Written Answers Nos. 95-113
95. Deputy Charlie McConalogue asked the Taoiseach and Minister for Business, Enterprise and Innovation the amount allocated by the Health and Safety Authority for farm safety initiatives in 2016, 2017 and 2018; and if he will make a statement on the matter. [51238/17]
Amharc ar fhreagraThe table shows the funding allocated by the Health and Safety Authority for promotional activities regarding farm safety initiatives in 2016, 2017 and 2018.
Table of Expenditure on Farm Safety Initiatives 2016 to 2018
|
Year |
Allocation * |
|
2016 |
€384,000 (estimated) |
|
2017 |
€287,000 (projected) |
|
2018 |
€287,000 (projected)** |
*Note - that annual figures allocated include some cross sectoral initiatives where the allocation could also be relevant to other sectors – it is not possible to extract this so it has been included as the full figure. In addition, some of the advertising initiatives would cross years, so the yearly figure is an estimate of the allocation relevant to that year.
** Note - the 2018 sectoral budget allocation is still subject to final approval.
The 2017 and 2018 allocations are based on a no policy change basis, the current projected figurers for 2017 and 2018 may look like an expenditure cut but the 2017 allocation does not take account of recent additional funding made available for safety initiatives in areas including agriculture.
The priority tasks for the HSA in relation to engagement with the farming sector for 2017 included:
- ongoing delivery of the Farm Safety Partnership Action Plan, 2016 to 2018;
- encouraging the work of 6 working groups under the above plan;
- continuing awareness campaigns through the media, events and advertising targeted at the agricultural sector;
- promotion of good health for farmers;
- publication of information sheets;
- roll out of the revised Code of Practice on farm safety;
- finalising an e-learning tool on tractor and machinery safety;
- focusing on child safety on farms through programmes at primary and post-primary school level, letters have already issued to over 3,000 such schools;
- engagement of all representative organisations and stakeholders in the challenge;
- increasing awareness of farm safety throughout the sector.
The funding allocations that the HSA makes for particular aspects of its annual programme of work, including farm safety initiatives, can fluctuate from year to year as the HSA decides how to prioritise its non-pay funding in order to implement its overall programme of work.
In 2017 the Health and Safety Authority has allocated a budget of €287,000 for farm safety prevention initiatives. These initiatives involved the development of further guidance and advice materials and the organisation of, participation in, or support of a wide range of agriculture related events such as the Farm Tractor & Machinery Trade Association, Assisting in Knowledge Transfer Group Facilitator Training, Head to Toe Mental Health Day, Farmer of the Year Awards, Farm Safety Months, (March/Livestock, May/Tractors& Machinery, November/Falls from Height & Falling Objects), Teagasc Dairy Event, the Tullamore Show and the National Ploughing Championships.
The totality of the work of the HSA in relation to farm safety is not confined to specific farm safety initiatives or inspections. In addition to such initiatives visits to farms by inspectors include routine unannounced inspections to monitor general safety & health standards and assess compliance with the Safety, Health and Welfare at Work Act, 2005 and other health and safety regulations, and to investigate complaints, fatal and serious farm accidents. Typically in any one year there can be between 60 – 90 investigations on farms with the rest being unannounced inspections. In 2017 the HSA is carrying out three focused inspection campaigns each of one month duration. The first focused on “animal handling”, the second on working with “tractors & machinery” and the third on “working from heights & falling objects”.
The HSA approach of redirecting some of its inspection resources to engaging directly with farmers on other accident prevention initiatives has continued through 2016 & in 2017 particularly through the Knowledge Transfer Groups of which 98 have been attended & supported so far this year. Additionally all facilitators of knowledge transfer groups have now been trained in the essentials of occupational farm health and safety by Teagasc with the assistance of the HSA.
96. Deputy Timmy Dooley asked the Minister for Finance the estimated full-year cost of reducing the BIK rate on electric vehicles to 0% for each year until 2023. [50992/17]
Amharc ar fhreagraI am advised by Revenue that tax due as a result of benefit-in-kind is not separately declared by benefit type on employer returns, instead the total aggregated benefit-in-kind figure is declared to Revenue, therefore there is no basis for compiling the costing sought by the Deputy.
Given the relatively small numbers of electric vehicles currently registered in Ireland, and the fact that many of these are privately owned, the cost of the measure proposed is likely to be low at present. The estimated cost of the measure for 2018 for the purposes of inclusion in budgetary arithmetic is €500,000 in tax forgone.
A review of the BIK applying to motor vehicles in general is to take place in 2018. This review will include how best to implement a longer term 0% rate for electric vehicles.
97. Deputy Micheál Martin asked the Minister for Finance if papers (details supplied) were discussed at the last EU Council meeting. [47896/17]
Amharc ar fhreagraThe Paradise Papers were discussed in the November ECOFIN meeting in the context of the EU list of non-cooperative jurisdictions for tax purposes.
There is widespread consensus in recent years that aggressive tax planning can only be prevented by all countries acting together.
Member States of the EU agreed last year to draw up a list of countries who do not live up to international best practice on tax. Criteria were agreed by Member States early in 2017 which are based on agreed international standards and also require a closer examination of zero tax jurisdictions.
At this point in time, experts from the Member States have reviewed the jurisdictions and come to a preliminary analysis. In late October, letters issued to jurisdictions informing them of the outcome of this analysis. At EU level, we are engaging with jurisdictions where issues have been identified and have obtained commitment by a number of jurisdictions to review these issues and make changes to their tax systems.
I am confident that the list can be agreed at ECOFIN on 5 December.
98. Deputy Tom Neville asked the Minister for Finance his plans to consider the conditional retention of the 2% stamp duty rate on all agricultural land transfers to preserve and encourage land mobility; and if he will make a statement on the matter. [50733/17]
Amharc ar fhreagraIn my Budget 2018 statement I announced an increase in the stamp duty rate for all non-residential property transactions, including agricultural land, from 2% to 6%. Based on Revenue’s Post-Budget Ready Reckoner this is projected to raise around €392 million in 2018.
In my Budget statement I also announced an extension of consanguinity relief for another 3 years and that the stamp duty rate applying under that scheme would be fixed at 1%. Consanguinity relief is availed of in transferring farms to younger family members and is particularly relevant where the transferee does not qualify for an alternative relief such Young Trained Farmer stamp duty exemption.
Following further discussions with the Minister for Agriculture, Food and the Marine I decided that in addition to extending the period of the relief and fixing the associated stamp duty rate at 1% the age rule for the consanguinity relief will be removed. This means that it will be possible for all gifts and sales of farmlands to closely related family members, who do not qualify for the 100% exemption from stamp duty under the Young Trained Farmer scheme, to benefit from the consanguinity relief at a stamp duty rate of 1%.
The proposal outlined by the Deputy would result in a reduction in stamp duty yields which would have to be made up from other taxation measures in order to maintain overall Budget arithmetic. I am informed by Revenue that the estimated loss in yield in this case would be in the order of €32 million. The Government must consider carefully any tax changes as any reductions will have to be offset elsewhere. I have no plans to implement a special rate of stamp duty for agricultural land as suggested by the deputy.
99. Deputy Tom Neville asked the Minister for Finance if the payment of a deposit on a commercial land transfer before the budget change of 11 October 2017 will be recognised as a binding contractual agreement; and if he will make a statement on the matter. [50742/17]
Amharc ar fhreagraThe rate of stamp duty on non-residential land was increased to 6% on Budget Day, which rate applies in relation to all relevant conveyances executed after midnight on 10 October 2017. I subsequently introduced transitional measures in the Finance Bill that will allow for the lower rate of 2% to continue to apply where the parties to a contract entered into a binding contract before 11 October 2017 and where the conveyance or transfer is executed on or before 31 December 2017.
I am advised by Revenue that the payment of a deposit does not, of itself, necessarily indicate that the parties to a transaction had entered into a binding contract for the conveyance of property. If individuals are in doubt about the status of a transaction they should consult with their legal advisors to determine whether they had, in fact, entered into binding contracts before 11 October 2017 and indeed, whether the conveyances will be executed on or before 31 December 2017.
100. Deputy Tom Neville asked the Minister for Finance his views on a matter (details supplied); and if he will make a statement on that matter. [50744/17]
Amharc ar fhreagraAs 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, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to review individual cases as to the pricing level or terms or conditions that should be applied in those cases.
Motor insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. My understanding is that the factors include those such as the age and type of the car, the age of the driver, the claims record, driving experience, and the number of drivers, how the car is used, etc. As all Insurers do not all use the same combination of rating factors prices can vary across the market. In addition, insurance companies will price in accordance with their own past claims experience, meaning that in relation to different factors and the availability of cover, different insurance companies will use different thresholds.
While it is appreciated that the individual, the subject of the PQ, has been unsuccessful in getting a quote from another company, it is I think still worth noting that the Competition and Consumer Protection Commission website has an informative section regarding the purchase of car insurance. One of the tips listed to help cut costs is to “shop around” and to “always get quotes from several insurance providers when you need to get or renew insurance”. A checklist for “motor insurance shopping around” is also provided.
101. Deputy Tom Neville asked the Minister for Finance if a stamp duty overpayment on an inter-family farm land transfer in respect of persons (details supplied) in County Kerry will be refunded; and if he will make a statement on the matter. [50771/17]
Amharc ar fhreagraThere are two reliefs from the charge to Stamp Duty on inter family transfers of farm land – young trained farmer relief and consanguinity relief.
Young trained farmer relief provides a total relief from Stamp Duty, i.e. no duty is payable. I am advised by Revenue that based on the information available, the conditions for granting the young trained farmer relief did not apply in the case of the person concerned.
Consanguinity relief, for deeds of transfer signed before 11 October 2017 between related persons, reduces the amount of Stamp Duty payable by half. For deeds of transfer executed on or after 11 October, consanguinity relief reduces the rate of duty payable to 1% (instead of 6%). A number of conditions must be satisfied before the relief can be claimed.
I am advised by Revenue that in the case of the person concerned, the Stamp Duty Return made relates to a deed executed on 29 September 2017. The conditions that had to be satisfied before consanguinity relief could apply were that the person transferring the land was, at the time of transfer of the land, under 67 years of age and the person to whom the land was transferred must farm the land for at least 6 years or lease it to someone who will farm it for at least 6 years. In addition, the person farming the land must hold a specified qualification or obtain it within a period of four years from the date they get the land or spend at least 50% of their time farming land.
I am advised that based on the information available to Revenue, the conditions for granting consanguinity relief were not satisfied in this instance and that the relief was not claimed on the Stamp Duty return. There is, therefore, no overpayment of Stamp Duty and consequently no refund is due.
I should mention that while the Finance Bill 2017 abolishes the condition that the person transferring the land be under 67 years of age, this provision will only apply when the Bill becomes law and will then only apply to deeds executed on or after the date the Bill is enacted.
102. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding tracker mortgages; and if he will make a statement on the matter. [50772/17]
Amharc ar fhreagraThe Central Bank has clearly set out its expectations of lenders to provide appropriate redress and compensation to affected customers in its Principles for Redress.
The Principles of Redress provide for a number of different classes of redress payments depending on the harm suffered by individual borrowers. The question of whether a tax liability arises in any given case depends on the specific issues to be redressed and the facts and circumstances of that particular case.
The Principles for Redress sets out that ‘any tax liability that impacted customers may incur as a result of the relevant issue or in respect of any redress, compensation or other payment made to impacted customers by the lender, as a result of the relevant issue, are to be discharged by the lender. The lender is to liaise directly with Revenue in this regard’. The Central Bank has advised me that this includes TRS.
103. Deputy Tom Neville asked the Minister for Finance the amount of stamp duty paid on agricultural transfers over the past five years; and if he will make a statement on the matter. [50788/17]
Amharc ar fhreagraI am advised by Revenue that the amount of Stamp Duty paid on agricultural land is available for the years 2013 to 2016 and is as shown in the following table. Due to the manner in which data are recorded in Revenue systems, this information is not available for earlier years.
|
Year |
€m |
|
2013 |
9.6 |
|
2014 |
13.0 |
|
2015 |
18.1 |
|
2016 |
16.8 |
Further information in relation to Stamp Duty returns and reliefs for agricultural land is available on the revenue website at: https://www.revenue.ie/en/corporate/documents/statistics/farmers/farming-profile-2016.pdf.
104. Deputy Brendan Smith asked the Minister for Finance the taxation measures that will be applicable from 1 January 2018 for the transfer of farm land from a parent to a son or daughter under 35 years of age; if there are additional benefits for the potential beneficiary to have the green certificate; and if he will make a statement on the matter. [50810/17]
Amharc ar fhreagraI am advised by Revenue that there are two potential stamp duty reliefs where a parent transfers farm land to a son or daughter.
An exemption from stamp duty is currently available where farm land is sold or transferred to ‘young trained farmers’. These are farmers who are under 35 years of age and have (or will have within a specified period following the receipt of the farm land) specified relevant educational qualifications (known as the ‘green cert’). A ‘young trained farmer’ is required to retain ownership of the farm land for a period of five years following the transfer and to actively farm the land during this period. Section 81AA Stamp Duties Consolidation Act 1999 provides for this relief.
In addition, a relief known as ‘consanguinity relief’ applies in relation to transfers of farm land between certain blood relatives, including from parents to their children. A reduced 1% rate of stamp duty applies subject to specified conditions. The recipient of the farm land must actively farm the land for a period of at least six years or have (or will have within a specified period following the receipt of the farm land) specified relevant educational qualifications. Alternatively, the farm land can be leased for at least six years to someone who satisfies either this active farming or educational qualification condition.
Consanguinity relief currently applies where the person transferring the land is under 67 years of age. There is no age limit on the recipient of the farm land. However, Finance Bill 2017 contains measures to extend this relief for a further three years until 31 December 2020 and to remove the age limit of 67 years. Both of these measures will come into effect on the enactment of the Finance Bill which I expect to happen around the end of December.
I am also advised by Revenue that a recipient of farm land could potentially avail of ‘agricultural relief’ in relation to capital acquisitions tax. The relief takes the form of a 90% reduction in the taxable value of agricultural property that is gifted or inherited. Section 89 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for this relief.
To qualify for the relief, the recipient of the gift or inheritance (the 'beneficiary') must first qualify as a 'farmer' for the purpose of section 89 CATCA 2003. This means that a beneficiary's agricultural property must comprise at least 80% by gross market value of the beneficiary's total property at a particular date.
In addition, a beneficiary, or a lessee where the beneficiary leases the agricultural land, must actually farm the land on a commercial basis for a period of at least six years following the gift or inheritance. The relevance of a ‘green cert’ is that the holder of such a certificate, while required to actually farm the land, is not subject to the requirement that he or she spends at least 50% of his or her normal working time doing this.
The relationship between the person who provides the gift (i.e. the disponer) and the beneficiary determines the maximum tax-free threshold known as the ‘Group threshold’ below which gift or inheritance tax does not arise. Any prior gift or inheritance received by a beneficiary since 5 December 1991 from within the same Group threshold is aggregated for the purposes of determining whether any tax is payable on the current benefit. A son or a daughter is entitled to the Group A tax-free threshold of €310,000 for the purposes of computing the tax payable on the taxable value of any gift of agricultural property.
105. Deputy Joan Collins asked the Minister for Finance the number of appeals received and processed by the Revenue Commissioners in each of the past five years from 2012 to 2016. [50847/17]
Amharc ar fhreagraThe Tax Appeals Commission (TAC) was established and new procedures for making, processing, adjudicating and determining appeals came into effect on 21 March 2016. Before this date, taxpayers sent their appeals directly to Revenue, who then transferred appeals to the Appeal Commissioners for hearing. Since that date, taxpayers send their appeals directly to the TAC who then notify Revenue of the appeals. The TAC has full control over the processing and hearing of appeals.
I am advised by Revenue that it received 7,154 appeals for the years 2012 to 2016, whether directly from taxpayers or by notification from the TAC. All of the appeals that were received by Revenue before 21 March 2016 have either been closed or transferred to the TAC for adjudication and determination.
The table below details the number of appeals received in the years requested, the number of appeals closed in the year in which they were received and the number of appeals that have been closed in the years since then. Appeals are closed when they have either been determined by the Appeal Commissioners or the Courts, dismissed by the Appeal Commissioners, withdrawn by the appellant or settled by agreement with Revenue.
|
Year of appeal |
Appeals Received |
Closed in year |
Closed in years since |
|
2012 |
1,415 |
371 |
801 |
|
2013 |
1,381 |
334 |
692 |
|
2014 |
1,533 |
397 |
643 |
|
2015 |
1,368 |
369 |
345 |
|
2016* |
1,457 |
297 |
219 |
|
Totals |
7,154 |
1,768 |
2,700 |
*The 2016 figures in the table above include both appeals sent by taxpayers to Revenue before 21 March 2016 and appeals sent directly to the TAC after this date and subsequently notified to Revenue.
106. Deputy Stephen S. Donnelly asked the Minister for Finance the average cost of recruiting one additional customs revenue official. [50912/17]
Amharc ar fhreagraI am advised by Revenue that Revenue's Comprehensive Review of Expenditure 2014 estimated that the average cost of recruiting staff for compliance projects such as oils, tobacco and alcohol is €50,000 per annum.
Revenue is a fully integrated tax and customs administration. Staff are deployed across the full range of roles required of a modern integrated tax and customs administration, including customer service and non-compliance roles.
Revenue has been provided with additional resources to prepare to meet possible additional demands posed by the impact of the UK’s exit from the EU. This includes provision to upgrade ICT systems to manage the anticipated increase in the volume of Customs transactions.
107. Deputy Stephen S. Donnelly asked the Minister for Finance if he will provide a costing for the implementation of border checks on the Border with Northern Ireland in the event of a hard Brexit. [50913/17]
Amharc ar fhreagra109. Deputy Stephen S. Donnelly asked the Minister for Finance the number of Revenue Commissioner officials addressing Brexit-related tasks; and if he will make a statement on the matter. [50922/17]
Amharc ar fhreagraI propose to take Questions Nos. 107 and 109 together.
The precise customs arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK, however it is clear that political solutions must be found before technical resolutions can be applied. I am informed by Revenue that at this juncture it is not possible to assess what specific arrangements would be required if the UK left the Customs Union and Single Market or what post Brexit checks would be carried out. The Chairman of Revenue has previously confirmed that Revenue is not looking for sites for customs posts. Therefore it would be premature to consider hypothetical cost estimates.
However, I am informed by Revenue that they are actively engaged in examining a range of scenarios in order to support Ireland's Brexit objectives. This work is carried out by a significant number of staff, currently estimated as 25 full-time equivalents, of whom 12 are dedicated to Brexit work full time, supported by additional staff throughout the organisation as required.
108. Deputy Stephen S. Donnelly asked the Minister for Finance the estimated impact on GDP and GNP if parity with the pound is maintained for one week; and if he will make a statement on the matter. [50919/17]
Amharc ar fhreagraEuro-sterling exchange rate developments have been largely driven by the uncertainty associated with Brexit over the last year or so. There was a notable appreciation of the bilateral rate in the months leading up to the vote and a further sharp appreciation following the outcome of the referendum. Since the vote, the euro has appreciated by approximately 17% against sterling and is currently trading at around €1 = stg£0.90 (as of 28th November).
The impact on GDP/GNP if parity with the pound is maintained for one week would be negligible due to inter alia currency hedging as well as fixed-price contracts.
However, the table below illustrates the estimated impact of a sustained 5% appreciation of the euro-sterling bilateral rate on a number of key macro-fiscal aggregates. It is important to stress that these results are based on the historical relationship between the euro-sterling exchange rate and other macroeconomic variables and as such are only indicative.
Most of the impact from such a shock is felt immediately with the level of GDP expected to fall by 0.6 percentage points in the first year relative to baseline with adverse impacts on the deficit and debt ratios. Overall, the level of output would be 0.5% lower over the medium-term relative to baseline. This, in turn, would worsen the deficit path with the effect declining to 0.2 percentage points after 6 years.
The margin of error on scaled estimates is likely to be significant as the impact from exchange rate appreciation is likely to be non-linear.
5 per cent euro-sterling appreciation
|
|
|
T |
T+1 |
T+2 |
T+3 |
T+4 |
T+5 |
|
Real GDP |
% change compared to base |
-0.6 |
-0.8 |
-1.0 |
-0.9 |
-0.8 |
-0.5 |
|
Deficit-GDP ratio |
pp change compared to base |
0.4 |
0.7 |
0.6 |
0.5 |
0.4 |
0.2 |
|
Debt-GDP ratio |
pp change compared to base |
2.8 |
3.6 |
4.2 |
4.3 |
4.1 |
3.5 |
Source: ESRI, based on HERMES model estimates as published in Stability Programme Update 2016 (SPU 2016 page 27)
As we cannot control the international environment or exchange rate developments, it is crucially important that continued competitiveness improvements are achieved, including by focussing on costs we can control and by boosting our productivity. Ensuring a sustainable path for the public finances is also of fundamental importance.
In that context, on the fiscal side the Government has continued its policy focus of enhancing the resilience of our public finances to any Brexit-related shock. Specifically, it is projected that Ireland will achieve its medium-term budgetary objective of a balanced budget next year. Linked to this, over the forecast horizon, it is projected that the Debt-to-GDP ratio will continue on a downward trajectory, reaching the Stability and Growth Pact (SGP) 60 per cent threshold in the early part of the next decade and continuing to improve thereafter.
Whilst not complacent to potential challenges, including our currently elevated debt level, these developments will help provide fiscal capacity in the event of Brexit. Complementing this, Budget 2018 established the ‘Rainy Day Fund’, which provides a further counter-cyclical buffer, and represents an important measure to strengthen the shock absorption capacity of the national finances to such external risks.
Budget 2018 also announced further measures to prepare Ireland’s economy for the significant challenges ahead. These measures include:
- a doubling of capital investment between 2015 to 2021 - boosting the growth potential of the economy
- improving the competitiveness of our personal tax system - through income tax reform
- introducing a Key Employment Engagement Programme (KEEP) – a new incentive to attract key employees
- a new €300 million Loan Guarantee Scheme for Brexit-impacted business and a complementary €25 million Agriculture Brexit Loan Scheme – targeted at enhancing the competitiveness of the businesses most exposed to Brexit
- the retention of the 9% VAT rate in the hospitality sector to reduce the impact of currency volatility in the wake of the UK’s decision
- the doubling of additional Brexit-related staff in state agencies.
The Government also continues to encourage businesses to make contact with their Local Enterprise Office, Bord Bia or Enterprise Ireland for free services to help them build a plan for Brexit. The enterprise agencies will work with companies, helping them to deal with Brexit - making them more competitive, diversifying market exposure, and up-skilling teams.
Furthermore, the Government will also exploit fully any opportunities that arise. The Government will continue through the IDA to promote the attractiveness of Ireland as a location of choice for companies and talented people who are looking to establish or expand operations in what will be the only native English-speaking country within the EU and the Eurozone.
110. Deputy Stephen S. Donnelly asked the Minister for Finance the estimated cost of doubling the footprint of Enterprise Ireland, IDA Ireland, Bord Bia, Irish embassies and the Department of Foreign Affairs and Trade in the EU 26, in tabular form; and if he will make a statement on the matter. [50926/17]
Amharc ar fhreagraIdentifying the resources required for each of the bodies referred to in order to carry out their roles effectively is a matter for the relevant Ministers and Departments. Officials in the Department of Finance have not prepared any cost estimates based on doubling their footprints within the EU. I expect that any relevant Department and agency which, after appropriate policy analysis, determines that a change in its level of international representation is required, will carry out a costing exercise and seek altered levels of funding in a future estimates process.
111. Deputy Joan Burton asked the Minister for Finance his plans to improve housing financing structures for new housing, in particular the National Treasury Management Agency, NTMA, to small and medium builders and the builders of apartments; and if he will make a statement on the matter. [40358/17]
Amharc ar fhreagra112. Deputy Joan Burton asked the Minister for Finance when Home Building Finance Ireland will be established; the funds that have been allocated to it to date; the projects it will deliver; and if he will make a statement on the matter. [47232/17]
Amharc ar fhreagra113. Deputy Alan Kelly asked the Minister for Finance the estimated number of new housing units that will be built under Home Building Finance Ireland, HBFI; and if he will make a statement on the matter. [47335/17]
Amharc ar fhreagraI propose to take Questions Nos. 111 to 113, inclusive, together.
As announced in my Budget speech on 10 October 2017, it is my intention to establish Home Building Finance Ireland (HBFI) to provide funding on market terms to viable residential development projects which are experiencing difficulty in obtaining debt funding. HBFI will be a standalone entity which will provide funding directly into the market. As the Deputy will be aware, the State is already providing a number of alternative supports into this market, including equity finance, through the Irish Strategic Investment Fund's (ISIF) existing residential development funding platforms.
I would be hopeful of bringing the establishing legislation to the Houses of the Oireachtas for approval in early 2018, with a view to HBFI commencing operations later in 2018. It is not expected that HBFI will have an indefinite lifespan but it is too early to speculate on how long it may operate as this will depend on the availability of funding in the market to meet demand for homes in the coming years.
With a proposed allocation of up to €750m, it is estimated that HBFI could have capacity to fund about 6,000 homes in the coming years. The current estimated shortfall in residential supply is 15,000 – 20,000 units per annum and, accordingly, HBFI, with an annual average delivery of 2,000 homes, would reduce this shortfall by about 10% (assuming a three year horizon). This would be a significant contribution but it would not make HBFI a dominant player in the residential funding market and it would clearly leave room for banks and other finance providers to increase their contribution to funding much-needed residential development.
In relation to the products that will be offered by HBFI, the fund will be designed to focus on the provision of debt funding to viable residential development projects. HBFI will not be directly involved in development – its role would be solely as a commercial lender and therefore will not have any role in designing the schemes it funds. HBFI will provide lending on commercial, market-equivalent terms and conditions. This approach would be akin to a bank or private equity investor. As such HBFI will not have targets in relation to social or affordable housing but will provide a significant contribution to supporting the delivery of additional supply of all types of residential housing in the coming years.
