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Gnáthamharc

Tuesday, 27 Mar 2018

Written Answers Nos. 164-185

Northern Ireland

Ceisteanna (164)

Micheál Martin

Ceist:

164. Deputy Micheál Martin asked the Tánaiste and Minister for Foreign Affairs and Trade if he has discussed the possibility of appointing an independent chair to facilitate talks in Northern Ireland. [13930/18]

Amharc ar fhreagra

Freagraí scríofa

Over the course of many months, the Irish and British Governments, as co-guarantors of the Good Friday Agreement, have worked tirelessly to support and facilitate the parties in their efforts to form an Executive. The devolved, power-sharing institutions of the Good Friday Agreement are the best means for achieving accountable, representative decision-making for all the people of Northern Ireland. Unfortunately, to date, it has not proved possible to reach an agreement on the formation of an Executive, despite intensive engagement. In light of this, the Government has been working with the British Government to consider means by which we can support the political process, in accordance with the Agreement, in the period ahead.

I am in very regular contact with the Secretary of State for Northern Ireland in order to determine how both Governments, as co-guarantors of the Good Friday Agreement, can address the current impasse and secure the re-establishment of the Executive and Assembly. This includes consideration of the possibility that an independent chair would be appointed to facilitate talks. I will be speaking with the Secretary of State again this week and we will meet in early April.

I remain in contact also with the political parties in Northern Ireland, in working to ensure that every avenue is pursued and all possibilities are considered in seeking to secure a return to devolved power-sharing government, as provided for under the Agreement.

The Taoiseach has spoken with Prime Minister May and emphasised the Government’s full commitment to the Good Friday Agreement, and our determination to secure the effective operation of all of its institutions.

As co-guarantors of the Good Friday Agreement, the Irish and British Governments have an obligation to uphold and protect the letter and spirit of that Agreement.

The Good Friday Agreement remains the indispensable framework for providing stable, inclusive, power-sharing government for all the people of Northern Ireland and for sustaining our interlocking relationships - within Northern Ireland, on the island of Ireland and between the UK and Ireland.

Question No. 165 answered with Question No. 158.

Human Rights

Ceisteanna (166)

Maureen O'Sullivan

Ceist:

166. Deputy Maureen O'Sullivan asked the Tánaiste and Minister for Foreign Affairs and Trade his views on the human rights situation in Bahrain; and the way in which the Irish objective criteria apply in the case of Bahrain at present. [14080/18]

Amharc ar fhreagra

Freagraí scríofa

The deterioration of the human rights situation in Bahrain has been the subject of a number of Questions in this House recently, and continues to be of considerable concern. As I have previously outlined, despite repeatedly stating its commitment to improving its human rights record, the Bahraini Government appears to be targeting those who express disagreement with or criticism of the Government. A number of worrying developments suggest an increasingly restrictive attitude to those opposing or challenging the Government in any way. Statements from the Bahraini Government on its commitment to safeguarding human rights enshrined in the Bahraini Constitution ring hollow when there are so many examples of violations of the most fundamental freedoms, including those of opinion and expression. Ireland’s concerns about human rights issues and restrictions of civil liberties in Bahrain is regularly conveyed to the Bahraini authorities, including through the Bahraini Embassy in London and through Ireland’s (non-resident) Ambassador to Bahrain. Most recently, last month, officials from my Department met with the Ambassador of Bahrain and Embassy officials in Dublin, and raised Ireland’s concerns about the human rights situation in Bahrain. At the 32nd session of the Human Rights Council in June 2016, Ireland, on behalf of a cross-regional group of States, delivered a statement proposing possible objective criteria which could guide the Council when deciding how to act on emerging situations of concern. These criteria included, among others, whether there has been a call for action by the UN Secretary General, the High Commissioner for Human Rights or a relevant UN organ, body or agency.

These criteria, often referred to as the ‘Irish objective criteria’ may offer a useful guide, to help decide, in an objective and non-selective manner, when it is appropriate and necessary for the Council to engage with a concerned State. These same independent factors are also a valuable guide for States in assessing whether to bring a specific country to the attention of the Council by issuing for, example a statement on the matter at the Human Rights Council.

Officials from my Department raised ongoing human rights concerns with Bahrain in the context of its Universal Periodic Review, which took place in Geneva in May 2017, and more recently at the Human Rights Council in Geneva. At the Human Rights Council session earlier this month, Ireland supported an EU statement under Item 4 (Human Rights situations that require the Council’s attention) which reiterated calls on Bahrain “to maintain its commitments as to the respect of freedom of speech and human rights defenders.” Ireland also made reference to Bahrain in our national Item 4 statement.

My Department will continue to monitor the situation in Bahrain, and will continue to call on the Bahraini Government to make good on their stated commitment to make progress in the area of human rights.

My Department will continue to monitor the situation in Bahrain, and will continue to call on the Bahraini Government to make good on their stated commitment to make progress in the area of human rights.

Human Rights Investigations

Ceisteanna (167)

Maureen O'Sullivan

Ceist:

167. Deputy Maureen O'Sullivan asked the Tánaiste and Minister for Foreign Affairs and Trade the extent of the engagement by the embassy in Mexico on the human rights situation relating to the recent Honduras election. [14081/18]

Amharc ar fhreagra

Freagraí scríofa

Diplomatic relations with Honduras are maintained through our Permanent Mission to the United Nations in New York and our Embassy in Mexico is not accredited to Honduras.Officials in the Department of Foreign Affairs & Trade have been closely monitoring developments in Honduras following elections which took place there on 26 November, 2017. Officials have been in contact with the European External Action Service, which works through its delegation in Tegucigalpa, and have also met with human rights defenders and civil society organisations active in that country.

I am glad of this opportunity to condemn unreservedly the loss of life in the aftermath of those elections and wish to express my sincere condolences to the families of the victims.

Question No. 168 answered with Question No. 154.

Northern Ireland

Ceisteanna (169)

Brendan Smith

Ceist:

169. Deputy Brendan Smith asked the Tánaiste and Minister for Foreign Affairs and Trade when it is planned to have a British Irish intergovernmental conference; and if he will make a statement on the matter. [14170/18]

Amharc ar fhreagra

Freagraí scríofa

Over the course of many months, the Irish and British Governments, as co-guarantors of the Good Friday Agreement, have worked tirelessly to support and facilitate the parties in their efforts to form an Executive. The devolved, power-sharing institutions of the Good Friday Agreement are the best means for achieving accountable, representative decision-making for all the people of Northern Ireland. The electorate in Northern Ireland affirmed their support for power-sharing through the institutions of the Good Friday Agreement in May 1998 and have provided a mandate to the political parties to form an Executive and Assembly. Everyone agrees that devolved power-sharing institutions are in the best interests of the people of Northern Ireland and the Government continues to work with the British Government and the parties in Northern Ireland to support that outcome.

Unfortunately, to date, it has not proved possible to reach an agreement on the formation of an Executive, despite intensive engagement. In light of this, the Government has been working with the British Government to consider means by which we can support the political process, in accordance with the Agreement, in the period ahead.

I am in very regular contact with the Secretary of State for Northern Ireland in order to determine how both Governments, as co-guarantors of the Good Friday Agreement, can address the current impasse and secure the re-establishment of the Executive and Assembly. I will be speaking with the Secretary of State again this week and we will meet in early April.

As part of these ongoing discussions, I have indicated to the Secretary of State that it would now be appropriate to convene a British Irish Intergovernmental Conference in order for both Governments to formally engage through the structures of the Good Friday Agreement on next steps. The Secretary of State indicated that she wished to reflect on this suggestion and it will form part of our next discussion.

The British-Irish Intergovernmental Conference is an important institution of the Good Friday Agreement, bringing together the Irish and British Governments under Strand Three of the Agreement on matters of mutual interest within the competence of both Governments. It does not involve any derogation from the sovereignty of either Government.

International Agreements

Ceisteanna (170)

Thomas P. Broughan

Ceist:

170. Deputy Thomas P. Broughan asked the Tánaiste and Minister for Foreign Affairs and Trade his views on the historic status quo agreement on the rights of all inhabitants of Jerusalem; and the way in which he and his European Union partners will ensure that the agreement continues to be adhered to. [14243/18]

Amharc ar fhreagra

Freagraí scríofa

There are considerable and well-known sensitivities in relation to the position of the Christian communities in Israel and Palestine, and also to the Holy Places of Christians, Jews and Muslims, especially in and around Jerusalem. Concerns around these issues have led to significant tensions and even violence in recent years, which we have discussed in the Oireachtas. The issues involved can be very complex and multifaceted. There are many Christian denominations present, and their churches and traditional status and rights predate not only the foundation of Israel but even the former British Mandate, and go back to the Ottoman period or even earlier. Some European partners have historical and treaty links to various Christian denominations, and the Jordanian Government retains a role as guardians of the Muslim holy places. Jerusalem is uniquely sensitive, and Israel’s discriminatory treatment of Palestinians and their land rights under the occupation has meant that any proposed changes to the regime pertaining to religious properties are viewed with deep suspicion. I do not wish to comment on the specific issues which led to the brief closure as a protest of some of the Christian churches in Jerusalem last month. While the immediate threat was lifted, and the churches reopened, these matters are not resolved and could recur.

However, both Ireland and the European Union have consistently and on a number of occasions in recent years stressed the important principle that there should be no change in the status quo with regard to religious affairs, properties and rights in Jerusalem and the Occupied Territory, pending the final resolution of the position of the city and the holy places in a peace agreement. I have made this point myself directly to the Israeli authorities, and I repeat that principle again now. My Department has also met with religious representatives from the city and the region. We will continue to do so, and to address the Israeli authorities on these issues.

Tax Agreements

Ceisteanna (171)

Micheál Martin

Ceist:

171. Deputy Micheál Martin asked the Minister for Finance the actions that will now be taken before the OECD makes final recommendations on digital tax. [14155/18]

Amharc ar fhreagra

Freagraí scríofa

The OCED Task Force on the Digital Economy Interim Report marks an important step in the ongoing work being undertaken by the Inclusive Framework on BEPS since 2015 and makes a significant contribution towards our understanding of the challenges arising from the digitisation of the economy and how the international tax system should adapt to address any issues arising. 

That the OECD has been able to publish the interim report earlier than originally anticipated bodes well for the timely publication of the Final Report in 2020, and helps reassure those who are doubtful of the OECD’s ability to deliver a globally agreed sustainable evidence based outcome. 

Ireland has been a committed participant in, and strong supporter of, tax reform efforts led by the OECD through the BEPS process.  We believe any policy approaches must focus on value creation – tax should be paid where value is created, not simply where a transaction happens and this view has been endorsed by the Report.  For new business models, the idea of value creation is not as simple as it is for manufacturing companies which is why the ongoing OECD analysis is so important.  

There is a clear consensus in that further consideration is needed of the key aspects of the existing tax framework, nexus and profit allocation rules that would consider the impacts of digitalisation. 

It also  clear from the Report that there is no consensus among the members of Inclusive Framework as to the merits of, or indeed need for, any interim measures to be introduced before the outcome of this further work. The report acknowledges that such measures are likely have adverse impacts on investment and growth and risk increasing double taxation and complexity for taxpayers and tax authorities alike.  For those countries who wish to persist towards implementing interim measures in advance of an agreed global approach, the Report has identified some hazards to be avoided so that the damaging effects are mitigated in so far as it is possible to do so.  

I share the view expressed in the Report that further analysis is needed to achieve a globally agreed, evidence based solution, sustainable in the long run and focussed on aligning taxing rights with the location of real substantive value creating activity.  It has long been our position that it has been the mis-match arising from different tax systems which has facilitated aggressive tax planning and the only sustainable way to address this is for countries to cooperate globally through the OECD.

Ireland will continue to actively engage with work in the area of the digital economy at both OECD and EU level.  As you are ware, the European Commission have also last week published proposals for two Directives in this area.  We have been a strong voice in the many tax directives that have been agreed at EU level in recent years and we look forward to critically assessing and discussing the Commission’s recent proposals with all Member States. 

Tax Reliefs Application

Ceisteanna (172)

Michael McGrath

Ceist:

172. Deputy Michael McGrath asked the Minister for Finance his views on the reintroduction of tax relief on union subscriptions for workers; and if he will make a statement on the matter. [13548/18]

Amharc ar fhreagra

Freagraí scríofa

A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by my Department in 2016 and included in the 2016 report on tax expenditures published on budget day 2016. The review may be found at the following link:

(http://www.budget.gov.ie/Budgets/2017/Documents/Tax_Expenditures_Report%202016_final.pdf)

The review concluded that:

"... analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.

The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight ."

Given the conclusions of the review, I have no plans to reintroduce such a relief.

Tax Code

Ceisteanna (173)

Pearse Doherty

Ceist:

173. Deputy Pearse Doherty asked the Minister for Finance his plans to update Ireland's limited partnership legislation with regard to the funds industry; and if he will make a statement on the matter. [13592/18]

Amharc ar fhreagra

Freagraí scríofa

The Irish Funds Industry Association developed proposals consistent with IFS2020 and timed to take advantage of the Capital Markets Union agenda to promote the establishment of private equity and venture capital funds vehicles in Ireland. Private Equity are typically constituted as partnerships and such funds are not common in Ireland.

The Department of Finance analysed the proposals put forward by industry and as the proposals have implications on a number of areas including company law, regulatory framework and taxation, engagement with a number of stakeholders took place. These included the Department of Business, Enterprise & Innovation, Central Bank of Ireland, Revenue Commissioners, and other industry stakeholders.

The ultimate aim of the proposed amendments is to help ensure that Ireland remains one of the leading funds domiciles in Europe, while maintaining a robust regulatory and supervisory framework for investment funds domiciled here.

At its meeting on 18 July 2017, the Government approved the legal drafting of the Investment Limited Partnership (Amendment) Bill, 2017.

Heads of Bill were submitted to the Office of the Parliamentary Counsel. A draftsperson has been appointed and officials are engaging with him and relevant stakeholders on the drafting process.

Revenue Commissioners Resources

Ceisteanna (174)

David Cullinane

Ceist:

174. Deputy David Cullinane asked the Minister for Finance if funding will be provided for the purchase of two additional mobile X-ray scanners for the Revenue Commissioners; and if he will make a statement on the matter. [13694/18]

Amharc ar fhreagra

Freagraí scríofa

I am advised by Revenue that they currently have three mobile container scanners and a specialist vehicle incorporating x-ray facilities and radiation detection technology for monitoring baggage and smaller items of cargo. All mobile scanners are available for deployment at ports and locations such as warehouses, as required.

Revenue monitors and assesses its needs in relation to detection technology on an ongoing basis, having regard to risk, developments in scanning and detection technology and the obsolescence of existing technology over time. Revenue has successfully applied from OLAF (European Anti Fraud Office) for a funding grant for part of the cost towards the purchase of a new mobile x-ray scanner van in 2018. I and my Department are open to considering any request from Revenue as regards the replacement or acquisition of new technology to support the important work of tackling fraud and smuggling.

Question No. 175 answered with Question No. 96.

Banking Sector Regulation

Ceisteanna (176)

Joan Burton

Ceist:

176. Deputy Joan Burton asked the Minister for Finance his definition of non-performing loans; if it includes loans that have been restructured where the borrower has adhered to the conditions of the restructured loan; and if he will make a statement on the matter. [13666/18]

Amharc ar fhreagra

Freagraí scríofa

In answering the Deputy’s question, it is useful if I start by giving some historic context. During the height of the financial crisis a key focus of the authorities was on stabilising and ultimately reducing mortgage arrears through the implementation of sustainable mortgage solutions that were agreed with borrowers.

This led to the Central Bank of Ireland (CBI) introducing public mortgage arrears resolution targets (MART) for the banks in H1 2013. As the MART process was rolled out a split mortgage solution or a part capital and interest solution that met certain criteria were accepted by the CBI as being sustainable for the purposes of these targets.

Since the establishment of the Single Supervisory Mechanism (SSM) in November 2014, the focus has shifted from reducing mortgage arrears levels to reducing Non-performing Loans (NPLs). This shift in focus has been accompanied by a new strict definition Europe-wide of what constitutes an NPL by the European Banking Authority (EBA) which means that certain restructures are deemed NPL even if customers are meeting the revised payment schedule.

Officials in my Department met with staff of the SSM at the highest level on two occasions since late 2016. In the course of their discussions they outlined the background and history to the restructuring effort in Ireland and questioned the logic of now classifying some types of restructured loans, including certain split mortgages, as NPL indefinitely.

While my Department has been informed that the SSM is looking into the regulatory treatment of split mortgages across a number of European member states I have no evidence at this point that this categorisation is going to change.

Aside from direct interaction with the SSM, Department officials have also been actively involved in the discussions on NPLs through its involvement in the European Council’s Financial Services Committee subgroup on NPLs, and the more recent European Commission Expert Group on NPLs. While this has ensured that Ireland’s views are voiced and considered on the matter, ultimately the final arbiter on the resolution of NPLs for the Irish banks is the SSM.

European Financial Forum

Ceisteanna (177)

Richard Boyd Barrett

Ceist:

177. Deputy Richard Boyd Barrett asked the Minister for Finance if he will report on his Department's or his involvement in the European Financial Forum. [7006/18]

Amharc ar fhreagra

Freagraí scríofa

The third annual European Financial Forum (EFF) was held in Dublin Castle on 31 January 2018. The event, which was hosted by my colleague Minister of State for Financial Services and Insurance Michael D’Arcy TD, is now in its third year and is a key deliverable as part of the Government’s International Financial Services 2020 Strategy.

Following a review of the 2017 forum IDA Ireland were tasked with planning and executing the European Financial Forum 2018. As the department responsible for the delivery of the IFS2020 Strategy officials from my department engaged regularly with IDA Ireland as to progress on the planning of the event and assisted with invitations to overseas speakers and delegates where required.

The EFF 2018 was a tremendous success with almost 600 delegates in attendance from 24 countries representing over 350 different organisations. Preliminary planning for the 2019 forum is currently underway, led once again by IDA Ireland. We hope that the 2019 EFF will build on the continued success of the EFF as a showcase for Ireland’s financial services environment and Ireland as a location for high quality investment.

The evening before the EFF my colleague Minister of State D’Arcy launched the IFS2020 Action Plan 2018. The Action Plan outlines 43 measures designed to improve Ireland’s financial services environment, all to be actioned in 2018.

In addition to Minister of State D’Arcy hosting the EFF, I had the opportunity to engage with the Vice President of the European Commission Valdis Dombrovksis in a joint closing keynote address and conversation.

The purpose of the Forum is to support IFS2020 and the Strategy’s aim to create 10,000 net new jobs in the international financial services sector, which translates to a 30% increase in those employed in the sector. At this year’s EFF it was confirmed that to date almost 7,000 net new jobs have been created in the sector since the Strategy began, representing 70% of the target, with two years remaining.

Question No. 178 answered with Question No. 87.

Economic Competitiveness

Ceisteanna (179)

Bernard Durkan

Ceist:

179. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which Ireland's economic development compares favourably with other European countries within the eurozone, notwithstanding the impact of Brexit; and if he will make a statement on the matter. [13649/18]

Amharc ar fhreagra

Freagraí scríofa

The CSO’s preliminary estimate for full-year GDP growth in 2017 is 7.8 per cent. According to Eurostat, the statistical office of the European Union, in 2017 the EU and euro area economies grew by 2.4 per cent and 2.3 per cent respectively. This would suggest that Ireland was the fastest growing economy in the EU in 2017. While the 2017 outturn is based on preliminary quarterly data which is highly volatile and prone to revision, the numbers provide clear evidence of continued momentum in the economy. Other indicators such as consumer spending, labour market trends and taxation receipts confirm Ireland’s strong economic position.

According to the European Commission, Ireland is also expected to be among the fastest growing economies in Europe this year and next. The European Commission expects Ireland's economy to grow by 4.4 per cent in 2018 and 3.1 per cent in 2019. This compares with growth of 2.3 per cent this year and of 2.0 per cent next year for the EU and the euro area respectively. The Commission notes that consumer spending and construction investment are forecast to drive GDP growth in the short-term. Strong employment growth, particularly for full-time jobs, should underpin a rise in disposable income and household consumption over the next two years.

My Department will publish updated forecasts with the Stability Programme Update 2018 in April. Given the strength of activity last year, growth forecasts for this year are likely to be revised upwards.

However, economic challenges remain, mainly linked to the outcome of the negotiations between the EU and the UK and the potential changes to the international taxation and trading environments. The best way to deal with the challenges we face, and to support continued economic growth, is through continued implementation of productivity-oriented policies along with sustainable public finances. That is what this Government will continue to do.

Tax Avoidance

Ceisteanna (180, 183)

Joan Burton

Ceist:

180. Deputy Joan Burton asked the Minister for Finance if he has further examined the issue of tax avoidance by so-called vulture funds; if such entities are subject to corporation tax in respect of interest earned and other banking activities here; and if he will make a statement on the matter. [13667/18]

Amharc ar fhreagra

Brendan Howlin

Ceist:

183. Deputy Brendan Howlin asked the Minister for Finance if the issue of tax avoidance by so-called vulture funds has been further examined; if such entities are subject to corporation tax in respect of interest earned and other banking activities here; and if he will make a statement on the matter. [13623/18]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 180 and 183 together.

The term "so-called vulture funds”, while not being consistently defined, is often used in public discourse to refer to variety of different types of investors from banks to private equity to small groups of individual investors.  In recent times, a common feature of these investors is that they have acquired loan books, often but not exclusively, where the loans were in the non-performing category. Recently the term has also been used to refer to groups of investors that have broadened their scope to become active in other parts of the Irish financial services market.  

However for the purposes of the reply from a taxation perspective, I assume the Deputies are referring to the use of the section 110 regime which is often linked to the debate on the activities of such funds.

Section 110 is intended to create a tax neutral regime for bona-fide securitisation and structured finance purposes.  It has been part of our corporation tax code since 1991, with significant amendments in 2003.  Securitisation involves the creation of tradeable securities out of an income stream or projected future income stream generated by financial assets.  The transaction can involve the use of a special purpose securitisation vehicle to facilitate the transaction and issue the securities.

Securitisation allows banks to raise capital and to share risk, and by providing a repackaging and resale market for corporate debt, it lowers the cost of debt financing. 

A section 110 company will be taxed on all of its income but will obtain a deduction for its expenses paid out to investors.  Effectively, the investors will be taxed in accordance with

the rules in their own jurisdiction.  

The section 110 regime was designed to improve Ireland’s offering as a location for the conduct of financial services.  It has achieved that broad goal and the financial services industry now makes use of these vehicles as a support to financial intermediation.  Such financing is useful for the productive economy as it can underpin the supply of finance to industries and companies in Ireland, Europe and further afield.  

Ireland is not unique in having a specific regime for securitisations. The importance of securitisation has been recognised by the European Commission through their work on the Capital Markets Union.  This is a European Commission initiative to mobilise capital in Europe.  A main objective of which is to build a sustainable securitisation regime across the European Union.  The Capital Markets Union specifically states how alternative sources of finance are more widely used in other parts of the world, and the widely held view is that should play a bigger role in providing financing to companies that struggle to get funding, especially SMEs and start-ups.

Section 22 Finance Act 2016 restricts the use of the section 110 regime to minimise Irish tax liabilities on Irish property or distressed debt transactions.  The core effect of the amendment removes the possibility for section 110 companies to use what are known as 'profit participating notes,' or PPNs, to sweep Irish property or distressed debt profits out of the company in a way that ensures little or no Irish tax liability arises.

Credit Union Services

Ceisteanna (181)

Joan Burton

Ceist:

181. Deputy Joan Burton asked the Minister for Finance if his Department is examining an amendment to the Credit Union and Co-operation with Overseas Regulators Act 2012 to allow credit unions lend to affordable housing bodies and local authorities as recommended by the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach; and if he will make a statement on the matter. [13669/18]

Amharc ar fhreagra

Freagraí scríofa

I can advise the Deputy that common bond restrictions limit the potential for credit unions to lend to housing bodies and local authorities, either directly or on a syndicated basis.

As previously set out in my reply to parliamentary question No. 55 for written answer on 22nd February 2018, the Credit Union and Co-Operation with Overseas Regulators Act 2012 introduced changes to the Credit Union Act, 1997 (the 1997 Act). Since 1 January 2016, section 43 of the 1997 Act provides that the Central Bank may prescribe investments in which a credit union may invest its funds.

The Central Bank undertook a review of the investment framework for credit unions in 2017. This review resulted in the publication of Consultation Paper 109 (CP109) which consulted on potential changes to the investment framework for credit unions. One of the proposals in CP109 was that credit unions be permitted to provide funding for the provision of social housing to Tier 3 Approved Housing Bodies (AHBs).

Submissions to CP109 were broadly supportive of credit unions providing funding to Tier 3 AHBs with a significant number of those in favour citing the alignment of the social goals of both the credit union movement and the AHB sector as the principal rationale for permitting this type of investment.

Taking account of the feedback provided to CP109, amended regulations commenced on 1 March 2018 which permit credit unions to provide funding to Tier 3 AHBs for the provision of social housing. The maximum permitted investment amount per credit union is 50% of regulatory reserves where a credit union has total assets of at least €100 million and 25% of regulatory reserves for all other credit unions. These limits may facilitate a combined sector investment in Tier 3 AHBs of close to €700 million.

The Central Bank is open to considering further investment proposals. Where the Central Bank receives detailed proposals which can demonstrate that an investment could fall within the appropriate risk profile for credit union investments, it will consider further amendments to the investment regulations to facilitate such investments in the future.

The Central Bank has committed to undertaking and publishing analysis of credit union sector investments, two years post commencement of the amending investment regulations for credit unions, to assess and analyse the actual impact which the changes to the investment regulations have had.

Question No. 182 answered with Question No. 106.
Question No. 183 answered with Question No. 180.

Carbon Tax Implementation

Ceisteanna (184)

Thomas P. Broughan

Ceist:

184. Deputy Thomas P. Broughan asked the Minister for Finance his views on the OECD report entitled, Taxing Energy Use 2018, on the role of carbon taxes here and throughout the OECD. [11010/18]

Amharc ar fhreagra

Freagraí scríofa

Climate change is a great global challenge and imposing carbon taxation on pollutant fossil fuels, as part of a broader strategy involving both taxation and non-taxation measures, incentivises the uptake of cleaner and more sustainable fuel sources.    

The OECD report, Taxing Energy Use 2018, brings together statistical data from 42 OECD and G20 countries and allows for comparison of effective energy tax rates on energy use.  The report recommends the imposition of carbon tax as an important measure to address climate change and provides food for thought as to how this should be done.  

The OECD also recommends complementary policies, such as grants to improve energy efficiency, in place of tax exemptions or reliefs.  This has been the long standing practice in Ireland with over 207,000 homes receiving in excess of €220m through the Better Energy Homes Scheme and over 134,000 low income households receiving free energy efficiency upgrades at a cost of €198m.

A review of the carbon tax in Ireland is underway as part of the joint research programme between the ESRI and the Department of Finance.  It is expected that this review will inform decisions for Budget 2019.

Vacant Properties Data

Ceisteanna (185)

Thomas P. Broughan

Ceist:

185. Deputy Thomas P. Broughan asked the Minister for Finance the number of vacant properties which have been surrendered to mortgage lenders around the country; the average length of the vacancy; the number of vacant properties held by the Insolvency Service of Ireland; the average length of the vacancy; and if he will make a statement on the matter. [11136/18]

Amharc ar fhreagra

Freagraí scríofa

I have been advised by the Central Bank of Ireland that while it collects data on homes voluntarily surrendered to mortgage lenders, they do not distinguish between vacant or occupied.

The latest Mortgage Arrears and Repossession Statistics published by the Central Bank, indicate that there were 1,717 properties in mortgage lenders possession at the beginning of the fourth quarter of 2017. A total of 311 properties were taken into possession by lenders during the quarter, down from 396 properties in the previous quarter. Of the properties taken into possession during the quarter, 138 were repossessed on foot of a Court Order, while the remaining 173 were voluntarily surrendered or abandoned.

I have been informed by the Department of Justice & Equality that the Insolvency Service of Ireland (ISI) does not hold any property.

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