Written Answers Nos. 230-247
230. Deputy Pearse Doherty asked the Minister for Finance the way in which the Central Bank surpluses are factored into the fiscal space for the coming period; if an expected decline in the surplus is factored into such calculations; and if he will make a statement on the matter. [15295/18]
Amharc ar fhreagraAs the Deputy is aware, the calculation of fiscal space decouples expenditure growth from revenue developments. Fiscal space represents the additional capacity arising from the permitted expenditure growth rate that is available for expenditure increases and/or tax reductions. Fiscal space may be increased through the introduction of discretionary revenue measures that increase revenue and conversely it is reduced by discretionary revenue measures that lower revenue.
As the surplus income of the Central Bank of Ireland paid to the Exchequer is not discretionary it does not impact on the expenditure benchmark.
The surplus income from the Central Bank of Ireland, excluding capital gains, is counted as general government revenue and therefore improves both the general government balance and the structural balance. Table 10 in the Economic and Fiscal Outlook issued for Budget 2018 includes the forecasts for this surplus income out to 2021.
Finally, I would point out that I regard the fiscal stance as more important than fiscal space. In formulating budgetary policy, the Government will do what is right for the economy, and will not adopt pro-cyclical policies that jeopardise the sustainability of the public finances or our future living standards.
231. Deputy Pearse Doherty asked the Minister for Finance the reason the Central Bank is disposing of the Government floating rate note bonds at a quicker rate than necessary to avoid failure to comply with Article 123 of the EU Treaty; the level a decision to sell the notes is taken at; and if he will make a statement on the matter. [15296/18]
Amharc ar fhreagraI am informed by the Central Bank that the position remains that it is committed to disposing of the floating rate notes acquired as part of the IBRC liquidation as soon as possible, provided financial stability conditions permit. As the Deputy is aware the Bank is statutorily independent therefore decisions around sales are a matter for the Bank itself.
232. Deputy Pearse Doherty asked the Minister for Finance the projected Central Bank surplus for each of the next five years on the basis of the minimum required rate of sale of Government floating rate note bonds to avoid failure to comply with Article 123 of the EU Treaty; and if he will make a statement on the matter. [15297/18]
Amharc ar fhreagraThe ECB conducts an annual monitoring exercise to assess the compliance of national central banks (NCBs) with the prohibitions of monetary financing and privileged access referred to in Article 123 (and Article 124) of the Functioning of the European Union. Monetary financing prohibition includes the principle that NCBs must ensure that they do not finance obligations of the State vis-à-vis third parties. The ECB report classifies problematic cases in terms of ‘violations’ (which require specific follow-up measures) or ‘potential conflicts’ (which are not (yet) problematic but require further regular monitoring and should not serve as a precedent), while less clear-cut cases may be classed as ‘concerns’.
The 2016 ECB Report on Central Bank Compliance report noted that the information received by the ECB confirms that the provisions have generally been respected, although the report notes a number of cases which could raise concerns for the national central banks; in the case of the Central Bank of Ireland, this is in relation to the liquidation of the Irish Bank Resolution Corporation (IBRC).
As part of the liquidation of the IBRC in 2013, the Central Bank acquired a ‘Special Portfolio’, of additional assets to the value of approximately €42.6 billion, primarily in the form of eight long-dated Irish Government Floating Rate Notes amounting to €25 billion, and €13.7 billion NAMA bonds. The 2016 ECB report restated the opinion voiced in previous years, that the liquidation of the IBRC in 2013 raised “monetary financing concerns”.
Let me reiterate that the ECB defines less clear-cut cases as ‘concerns’; the liquidation of IBRC is not a violation.
The ECB Governing Council considers that the after-effects of the liquidation can be mitigated by the Central Bank’s disposal strategy for the Special Portfolio.
The Bank has indicated that it will sell a minimum of these securities to the following schedule: 2017-2018 (€0.5 billion per annum), 2019-2023 (€1 billion per annum), and 2024 on (€2 billion per annum until all bonds are sold). The actual sales have been well ahead of the stated schedule, as can be seen below:
|
Year |
Amount Sold € billion |
|
2014 |
0.5 |
|
2015 |
2.0 |
|
2016 |
3.0 |
|
2017 |
4.0 |
|
2018 |
1.0 |
|
Total |
10.5 |
The ECB report welcomed that disposals in 2016 were at a rate well above the minimum repayment schedule.
I am informed by the Central Bank that the position remains that it is committed to disposing of the Floating Rate Notes as soon as possible, provided financial stability conditions permit. As the Deputy is aware the Bank is statutorily independent therefore decisions around sales are a matter for the Bank itself.
The Floating Rate Notes originally amounted to €25.034 billion, this has been reduced to €14.534 billion as of 28 March 2018.
The Central Bank of Ireland does not publish its forecasts of surplus income. However, the Central Bank does provide forecasts to my Department from time to time to support Exchequer budgeting, given that the bulk of any surplus is returned to the Exchequer. These forecasts take account of all the Central Bank's activities.
233. Deputy Thomas Byrne asked the Minister for Finance if first time buyers who purchased their home, paid their deposits and signed their contracts in 2008 but their first mortgage repayment was not until early 2009 ever received the increase in the tax relief at source that was introduced in budget 2012 with regard to mortgage interest relief; and if he will make a statement on the matter. [15327/18]
Amharc ar fhreagraI am advised by Revenue that Section 244 Taxes Consolidation Act 1997 provides for tax relief on qualifying interest paid in respect of qualifying home loans. The applicable ceilings and rates of relief will depend on the particular circumstances of the borrower and are set out in Section 244.
For the purposes of Section 244, a “qualifying loan” is a loan which is used by the individual solely for the purpose of defraying money employed in the purchase, repair, development or improvement of a qualifying residence. Broadly, a “qualifying residence” is the sole or main residence of the individual.
Finance Act 2012 introduced a new rate of tax relief of 30% in respect of qualifying loans taken out during the period 1 January 2004 to 31 December 2008, to purchase an individual’s first qualifying residence or second or subsequent qualifying residence, but only where the first qualifying residence was purchased on or after 1 January 2004.
Where a qualifying loan is used to purchase a qualifying residence, the date that a deed of transfer is executed is generally taken to be the date on which the loan commences for the purposes of Section 244. In this regard, where the loan was taken out and the deed of transfer was executed on or before 31 December 2008 and provided the other conditions of Section 244 are satisfied the 30% rate applies. This increased rate is automatically applied to loans that meet the criteria based on the information supplied by the borrower when applying for relief on the Revenue on-line tax relief at source application system.
Comprehensive guidance notes on mortgage interest relief can be found on the Revenue website using the following link - Tax and Duty Manual 08.03.08.
Individuals who consider that they meet the qualifying criteria for the 30% rate of relief but are currently on a lower rate of relief can contact the Revenue helpline on 1890 46 36 26 to get clarification on their entitlement.
234. Deputy Pearse Doherty asked the Minister for Finance the number of pieces of legislation both enacted and published by his Department which originated in work carried out by the Law Reform Commission in each of the past ten years in tabular form; the details of each piece of legislation in the corresponding year; and if he will make a statement on the matter. [15348/18]
Amharc ar fhreagraMany Law Reform Commission papers are concerned with matters which fall under the responsibility of the Minister for Justice and Equality. It is difficult to be definitive in respect of which legislation over the past decade was inspired or influenced by a Law Reform Commission report and no statistics are collated or maintained in this regard.
However reports published by the Law Reform Commission in relation to areas which fall within the remit of this Department are considered. In this regard, the Finance (Tax Appeals) Act 2015 which revised the law concerning the making of appeals in matters of taxation (including in respect of stamp duties and of duties relating to customs and excise) and established the Tax Appeals Commission was influenced by a Law Reform Commission Report (the 2004 Report on a Fiscal Prosecutor and a Revenue Court (LRC 72-2004)).
235. Deputy John Deasy asked the Minister for Finance the uptake of the Living City initiative in each designated city and town since its introduction. [15393/18]
Amharc ar fhreagraBased on the most recent information received by Revenue from the City and County Councils, the number of applications received per eligible city is set out below.
I am advised by Revenue that applications are only required to be made to the relevant local authority under the owner-occupier and rented residential elements of the scheme. Applications are not required to be made under the commercial element of the scheme.
|
City |
Applications Received |
|
Dublin |
43 |
|
Cork |
30 |
|
Limerick |
14 |
|
Waterford |
16 |
|
Kilkenny |
8 |
|
Galway |
2 |
236. Deputy John Deasy asked the Minister for Finance if he will release figures or statistics on mortgage arrears on a county basis incorporating three, six and 12 month arrears data, respectively. [15394/18]
Amharc ar fhreagraI have been informed by the Central Bank of Ireland that it while it produces mortgage arrears statistics on a quarterly basis, this information is not collated on a county by county basis. The latest statistic are available at https://centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears.
The Central Bank of Ireland does however provide a breakdown of aggregate levels of arrears by county in their Household Credit Market Report. The report can be found at https://centralbank.ie/docs/default-source/publications/household-credit-market-report/household-credit-market-report-2017h2.pdf?sfvrsn=4.
237. Deputy Colm Brophy asked the Minister for Finance his views in relation to the excise of heated tobacco products; and if he will make a statement on the matter. [15412/18]
Amharc ar fhreagraThe tax treatment of tobacco products in EU member states is provided for in Directive 2011/64/EU (the 'Tobacco Products Tax Directive'), but it does not provide explicitly for heated tobacco products.
I am advised by Revenue that heated tobacco products, which are also known as heat-not-burn tobacco products, are a relatively recent innovation and have yet to enter the Irish market. In the event that they were to be launched on the Irish market, the current national tobacco tax provisions are sufficiently broad to ensure that they would automatically fall to be taxed as ‘other smoking tobacco’ and therefore subject to a rate of €246.449 per kilogram.
I am advised that Revenue continues to monitor the situation regarding these products and the question of their tax treatment remains under review.
238. Deputy Michael McGrath asked the Minister for Finance the reason the Central Bank decided to discontinue the blue book for the insurance industry; if the Central Bank will reinstate it; the document or programme which has taken the place of the blue book; and if he will make a statement on the matter. [15423/18]
Amharc ar fhreagraAt the outset, the Deputy should note that the decision to discontinue the production of the Blue Book is an operational matter for the Central Bank of Ireland, and I in my role as Minister for Finance have no influence over it.
Notwithstanding this, my officials have had some engagement with the Central Bank on this matter. In response, the Bank has indicated that, the tables in the annual Insurance Statistics publication, known as the 'Blue Book' were extracted from the Solvency I forms which were completed by the industry and were publicly available (in the Companies Registration Office). However, with the transition from Solvency I to Solvency II (in place since 1 January 2016), this information is no longer available to the Bank, as these forms are no longer completed due to the underlying data now being valued on a Solvency II basis. This change in prudential regime means unfortunately that the time series has been broken. I understand that to reinstate the Blue Book in its old format would require an additional reporting burden on the industry and would in effect means a dual reporting system for insurers which would almost certainly have cost implications.
I appreciate that the discontinuation of the ‘Blue Book’ may be regrettable to particular interested parties, however I understand that those interested parties seeking data at company level can find such data in publically available reports which are required of all insurance undertakings under the Solvency II regime. These reports are known as the Solvency and Financial Condition Reports (SFCRs). The SFCRs include a detailed narrative report on the insurance undertaking coupled with key quantitate reporting templates that contain premiums, claims, expenses, technical provisions, solvency and other information. All SFCRs for 2016 are made available by the Central Bank in a dedicated SFCR repository which can be accessed at https://www.centralbank.ie/regulation/industry-market-sectors/insurance-reinsurance/solvency-ii/solvency-and-financial-condition-report-repository.
In addition, the Deputy may be aware that the Central Bank publishes harmonised data that is consistent and comparable with other insurance supervisors in the EU. The first data on the new regime was published in August 2017 covering 2016 - Aggregate Statistical Data, which can be accessed at: https://www.centralbank.ie/regulation/industry-market-sectors/insurance-reinsurance/solvency-ii/supervisory-disclosures.
Finally, the National Claims Information Database will produce an annual statistical analysis of the factors related to the movement in claims costs / claims trends which will contribute to the improvement of data availability in the insurance sector. This is still under development and by way of update to the Deputy, my Department is currently working with the Office of the Parliamentary Counsel and the Central Bank in drafting the legislation required to underpin the National Claims Information Database and it is hoped that the relevant Bill will be published by this summer.
240. Deputy Pearse Doherty asked the Minister for Finance the estimated budgetary implications of the delay in introducing the sugar tax; and if he will make a statement on the matter. [15459/18]
Amharc ar fhreagra251. Deputy Kevin O'Keeffe asked the Minister for Finance when he plans to introduce the sugar tax as agreed in budget 2018; his views on the fact that this delay is now causing administrative and logistical problems for many companies; and if he will make a statement on the matter. [15829/18]
Amharc ar fhreagraI propose to take Questions Nos. 240 and 251 together.
Ireland has engaged in extensive and constructive discussions with the European Commission to ensure that once commenced, the Sugar Sweetened Drinks Tax does not infringe EU State aid law. Following these constructive discussions with, and a formal notification to, the European Commission, a positive decision is expected very soon to allow for the commencement of the tax on 1 May 2018.
While any inconvenience caused by the short delay to the commencement is regrettable, this was unavoidable. The sugar-sweetened drinks tax is the first of its kind to be reviewed by the European Commission and will provide a benchmark for State aid decisions in this area. Key stakeholders were informed of the delay as soon as it became apparent that the Commission decision would not be communicated within the anticipated timeframe.
The estimated yield for 2018 is in the region of €30m with the yield for 2019 and subsequent years €40m per annum. On a straight line basis the estimated cost of delaying the introduction from 6 April to 1 May is estimated to be in the region of €2.5m.
The yield could potentially decrease over time as consumers opt for cheaper non-tax products combined with continued industry reformulation.
241. Deputy Fergus O'Dowd asked the Minister for Finance if an energy roadmap document from a person (details supplied) will be examined; if he will relay the document to the relevant officials in his Department; if his officials will contact the person to meet and discuss the roadmap in more detail; and if he will make a statement on the matter. [15473/18]
Amharc ar fhreagraI wish to thank the Deputy for forwarding the above mentioned paper which has been passed onto to my officials for their consideration. The paper contains proposals in relation to vehicle and carbon taxation.
The National Mitigation Plan sets out the Governments approach to transforming Ireland towards a low carbon society. The plan contains commitments in relation to carbon tax and vehicle taxation which my officials are currently working on. In this regard, my Department is engaged in a joint research project on carbon tax with the ESRI. While vehicle registration tax and motor tax are under consideration in the context of EU regulatory and technological changes to ensure these taxes continue to provide appropriate financial incentives for the purchase of lower emission vehicles.
This body of work is pursuant to the aforementioned commitments in the National Mitigation Plan and will inform budgetary decisions.
242. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter regarding a person's (details supplied) State savings bonds; and if he will make a statement on the matter. [15611/18]
Amharc ar fhreagraThe National Treasury Management Agency (NTMA) has informed me that all State Savings Fixed Term Products are purchased subject to Terms and Conditions. The Terms and Conditions do not allow assignment or transfer of products, or rights under the Agreement to purchase a product. The product may be redeemed before maturity without penalty, with the interest earned to that time, and then re-invested as a Joint Holding.
Further information may be obtained by contacting Customer Service State Savings: at i, Phone 1850 30 50 60 or 01-7057200, or Mail at State Savings, GPO, FREEPOST, Dublin 1.
243. Deputy Michael Healy-Rae asked the Minister for Finance the status of an application under the disabled passenger scheme by a person (details supplied); and if he will make a statement on the matter. [15645/18]
Amharc ar fhreagraI am advised by Revenue that the delay in processing the person’s Disabled Passenger Scheme application arose because she inadvertently provided incorrect information when registering for access to the required online system.
The issues were corrected by the person on 28 March 2018 and the necessary access information to allow her complete the application issued to her. Revenue has also provided a direct contact name to her should she require any further help.
244. Deputy Michael Healy-Rae asked the Minister for Finance if he will address a matter (details supplied) regarding the disabled passenger scheme; and if he will make a statement on the matter. [15697/18]
Amharc ar fhreagraI am advised by Revenue that an application for exemption from Vehicle Registration Tax (VRT) under the Drivers/Passengers with Disabilities Scheme was received on behalf of the person in question on 25 January 2018. The application was approved and a certificate allowing exemption from VRT issued on 7 February 2018.
The exemption certificate was subsequently used to register the particular car on 16 February 2018. Sadly, the person passed away on 11 February 2018, which meant that the exemption was no longer valid and, as a consequence, the VRT relieved must be repaid. The legislation does not provide Revenue with any discretion in regard to the conditions under which the relief can be allowed, even in such difficult circumstances.
Revenue will liaise directly with the family concerned to explore options to assist them with repaying the VRT involved.
245. Deputy Michael McGrath asked the Minister for Finance the protections that are available to a buy-to-let mortgage holder who is seeking to hold onto a tracker rate of interest as part of a restructuring of the mortgage; and if he will make a statement on the matter. [15727/18]
Amharc ar fhreagraI have been informed by the Central Bank of Ireland that the Code of Conduct on Mortgage Arrears 2013 (‘CCMA’) contains specific protections in respect of tracker mortgages.
However, the CCMA only applies to a mortgage loan of a borrower which is secured by his/her primary residence. For the purposes of the CCMA, ‘primary residence’ means a property which is the residential property which the borrower occupies as his/her primary residence in the State, or a residential property which is the only residential property in the State owned by the borrower. Therefore, the protections of the CCMA only apply to buy-to-let mortgages if the residential property is the only residential property in the State owned by the borrower.
Provision 41 of the CCMA provides that the lender must not require the borrower to change from an existing tracker mortgage to another mortgage type, as part of any alternative repayment arrangement offered to the borrower , except in the circumstances set out in Provision 46.
Provision 46 provides that, in the case of an existing tracker mortgage, if following consideration of the options in accordance with Provision 39 (which states that a lender must explore all of the options for alternative repayment arrangements offered by that lender), in conjunction with Provision 41, the lender concludes that none of the option(s) that would allow the borrower to retain his/her tracker interest rate is/are appropriate and sustainable for the borrower’s individual circumstances, the lender may offer the borrower an alternative repayment arrangement which requires the borrower to change from an existing tracker mortgage to another mortgage type, if that alternative repayment arrangement:
a) is affordable for the borrower, and
b) is a long-term sustainable solution which is consistent with Central Bank of Ireland policy on sustainability.
For mortgages in arrears that do not fall within the scope of the CCMA, (e.g. buy to let properties which are not the only residential property in the State owned by the borrower), the provisions of the Consumer Protection Code 2012 (the Code) apply. With respect to arrears resolution, the Code requires a lender to seek to agree an approach that will assist the personal consumer in resolving the arrears. However, it does not specifically prevent a lender from removing or amending a tracker rate on a buy to let mortgage in arrears.
246. Deputy Jackie Cahill asked the Minister for Finance if there is a concession in vehicle registration tax when the vehicle in question is a public service vehicle such as a hackney; and if he will make a statement on the matter. [15728/18]
Amharc ar fhreagra247. Deputy Jackie Cahill asked the Minister for Finance if there is a concession in vehicle registration tax when the vehicle in question is a public service vehicle such as a hackney and is wheelchair accessible; and if he will make a statement on the matter. [15729/18]
Amharc ar fhreagraI propose to take Questions Nos. 246 and 247 together.
I am informed by Revenue that VRT is levied under the provisions of the Finance Act 1992, Part II, Chapter IV. There are a number of exemptions and reliefs under this legislation including a zero rating on vehicles such as ambulances and fire engines, and, under certain circumstances, relief from VRT and VAT under the provisions of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.
While a vehicle may qualify under one of the above provisions, none of the provisions apply to public service vehicles, including hackneys, whether they are wheel chair accessible or not.
The National Transport Authority “Wheelchair Accessible Vehicle Grant Scheme” offers a financial grant of up to €7,500 for the purchase or conversion of a new WAV and a sliding scale with lesser monies being available for older cars. More information in respect of this grant is in the NTA Information Guide at the following link: https://www.nationaltransport.ie/wp-content/uploads/2018/02/Information_Guide_for_WAV18_Grant_Scheme_Applicants_2018.pdf.
