Written Answers Nos. 66-74
66. Deputy Michael McGrath asked the Minister for Finance his views on concerns regarding the postponing of the planned revaluation of properties for purposes of the local property tax; the basis under which this postponement is based; and if he will make a statement on the matter. [42250/15]
Amharc ar fhreagraIn my Budget 2016 statement I announced that I would be making a proposal to Government to postpone the revaluation date for the Local Property Tax from 2016 to 2019. Legislation to give effect to this announcement is currently being prepared and I hope to introduce it to the Houses of the Oireachtas shortly. I am aware of commentary that the deferral of the revaluation date to 2019 could in some way leave the LPT system open to constitutional challenge. As with all legislative provisions, the Office of the Attorney General will advise on any legal issues that may arise in the drafting of the legislation.
67. Deputy Michael McGrath asked the Minister for Finance the number of staff in the Central Bank of Ireland who received bonus or retention payments in 2014; the total level of such payments; if his permission for these payments was sought or granted; and if he will make a statement on the matter. [42251/15]
Amharc ar fhreagraFirstly, I should inform the Deputy that under the Central Bank Act 1942, the Treaty on the Functioning of the European Union and the Statute of the ESCB, save as may be required by the terms of the Financial Emergency Measures in the Public Interest (FEMPI) Acts 2009 2013 as stated below, the Government has no role in the setting of terms and conditions of employment in the Central Bank. The Act, the Treaty and the Statute guarantee the independence of the Governor in carrying out his ESCB related functions and control over pay and conditions is seen as a necessary part of that independence. The employment of staff at the Central Bank and their terms and conditions are matters for the Central Bank Commission. Given this independence, the permission of my Department was not sought for the payment of retention payments or bonuses.
However, in order to answer the Deputy's question, the Central Bank has provided the following information to me:
There were no bonus or performance related payments paid by the Central Bank in 2014. The cost of retention payments made in 2014 was €111,167, which related to four individuals. The Central Bank has made further information on these and other retention payments available in a statement released on 25th November, which is available on its website at this link: http://www.centralbank.ie/press-area/press-releases/Pages/StatementRetentionPayments.aspx.
As I have stated, this information has been provided by the Central Bank and these retention payments are entirely a matter for the Bank. The remuneration policy of the Bank is determined by the Central Bank Commission, which must take account of the need for the Bank to fulfil its essential financial regulation functions. However in doing so, the Bank's remuneration policy must also abide by the Financial Emergency Measures in the Public Interest (FEMPI) legislation given the Central Bank is covered by the FEMPI Acts. I have been informed by the Central Bank that it has obtained legal advice that the payments under its retention policy are compliant with the FEMPI Act.
68. Deputy Michael McGrath asked the Minister for Finance if the Central Bank of Ireland has carried out analysis of the credit market for car loans; and if he will make a statement on the matter. [42252/15]
Amharc ar fhreagraI am informed by the Central Bank that it does not specifically monitor information on the motor trade or motor lending. However, as part of the Household Credit Market Report, the Central Bank monitor trends in consumer credit by focusing on developments in aggregate consumer credit series as well as considering the financial stability implications of these credit balances through a monitoring of default rates on consumer lending.
The Central Bank provides statistics on default rates on secured term loans for consumer credit which would include some motor loans as well as other types of secured loans. Total default by loan count was 12 per cent as of December 2014. It should be noted that these default rates only relate to the three main lenders so do not cover specific asset financing outside AIB, BOI and PTSB.
Total consumer credit is continuing to decline in line with the broader deleveraging of the household credit market. As of the first quarter of this year, the stock of consumer credit fell by approximately 7.4 per cent on a year-on-year basis. Data for this series can be seen in Figure 2 in the Household Credit Market Report which is available at http://www.centralbank.ie/publications/Documents/Household%20Credit%20Market%20Report%202015H2.pdf. Further detailed data is also available on the Central Bank's website.
Of course, many cars are purchased under hire purchase agreements and the consumer protection aspects of such agreements come under the aegis of my colleague, the Minister for Jobs, Enterprise and Innovation.
69. Deputy Michael McGrath asked the Minister for Finance the number of mortgages issued outside the terms of Central Bank of Ireland limits for first-time buyers in 2015; and if he will make a statement on the matter. [42253/15]
Amharc ar fhreagra70. Deputy Michael McGrath asked the Minister for Finance the number of mortgages issued outside the terms of Central Bank of Ireland limits for non-first-time buyers in 2015; and if he will make a statement on the matter. [42254/15]
Amharc ar fhreagraI propose to take Questions Nos. 69 and 70 together.
The Central Bank of Ireland, in line with its mandate to safeguard financial stability, has put in place macro-prudential measures for residential mortgage lending effective from last February. These measures apply proportionate loan-to-value and loan-to-income limits to mortgage lending by regulated financial service providers in the Irish market. The key objective of these measures is to increase the resilience of the banking and household sectors to the property market and to reduce the risk of bank credit and house price spirals from developing in the future. The Central Bank is independent in the formulation and operation of these new macro prudential measures. However, I am informed by the Central Bank that, while it does not publish the particular information requested by the Deputy, compliance with the macro prudential regulation will be measured on an annualised basis at year end and that a decision will be made by the Bank at that time in relation to publishing the information.
71. Deputy Michael McGrath asked the Minister for Finance the status of the European Commission’s investigation into the tax affairs of a company (details supplied) in Ireland; the number of specific requests for information his Department has received; and if he will make a statement on the matter. [42255/15]
Amharc ar fhreagraIn 2013, the Competition Directorate of the European Commission announced their intention to open formal state aid investigations into tax rulings provided to a number of companies in various Member States of the European Union.
This announcement is part of a much wider review of tax ruling practice that is currently being undertaken by the European Commission and in 2014 the Commission announced that it was broadening its enquiries to include all Member States.
Last month, the Commission announced their view that the tax rulings given by two other Member States constitute an illegal State Aid.
I would like to emphasise that the Commission has opened a formal investigation in relation to one particular case involving Ireland but has not made a final determination in the matter.
Ireland has provided a detailed and comprehensive response to the Commission investigation demonstrating that the appropriate amount of Irish tax was charged in accordance with the relevant legislation, that no selective advantage was given and that there was no state aid. We remain committed to fighting this case in the European Courts if necessary.
There is no timeline for a final decision in respect of the Irish case, but it is not expected before the end of 2015.
As the Commission has acknowledged, Ireland has co-operated fully with the process to date and we will continue to do so. Given the confidential nature of the ongoing procedure, I am not able to make a more detailed comment on the matter at this time.
72. Deputy Michael McGrath asked the Minister for Finance the current estimate by the joint administrators of the losses at a company (details supplied); the role of the insurance compensation fund in dealing with this issue; the amount that has been collected to date from the 2% insurance levy introduced since 1 January 2012; the timeframe the levy is likely to have to remain in place; and if he will make a statement on the matter. [42256/15]
Amharc ar fhreagraI have been advised by the administrators of the company in question that the current estimated total cost to the Insurance Compensation Fund (ICF) is between €1.1 billion and €1.15 billion.
The establishment of the Insurance Compensation Fund is provided for by the Insurance Act 1964. It applies to home, motor and commercial insurance. The purpose of the ICF is to protect policy holders in the event of their insurer becoming insolvent. In this particular case, the ICF is being used in accordance with the legislation to allow the administrators of the company to meet their financial obligations as they arise. The management and administration of the ICF is under the control of the President of the High Court acting through the Office of the Accountant of the Courts of Justice.
The Central Bank of Ireland has responsibility under Section 6 of the Insurance Act 1964, as amended, to carry out an annual assessment of the ICF to see if it needs financial support. Where the Central Bank is of the view that the state of the ICF is such that financial support should be provided for it, it is allowed to determine an appropriate contribution to be paid to the ICF by each insurer. This is calculated as a percentage determined by the Central Bank, not exceeding 2 per cent of the aggregate of the gross premiums paid to the insurer or insurer authorised in another Member State in respect of policies issued in respect of risks in Ireland. If the Central Bank envisages a deficit may exist in the fund at any time in the calendar year after the contributions received from each insurer, it may recommend to myself as Minister for Finance to advance funds to the ICF from the central fund. This advance would be a loan and must be repaid to the Exchequer.
The ICF levy currently in place of 2 per cent has applied since 1 January 2012. I am advised by the Accountant of the Courts of Justice, that since that date and up until the end of October 2015, a total of €236,469,891.21 has been collected from the levy.
At present, the balance owed to the Exchequer by the ICF is €912.3m. Since approximately €65m is collected each year under the 2% levy, it will take several years for the ICF to collect and repay the amount owed.
73. Deputy Michael McGrath asked the Minister for Finance the number of applications received and granted for a banking licence, in each year since 2011, in tabular form. [42257/15]
Amharc ar fhreagraThe Central Bank has informed me that since 2011 the Central Bank of Ireland has received 2 applications for banking licences and granted both:
- Dell Bank International Limited on 24 June 2013
- EBS Limited on its conversion from a Building Society on 1 July 2011.
74. Deputy Michael McGrath asked the Minister for Finance the number of persons or mortgage accounts in receipt of tax relief at source in each year from 2012 to 2015 in tabular form; the projected cost of the scheme in 2015; and if he will make a statement on the matter. [42258/15]
Amharc ar fhreagraI am advised by the Revenue Commissioners it is estimated that the number of individuals availing of mortgage interest relief and the cost of this scheme in the years 2012, 2013 and 2014, the latest year for which data are available, is set out in the table below. This information is on the basis of returns in respect of eligible tax relief at source accounts.
|
Year |
Number of individuals availing (estimated) |
Estimated Cost €M |
|
2012 |
508,200 |
411 |
|
2013 |
498,000 |
353 |
|
2014* |
495,000 |
266 |
The cost of this relief for 2015 will depend on a wide variety of factors which are not yet quantified, and while the current working estimate of cost is €275m, this is subject to a high margin of error.
The Deputy will be aware that mortgage interest relief has been abolished for homes purchased from 1 January 2013. Up until 2018 however, tax relief continues to be available for interest paid on qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012.
This Government is committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. In this regard, in Budget 2012, I fulfilled the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period. This was the period during which house prices peaked. This 30% rate will continue to be applicable to these first-time buyers for the remaining years that mortgage interest relief continues to be available. In the absence of this change the mortgage interest relief available would have gradually reduced to a rate of 15%.
The system of mortgage interest relief is designed and targeted in such a way that the relief is of greater value in the early years of a qualifying loan where the interest represents a greater proportion of the repayment. As the amount of interest payable reduces as a mortgage is paid down, the level of mortgage interest relief also reduces in tandem.
