Tuesday, 22 Mar 2016

Written Answers Nos. 52-74

Small and Medium Enterprises Debt

Ceisteanna (52)

Dara Calleary

Ceist:

52. Deputy Dara Calleary asked the Minister for Finance the action he is taking to deal with the small and medium enterprise legacy debt issue; and if he will make a statement on the matter. [5265/16]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, Chapter 7 (Finance for Growth) of this year's Action Plan for Jobs (APJ) sets out a range of commitments to ensure viable SME's can access appropriate finance at a reasonable cost from both bank and non-bank sources.

In line with Action 144 of the APJ, officials from my Department continue to collate and examine data from AIB and Bank of Ireland on a monthly basis, including data pertaining to SME legacy debt. Furthermore, my officials meet the banks on a quarterly basis to ensure an informed understanding of the wider SME bank lending environment which assists the development and implementation of policies aimed at ensuring SME access to finance and increased competition in the SME lending sector.  In addition, I am informed by the Central Bank of Ireland that, as part of their on-going supervision, the Central Bank, working in conjunction with the European Central Bank (ECB) as part of the Single Supervisory Mechanism (SSM), continues to challenge the banks on their strategies, management, measurement and reporting of the resolution and restructuring of all non-performing loans (NPLs) including SME NPLs. Relevant actions taken by the Central Bank in recent years have been extensive and include, inter alia, capital assessment reviews, stress tests, distressed credit operation reviews, balance sheet assessment exercises, SME loan resolution bank specific targets, on-site inspections and on-going, intensive supervisory engagement with the banks regarding distressed debt. In 2013 non-public institution specific SME distressed loan resolution targets were set for a number of banks. The targets required the banks to develop strategies, at borrower level, to resolve their non-performing loans. The targets ended in Q1 2015 with lenders reporting that they satisfied the requirements set out. Progress has been made by the relevant institutions in resolving SME NPLs in recent years and NPL trends continue to move in a positive trajectory. Bank of Ireland have indicated that they have reached resolution in 90% of distressed SME cases and more than 9 out of 10 restructured business banking borrowers continue to meet their agreed arrangements. AIB has also made significant progress in reducing distressed loan balances with the process of restructuring the group's SME book reaching its latter stages with the majority of offered SME restructures either complete or at the final stages of completion. Recognising these developments, alongside changes in the supervision of the banks following the introduction of the SSM, the Central Bank's approach to commercial NPL resolution utilises a bank specific approach taking into consideration a number of factors including, inter alia, the institution's NPL resolution strategy and operational capability. The sustainable resolution of distressed SME loans remains a significant priority for the Central Bank and will therefore continue to be central to their supervisory focus throughout 2016 and beyond. Supervision will continue to be intrusive, supplemented by targeted inspections and enhanced monitoring of performance of the banks in delivery of supervisory objectives.

VAT Rate Increases

Ceisteanna (53)

Regina Doherty

Ceist:

53. Deputy Regina Doherty asked the Minister for Finance to amend the value added tax rates on sunbed sessions and on sunscreen, given the 13.5% rate on sunbed sessions and the 23% rate on sunscreen and the significantly increased risk of a number of skin cancers attributable to sunbed use; and if he will make a statement on the matter. [4718/16]

Freagraí scríofa

Minister for Finance

I am advised by the Revenue Commissioners that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply.  The EU VAT Directive (Council Directive 2006/112/EC) generally provides that supplies of goods and services be chargeable to VAT at the standard rate but that lower rates are permitted in very limited circumstances.  VAT legislation differentiates between a good such as sunscreen and a service such as providing access to a sunbed.  There is no scope for a reduction in the rate of VAT on sun protective creams that would be in compliance with the EU VAT Directive.

The Schedules to the VAT Consolidation Act 2010 set out the circumstances in which a rate lower than the standard rate can apply.  Services consisting of the care of the human body, which includes access to sunbeds, health studios, yoga, etc., are liable to VAT at the reduced rate, currently 13.5%.  An amendment to the VAT Consolidation Act 2010 would be required to exclude sunbed sessions from the reduced rate of VAT.

Retail Sector

Ceisteanna (54)

Fergus O'Dowd

Ceist:

54. Deputy Fergus O'Dowd asked the Minister for Finance his views on an issue raised in communications received (details supplied); and if he will make a statement on the matter. [4720/16]

Freagraí scríofa

Minister for Finance

The question appears to relate to incentivising the use of debit cards and specifically to the charges paid by retailers to acquirers when accepting payment by debit card.

In Budget 2016, I introduced measures to support retailers by reducing costs and incentivising electronic payments.  I announced that the fixed stamp duty charge on debit/cash machine cards would be abolished and replaced with a 12c per transaction charge for withdrawing cash from an ATM, capped at an annual maximum of €2.50 or €5, depending on card type. Since 1 January 2016 there is no stamp duty charge for debit card transactions.

In addition, I made changes to interchange fees faced by retailers accepting cards.  I announced that an EU regulation would halve the interchange fee charged to retailers to 30 basis points for credit cards and that I was halving the corresponding fee for domestic consumer debit cards to 10 basis points. These changes came into effect on 9 December last year and significantly reduce the costs of accepting card payments.  Combined, these reductions will save retailers an estimated €36 million a year in fees.

These interchange fees form part of the overall charges collected by acquirers from retailers.  An acquirer is a financial services company (e.g. a bank, bank subsidiary or payment institution) which manages the account and relationship between a retailer and the various card schemes. All acquirers in Ireland are independent commercial entities and I have no statutory role in relation to the charges applied by acquirers, other than setting caps on interchange fees as I have done.

Many retailers, particularly smaller retailers, could stand to benefit from shopping around for lower rates from acquirers for accepting cards.  The changes announced in the Budget speech present an opportunity for retailers to examine the rates they are paying so as to ensure they are getting the best rates.

Tax Reliefs Availability

Ceisteanna (55)

Clare Daly

Ceist:

55. Deputy Clare Daly asked the Minister for Finance the options available to persons who pay large yearly management fees on their properties but who get no tax relief, given that persons who rent their homes get tax relief; and if he will make a statement on the matter. [4735/16]

Freagraí scríofa

Minister for Finance

The Deputy will be aware that management fees in managed estates are used to fund costs such as repairs and maintenance of common areas, refuse collection and insurance. These are costs which homeowners in other households have to fund themselves for their own properties, for which they do not receive tax relief. Similarly, owner-occupiers in managed estates cannot claim tax relief for management fees.  Such properties would have been purchased by their owners in the knowledge that they would be taking on commitments to partake in, and to fund, the management of the estate.

With regard to rental properties, the Deputy will be aware that landlords are liable to tax on their net rental profit after deduction of allowable letting expenses. The Office of the Revenue Commissioners has published a guide to the income tax treatment of rental income, available at http://www.revenue.ie/en/tax/it/leaflets/it70.html, which sets out the treatment of rental income for income tax purposes and provides a comprehensive list of expenditure items that are allowable for deduction in computing taxable rental profits. Allowable letting expenses include expenses incurred on the upkeep and maintenance of a property. In the case of rental properties in managed estates, management fees are generally collected to fund the upkeep and maintenance of the buildings and grounds of a managed estate and, as such, are allowable letting expenses.

Vehicle Registration

Ceisteanna (56)

Michael Healy-Rae

Ceist:

56. Deputy Michael Healy-Rae asked the Minister for Finance the status of an application for an exemption from vehicle registration tax by a person (details supplied) in County Kerry; and if he will make a statement on the matter. [4807/16]

Freagraí scríofa

Minister for Finance

I am advised by Revenue that an incomplete application under the Drivers/Passengers with Disabilities Scheme was received from the person concerned on 26th January 2016. Following subsequent contacts with the person concerned, the fully completed application was processed by Revenue and an exemption notification issued on 15th March 2016, enabling the person concerned to avail of the exemption from Vehicle Registration Tax.

Pensions Insolvency Payments Scheme

Ceisteanna (57)

David Cullinane

Ceist:

57. Deputy David Cullinane asked the Minister for Finance the status of the appeals process under way for former Waterford Crystal workers whose service was given under contract and who have made a claim under the Social Welfare and Pensions Act 2014; and if he will make a statement on the matter. [4900/16]

Freagraí scríofa

Minister for Finance

The statutory authority for payments in respect of the Waterford Crystal pensions settlement is in Section 48B of the Pensions Act, 1990. The provision was inserted by the Social Welfare and Pensions (No 2) Act, 2014. While policy responsibility rests with the Minister for Social Protection, the legislative provision makes the payments a charge on the Central Fund i.e. they are not a charge on the Vote for the Department of Social Protection. Payments made directly from the Central Fund are the responsibility of the Department of Finance.

In order to make a payment from the Central Fund, the Minister for Finance has, firstly, to requisition a credit from the Comptroller and Auditor General under the Comptroller and Auditor General Amendment Act, 1993.  Under that Act, the Comptroller and Auditor General has to satisfy himself that the credits sought "comply in all other respects with the provisions of the enactments relating to them." In this case, the relevant enactment is the amended Pensions Act. That Act provides that the Minister for Finance may pay moneys for the purpose of the discharge "of the liabilities of an eligible pension scheme".

My Department was approached by the Department of Social Protection in relation to payments from the Central Fund to former employees of Waterford Crystal in respect of service given under contract, which had not been purchased at the point of insolvency of the company. Before it proceeded to requisition a credit from the Comptroller and Auditor General for the payments, my Department asked the Department of Social Protection to clarify whether the unpurchased service was a liability of the pension scheme at the point of insolvency.  The latter Department has now obtained legal advice, which confirms that unpurchased service at the date of winding up of the Waterford Crystal Pension Fund cannot form part of the liabilities of the pension scheme for the purposes of section 48B of the Pensions Act.

Insurance Costs

Ceisteanna (58, 59)

Pearse Doherty

Ceist:

58. Deputy Pearse Doherty asked the Minister for Finance if he has analysed the punitive interest rates being charged by insurance companies, especially on motor insurance, on missed or late payments; and if he will make a statement on the matter. [4905/16]

Pearse Doherty

Ceist:

59. Deputy Pearse Doherty asked the Minister for Finance how he regulates the levying of interest on missed or late payments on an insurance payment; his views on whether he, or the Central Bank of Ireland, believes that companies are charging excessive interest; and if he will make a statement on the matter. [4906/16]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 58 and 59 together.

It is important to note that as Minister for Finance, I am responsible for the development of the legal framework governing financial regulation.  Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products. The Central Bank of Ireland has no remit over the make-up and content of products including the levels of charges or fees. These are commercial decisions for the various insurers themselves.

The Central Bank of Ireland is, however, responsible for ensuring that the Consumer Protection Code is being complied with.  I have consulted with the Central Bank and it is aware that insurers charge interest in cases where premiums are paid monthly.  It is unaware, however, of the specific issue to which the Deputy currently refers and it would welcome more specific details so that a fuller reply may be provided.

The Consumer Protection Code requires firms to make full disclosure of all relevant material information including all charges in a way that seeks to inform the consumer.  In addition, a regulated entity must provide the consumer with details of all charges which it will pass onto the consumer prior to providing a service to the consumer.  Any increase in such charges must be informed to the consumer at least 30 days before the change takes effect.

Mortgage Lending

Ceisteanna (60, 61)

Thomas P. Broughan

Ceist:

60. Deputy Thomas P. Broughan asked the Minister for Finance the measures he is taking to liaise with the Central Bank of Ireland regarding access to mortgages for first-time buyers; and if he will make a statement on the matter. [4916/16]

Thomas P. Broughan

Ceist:

61. Deputy Thomas P. Broughan asked the Minister for Finance the measures he is taking to liaise with the Central Bank of Ireland regarding access to mortgages for buyers who previously held mortgages which were distressed and or are in negative equity; and if he will make a statement on the matter. [4917/16]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 60 and 61 together.

In terms of overall policy, the Central Bank of Ireland has a key role in maintaining and safeguarding financial stability.  In that context, the Bank has put in place macro-prudential measures for new residential mortgage lending.  These measures apply proportionate loan-to-value (LTV) and loan-to-income (LTI) 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 housing sector 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 implementation of these macro prudential measures.  However, in formulating these rules the Central Bank had regard to the particular position of first time buyers and to households who were having difficulty with their existing mortgage.  For example, for first time buyers of properties valued over €220,000, a 90 per cent LTV limit applies on the first €220,000 value of a property and an 80 per cent LTV limit applies on any value of the property thereafter; furthermore, the LTV limits do not apply to housing loans entered into in order to address arrears or pre-arrears and, in addition, housing loans for borrowers in negative equity who wish to obtain a mortgage for a new property are not in the scope of the LTV limits.  Also the LTI limits also do not apply to housing loans entered into in order to address arrears or pre-arrears.

 The Central Bank will conduct a review of the particular macro prudential measures adopted last year, and this is expected to be published by November.  This review will be based on an analysis of the evidence provided by data on the first year of the operation of the rules, while taking into account other factors that may have influenced the mortgage market during this period.  In that context the Governor of the Central Bank has stated that the Central Bank is open to tightening or loosening the calibration of these rules in response to the evidence but also referenced that the value of stability in a rules-based framework means that the evidence threshold to justify adjustments to these rules is significant.

NAMA Assets Sale

Ceisteanna (62, 63)

Thomas P. Broughan

Ceist:

62. Deputy Thomas P. Broughan asked the Minister for Finance the number of National Asset Management Agency residential properties that international vulture funds have purchased each year since 2009; the location of each of these properties; and the number of residences in each property. [4918/16]

Thomas P. Broughan

Ceist:

63. Deputy Thomas P. Broughan asked the Minister for Finance the number of National Asset Management Agency commercial units which international vulture funds have purchased in each year since 2009; the location of each of these properties and the number of units in each development; and if he will make a statement on the matter. [4919/16]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 62 and 63 together.

The Deputy will be aware that NAMA does not own residential or commercial property and therefore is not in a position to sell such properties to any prospective purchaser. Rather, NAMA has acquired loans and its role is that of a lender with claims over security for its loans, like a bank, rather than a property owner or lessor. The sale of properties securing NAMA's loans is managed directly by the property owners or, where the property is the subject of enforcement, by the appointed receiver/administrator.

If the Deputy is referring to the sale of NAMA loans which were secured by residential and commercial property, I would refer him to NAMA's Annual Report and Accounts, which are available on NAMA's website. These reports cover each full year of NAMA's operations and provide a breakdown of disposals by sector and location, as well as the number of residential units disposed of by its debtors and receivers.

In the same way as banks or other financial institutions do not publish lists of properties owned by people who have borrowed money from them, NAMA does not do so. In fact, NAMA cannot do so as sections 99 and 202 of the NAMA Act make it an offence for NAMA disclose details relating to its borrowers and their assets.

NAMA cannot disclose details on the purchasers of debtor properties. To do so would place NAMA, and by extension Irish taxpayers, at a significant commercial disadvantage relative to other deleveraging entities.

In overseeing the sale of assets by debtors and receivers, NAMA is obliged under Section 10 of the NAMA Act to maximise the price achieved for Irish taxpayers and all NAMA-related sales processes are implemented by reference to this obligation.

Parliamentary Questions

Ceisteanna (64)

Michael McGrath

Ceist:

64. Deputy Michael McGrath asked the Minister for Finance the role of non-established civil servants and political advisers in formulating replies to parliamentary questions; and if he will make a statement on the matter. [4937/16]

Freagraí scríofa

Minister for Finance

I wish to inform the Deputy that non established civil servants have a role in providing support and advice both to me and my Department.  Included in that role is the carrying out of activities that support functions of my Department.  Formulating replies to Parliamentary Questions for consideration by the Secretary General and for approval by me is a function of the Department.

Please note, in relation to my political advisers, they advise me directly.

EU Directives

Ceisteanna (65)

Michael McGrath

Ceist:

65. Deputy Michael McGrath asked the Minister for Finance when the mortgage credit directive will be transposed into law; how this will impact on the sale of mortgage products; and if he will make a statement on the matter. [4938/16]

Freagraí scríofa

Minister for Finance

I have signed regulations to transpose the Mortgage Credit Directive and arrangements are in train to lay the transposing regulations before the Houses of the Oireachtas.  Information regarding the regulations will also be put on the Department's website.

The overall objective of the Mortgage Credit Directive is to provide for a more common European mortgage market with minimum standards and provisions for the protection of consumer mortgage borrowers and will therefore build on existing Irish measures in this area including the Consumer Credit Act, the Central Bank's Consumer Protection Code, Code of Conduct on Mortgage Arrears and Minimum Competency Code for financial service providers.  There are a number of areas where these new regulations will complement and add to the existing framework in relation to the provision of residential mortgages such as:

- a legal obligation on a creditor to conduct creditworthiness assessment and a requirement to extend credit to a consumer only where the assessment indicates that the consumer is likely to meet the obligations of the agreement;

- enhanced information provision requirements on mortgage lenders and mortgage credit intermediaries which now includes the mandatory provision of standard pre-contractual information to consumers by means of the European Standardised Information Sheet (ESIS), as well as a standard way of calculating the annual percentage rate of charge (APRC) to capture the total cost of credit to the consumer;

- standards for the performance of service, such as conduct of business obligations and competence knowledge requirements, for mortgage providers and mortgage credit intermediaries;

- other consumer protection provisions in relation to mortgage credit such as rights on early repayment, notification of interest rate changes, a formal onus on lenders to exercise reasonable forbearance if mortgage repayment difficulties emerges and restricting default charges a lender may charge to a level that will be limited to the recovery of costs;

- some additional regulation and control of mortgage credit intermediaries, including a requirement for such regulated entities to hold (after a transition period) professional indemnity insurance.

The discretions contained in the Mortgage Credit Directive were the subject of a public consultation process and the decisions on these were also published and have been incorporated as necessary into the regulations.

NAMA Assets Sale

Ceisteanna (66)

Michael McGrath

Ceist:

66. Deputy Michael McGrath asked the Minister for Finance if he will take action following a recent documentary on a matter of public concern (details supplied); and if he will make a statement on the matter. [4939/16]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, the BBC Spotlight programme broadcast, which aired on 29 February 2016, made no allegation of wrongdoing by NAMA. The programme raised matters which relate to individuals at the margins of the buyer side of the Project Eagle loan sale and which fall within the jurisdiction of the Northern Ireland authorities. These matters have been raised previously on a number of occasions, in the Oireachtas and elsewhere. I understand that there are a number of investigations underway in this regard, including those with the UK National Crime Agency (NCA), the US Department of Justice and the Northern Ireland Law Society. I welcome these investigations as such serious allegations should be, and clearly are being, thoroughly investigated. However, I reiterate that, to the best of my knowledge, these investigations concern activities on the purchaser side of the sales process and do not involve NAMA's role in this process.

NAMA has publically stated the factual position on the sale of its Northern Ireland loan portfolio through its appearances before the Dáil Public Accounts Committee (16 December, 1 October 2015) and the Oireachtas Finance Committee (16 December 2015) and, separately, in detailed submissions to the Northern Ireland Finance and Personnel Committee (4 September, 27 November 2015), who recently published their own report on the sales process.  All of this information is on public record and available from NAMA's website, the Oireachtas website, and the Northern Ireland Finance and Personnel Committee's website. 

The Deputy will also be aware that the Comptroller and Auditor General ("C&AG") has commenced work on a second report under Section 226 of the NAMA Act, which will focus on the progress NAMA has made at the end of 2015 towards achieving its overall objectives. I understand that the C&AG has, in parallel with the Section 226 review, commenced work under Section 9 of the C&AG (Amendment) Act 1993 ("1993 Act") of an examination of the disposal of the loans of Northern Ireland debtors. The C&AG has indicated that he may issue a report, under Section 11 of the 1993 Act, if he considers that it is warranted by the findings of the Section 9 review. This is consistent with the C&AG's power to investigate, scrutinise and report on concerns regarding any aspect of NAMA's work which may arise through its annual audits or special reports about any aspect of NAMA's work.

In the absence of any allegation or evidence of wrongdoing by NAMA, the C&AG is best positioned to independently review this transaction. C&AG officials have confirmed that, given their independent role, any queries related to the timing, content, or any other specific aspects of their reports should be directed to the Office of the Comptroller and Auditor General.  I would encourage the Deputy to support this process and await the findings of the C&AG's independent review.

NAMA Assets Sale

Ceisteanna (67)

Michael McGrath

Ceist:

67. Deputy Michael McGrath asked the Minister for Finance his views on the report of the Northern Assembly on the sale of Project Eagle loans; and if he will make a statement on the matter. [4940/16]

Freagraí scríofa

Minister for Finance

As the Deputy is aware, the stated purpose of the Northern Ireland Finance and Personnel Committee's Review was 'to undertake a fact-finding review in relation to the operations of NAMA in Northern Ireland, including the "Project Eagle" sale and related policy and regulatory issues that fall within the DFP [Department of Finance and Personnel] remit.

The remit of the Northern Ireland Department of Finance and Personnel clearly falls under the jurisdiction of the Northern Ireland Assembly, therefore I do not propose to comment on such matters.

I acknowledge that the Committee's investigatory work clearly involved gathering, and reviewing, a significant amount of oral and documentary evidence.  My own Department assisted the Committee in this regard by providing a large volume of documentation in response to the Committee's requests. Separately, NAMA also provided detailed written responses to over 100 questions submitted by the Committee. I understand that the Committee has published all of this documentation, as well as the other evidence gathered in the course of its review, in a detailed timeline on their website.

The Committee's report includes a number of points regarding NAMA. I understand that the NAMA Chairman, Mr Frank Daly, has already written to the Finance and Personnel Chair, Mr Daithí McKay MLA, to address some of these points. Given NAMA's has an independent mandate and Board of Directors, I do not propose to elaborate on the points raised by Mr Daly. The NAMA Chairman's letter can be found on the NAMA website via the following link:

https://www.nama.ie/fileadmin/user_upload/NAMA_Response_to_Committee_for_Finance_and_Personnel_-_11.03.16.pdf

The NAMA Act 2009 establishes that NAMA is accountable to Parliamentary Committees of the Oireachtas.  I commend NAMA for providing thorough and detailed written responses to the questions posed by the Finance and Personnel Committee. I understand that NAMA offered to answer further written questions, should this have been required by the Finance and Personnel Committee. I understand, in this respect, that the Committee did not submit any additional questions to NAMA.

Consumer Protection

Ceisteanna (68)

Michael McGrath

Ceist:

68. Deputy Michael McGrath asked the Minister for Finance if he is satisfied with the protection in place for mortgage holders, tenants and small and medium-sized enterprises from the actions of vulture funds that have acquired their loans; and if he will make a statement on the matter. [4941/16]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted on 8 July 2015. It was introduced to fill the consumer protection gap where loans were sold by the original lender to an unregulated firm. The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'.  Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes (such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears, Code of Conduct for Business Lending to Small and Medium Enterprises and the Minimum Competency Code) issued by the Central Bank of Ireland and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015 which come into operation on 1 July 2016.

Landlord-tenant relations are governed by multiple pieces of legislation (mainly under the aegis of my colleague, the Minister for the Environment, Community and Local Government) and the landlord/owner of the property is restricted in what they can do in relation to removal of tenants from a property. I understand that these restrictions are the same whether the landlord bought the property, built the property themselves, became a landlord as a result of renting out what was formerly a principal dwelling house or acquired the property by other means such as enforcing loans secured on the property.

Budget Targets

Ceisteanna (69)

Michael McGrath

Ceist:

69. Deputy Michael McGrath asked the Minister for Finance when he will provide the next estimate of fiscal space for the period 2017 to 2021; and if he will make a statement on the matter. [4942/16]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, estimates of fiscal space for the period 2017 - 2021 were published by my Department in the documentation accompanying the 2016 Budget last October.  The decision on when to publish any revisions to this table is one for the Government.

Stability Programme Data

Ceisteanna (70)

Michael McGrath

Ceist:

70. Deputy Michael McGrath asked the Minister for Finance when he will publish the stability programme update for Ireland; and if he will make a statement on the matter. [4943/16]

Freagraí scríofa

Minister for Finance

In accordance with the requirements of Regulation 1466/97, Ireland's 2016 Stability Programme Update must be submitted to the European Commission no later than the end of April.  It is normally published at the same time.

The Stability Programme Update must, of course, be approved by the Government before it is submitted to the Commission.

Mortgage Data

Ceisteanna (71)

Martin Heydon

Ceist:

71. Deputy Martin Heydon asked the Minister for Finance his contact with AIB and EBS in 2014 on their plans to introduce a tracker mortgage retention product for tracker mortgage customers of the banks who wished to trade up; when he became aware of AIB's plans for this product; and if he will make a statement on the matter. [4950/16]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware, decisions taken by the banks including the introduction of new products such as AIB's Tracker Interest Rate Retention (TIRR) product, are solely a matter for the board and management of the relevant institution within the constraints imposed by their regulator, the Central Bank, and the law as it applies. The Relationship Framework Agreement defines the arm's length nature of the relationship between the State and the banks in which the State has an investment, and the AIB relationship framework agreement can be accessed here: http://finance.gov.ie/sites/default/files/Allied-Irish-Banks1.pdf

My officials were aware that the TIRR product was under consideration by AIB from the early part of 2014. AIB's intention to develop such a product was announced by the then CEO, Mr David Duffy, at the time of its 2013 Annual Results announcement on 5 March 2014.  The TIRR product was formally launched by AIB on 1 July 2014.

Tax Code

Ceisteanna (72)

Martin Heydon

Ceist:

72. Deputy Martin Heydon asked the Minister for Finance if he will consider a reduction in the capital gains tax rate for the sale of small assets of less than €10,000 in value; and if he will make a statement on the matter. [4996/16]

Freagraí scríofa

Minister for Finance

I do not have any plans to introduce the change suggested by the Deputy. Capital gains tax (CGT) is charged at a rate of 33% on gains realised or deemed to be realised (in the case of gifts) on the disposal of assets in excess of  an annual tax-free gain of €1,270. In addition, disposals by qualifying individuals of qualifying business assets are charged at a reduced rate of 20% up to a lifetime limit of chargeable gains of €1 million.

It has never been a feature of the CGT code to charge different rates depending on the value of the asset being disposed of. That said, in common with all taxes CGT is subject to ongoing review, in which the rate of tax and all reliefs and exemptions are carefully considered. Decisions concerning changes to taxes, generally, are taken in the course of the Budgetary and Finance Bill process and I will bear the Deputy's suggestion in mind in that context, subject to my continuing in my role as Finance Minister following the formation of the next Government.

Motor Insurance Regulation

Ceisteanna (73)

Brendan Griffin

Ceist:

73. Deputy Brendan Griffin asked the Minister for Finance his views on the huge motor insurance premiums returning emigrants are being charged; and if he will make a statement on the matter. [5022/16]

Freagraí scríofa

Minister for Finance

As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation but cannot interfere in the provision or pricing of insurance products.  The EU framework for insurance expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing, or terms and conditions of an insurance product.

The provision of insurance cover and the price at which it is offered, including the granting of no claims discounts, is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks.  These are considered by insurance companies on a case by case basis.  Variations in the costs and risks of providing motor insurance cover can vary between different countries.

Insurance Ireland, which represents the insurance industry in Ireland, has informed me that, in general terms, where there has been no motor insurance in an individual's name and there is a gap of cover of two years or more since their last insurance, the no claims discount is deemed invalid. However, Insurance Ireland has further stated that if the individual can produce confirmation that they were continually insured and are claims free in their own name while they were away, this would be taken into consideration.

Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance. In the event that a person is unable to obtain a quotation for motor insurance or feels that the premium proposed or the terms are so excessive that it amounts to a refusal to give them motor insurance, they should contact Insurance Ireland, 5 Harbourmaster Place, IFSC, Dublin 1, Telephone [phone] quoting the Declined Cases Agreement.

VAT Rate Reductions

Ceisteanna (74)

Brendan Griffin

Ceist:

74. Deputy Brendan Griffin asked the Minister for Finance if he will now introduce a 9% rate of value added tax for residential construction activity given the shortage of houses and the number of unemployed construction workers; and if he will make a statement on the matter. [5032/16]

Freagraí scríofa

Minister for Finance

VAT is governed by the EU VAT Directive, with which Irish VAT law must comply. Construction services already avail of the reduced VAT rate of 13.5% while most economic activity is subject to the standard VAT rate of 23%.  Ireland has historically applied the 13.5% reduced rate of VAT to all construction services under a derogation from the EU VAT Directive.  This derogation is only permissible where the VAT rate applying is 12% or greater.  Accordingly, it is not legally possible to introduce a 9% rate of VAT on non-residential construction services.  Having said that, it is possible to apply the 9% VAT rate to the construction of residential properties, but as I have said before this would involve having two separate VAT rates applying to construction services, would be difficult to administer and could lead to underpayment of VAT. Accordingly, I have no plans to apply different rates to construction services at this time.