government's decentralisation body.
I understand we are on Question No. 9, which refers specifically to the list of properties sold, the amount raised, the way in which the money raised has been used and the properties it is planned to sell during 2005. That is what the question is about.
I have asked the Minister of State those questions, specifically, because no progress appears to have been made. What is the effect of the resignation of Mr. Philip Flynn on the decentralisation programme?
I am allowing the Minister of State to answer those questions, but we cannot go into other questions because other Members have questions to be answered.
I believe that Deputy Burton is again relying on poor sources of information. The board of FÁS has no interest in any property in Tullamore.
I said FÁS was told to acquire a property, which it did not do because the value had tripled.
The Minister of State, without interruption, please.
The property in question is in Birr, County Offaly, which is quite a distance from Tullamore. The speculation referred to by the Deputy, which is entirely inaccurate, appeared, I believe, in one of the national newspapers. I understand the board of FÁS has now decided to buy that property. It has been advised by the OPW that the price sought is well within the range of the amount being paid for property throughout the country. I understand that particular deal is moving along quickly.
Likewise, in terms of the Deputy's reference to the lack of progress on decentralisation, I am hopeful the Minister of Finance and I will shortly make substantial announcements with regard to progress, in terms of the acquisition of sites and further progress.
Will the Minister of State comment on the price of the sites?
I would like to get another question in before 4.45 p.m.
10 Mr. Bruton asked the Minister for Finance if he has decided on the membership of the public service benchmarking body for its next phase of work; and if he will make a statement on the matter. [7127/05]
Amharc ar fhreagraI refer the Deputy to my previous reply of 1 February 2005. In the first public service pay agreement under Sustaining Progress, the parties agreed that the benchmarking process was the appropriate way to determine public service pay rates. They committed themselves to engage in consultation on the terms of reference, modus operandi, establishment and timescale of a further benchmarking exercise.
In the pay agreement reached in June 2004 under the mid-term review of Sustaining Progress the parties agreed that the benchmarking body will commence its next review in the second half of 2005, to report in the second half of 2007. Under the agreement the parties agreed to review the operation of the first benchmarking exercise and consider ways in which, based on experience gained in the last exercise, the process can be improved and streamlined. It was also decided that the membership of the benchmarking body and its terms of reference will be agreed between the two parties not later than July 2005. Membership of the benchmarking body has not yet been decided and will be the subject of consideration and consultation by the parties over the coming months.
On the last occasion, benchmarking cost the taxpayer €1.3 billion. Surely somebody representing the taxpayers' interests should have a role in deciding the membership of the benchmarking body. Should there not be a member of that body who is watching out for issues such as value for money and public service reform? I am not satisfied at the way this is being structured because benchmarking was charged with problems over non-transparency before and it looks as if this will happen again.
To answer that specific supplementary question, as stated in the national pay agreement, the parties considered in its request that the body should seek to ensure the optimum level of transparency consistent with the efficient and effective operations of the benchmarking process. How this is reflected in the report is a matter for the benchmarking body as it is independent. In the last exercise it felt restrained as regards the amount of information it could give because of the assurances on confidentiality that had been given when researching the data underlying its examination. In any event, in an exercise of this type, if endless debate and nit-picking are to be avoided, all information cannot be released and some selectivity must enter into the equation. It would be desirable for the body to give a greater amount of information this time around. However, that is a matter for the body to decide and the Government represents the taxpayer in these matters.
The Government did not do very well on the last occasion.
I disagree.
Written answers follow Adjournment Debate.
