Written Answers Nos. 74-88
74. Deputy Pearse Doherty asked the Minister for Finance the total number of contracts and their total financial cost awarded to companies (details supplied) by the Irish Bank Resolution Corporation in each of the years 2010, 2011, 2012 and to date in 2013 or whatever years practicable; if all the contracts were winning public tenders; and if he will provide a breakdown of the contracts by date, purpose and individual value. [51724/13]
Amharc ar fhreagraI have been informed by the Special Liquidators of IBRC that they have been unable to obtain the information requested by the Deputy in the time available. I will write to the Deputy directly with the information as soon as it becomes available.
75. Deputy Patrick O'Donovan asked the Minister for Finance if there is any circumstance in which a home owner may have the valuation of his or her property altered (details supplied); and if he will make a statement on the matter. [51730/13]
Amharc ar fhreagraThe Finance (Local Property Tax) Act 2012 (as amended) sets out how a residential property is to be valued for Local Property Tax (LPT) purposes. LPT is a self-assessed tax so it is a matter for the property owner to calculate the tax due based on his or her assessment of the market value of the property as at 1 May 2013. For the purposes of LPT, values for properties under €1 million are organised into valuation bands, with an initial band of €0 to €100,000 and 18 bands of €50,000 width from €100,001 to €1 million As property owners were not required to provide a precise value for their property, it is anticipated that for the most part overpayments of LPT should not happen. When completing their LPT Return earlier this year, it was expected that property owners would make their best endeavours to self-assess the value of their property at 1 May 2013 and the Revenue Commissioners provided guidance, including an online valuation guidance tool, to assist property owners in making their self-assessment.
I am also advised that the initial valuation of a property on 1 May 2013, assuming it was made in good faith, is valid up to and including 2016 and will not be affected by any increase or decrease in property prices or other changes, during this period. Accordingly where the owner self-assessed the value of their residential property on 1 May 2013 and placed it in a particular valuation band but, due to a general decrease in property prices after that date, the property has sold for an amount less than the self-assessed amount, the owner would not be entitled to a refund of tax. In the same way, if the property had increased in value in that period, no additional LPT charge would apply.
The Revenue Commissioners have confirmed that if the liable person has genuinely overpaid the tax through an error or mistake concerning the property’s value as at 1 May 2013, then they should write to LPT Branch, Government Buildings, Ennis, Co Clare, setting out fully the nature of the error or mistake and explaining the circumstances in which the overpayment arose. They are required to provide any relevant documentation to support the basis for their self-assessed valuation at 1 May 2013 which may include professional valuations obtained at the time or house price surveys for the area. They should also indicate whether they relied on Revenue’s online valuation guidance tool for the purposes of their self-assessment.
I am further advised by the Commissioners that once the relevant documentation is received LPT Branch will make direct contact with the person. Should it transpire that the person did in fact genuinely overpay the 2013 liability, on account of their error or mistake in self-assessing the valuation band at 1 May 2013 for their residential property, it will then be possible to offset some or all of the overpayment to the 2014 liability, if appropriate, or to make a repayment.
76. Deputy Lucinda Creighton asked the Minister for Finance further to Parliamentary Question No. 47 of 21 November 2013, if he will detail in euro terms the total proceeds of all borrowings by the Exchequer lodged to the Exchequer account at the Central Bank of Ireland at the end of year in 2011, 2012 and end of October in 2013; and if he will make a statement on the matter. [51732/13]
Amharc ar fhreagraNet Exchequer borrowing in 2011, 2012 and to end-October 2013 is shown in the table below:
|
€ million |
2011 |
2012 |
2013 (to end-October) |
|
Net Borrowing1 |
27,046 |
21,050 |
13,408 |
|
Applied as follows: - Exchequer Borrowing Requirement (EBR) |
24,918 |
14,892 |
10,526 |
|
- Increase in Exchequer Deposits & Other Balances |
2,128 |
6,158 |
2,883 |
Source: Finance Accounts 2012 and end-October 2013 Exchequer Statement
Rounding may affect totals
1. The Deputy should note that the net borrowing figure for 2012 excludes the Government bonds issued to IBRC in respect of the 2012 Promissory Note instalment of €3,060 million due at end-March 2012. Similarly, the net borrowing figure for 2013 excludes the €25,034 million in Government bonds issued to the Central Bank of Ireland in February 2013 on the liquidation of IBRC.
77. Deputy Lucinda Creighton asked the Minister for Finance the consultation that has taken place to date with Dublin City Council regarding areas of eligibility for the living city initiative; if he has any figures on the number of individual properties likely to be eligible in the Dublin City Council area if the living city initiative gets approval by the European Commission; and if he will make a statement on the matter. [51739/13]
Amharc ar fhreagraThe Deputy will be aware that I announced in my Budget Statement that the Living City Initiative, which was enacted in the Finance Act 2013, would be extended to now include the cities of Dublin, Cork, Galway and Kilkenny as well the original target cities of Limerick and Waterford. The inclusion of these four cities within the Initiative followed the results of a thorough independent ex ante cost benefit analysis. The Initiative will target certain areas of these six cities, particularly those areas which are most in need of regeneration. Those designated areas will be decided upon following consultations with the relevant local authorities and other Government agencies. These consultations have not yet taken place but are expected to commence shortly. It is not yet possible to estimate the number of properties which might be eligible in any of the cities but I have made it clear that I do not see this as a wide-spread Initiative, as it is targeted at those areas which are most in need of attention.
The submission to the European Commission seeking State Aid approval will also be issued shortly.
78. Deputy Lucinda Creighton asked the Minister for Finance his views on whether the split responsibilities between his Department and the Department of Social Protection on pensions policy creates a disconcerted, divided and poor management structure for addressing an issue of enormous importance to the future liabilities of the State; and if he will make a statement on the matter. [51762/13]
Amharc ar fhreagraAt the outset the Department of Social Protection has policy responsibility for the pensions system in Ireland from a social policy context as well as determining the future direction of how this policy should unfold. This policy area includes pensions adequacy to ensure sufficient income in retirement, the sustainability of the pension system in the light of demographic and investment challenges, the modernity of pension systems and overall equity within the pension system. The Department of Finance has responsibility for general insurance policy issues and in that regard negotiates and transposes insurance directives the bulk of which underpin how insurance companies can conduct their business in Ireland and elsewhere from a prudential perspective. The Department is also responsible for developing and enacting domestic insurance legislation where appropriate e.g. the Insurance Act 2011.
Furthermore the Department of Public Expenditure and Reform is responsible for pension’s policy in the public sector.
While the Department of Social Protection has the lead policy role, there is an integrated whole of Government approach taken towards the issue of Pensions Policy. A Cabinet Committee on Pensions which includes the Departments of Social Protection, Finance and Public Expenditure and Reform, as well as the Department of Jobs Enterprise and Innovation, meets regularly. Where overlaps in policy responsibility exist the Government Departments concerned engage closely to ensure the continued coherency and relevance of public policy. This includes the National Pensions Framework in 2010 and the recent OECD ‘Review of Irish Pensions System’.
79. Deputy Lucinda Creighton asked the Minister for Finance the person who is the Irish representative on the European Insurance and Occupational Pensions Authority; and if he will make a statement on the matter. [51763/13]
Amharc ar fhreagraEIOPA (European Insurance and Occupational Pensions Authority) was established by the EIOPA Regulation on 1 January 2011. It is part of the European System of Financial Supervision and is an independent advisory body to the European Parliament, the Council of European Union and the European Commission. EIOPA’s core responsibilities are to support the stability of the financial system and the transparency of markets and financial products as well as the protection of insurance policyholders, pension scheme members and beneficiaries.
The Central Bank has informed me that there are two Irish representatives on the Board of Supervisors for EIOPA;
- Mr Cyril Roux, Deputy Governor of the Central Bank of Ireland, who was appointed on October 2nd 2013. Mr Mark Burke, head of the Life Insurance Division of the Central Bank, is the alternate representative; and,
- Mr Brendan Kennedy, Chief Executive Officer of the Pension Board, who was appointed to the board on 1st January 2011. Mr Pat O’Sullivan, head of funding and actuarial division of the pensions Board, is the alternative representative.
80. Deputy Terence Flanagan asked the Minister for Finance the position regarding the provision in the Finance Bill 2012 which allows early access to pensions for certain public servants; if he will list the categories of public servants to which this applies (details supplied); and if he will make a statement on the matter. [51764/13]
Amharc ar fhreagraI take it that the Deputy is referring to the encashment option provided for by section 787TA of the Taxes Consolidation Act 1997 which was inserted into that Act by section 18(7)(b) of the Finance Act 2012. In that regard, I would like to clarify that the encashment option confers no rights on public servants to early access to pension benefits. The encashment option operates in the context of the Standard Fund Threshold (SFT) regime, which places a life-time limit on an individual’s tax–relieved pension benefits. The SFT regime is designed to discourage over-funding of pension savings by such means. It addresses the problem of pension overfunding and excessive pension accrual by imposing a penal tax charge on the value of retirement benefits above set limits when they are drawn down. In this way, it acts to deter the building up of large pension funds in the first place or unwinds the tax advantage of such overfunding by clawing back, through the penal tax charge, the tax relief granted. Among other changes to the SFT regime being introduced by Finance (No.2) Bill 2013, is a reduction in the value of the life-time limit from its current level of €2.3 million to €2 million, with effect from 1 January 2014.
The encashment option was introduced to deal with particular difficulties that individuals with both private and public service pension arrangements would otherwise face from the operation of the SFT regime. An individual in the private sector is generally able to prevent or minimise any breaching of the SFT, or a Personal Fund Threshold (PFT), if he or she has one, by ceasing to contribute to, or accrue benefits under, a pension scheme. However, affected individuals in the public service have no control over their accrual of public service pension entitlements and, as a result, significant chargeable excesses could arise on the public service pension entitlement at retirement in certain circumstances. This is the case where such individuals have built up substantial private sector pension savings before taking up a public service career.
Because the SFT regime operates by aggregating the capital value of pension benefits taken over time, where such private sector benefits are drawn down first their capital value would aggregate with the capital value of the public service pension rights when subsequently drawn down, resulting in, as mentioned, very significant chargeable excesses and penal tax charges on the public service pension which the affected individual would be powerless to abate.
Concerns were expressed that this could have a significant disincentive effect for some people to remain in the public service or hinder the future recruitment into the public service of exceptionally well-qualified people from the private sector.
To deal with this, I introduced a once–off opportunity for individuals who meet the qualifying conditions, to encash their private sector pension rights, in whole or in part, from age 60, with a view to preventing or minimising the chargeable excess that would otherwise arise when the public service pension crystallises. The private sector pension rights concerned would invariably be personal pensions which would be accessible from age 60 in any event (so there is no issue of early access). The exercise of the option attracts tax at the point of encashment on the full value of the rights at a ring-fenced rate of 41% plus USC of 4%. This is aimed at broadly neutralising the tax relief that such individuals enjoyed when building up their private pension funds. No tax-free lump sum is available from the pension scheme where the encashment option is exercised and it is the pension scheme administrator who is primarily responsible for deducting and remitting the “encashment tax” to Revenue.
The qualifying conditions can be summarised as follows. Firstly, the individual must, on 8 February 2012 (the date of publication of the 2012 Finance Bill), be a “relevant individual”, meaning that he or she must;
- Be a member of both a private sector and public service pension scheme, or
- Be a member of a public service pension scheme and have drawn down their private sector pensions in the period 7 December 2005 to 7 February 2012, or
- Be a member of a private sector scheme on, or after, 7 February 2012 and subsequently become a member of a public service scheme, and
- Remain an active member of the public service scheme until their retirement date.
Secondly, the combined capital value of the pension scheme savings, both private and public, must be likely to exceed the SFT, or the individuals PFT, if they have one, in circumstances where the intention is that the public service pension benefits will be crystallised or drawn down last (i.e. after all the private sector pensions benefits have been drawn down). It is this sequence of cashing in the private sector benefits first that would place the individual in a position whereby a chargeable excess would fall mostly, or entirely, on the public service pension. In extreme situations, where an individual, on taking up a pensionable post in the public service, had already built up private sector pension savings equal to the SFT, or the individual’s PFT, every euro of public service pension accrued would be subject to chargeable excess tax of 41% in addition to the tax on the pension at the individual’s marginal rate when paid out.
It is important to note, that in no case can the exercise of the encashment option reduce the chargeable excess tax due on an individual’s public service pension benefits if the capital value of those benefits on their own exceeds the SFT or the individual’s PFT.
The option came into effect from 8 February 2012 (the date of publication of Finance Bill 2012) with transitional arrangements for affected individuals who may have drawn down their private sector pensions before that date but remained members of a public service scheme on or after that date.
81. Deputy Lucinda Creighton asked the Minister for Finance if any consideration has been given to developing a tax credit in the future for drawdowns from pensions that have been subjected to a levy since 2011 and beyond; his views on whether such a credit would offset the disincentive to save caused by the taxation of pensions; and if he will make a statement on the matter. [51777/13]
Amharc ar fhreagraI assume that the Deputy is referring to the stamp duty levy that applies to the assets of funded pension schemes and plans approved by the Revenue Commissioners under Irish tax legislation. The chargeable persons for the levy are the trustees or other persons (including insurance companies) with responsibility for the management of the assets of the pension schemes or plans. The payment of the levy is treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, are entitled, where they decide to do so, to adjust current or prospective benefits payable under a scheme to take account of the levy. It is up to the trustees to decide whether and how the levy should be passed on and who should be impacted and to what extent, given the particular circumstances of the pension schemes for which they are responsible.
I have no plans to develop a tax credit in the manner suggested in the question. The 0.6% levy which has applied since 2011 will end after 2014. The additional levy of 0.15% which I announced in Budget 2014 will apply for 2014 and 2015. I do not consider that the levy applying on this basis will have any significant long-term disincentive effect on pension saving. As I re-iterated in my Budget 2014 speech, tax relief on contributions to pension savings will continue at the marginal income tax rate.
82. Deputy Noel Grealish asked the Minister for Finance the reason the new valuation basis for pensions is not applied to all pensions rather than just those which are payable post 1 January 2014; the reason that particular date was chosen; and if he will make a statement on the matter. [51796/13]
Amharc ar fhreagra83. Deputy Noel Grealish asked the Minister for Finance the tax saving to the State if the €60,000 cap on pensions was applied to all pensions rather than excluding those pre-31 December, 2013; and if he will make a statement on the matter. [51797/13]
Amharc ar fhreagraI propose to take Questions Nos. 82 and 83 together.
Regarding the start date for the changes I am making to the SFT regime, I indicated in my 2013 Budget Statement that changes would be introduced in 2014 to give effect to the commitment in the Programme for Government to cap taxpayers’ subsidies for pension schemes that deliver pension income of more than €60,000 per annum. 1 January is a natural starting point for the changes, coinciding as it does with the start of the 2014 tax year.
I should clarify, in the first instance, that the change to age-related valuation factors used to place a value on Defined Benefit pension rights for the purpose of the SFT regime apply to pension benefits accrued after 1 January 2014 and not by reference to the value of pensions paid after that date. The application of the new age-related valuation factors to Defined Benefit pension rights accrued after 1 January 2014, reflects legal advice which I received to the effect that pension savings and pension rights accrued up to that date should be protected. On foot of that advice, and as occurred on the occasion of the introduction of the SFT regime in 2005 and again when the value of the SFT limit was reduced to €2.3m in 2010, the legislation contained in the Finance Bill provides for an individual who has pension rights on 1 January 2014 in excess of the new lower SFT limit of €2m, to claim a Personal Fund Threshold (PFT) from Revenue in order to protect or “grandfather” the value of those rights on that date. This is subject to a maximum PFT of €2.3m (the level of the current SFT) and individuals with PFTs from 2005 or 2010 retain those PFTs. The ability to claim a PFT applies to affected individuals with Defined Benefit or Defined Contribution pension rights or who have a combination of both.
However, unlike previous occasions, the protection or “grandfathering” arrangements this time around had to take cognisance not just of the reduction in the absolute level of the SFT from 1 January 2014 from €2.3m to €2m, but also of the increase, from that date, in the valuation factors used for converting Defined Benefit pension rights into capital value equivalents for the purposes of the SFT regime. It is for that reason, lest there be any suggestion that the changes had retrospective application, that such rights accrued up to 1 January 2014 are to be capitalised at the existing valuation factor of 20, both for the purposes of determining if there is a PFT and for placing a capital value on those rights at the time of retirement, where that takes place after 1 January 2014.
The estimated yield of €120 million from the proposed changes to the SFT regime is based to a significant degree on assumed behavioural impacts. The yield is expected to arise in two ways. Firstly and mainly, from the cessation of tax-relieved contributions to pension saving from those employees and individuals in the private sector affected in the short to medium term by the changes and secondly by the conversion, to some degree, of employer pension contributions and pension promises in respect of those employed individuals into compensatory current taxable remuneration. In addition, some of the yield will also arise from affected individuals who remain in pension arrangements and continue to contribute to them or accrue benefits under them, and will take the form of chargeable excess tax payable at retirement where their SFT or PFT, as appropriate, is exceeded. This increased tax will effectively claw back any tax subsidy which helped fund the excess over the SFT or PFT. Given the range of variable assumptions on which the estimate of the yield from the current changes is based, I do not consider that a reliable estimate of yield could be provided on foot of the hypothetical assumption contained in the question.
84. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 214 of 23 April 2013, when he stated he welcomed KBC Group’s commitment to the Irish market and note that it is planning to develop its business in Ireland further with new retail branches and distribution platforms to be rolled out in 2013 and continued expansion of its retail product portfolio; if he will confirm the quantum of new lending by KBC in Ireland in 2013; and his views on KBC’s deposit gathering operation which has seen retail deposits increase threefold since 2011 from €1 billion to €2.9 billion at the end of the third quarter of 2013. [51831/13]
Amharc ar fhreagraCompetition in the retail deposit market is a good thing for Irish customers. As the Deputy is aware, I have no function in setting the interest rates that commercial banks are willing to pay for deposits. I strongly urge customers to shop around and obtain the best rate they can for the type of account they want, the duration and the amount they are depositing. The National Consumer Agency’s website http://www.consumerhelp.ie/ is particularly useful for this. The quantum of new lending by KBC in Ireland in 2013 is a commercial matter for the bank concerned and is not in the public domain.
The deposit inflows and outflows of banks are monitored on a weekly basis by the Central Bank of Ireland with its liquidity risk assessment framework.
My Department publishes information on deposit trends in the Irish Covered Banks (AIB Group (including EBS Building Society), Bank of Ireland Group, Permanent TSB and IBRC) monthly. Deposit volumes remained broadly stable in October 2013 at €152.7 billion, with deposits decreasing by €1.5 billion month-on-month.
I would remind the Deputy that deposits up to and including €100,000 per individual per institution (€200,000 for joint accounts) are covered by the Deposit Guarantee Scheme.
85. Deputy Derek Nolan asked the Minister for Finance in the context of the EU anti-money laundering directive being discussed at EU level at present, his position on the introduction of a public register of beneficial owners of companies; his views that a fully public register would be beneficial in achieving transparency in international finance and taxation; and if he will make a statement on the matter. [51867/13]
Amharc ar fhreagra86. Deputy Derek Nolan asked the Minister for Finance his view that many international money launderers and tax evaders benefit from the fact that the true owners of international companies can often be hidden under notional owners and-or lawyers; Ireland's position regarding same; and if he will make a statement on the matter. [51868/13]
Amharc ar fhreagraI propose to take Questions Nos. 85 and 86 together.
The proposed 4th Anti-Money Laundering Directive seeks to update the 3rd Directive to take account of the February 2012 revision of the international standards for anti-money laundering requirements – the recommendations of the FATF (Financial Action Task Force).
This is a very important piece of legislation and we continue to support transparency across all financial services files. The proposed 4th Anti-Money Laundering Directive covers a number of policy areas which come under the responsibility of a number of different Departments and the issue of beneficial ownership of companies falls under the remit of the Department of Jobs, Enterprise and Innovation.
Having consulted with the Minister for Jobs, Enterprise and Innovation, the national position is that Ireland supports the idea that beneficial ownership should be known, in fact there are already provisions in place which allow for enforcement authorities and other shareholders to identify beneficial owners of companies when required.
At European Council Ireland has supported the Presidency approach which would require that Member States ensure that the beneficial ownership information on companies incorporated within their territory is held in a specified location, for example, in one or more registries, or by means of other suitable mechanisms.
However, negotiations are continuing on this directive at the Council of the EU and the final provisions on beneficial ownership will only be agreed as part of the overall compromise. We continue to work to the objective of an agreement with the European Parliament before the end of its current term (May 2014).
87. Deputy Joe Carey asked the Minister for Finance the number of cash purchases of housing or other properties which were subject to investigation by the Revenue Commissioners with a view to determining the origin of the cash over the past five years on a per county basis; where it was established that such cash purchases were being made through the proceeds of illegal activities, the action taken by the Revenue Commissioners on a county basis; if investigations will be initiated by the Revenue Commissioners into cash sales of housing or other properties where there is reason to believe that such cash was gained from illegal activities; and if he will make a statement on the matter. [51872/13]
Amharc ar fhreagraI am advised by the Revenue Commissioners that while no specific projects have been undertaken in the recent past to identify the origin of funds used to acquire residential or other properties for cash, the Revenue Commissioners have a wide range of information sources available from which they can monitor cash purchases of houses and other real estate. Under Section 42 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 all designated bodies (including all financial institutions) are required to report to An Garda Síochána and the Revenue Commissioners all suspicious transactions, including any unusually large cash movements. Similarly, any solicitors or other practitioners who execute property transfer instruments are also designated persons for the purposes of the money laundering legislation and must satisfy themselves as to the source of purchase monies in drawing up the transfer instrument and report anything untoward to the Gardaí and to Revenue.
Cases are selected by Revenue for examination based on the presence of various risk indicators. The Revenue Commissioners are assisted in that process by their Risk Evaluation Analysis and Profiling (REAP) system that contains various types of information including information relating to the purchase of property and suspicious transactions involving the movement of monies. In the case selection process, of particular interest to Revenue are those individuals whose funds used to purchase a property appear to have come from hidden or undeclared income or from unexplained wealth. In such cases, Revenue carry out the necessary ‘checks and balances’ with a view to determining whether the money used to fund (or part fund) the purchase of a property came from illegal activity, including the shadow economy. Where the explanation as to the source of money used to purchase a property is not creditable, Revenue then carry out further checks, including audits or investigations, which may result in Revenue seeking additional tax, interest on late payment of tax and penalties as well as prosecutions for making false tax returns.
I am further informed by the Revenue Commissioners that they do not retain statistics for each separate risk factor used to trigger a case for examination as the case selection of a case for examination generally includes a number of risk factors including the level of income shown in a person’s tax returns. However, I am assured by the Revenue Commissioners that they are very mindful that cash obtained from illegal activities can be used to purchase properties and I am satisfied that their overall compliance programme focusses significant resources on the cash sector which includes examining the use to which undeclared cash amounts have been put.
Lastly, cases involving serious criminality and proceeds of crime are investigated by the Criminal Assets Bureau (CAB). CAB is resourced by officials from the Attorney General’s Office, the Department of Social Protection & the Revenue Commissioners. These investigations can result in the confiscation of assets under the Proceeds of Crime legislation in addition to the raising of tax & duty assessments.
88. Deputy Aengus Ó Snodaigh asked the Minister for Finance the future of the pension levy; the number of years it is expected to last and the rate; the amount it is anticipated will be raised by it; what the money raised is being allocated to; if he intends to bring forward legislation ring-fencing it for any particular purpose; and if he will make a statement on the matter. [51876/13]
Amharc ar fhreagraI announced in my 2014 Budget speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will, however, introduce an additional levy on pension funds at 0.15%. I am doing this to continue to help fund the Jobs Initiative, including the continuation of the reduced 9% VAT rate detailed below and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties. The additional levy within the existing legal framework will apply to pension fund assets in 2014 and 2015. The yield from the pension fund levy in 2014 is estimated at €675 million. The yield from the pension fund levy at the reduced rate of 0.15% in 2015 is estimated at €135 million.
The revenues arising to the Exchequer from the levy are, in common with Exchequer revenues generally, not hypothecated to any particular item of expenditure or liability but have been used to help fund the various measures introduced by the Jobs Initiative. I have no plans to change this approach. One of the very significant and successful measures introduced by the Jobs Initiative – the reduced VAT rate of 9% on tourism and certain other services – was due to end this year. In my Budget speech, I announced the continuation of the reduced 9% VAT rate. I also announced that the Air Travel Tax is being reduced to zero with effect from 1 April 2014. The combined cost of these initiatives is estimated at close to €400 million in a full year.
The Jobs Initiative also included a number of current and capital expenditure measures. While the details of the expenditure on these measures are a matter for my colleagues in Cabinet, I would ask the Deputy to note that the Jobs Initiative originally provided for 5,000 places under Jobbridge, the National Internship scheme and 5,900 places under the Springboard scheme. Numbers who have participated in Jobbridge have now exceeded 20,000 with an evaluation by Indecon Economic Consultants finding that 61.4% of survey respondents were in employment within 5 months of finishing their internships. The Springboard scheme, now in its third iteration, has expanded to over 16,500 places. The expansion of these schemes, reflective of their success, will require further funding from the Exchequer.
The extent of the potential State liabilities from the pre-existing or future pension fund difficulties is a matter primarily for my colleague the Minister for Social Protection. However, I can say that agreement has been secured for these liabilities to be met by the Exchequer, where they arise. As I have already indicated, however, the proceeds from the levy that accrue to the Exchequer are not set aside in the manner suggested in the question and expenditure decisions on the use of those and other funds will be made as they arise in the normal way.
