Michael McGrath
Ceist:118. Deputy Michael McGrath asked the Minister for Finance the position regarding the mis-selling of payment protection insurance; and if he will make a statement on the matter. [5362/15]
Amharc ar fhreagraInsurance Costs
Ceisteanna (118)
Freagraí scríofa
In March 2014, following the conclusion of its investigations, the Central Bank reported on its review into the sales of Payment Protection Insurance ("the PPI Review"). The PPI Review included the sales by 11 credit institutions since July 2007 and resulted in a refund figure of €67.4 million (including €4.9 million in interest) to consumers. 353,806 policies were within the scope of the PPI Review.
Credit institutions included in the PPI Review were required to demonstrate that their PPI sales were in compliance with the Consumer Protection Code. This included requirements to assess and evidence suitability and eligibility and to check that claims were not declined for reasons which the seller should have identified during the sales process.
The Central Bank has informed me that it is continuing to engage with smaller entities that sold PPI including Credit Unions.
A copy of the press release, report and a customer Q and A is available on the Central Bank's website.
Home Renovation Incentive Scheme Data
Ceisteanna (119)
Michael McGrath
Ceist:119. Deputy Michael McGrath asked the Minister for Finance the number of persons who have availed of the home renovation incentive scheme since its inception; and if he will make a statement on the matter. [5363/15]
Amharc ar fhreagraFreagraí scríofa
As the Deputy will be aware, the Home Renovation Incentive was introduced on 25 October 2013 for repairs, renovations and improvements carried out on a person's main residence. The scheme was extended in the recent Budget to include repairs, renovations and improvements carried out on rental properties, where the relevant owners are liable to income tax. Only works carried out by a tax compliant contractor qualify under the Incentive. It is clear from the figures available that the Incentive has been very successful in boosting activity in the legitimate construction sector and ancillary services.
The electronic facility to allow homeowners claim their tax credit has been available since 13 January 2015. To date, 1,970 claims have been processed, representing total tax credits of €4.3 million. The approach of linking activity to tax compliance is proving to be a successful means of levelling the playing pitch when legitimate traders are competing with those still operating in the shadow economy. This approach will be continued and should encourage those in the shadow economy to regularise their tax affairs and avail of the opportunities that will continue to come on stream in the construction sector.
The information requested is as follows:
General Statistics on Home Renovation activity at 29 January 2015
|
Home Renovation Activity |
Statistics |
|
Number of Works |
20,334 |
|
Number of Properties |
15,487 |
|
Number of Contractors |
4,133 |
|
Value of Works |
€318 million |
Tax Reliefs Availability
Ceisteanna (120)
Michael McGrath
Ceist:120. Deputy Michael McGrath asked the Minister for Finance the number of persons who have availed of the start your own business relief scheme since its inception; and if he will make a statement on the matter. [5364/15]
Amharc ar fhreagraFreagraí scríofa
As the Deputy is aware, I introduced the Start Your Own Business initiative in Finance (No. 2) Act 2013, which provides an exemption from Income Tax for individuals who have been unemployed for a period of 12 months and who start a new, unincorporated business between 25 October 2013 and 31 December 2016.
An exemption from Income Tax is provided on profits up to a maximum of €40,000 per annum for the first two years of trading. However, USC and PRSI continue to be payable. If a loss is incurred, then loss relief is available in the normal manner.
The business must be unincorporated i.e., it must not be registered as a company. In order to claim this relief, the individual must file a tax return notwithstanding that there may be no liability to tax.
This relief does not require pre-approval. Instead, the relief is claimed by completing the relevant section of the individual's annual Income Tax return form in late October of each year. As a result, figures on the level of the initial take-up of the scheme will not be available until later this year.
Mortgage Data
Ceisteanna (121)
Michael McGrath
Ceist:121. Deputy Michael McGrath asked the Minister for Finance if mortgage deposit rules apply to corporate entities or investment funds purchasing residential property; and if he will make a statement on the matter. [5365/15]
Amharc ar fhreagraFreagraí scríofa
The regulations providing for the macro prudential measures are currently being finalised by the Central Bank in advance of being laid before the Houses of the Oireachtas. However, the Central Bank has advised that the draft regulations issued with Consultation Paper 87 referred to "housing loans" which is basically a loan between a lender and a borrower which is secured on residential property (where a borrower means a 'person' to whom a housing loan is granted). A 'person' in that sense incorporates both legal (i.e. corporates) and natural persons and accordingly, where the loan is secured on a residential property, the regulations would apply irrespective of the legal personality of the borrower.
Financial Services Ombudsman
Ceisteanna (122)
Michael McGrath
Ceist:122. Deputy Michael McGrath asked the Minister for Finance when the merger of the Financial Services Ombudsman and the Pensions Ombudsman will take place; and if he will make a statement on the matter. [5366/15]
Amharc ar fhreagraFreagraí scríofa
As the Deputy may be aware, my Department is currently progressing the amalgamation of the Offices of the Financial Services Ombudsman and the Pensions Ombudsman. A Steering Group chaired by my Department with representatives from the Financial Services Ombudsman, the Pensions Ombudsman, the Departments of Public Expenditure and Reform and Social Protection meets as necessary to progress the amalgamation process.
It is intended as part of the merger process that one person will take on the existing separate roles of Financial Services Ombudsman and Pensions Ombudsman. A competitive appointment process is currently being run for the role of Financial Services and Pensions Ombudsman (designate). It is anticipated that the successful candidate will take up the role of Financial Services Ombudsman in March 2015 when the term of office of the current Financial Services Ombudsman ends and will be nominated as Financial Services and Pensions Ombudsman when the legislation to merge both offices is agreed by the Oireachtas.
NAMA Operations
Ceisteanna (123)
Michael McGrath
Ceist:123. Deputy Michael McGrath asked the Minister for Finance if contractual restrictions on former National Asset Management Agency staff working on property related matters with which they had previously had exposure during their tenure of employment are being revised for both new and existing staff; and if he will make a statement on the matter. [5367/15]
Amharc ar fhreagraFreagraí scríofa
In light of changes made in the NTMA policy in 2013 in respect of notice periods and post-termination restrictions on employment, which relate to all NTMA employees including those assigned to NAMA under Section 42 of the NAMA Act, I consider that the existing contractual provisions relating to NAMA staff are appropriate.
As previously advised to the House, in early 2013 the NTMA Chief Executive committed to a review of NTMA policy in respect of notice periods and post-termination restrictions on employment. Accordingly, the law firm Matheson was engaged by the NTMA to:
(i) advise on market norms in the private sector in terms of notice periods and post-termination restrictions;
(ii) assess the adequacy of the protections in the current NTMA employment contracts/codes of conduct where employees leave the NTMA to join a commercial entity in the private sector that might gain an unfair advantage by employing them; and
(iii) recommend changes that could be made in this area by the NTMA.
This review applied across all the NTMA's business areas, including NAMA. All NAMA staff are employees of the NTMA and under Section 42 of the National Asset Management Agency Act, 2009 the NTMA assigns staff to NAMA. Other than a small number of staff reassigned from other functions within the NTMA, NAMA staff are employed on the basis of specified purpose contracts their employment lasts for as long as NAMA requires their particular function - or fixed term contracts.
Matheson's principal recommendations were as follows:
- longer notice periods (3 to 6 months) to be introduced for middle and senior NTMA management employees.
- garden leave provisions to be included in all NTMA employment contracts.
- post-termination of employment restrictions (including cooling-off periods and non-solicitation of employees) to be considered on a case-by-case basis in respect of senior NTMA management employees in particular.
However, Matheson stressed that the imposition of such restrictions would need to be balanced against the NTMA's need to recruit good candidates for whom such restrictions may act as a significant disincentive to taking up employment with the NTMA. Furthermore, to maximise the prospects of enforceability, Matheson advised that any such restrictions would need to be drafted as narrowly as possible.
It was proposed by Matheson that any required changes resulting from these recommendations would be introduced for new NTMA employees and for existing NTMA employees on promotion. The NTMA accepted the Matheson proposals and is implementing them on this basis.
With regard to staff assigned to NAMA, it should be noted that the 3 month notice period and garden leave provision were already in operation since the first employees were assigned to NAMA at the start of 2010. A provision prohibiting certain activities in an employee's subsequent employment for a defined period of time has also been introduced on a case by case basis for new employees, in cases where employees have moved from fixed to specified purpose contracts, and on promotion.
The Deputy will also be aware of S202 provisions in the NAMA Act which are lifelong provisions with respect to confidentiality for all current and former staff assigned to NAMA and to members of the NAMA Board.
Mortgage Interest Relief Expenditure
Ceisteanna (124)
Michael McGrath
Ceist:124. Deputy Michael McGrath asked the Minister for Finance the projected cost of mortgage interest relief this year; the estimated cost in 2014, the number of persons currently in receipt of mortgage interest relief; and if he will make a statement on the matter. [5368/15]
Amharc ar fhreagraFreagraí scríofa
I am informed by the Revenue Commissioners that the provisional cost to the Exchequer of mortgage interest relief in respect of principal private residences, provided via tax relief at source (TRS) in 2014 is €266 million. I am also informed that, on the basis of returns in respect of eligible TRS accounts, it is estimated that approximately 495,000 individuals availed of the relief in 2014.
The cost of mortgage interest relief in 2015 will depend on a variety of factors including the numbers of mortgages, the monetary amount of the qualifying loans taken out, the rate of relief applying to those qualifying loans, the year the qualifying loans were taken out and the extent to which the ceilings for relief are impacted by changes in interest rates. Accordingly it is not possible to provide an accurate estimate of the expected cost of the relief.
NAMA Bonds
Ceisteanna (125)
Michael McGrath
Ceist:125. Deputy Michael McGrath asked the Minister for Finance the amount of subordinate National Asset Management Agency bonds in issuance; the interest payment that will attach to these bonds; and if he will make a statement on the matter. [5369/15]
Amharc ar fhreagraFreagraí scríofa
I would like to advise the Deputy that the information requested is available in the NAMA Section 55 Quarterly Report for Q3 2014 which was laid before the Oireachtas and published on the NAMA website on the 21st of January 2015.
In the report NAMA states that there are €1.593 billion of subordinated bonds in issue and that the coupon on the bonds is based on the Irish 10 year Government bond yield at the date of issue plus a margin of 75bps, this is 5.264%.
Small and Medium Enterprises Debt
Ceisteanna (126)
Michael McGrath
Ceist:126. Deputy Michael McGrath asked the Minister for Finance the latest information he has available as to the amount of small and medium enterprise debt outstanding in the country; the amount which is in arrears; the amount classified as non-performing; and if he will make a statement on the matter. [5370/15]
Amharc ar fhreagraFreagraí scríofa
I am informed by the Central Bank that they do not publish statistics on SME debt as part of any of their statistical series. However, the Bank do publish the level of outstanding debt, through the statistical release "Trends in Business Credit and Deposits: Q3 2014", which indicates that total loans by Irish resident credit institutions to Irish resident SMEs was €59.4 billion at end-September 2014. This publication is available on the Central Bank website: http://www.centralbank.ie/polstats/stats/cmab/Documents/2014q3_ie_trends_in_business_credit_and_deposits.pdf.
The Deputy may be interested in the Central Bank publication "SME Market Report 2014 H2", which reports on SME default numbers (as per the Basel II definition of default). This publication is available on the Central Bank website: http://www.centralbank.ie/publications/Documents/SME%20Market%20Report%202014H2.pdf.
Ireland Strategic Investment Fund Investments
Ceisteanna (127)
Michael McGrath
Ceist:127. Deputy Michael McGrath asked the Minister for Finance the number of projects in which the Ireland Strategic Investment Fund has currently invested; the number of new jobs created as a result of these projects; and if he will make a statement on the matter. [5371/15]
Amharc ar fhreagraFreagraí scríofa
The Ireland Strategic Investment Fund (ISIF) was established on a legislative basis on 22 December 2014 taking over the assets of the National Pensions Reserve Fund under new National Treasury Management Agency (NTMA) governance arrangements.
The mandate for the ISIF is to invest on a commercial basis to support economic activity and employment in Ireland. This means the ISIF has the dual objectives of investment return and economic impact. There is little precedent for sovereign funds investing with such a mandate, although a number of such funds are beginning to emerge.
The ISIF Investment Strategy will be approved in due course by the NTMA, following consultation as specified in legislation with the Minister for Finance and with the Minister for Public Expenditure and Reform.
In recent months the NTMA, following consultation with the Department of Finance and a number of other Government Departments and Agencies in 2014, has been developing a new Economic Impact Framework which will be a key element of the ISIF Investment Strategy. The Economic Impact Framework will seek to identify target areas for investment which have higher potential economic and employment impact, and will also facilitate the identification of categories of investment that would be expected to assist and accelerate normalisation of capital markets in Ireland following the financial crisis.
The ISIF has committed to a number of investments in Ireland including infrastructure, water, long-term financing for SMEs (both credit and equity) and venture capital. A detailed table of the commitments to Irish investments at 31 December 2014 is set out as follows:
|
31/12/14 |
ISIF Commitment Capital (€m) |
3rd Party Capital (€m) |
Total Project size in Ireland (€m) |
|
SME Equity Fund- Carlyle Cardinal |
125 |
167 |
292 |
|
SME Credit Fund BlueBay |
200 |
250 |
450 |
|
West Summit "China Ireland" Funds |
72 |
36 |
72 |
|
Innovation Fund Ireland |
125 |
125 |
250 |
|
Local Venture Capital Funds |
116 |
460 |
576 |
|
Silicon Valley Bank |
36 |
72 |
72 |
|
Irish Water |
300 |
- |
300 |
|
Irish Infrastructure Fund |
250 |
67 |
317 |
|
Forestry |
30 |
187 |
217 |
|
PPP Schools Bundle 3 |
14 |
121 |
121 |
|
PPP N11 |
18 |
165 |
165 |
|
Covanta project |
44 |
456 |
500 |
|
WLR Cardinal CRE Mezz |
75 |
195 |
270 |
|
Committed to Date |
1,406 |
2,301 |
3,602 |
Because of uncertainty regarding the nature of investment opportunities satisfying the Fund's commercial return and economic impact objectives that may emerge or can be developed, it is not feasible at this stage to estimate in advance what the economic activity and employment impacts of the ISIF may be.
In the interim, the NTMA is developing its capabilities for collating and analysing data to measure and report on economic impact of ISIF investments on an ex post basis (i.e. after the investment has been made). This will require a completely new data set to be sought and reported on by funds and the underlying companies in which funds have invested and by companies or project sponsors in which the ISIF has invested directly. While it is standard practice that companies report financial information to their investors, the ISIF mandate will also require metrics that can be used to help assess economic impact to be reported. The NTMA expects to be able to publish a preliminary assessment of the economic impact of the investments made to date in Ireland by the ISIF during the second quarter of this year.
Company Data
Ceisteanna (128)
Michael McGrath
Ceist:128. Deputy Michael McGrath asked the Minister for Finance the number of Irish incorporated companies that are not judged to be resident here under the test of management and control and which have advised the Revenue Commissioners as to where they are actually resident, since the change announced in budget 2014; and if he will make a statement on the matter. [5372/15]
Amharc ar fhreagraFreagraí scríofa
Further to the announcement I made in Budget 2014, a change in company residence rules was made in Section 39 of the Finance (No. 2) Act 2013 to provide that where, by reason of a mismatch of residence rules with a treaty-partner country, an Irish-incorporated company would neither be resident in that country nor in the State and, accordingly, would not be resident in any country, the company will then be treated as resident in the State for tax purposes. The change will ensure that the mismatch of company residence rules does not allow an Irish-incorporated company to be 'stateless' in terms of its place of tax residency. The change applies from 24 October 2013 for newly-incorporated companies (i.e. companies incorporated on or after that date) and from 1 January 2015 for companies incorporated before 24 October 2013.
I am informed by the Revenue Commissioners that they have been advised of companies that will be affected by the change in residence rules in Section 39 of the Finance (No. 2) Act 2013. However, because of the small number of companies involved, the Revenue Commissioners' obligation in relation to confidentiality of taxpayer information precludes them from providing the information requested.