Written Answers Nos. 163-190
163. Deputy Michael McGrath asked the Minister for Finance the estimated funds currently covered by the eligible liabilities guarantee; the rate at which this will decline; and if he will make a statement on the matter. [30781/14]
Amharc ar fhreagraAt the date of ending the Scheme for new liabilities (midnight 28th March 2013), ELG covered liabilities stood at c. €74.6 billion. The most up-to-date information available at 30th April 2014 illustrates that ELG covered liabilities have fallen following the run-off of maturing deposits and bonds to c. €16.3 billion a reduction of c. €58 billion in just over a year with little direct impact on overall deposit volumes at the Covered Banks.
Following the ending of the Scheme in March 2013, a re-forecasting exercise was carried out based on the maturity profile of the remaining liabilities covered under the ELG Scheme. As the quantum of liabilities diminishes, the resulting fees paid to the Exchequer continue to reduce, however, this is built into budgetary forecasting.
164. Deputy Michael McGrath asked the Minister for Finance the proceeds that the State has received to date from the disposal of bank assets acquired in each institution as part of the recapitalisation process; and if he will make a statement on the matter. [30782/14]
Amharc ar fhreagraI can confirm to the Deputy that, since the State first invested in the banks, the following disposals have been made:
|
Date of disposal |
Bank |
Transaction |
Total proceeds - including accrued interest/dividend |
|
April 2010 |
Bank of Ireland |
Cancellation of preference share warrants |
€491m |
|
December 2010 |
Allied Irish Banks |
Cancellation of preference share warrants |
€53m* |
|
August 2011 |
Bank of Ireland |
Sale of equity shares |
€0.24bn |
|
October 2011 |
Bank of Ireland |
Sale of equity shares |
€0.81bn |
|
2012 - no disposals |
|||
|
January 2013 |
Bank of Ireland |
Sale of convertible contingent capital note (CoCo) |
€1.06bn |
|
July 2013 |
permanent tsb |
Sale of Irish Life |
€1.34bn |
|
December 2013 |
Bank of Ireland |
Sale/redemption of preference shares |
€2.05bn |
* These proceeds were netted off in calculating the State's recapitalisation investment
165. Deputy Charlie McConalogue asked the Minister for Finance the position regarding policyholders of Setanta Insurance who submitted a claim prior to the company entering liquidation; if these persons will be compensated; if not, whether they will be compensated by a State fund; if so, the way one applies; and if he will make a statement on the matter. [30791/14]
Amharc ar fhreagra175. Deputy Denis Naughten asked the Minister for Finance further to Parliamentary Question No. 58 of 29 May 2014, if he will provide an update on same; and if he will make a statement on the matter. [30985/14]
Amharc ar fhreagra258. Deputy Ciara Conway asked the Minister for Finance further to Parliamentary Question No. 41 of 18 June 2014 and further to the meeting of 11 June between his Department officials and the MIBI if he will provide an update with respect to the legal certainty in relation to Setanta Insurance issues, particularly relating to third party claimants; and if he will make a statement on the matter. [31449/14]
Amharc ar fhreagraI propose to take Questions Nos. 165, 175 and 258 together.
My officials have been in discussions with the Central Bank of Ireland, with the Liquidator of Setanta Insurance Company Limited (Setanta), the Accountant of the High Court and with the insurance industry representative bodies with regard to the position of Setanta policyholders. We are endeavouring to obtain legal certainty on a number of matters relating to unearned premiums and policyholders' claims for compensation and this will be made publicly available in due course. When clarification has been received from the Liquidator in the first instance, I will consider what steps, if any, will be appropriate. At this time, I propose to set out the position as it currently stands.
Setanta was formally placed into liquidation by the Malta Financial Services Authority (MFSA) on the 30 April 2014 and a liquidator was appointed. Officials from my Department together with officials from the Central Bank met with the Liquidator and his representatives in Ireland on 7 May 2014 and both my Department and the Central Bank are in ongoing contact with him regarding the position of Setanta policyholders. All Setanta policies have now been cancelled by the liquidator in line with the terms of the policies.
With regard to Setanta premiums and claims, the position on each policy is for the Liquidator to decide in due course. The Liquidator has a legal obligation to treat all claims equally. This applies to all claims submitted both before and after Setanta was formally placed into liquidation. The Insurance Compensation Fund (ICF) will also treat equally claims submitted but not paid before and after Setanta was formally placed into liquidation. My officials and the Central Bank will remain in close contact with the Liquidator and I have asked that public statements are provided to clarify matters for policyholders and claimants.
The Motor Insurance Bureau of Ireland (MIBI) is a non-profit-making organisation registered in Ireland. All insurance companies underwriting motor insurance in this country must, by law, be members of MIBI and contribute to the funding of claims in proportion to their market share. The principal role of MIBI is to compensate innocent victims of accidents caused by uninsured and unidentified vehicles. This is regulated under the terms of an Agreement between the MIBI and the Minister for Transport, Tourism and Sport. MIBI has sought legal certainty on its role in relation to Setanta policyholders. I understand that the MIBI Board met on 11 July 2014 to consider this legal advice . We expect to receive a considered response from MIBI in the coming days in relation to their position. If, for legal reasons, MIBI is not in a position to accept a claim, these third party claims will be eligible to proceed for consideration by the High Court for compensation from the ICF.
The legislation dealing with the ICF provides that claims by bodies corporate or unincoorporated bodies are not covered by the Fund except where there is a liability to or by an individual. Furthermore, all ICF payments are subject to a limit of 65% of the total amount of the claim or €825,000, whichever is the lesser. Refund of premiums is not allowable from the ICF.
The payment of costs which have already been ruled by a Court and are due to be paid by Setanta are a debt of Setanta which may be claimed from the liquidation. In addition, under Section 3.1 of the Insurance Act 1964 (as amended) the costs and expenses which have been necessarily and reasonably incurred by a claimant in endeavouring to secure payment of a claim are eligible for compensation from the ICF.
Setanta claimants should continue to contact the Liquidator in relation to their claims until otherwise advised. The Liquidator is continuing his work on providing clarity to the extent he can on the full extent of claims and the likely dividend from the liquidation. Once further information becomes available, and the outcome of MIBI's consideration of its legal advice has been taken into account, the Department will further examine how the ICF can assist those policyholders affected by the Setanta closure.
166. Deputy Catherine Murphy asked the Minister for Finance further to Parliamentary Questions Nos. 63 and 64 of 3 July 2014, his intention regarding the proceeds of the sale of the €25 billion of floating rate notes and €3.46 billion of Government fixed coupon bonds acquired by the Central Bank of Ireland last year; the portion that will be destroyed and to what specific schedule; the portion that will be redirected toward supplementing Government income and to what schedule; the total projected cost of the bonds, including all interest coupons-final maturity payments; and if he will make a statement on the matter. [30831/14]
Amharc ar fhreagraSubsequent to the liquidation of IBRC the Central Bank acquired €25bn of Floating Rate Notes (FRNs) and €3.46bn of Government Fixed Coupon 2025 bonds. The Bank undertook to sell the combined portfolio of the FRNs and the fixed rate bond as soon as possible provided the conditions of financial stability permit. The Bank also indicated that, as a minimum, it will make sales in accordance with the following schedule: to end 2014 (€0.5 billion), 2015-2018 (€0.5 billion per annum), 2019-2023 (€1 billion per annum), and 2024 on (€2 billion per annum until all bonds are sold). The Bank's recent Annual Report notes that sales have been made from this combined portfolio, with the Bank selling €350mn of its holdings of the Government 2025 Fixed Rate Bond in 2013. The timing of the sales is a matter for the Central Bank which may elect to sell bonds at a particular time if it feels that this is the best course of action, for example, in order to take advantage of favourable market conditions.
The Central Bank of Ireland is independent in the exercise of its functions. The issue of proceeds from the disposals and its impact on profit distribution is a matter for the Central Bank of Ireland and the Department of Finance has no role in those matters.
I have been advised by the NTMA that total cash interest payable on the floating rate bonds in 2013 was €638 million. Following last month's rate reset in respect of the December 2014 interest payment, total cash interest payable in 2014 is presently expected to be just over €750 million. The increase in interest payable in 2014 compared to 2013 largely reflects the fact that a full year's interest is payable this year. Interest payable on the floating rate bonds is currently projected to increase in the coming years, consistent with the projected increase in the six-month Euribor interest rate as the interest margins on the floating rate bonds are fixed. The interest margin averages 2.63% across the eight issues.
The Central Bank provides the Department of Finance with an estimate of expected surplus income to be paid to the Central Fund on a regular basis. This estimate will continue to form part of the Government's overall budgetary strategy. However, the level of detail on the composition of its profits provided by the Central Bank of Ireland to the Department is not sufficiently granular to enable the Department to estimate the impact on those profits of the timing of specific bond disposals undertaken by the CBI.
167. Deputy Catherine Murphy asked the Minister for Finance if, in relation to the €25 billion of floating rate notes and €3.46 billion of Government fixed coupon 2025 bonds acquired by the Central Bank of Ireland, he will ask the ECB or Commission for a review of the economic efficacy that destruction of proceeds from the sale of said bonds would have in view of the fact that they form such a major portion of legacy bank debt, that this money is already in circulation, and that such destruction would simply take this sum out of circulation; and if he will make a statement on the matter. [30832/14]
Amharc ar fhreagraUnder the original Promissory Note arrangement, the Government was scheduled to make annual payments of €3.1 billion thereby putting significant upward pressure on the amounts to be funded from the market. Following a long period of negotiation the notes were replaced in February 2013 with a portfolio of Irish Government bonds which consists of three tranches of €2 billion each maturing after 25, 28 and 30 years, three tranches of €3 billion each maturing after 32, 34 and 36 years and two tranches of €5 billion each maturing after 38 and 40 years. The provision of these long-term non-amortising Government bonds to replace the amortising Promissory Notes has therefore had significant benefits from a market perspective as it ensures that there will be much less issuance of Irish Government bonds into the market over the next decade and beyond than would otherwise have been the case.
The market continues to react positively to the restructuring and we have recently seen further reduction of the 10 year bond yields to 2.3%, far lower than had been the case before the State entered the EU/IMF programme and thus enabling the State to substantially reduce their cost of borrowings.
The Promissory Note transaction has delivered real savings to the Irish State and I do not consider it necessary to request the ECB or Commission to conduct a review of the matter.
168. Deputy Michael McGrath asked the Minister for Finance the number of credit unions that currently have lending restrictions imposed on them by the regulator; if he will provide a profile of the nature of the lending restrictions; the lowest maximum permitted amount for an individual credit union; and if he will make a statement on the matter. [30845/14]
Amharc ar fhreagraThe imposition of lending restrictions is the responsibility of the Registrar of Credit Unions, who is the independent regulator for credit unions. Within her independent regulatory discretion, the Registrar acts to support the prudential soundness of individual credit unions, to maintain sector stability and to protect the savings of credit union members.
As Minister for Finance, my role is to ensure that the legal framework for credit unions is appropriate for the effective operation and supervision of credit unions.
The Registrar of Credit Unions advises me that it has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns about the operation of these individual credit unions and the resultant risk to members' savings. The number of lending restrictions is a reflection of concerns about lending practices in the sector.
Currently about 59% of all credit unions are subject to lending restrictions. Almost all credit unions with a lending restriction in place have a maximum individual loan size restriction. Of the credit unions with lending restrictions, approximately 70% currently can lend €20,000 or more to an individual member, which is a sizeable monetary amount and should cover most individual circumstances.
Of the credit unions with maximum individual loan size restrictions, 60% can lend from €20,000 to just under €30,000, 4% can lend from €30,000 to just under €45,000, 5% can lend from €45,000 to just under €75,000 and less than 2% can lend from €75,000 up to €100,000.
2.1% of all credit unions are restricted to issuing loans of less than €10,000 to an individual member. Fewer than 1% of all credit unions are currently restricted to issuing loans of less than €5,000 per member, unchanged since 2012. These are the cases where there are more significant concerns in terms of risk to members' savings.
I have been informed that individual credit union lending restrictions currently in place are reviewed on a regular basis to determine whether they are still set at appropriate levels. Lending restrictions are typically given effect by regulatory directions. As from 1 August 2013 regulatory directions are appealable to the Irish Financial Services Appeals Tribunal.
I have, on a number of occasions, highlighted the Governments' recognition of the important role of credit unions as a volunteer co-operative movement in this country and also the importance of getting lending going in the economy. However, the issue of lending needs to be constructively considered in order to ensure a viable credit union sector into the future.
169. Deputy James Bannon asked the Minister for Finance if herbal teas, vitamins and health supplements will continue to avail of the special VAT rate; and if he will make a statement on the matter. [30851/14]
Amharc ar fhreagra173. Deputy Eoghan Murphy asked the Minister for Finance if he is considering a VAT rate of 23% on health products; and if this will include food or drink products that are viewed as natural remedies to certain conditions, or are taken as alternatives to other similar foods because of dietary requirements. [30977/14]
Amharc ar fhreagraI propose to take Questions Nos. 169 and 173 together.
VAT rates are governed by EU VAT law, with which Irish VAT law must comply. The EU VAT Directive generally provides that supplies of goods and services are chargeable to VAT at the standard rate but that lower rates are permitted in very limited circumstances. Food products can only benefit from the zero rating in accordance with Article 110 of the VAT Directive which permits the retention of the zero rate where the products were liable to VAT at the zero rate on and from 1 January 1991.
A range of food supplements and vitamins that encourage the maintenance of health, through the sustenance derived from a normal, healthy diet, benefit from the zero rate. However, a food supplement taken for the purposes of muscle growth or body mass increase, or for the purposes of weight reduction or bodily sculpture, cannot benefit from the zero rate. I would draw the Deputies' attention to Revenue eBrief 70/2011 which contains additional detail in relation to the VAT rates of vitamins and food supplements.
I would further draw to your attention that paragraph 8 of Schedule 2 of the Value-Added Tax Consolidation Act 2010 provides that the supply of tea and preparations derived from the crushed leaves of the tea plant when supplied in non-drinkable form is liable to VAT at the zero rate. The VAT applicable to herbal teas derived from plants other than the tea plant has been raised with me by the industry and the matter is subject to ongoing analysis.
170. Deputy Terence Flanagan asked the Minister for Finance the amount that would be raised by the Exchequer if income tax was increased by 1%, 2% or 3% in each tax band; and if he will make a statement on the matter. [30883/14]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the full year yield to the Exchequer, estimated by reference to 2014 incomes, of increasing both standard rate and higher rates of Income Tax by 1, 2 and 3 percentage points would be approximately €660 million, €1,330 million and €2,000 million respectively.
171. Deputy Michael McGrath asked the Minister for Finance in respect of each of the State-supported banks, the number and overall value of judgments secured against debtors in 2013 and to date in 2014. [30937/14]
Amharc ar fhreagraBased on replies I have received from the banks, I can confirm for the Deputy that the information he has requested in relation to the number and value of judgements secured against debtors is a matter of public record and the information is available in court records, including on the court service website.
172. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare is due a refund of tax and universal social charge for 2013; and if he will make a statement on the matter. [30956/14]
Amharc ar fhreagraI have been advised by the Revenue Commissioners that a PAYE Balancing Statement (P21) for 2013 issued to the person concerned dated 29 March 2014.
As no tax was deducted from the person's wages during 2013, no refund of income tax is due. The amount of USC deducted is in accordance with the rates applying during 2013 and the information available to Revenue.
A further copy of the 2013 PAYE Balancing Statement (P21) will be issued to the person concerned. If the person concerned has any further queries they may contact Revenue on Lo Call 1890 44 44 25.
176. Deputy Terence Flanagan asked the Minister for Finance his views regarding the local property tax (details supplied); and if he will make a statement on the matter. [30993/14]
Amharc ar fhreagraIn accordance with the Finance (Local Property Tax) Act 2012 (as amended), the amount of Local Property Tax (LPT) due on a property is based on the valuation at 1 May 2013. The LPT regime is designed so that the initial valuation at 1 May 2013 will be valid up to and including 2016 and will not be affected by any increase in property prices during the period 2013 to 2016.
The Deputy will be aware that section 20 of the Finance (Local Property Tax) Act 2012 (as amended) allows elected members of a local authority to pass a formal resolution to vary the basic rate of LPT by up to 15% for their functional area, which may result in a lower LPT rate applying for 2015. This is referred to as the "local adjustment factor" (LAF) and the earliest year that this can apply is 2015. In determining the LAF, local authorities are required to take account of their income and expenditure projections for the coming year, their current financial position and the effect of the variation on the economy and taxpayers in their functional area. I am further advised that local authorities are required to notify Revenue on or before 30 September 2014 if they wish to vary the LPT rate that will apply in 2015.
As regards higher property values in Dublin, the market value of a residential property is related to the characteristics of the building itself, the site on which it is located, and the characteristics and amenities of the neighbourhood. There will be a relationship between the market value of a house and benefits to the owner in terms of enjoyment of the amenity value of the property. This is equitable to the extent that market value provides a measure of the value of a residential property to the owner, particularly in terms of its proximity to places of work and local amenities and facilities.
Market valuation or a variation thereof is a standard measure for property taxation internationally (for example, the domestic rates in Northern Ireland are based on the "capital assessed value" of the property). Property taxes based on a variant of market value are commonly used for local authority funding in many jurisdictions.
177. Deputy Richard Boyd Barrett asked the Minister for Finance his views that some insurance companies are engaging in excessive profiteering and price hikes in premiums (details supplied); and if he will make a statement on the matter. [31000/14]
Amharc ar fhreagraIn my role as Minister for Finance I have responsibility for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland, as regulator, interfere in the pricing of insurance products. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on a proper assessment of the risks they are accepting and the making of adequate provisioning to meet these risks.
The EU framework for insurance expressly prohibits Member States adopting provisions requiring the prior approval or systematic notification of certain matters including general and special policy conditions, scales of premiums and, for life insurance, technical bases used for calculating scales of premiums. Furthermore, in the context of non-life insurance, the EU framework provides non-life insurers with the freedom to set premiums, as has been acknowledged in case law by the European Court of Justice (Case C-518/06). In this regard, Member States may not require non-life insurance undertakings to make prior notification or seek prior approval of proposed increases in premium rates, except as part of a general price-control system.
The Central Bank does not regulate premiums in the insurance market. Insurance companies consider a number of risks when determining the premium for a proposed insurance policy, whether that is a general insurance policy such as motor or home insurance, or a life assurance policy. A premium is based on the actuarial calculation of risk. For example, a consumer with penalty points may be subject to a higher premium on motor insurance than a consumer with no penalty points. Similarly the claims history of the consumer seeking the insurance is considered. An increase in claims in the geographical location of the asset to be insured can also impact on the premium cost.
Consumers are encouraged to shop around at the time of insurance renewal. The National Consumer Agency has information that may assist a consumer to shop around it can be found at http://www.consumerhelp.ie/getting-insurance-quotes#Shopping.
In the case of motor insurance only, if a consumer believes that the quoted premium is so high as to be, in effect, a refusal of insurance, then the Declined Cases Committee at Insurance Ireland may be able to assist the consumer. The current Declined Cases Agreement was drawn up in 1981 and is adhered to by all motor insurers in Ireland. I am informed that under the agreement, the insurance market will not refuse to provide insurance to an individual seeking insurance, if he/she has approached at least three insurers and has not been able to obtain cover from them. I understand that Insurance Ireland is also making information available to those who have queries, complaints or difficulties in relation to this matter through their service at (01) 676 1914 or by email at info@insuranceireland.eu.
178. Deputy Jim Daly asked the Minister for Finance if he will request the Revenue Commissioners to arrange an oral hearing of an appeal for a voluntary organisation (details supplied) in County Cork which has been refused a VRT repayment; and if he will make a statement on the matter. [31030/14]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the organisation in question has completed the first stage of the appeals process, namely consideration of their application by the appropriate appeals officer in the Cork Revenue office. I am advised that his decision upheld the original decision taken by the Central Repayments Office and that the organisation and the Deputy were previously advised that it has the option of a further appeal, within 30 days of being notified of the decision, to the Appeal Commissioners. This 30 day period will be extended to ensure that the organisation has time to prepare their appeal but the hearing of the appeal is a matter for the Appeal Commissioners, and I have no role in the matter.
I am advised that the Revenue Commissioners will facilitate the organisation in any further appeal it may choose. However, before the organisation incurs additional costs in preparing a formal appeal it may be helpful to meet with senior officers in Cork to ensure that they are fully familiar with the scheme and the appeals process. The organisation may contact Mr Liam Rutledge, Revenue House, Cork, tel. 021 6027235, to arrange a meeting or alternatively submit their appeal and it will be processed.
179. Deputy Stephen S. Donnelly asked the Minister for Finance if he will confirm that the European Central Bank is seeking to pressurise the National Asset Management Agency into the early redemption of NAMA’s senior bonds, bonds which, according to the NAMA scheme approved by the European Commission in 2010, NAMA is not required to redeem until 2020; and if he will make a statement on the matter. [31061/14]
Amharc ar fhreagra180. Deputy Stephen S. Donnelly asked the Minister for Finance his views that the early redemption of the National Asset Management Agency’s senior bonds ahead of the 2020 deadline, agreed with the European Commission and European Central Bank in 2010, is beneficial for the State; and if the elimination of a contingent liability outweighs the benefit of access to substantial amounts of cheap funding; and if he will make a statement on the matter. [31062/14]
Amharc ar fhreagraI propose to take Questions Nos. 179 and 180 together.
There is no basis for the Deputy's suggestion that the European Central Bank is putting pressure on NAMA for an early redemption of its senior bonds.
Contrary to what the Deputy suggests, the NAMA scheme as approved by the European Commission in February 2010 did not specify a final date for the redemption of NAMA senior bonds. The NAMA Board in 2012 determined that one of its main objectives would be the redemption of all senior bonds by 2020.
I am advised that the NAMA Chairman has recently stated that NAMA may now be in a position to complete its work sooner than the 2020 date initially envisaged. This is due to the strong performance of the Irish property market over the past year and NAMA's ability, as a result, to increase its Irish sales activity substantially.
Its success in generating cash from asset sales has enabled NAMA to redeem €13 billion of its senior debt to date and it expects to redeem another €2 billion before the end of 2014. This would bring its cumulative redemption to €15 billion which is 50% of the senior bonds that it issued to acquire its loan portfolio. I am advised that this milestone will have been reached two years ahead of schedule.
I welcome the contribution that NAMA's sales and debt redemption activity has made to a significant reduction in the State's contingent liability. The Deputy may be aware that all the major rating agencies now classify the Irish sovereign as investment grade and have factored in NAMA's progress to date and its expected progress. On May 16, 2014, Moody's upgraded the Irish sovereign by two notches from Baa3 to Baa1, citing the accelerated reduction in the State's contingent liability due to the acceleration of NAMA's debt redemptions and the recent successes of the IBRC liquidation. On June 6, 2014, S&P upgraded the Irish sovereign to A-, specifically recognising the benefits to Ireland's credit worthiness from NAMA's accelerated bond repayments and going further in anticipating that NAMA would increase the pace of bond redemptions in 2014.
181. Deputy Stephen S. Donnelly asked the Minister for Finance the expected average annual interest rate to apply to general Government debt in 2014. [31063/14]
Amharc ar fhreagraThe forecast average rate of interest on general government debt for 2014 is given as 3.9% in my Department's Stability Programme Update, 2014 published last April.
182. Deputy Stephen S. Donnelly asked the Minister for Finance the expected average annual interest rate to apply to the €17 billion of extant senior bonds at the National Asset Management Agency in 2014. [31064/14]
Amharc ar fhreagraI am advised by NAMA that 0.33% is the forecast expected average 6 month euribor interest rate on the NAMA senior bonds currently outstanding in 2014.
183. Deputy Stephen S. Donnelly asked the Minister for Finance following the revision to the basis on which the national accounts are prepared, and the release of GDP and GNP figures by the Central Statistics Office for the first three months of 2014, if he will confirm the current best estimate budgetary adjustment required, in percentage and real terms, in 2015 to meet the agreed target as a result of GDP recalculation and revision; and if he will make a statement on the matter. [31065/14]
Amharc ar fhreagraThe most recent fiscal forecasts were contained in the Stability Programme Update published in April. The forecast for 2015 is predicated on a consolidation package of €2.0bn which has been well flagged over recent years and represents no change in stated Government policy. This is estimated to deliver a general government deficit of 2.9% of GDP.
However, as the Deputy notes, this forecast doesn't take into account the recently revised estimates of GDP by the Central Statistics Office. This will be taken into account along with the most up-to-date macroeconomic and fiscal data when deciding on the adjustment package necessary closer to Budget time.
Furthermore, it is the standard practice for the Minister for Finance to review all taxation policy in the run up to the annual Budget. During this review, proposed budget measures and any potential secondary impacts on the economy will be examined. The combination of this review of taxation policy and the latest fiscal and macroeconomic data will provide the framework for budgetary decisions with the objective of implementing measures that encourage economic growth while correcting the excessive deficit.
I am not prepared to be drawn into speculation on budgetary matters at this time, whether related to the size of the budgetary adjustment required or individual measures that may make up part of the budgetary package.
184. Deputy Stephen S. Donnelly asked the Minister for Finance in view of recent Exchequer statements which show a better than predicted deficit for the first six months of 2014, if he has considered seeking agreement from our partners in Europe to defer the announcement of budget 2015 by two months so that he has the benefit of considering actual self-employed and corporate tax returns in November 2014; and if he will make a statement on the matter. [31066/14]
Amharc ar fhreagraAs the Deputy will be aware, the Government has decided to hold Budget Day on or before the 15th of October from now on. This means that Budget 2015 will be presented and published on Tuesday, the 14th of October this year. This allows us to present our Budget and finalise it through the necessary legislation before the end of the year, in line with our EU commitments, in co-ordination with the rest of the euro area.
The enhanced economic governance regime now in place for euro area Member States directly impacts on national budget preparations. Regulation 473/2013, one of the 'two pack' surveillance and coordination regulations, provides that euro area member countries must make public their draft budget not later than 15 October each year. The Regulation further provides that euro area Member States must submit a separate draft budgetary plan, containing all of the information in the budget but in a common standardised format, to both the Commission and the eurogroup by 15 October. The draft budgetary plan will be made public and submitted to the European Commission by the required deadline, following the presentation of my Budget.
Turning to the Exchequer returns for the first half of the 2014, while it would be helpful to have information about the November tax receipts in light of the points raised by the Deputy, the reality is that there is no provision in the EU regulation allowing the 15 October deadline to be deferred for this reason. Furthermore, the Deputy should note that revenue forecasts based on outturns for the first three quarters have been have been reasonably close to the final outturn in the past few years.
185. Deputy Stephen S. Donnelly asked the Minister for Finance if he will provide in tabular form the number of borrowers of the National Asset Management Agency that have been declared bankrupt since NAMA’s inception; the number that were declared bankrupt in the Republic of Ireland, Northern Ireland, Britain and the rest of world; and the number of these borrowers that have been discharged from bankruptcy in each of these regions; and if he will make a statement on the matter. [31067/14]
Amharc ar fhreagraI am advised that NAMA is currently aware of a total of 77 debtors being declared bankrupt across a number of jurisdictions. 12 have been declared bankrupt in Ireland, 63 in Britain and Northern Ireland and 2 in the USA. NAMA is aware of 44 debtors being discharged from bankruptcy in Britain and Northern Ireland. NAMA is currently not aware of any debtors being discharged from bankruptcy in Ireland or the USA.
186. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question No. 64 of 2 July 2014, where he stated the Central Bank of Ireland has a wider role in relation to the approval of certain charges by credit institutions and bureaux de change under section 149 of the Consumer Credit Act 1995 as amended including the margins charged for foreign exchange services on top of the benchmark foreign exchange rates; if he will outline the oversight that these charges and margins takes place at the Central Bank; if the Central Bank examines samples of transactions to ensure compliance, and if, since March 2011, any credit institutions or bureaux de change have been found to have contravened the approved charges and margins; if sanctions have been applied to those credit institutions and bureaux de change; and if he will make a statement on the matter. [31068/14]
Amharc ar fhreagraSection 149 of the Consumer Credit Act 1995 (as amended) requires that credit institutions, prescribed credit institutions and bureaux de change must make a submission to the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges in respect of certain services. Section 149 does not cover interest rates; it applies to fees and commissions only.
My Department published a report on the review of the regulation of bank fees and charges in December 2013. This contains a detailed description of the process by which the Central Bank makes decisions on whether or not to approve proposed charges. It is available on my Department's website at www.finance.gov.ie.
I understand that the most recent mystery shop of foreign exchange was conducted at end-2008 and details are available on the Central Bank website.
The Central Bank regularly publishes feedback to the industry on topics that it investigates as part of monitoring of compliance with consumer protection requirements, in order to promote compliance within the industry. Where contraventions are identified and settlement agreements reached with regulated firms, details are published on the Central Bank s website at http://www.centralbank.ie/publications/Pages/settlement-agreements.aspx. However, I am informed by the Central Bank that it does not otherwise comment on any individual case or ongoing enforcement action.
187. Deputy Stephen S. Donnelly asked the Minister for Finance further to Parliamentary Question No. 64 of 2 July 2014, his plans to investigate whether Irish consumers and businesses are being overcharged for foreign exchange services, in view of the two major investigations ongoing in the United States; and if such investigations lie outside his remit; his views that the remit should be changed. [31069/14]
Amharc ar fhreagraI have no plans to carry out an investigation to ascertain if consumers and business are being overcharged for foreign exchange services.
All regulated financial institutions must comply with all the Codes of Conduct issued by the Central Bank, including the Consumer Protection Code. Consequently, any firm to which such codes apply must, as a matter of law, comply with the rules contained in the codes. Failure to comply may result in the imposition of an administrative sanction by the Central Bank.
The Central Bank monitors compliance with consumer protection requirements through its:
- on-going engagement with firms;
- reviews and research;
- themed inspections;
- mystery shopping; and
- advertising monitoring.
I understand that the most recent mystery shop of foreign exchange was conducted at end-2008 and details are available on the Central Bank website. The Central Bank published its planned series of themed reviews and inspections for 2014 on 25 February 2014. It has no plans to conduct a review of foreign exchange this year, but if the Deputy has any specific concerns about overcharging by any entity regulated by the Central Bank, he should bring these to the attention of the Central Bank.
188. Deputy Stephen S. Donnelly asked the Minister for Finance the number of qualifying investor funds in which the National Asset Management Agency has co-invested; the name of the qualifying investor funds; the investment partners; the date on which they were approved by the Central Bank of Ireland; the objects of each of the QIFs, and the value of the expected contribution by NAMA to each QIF. [31070/14]
Amharc ar fhreagra189. Deputy Stephen S. Donnelly asked the Minister for Finance the strategy of the National Asset Management Agency in relation to its qualifying investment funds; if NAMA has plans to market the QIFs to investors; if NAMA is presently open to selling investment stakes in the QIFs; if NAMA has plans to convert the QIFs into real estate investment trusts; if NAMA intends creating more QIFs; and if he will make a statement on the matter. [31071/14]
Amharc ar fhreagra190. Deputy Stephen S. Donnelly asked the Minister for Finance in relation to the maiden qualifying investment fund at the National Asset Management Agency, registered on 2 July 2013, and dubbed the South Docks Fund, if he will confirm the value of assets so far contributed by NAMA to the QIF, and the return on investment to NAMA on the QIF after its first full year of operation; his view on that return on investment; and if he will make a statement on the matter. [31072/14]
Amharc ar fhreagraI propose to take Questions Nos. 188 to 190, inclusive, together.
I am advised by NAMA that it has co-invested in two Qualifying Investor Funds, Gangkhar plc, promoted by Starwood, and Targeted Investment Opportunities plc, promoted by Oaktree. In the case of Targeted Investment Opportunities plc, NAMA has invested in two sub-funds, namely the South Docks Fund and the City Development Fund, and in the case of Gangkhar plc, NAMA has invested in one sub fund, namely Gangkhar Fund I. The investment partner in Gangkhar Fund I is White River Holdco. The investment partners in the South Docks Fund are Oaktree Capital Management, Willett/Arnow and Bennett. The investment partners in the City Development Fund are Thompsonville Limited and OCM Holdings. Targeted Investment Opportunities plc was incorporated on 15 May 2013 and Gangkhar plc was incorporated on 4 June 2013. The objective of Gangkhar Fund I is to generate an attractive return through a combination of rental income and capital appreciation generated by obtaining exposure primarily to property and property related assets. The objective of both the South Docks Fund and the City Development Fund is to generate capital growth over the longer term by developing, managing and realising property assets on development sites in Dublin Docklands.
The value of the expected contribution by NAMA to each Qualifying Investor Fund is commercially sensitive. NAMA has a 20% shareholding in Gangkhar Fund 1, a 16.5% shareholding in South Docks Fund and 47.8% shareholding in City Development Fund.
In accordance with the objective of the South Docks Fund to generate capital growth over the longer term and the nature of the un-developed assets in the Fund, the development of which is subject to the planning process, it is not envisaged that there will be return on investment in the first year of operation. Returns will be generated as planning consent is established, assets developed on the sites and realised over the longer term.
NAMA's stated position is that its development funding in the Dublin docklands and in other areas in which its assets are located will be delivered through a range of mechanisms, including directly via debtors and receivers and, where appropriate, through joint venture arrangements, including Qualifying Investor Funds. I am advised by NAMA that it intends, in this respect, to invest in further Qualifying Investor Funds.
For clarity, where NAMA is involved in Qualifying Investor Funds it is in the capacity as an minority investor. Qualifying Investor Funds are managed by an Investment Manager approved by the Central Bank of Ireland and with responsibility to all shareholders. Accordingly, the investment strategy, including decisions relating to, for instance, selling investment stakes or converting into Real Estate Investment Trusts, are a matter for the relevant Qualifying Investor Funds. Equally, the marketing of Funds to investors and related activities are a matter for the Qualifying Investor Funds. NAMA constantly evaluates its assets including its various Qualifying Investor Fund shareholdings and the timing of disposal is a matter for NAMA.
