Written Answers Nos. 155-170
155. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to monitor the levels of bank charges being imposed by various banks; the basis for such charges, nationally and internationally; and if he will make a statement on the matter. [31117/18]
Amharc ar fhreagraAll credit institutions in Ireland are independent commercial entities. I, as Minister for Finance, have no statutory role in relation to the charges applied by credit institutions. Section 149 of the Consumer Credit Act 1995, as amended, requires that credit institutions, prescribed credit institutions and bureaux de change must make a submission to the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges in respect of certain services. Section 149 does not cover interest rates, rather it applies to fees and commissions only. The Central Bank may direct the institution not to impose the new or increased charge or it may approve the charge, or approve it at a lower level than requested by the institution. Once approved, the bank is entitled to impose the charge.
My Department published a report on the review of the regulation of bank fees and charges in December 2013. This contains a detailed description of the process by which the Central Bank makes decisions on whether or not to approve proposed charges. It is available on my Department's website at www.finance.gov.ie. Among the key findings of the review was that, while fee and commission income has become a more important source of income to the banks in recent years, net fee and commission income in Irish banks was well below the average of their European peers.
The website of the Competition and Consumer Protection Commission (CCPC) also lists the various charges imposed by the various financial institutions in Ireland for different types of transactions www.ccpc.ie.
Irish financial institutions have varying models for charges and have different regimes and conditions under which they are willing to grant transaction free banking. Individuals' use of their bank account will be specific to each individual and I would again strongly encourage people to look at this comparison site with their specific circumstances in mind in order to decide which institution offers the best product for their pattern of account usage. My Department has run two media campaigns as part of a range of competition measures agreed with the European Commission to raise awareness and promote customer switching in the retail financial product area. This was agreed in the context of the restructuring plans for AIB and PTSB. The campaign is being funded entirely by the two banks. The campaign website www.switchyourbank.ie provides straightforward practical information and support on switching and I would strongly encourage people to visit it.
156. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which working capital continues to be made available to the farming and business sectors with particular reference to smaller enterprises; and if he will make a statement on the matter. [31118/18]
Amharc ar fhreagraSupporting the availability of finance for SMEs, including smaller enterprises, is a cornerstone element of Government policy in our efforts to strengthen the economy and create jobs. Government is focused on ensuring that all viable SMEs have access to an appropriate supply of credit from a diverse range of bank and non-bank sources. To facilitate this the Government has developed a number of initiatives to ensure that the supply of credit in the market is sufficient to meet the existing and future funding needs of SMEs.
To continue to monitor levels of working capital available to SMEs, my Department conducts biannual surveys looking at demand for credit by SMEs. The most recent Department of Finance SME Credit Demand Survey, covering the period April to September 2017, shows that, when pending applications are excluded, 88% of credit applications to banks were approved or partially approved. 38% of responders cited working capital/cash flow requirements as the main reason they were applying for bank finance. When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 81% of working capital coming from this source (up 8%) since September 2016. The survey for the period to end-March 2018 is underway at the moment.
The Microenterprise Loan Fund, administered by Microfinance Ireland, is targeted specifically towards smaller enterprises, it provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing less than 10 people.
The Strategic Banking Corporation of Ireland (SBCI) also ensures that viable SMEs can access low cost flexible loans from a variety of sources. The SBCI channels its funds through lending partners known as on-lenders. The SBCI currently has three bank on-lending partners and four non-bank on-lending partners. The SBCI has a current funding capacity of over €1 billion which it makes available to its on-lending partners as demand from SMEs arises. To the end of December 2017, SBCI cumulative lending stood at €920 million supporting 22,962 SMEs. In 2017, €391 million of loans were drawn by Irish SMEs with an average loan size of €37,300.
In March 2018, the SBCI launched a €300 million Brexit Loan Scheme, the Scheme is open to all SMEs and Midcaps with less than 499 employees that are viable but vulnerable and exposed to the impact of Brexit. The Scheme will provide loans of €25,000 to €1.5 million at a maximum interest rate of 4% with a term of 1-3 years to eligible enterprises. The Scheme will be in operation from March 2018 until March 2020, or until the Scheme has been fully subscribed.
The Government remains committed to the SME sector which it sees as a key engine of ongoing economic growth. My Department, working with other relevant Departments, Bodies and Agencies, will continue to advance policies to ensure the availability of both bank and non-bank credit so as to ensure that viable Irish businesses have sufficient access to finance.
158. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which an assessment has been carried out to clarify whether inflationary tendencies and speculative practice in the building sector during the economic boom continues to impact on the provision of a comprehensive housing programme in the current climate; and if he will make a statement on the matter. [31120/18]
Amharc ar fhreagraMy Department continues to monitor developments in the property market, including trends in property prices, on an ongoing basis. According to the Central Statistics Office's Residential Property Price Index, national property prices increased by 0.7 per cent between March and April, and by 13 per cent on an annual basis.
The underlying factors driving house prices now are fundamentally different from those which drove prices leading up to the financial crisis. The current inflationary pressures in the housing market reflect the insufficient supply response to meet the present demographic demands for housing, whereas previously credit was one of the primary factors contributing to house price inflation.
The credit environment now is markedly different. There is now an enhanced regulatory regime in place to monitor and manage risks to the economy emerging from the housing sector. The Central Bank's macro prudential rules aim to increase both bank and borrower resilience and mitigate the risks of credit fuelled house-price spirals emerging.
The availability of appropriate development finance for commercially viable residential projects has been identified as a key contributory factor for the ongoing shortfall in residential supply. The Government is meeting this challenge through the launch of Home Building Finance Ireland (HBFI) which will boost the supply of debt funding for residential development. Utilising up to €750 million, HBFI will fund new housing construction across all regions in the country, with the aim of boosting housing supply.
More generally, the Government’s response to mitigating inflationary tendencies in the housing market is contained within 'Rebuilding Ireland: An Action Plan for Housing and Homelessness'. The Action Plan sets out a comprehensive package of actionable measures designed to address the ongoing structural constraints within the construction sector and restore the housing market to a sustainable equilibrium.
160. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects to be in a position in the forthcoming budget to combine prudent fiscal management with the need to accommodate the issues which affect the general population in terms of the economic downturn; and if he will make a statement on the matter. [31122/18]
Amharc ar fhreagraExpenditure on public services and capital investment must be financed from a sustainable source. As Exchequer revenue is impacted by the cycle of the economy, basing expenditure commitments on the current historical high level of revenue would only serve to introduce uncertainty to the future provision of public services.
Therefore, it is not an issue of how to combine prudent fiscal management with the need to invest in our public services and infrastructure, rather prudent fiscal management is a prerequisite to ensuring the stability of public investment.
In terms of the allocation of resources in the upcoming budget, the Programme for Partnership Government states that future budgets will involve at least a 2:1 split between public spending and tax reductions. Budget 2019 will be no different in this regard.
161. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which budgetary projections remain on target for the balance of 2018; the extent to which he expects adjustments to be required in 2019; and if he will make a statement on the matter. [31123/18]
Amharc ar fhreagraThe end-June Exchequer returns showed that the cumulative target for tax revenue in the first half of the year has been achieved (over by 0.7% or €168 million). In year-on-year the terms tax revenue performance has been solid, with receipts up 5.4% or €1,276 million. This provides a level of confidence that the end 2018 tax revenue target of €54,175 million will be achieved.
In general government terms, the Summer Economic Statement published last month, showed that a general government deficit of 0.2% of GDP is forecast for this year, reducing to 0.1 % of GDP in 2019. These forecasts remain unchanged from the Budget 2018 fiscal forecast.
Regarding adjustments required for 2019, the Government will not adopt taxation or spending measures that would result is a deficit greater than 0.1% of GDP.
163. Deputy Jonathan O'Brien asked the Minister for Finance if a proposal (details supplied) will be costed. [31134/18]
Amharc ar fhreagraAs the Deputy is aware, under the expenditure benchmark capital increases are smoothed over a four-year period. As such, in order to assess the impact of capital smoothing on the proposal submitted by the Deputy, actual capital expenditure in 2016 and 2017 and the planned expenditure for 2018 must be included in the calculations, as these impact on 2019, 2020 and 2021.
The following table compares the National Development Plan with the Deputy's proposal. The impact on fiscal space in comparison to table 3 of the 2018 Summer Economic Statement is shown in row d.
As the Deputy is aware, forecasts beyond 2021 have not been compiled by my Department.
|
2019 |
2020 |
2021 |
2022 |
2023 |
|
|
a. National Development plan, € millions |
7,300 |
7,900 |
8,600 |
8,900 |
9,400 |
|
b. Alternative Plan, € millions |
8,500 |
9,100 |
9,700 |
10,300 |
10,900 |
|
c. (=b-a) Additional expenditure, € millions |
1,200 |
1,200 |
1,100 |
1,400 |
1,500 |
|
d. Impact of c on fiscal space after smoothing, € millions |
300 |
600 |
875 |
n/a |
n/a |
|
e. Alternative Plan, per cent of GNI* |
3.8 |
3.9 |
4.0 |
n/a |
n/a |
|
f. Alternative Plan, per cent of GDP |
2.6 |
2.6 |
2.7 |
n/a |
n/a |
As I have previously stated, such increases represent money that we would have to borrow. In this regard it is the full amount in row c which would have to be raised rather than the smoothed amount in row d, i.e. €6.4 billion by 2023.
Given our elevated debt levels, borrowing even more and increasing the debt would be reckless, particularly in view of the major downside risks to the economy. The Government is committed to prudent budgetary policy that supports sustainable and steady improvements in our living standards.
Finally, the Parliamentary Budget Office (PBO) provides independent and impartial information, analysis and advice to the Houses of the Oireachtas. The Deputy can avail of the PBO as a source of financial and budgetary intelligence and advice.
164. Deputy Bernard J. Durkan asked the Minister for Finance if the Revenue Commissioners will facilitate a deferred payment schedule for a person (details supplied); and if he will make a statement on the matter. [31176/18]
Amharc ar fhreagraI am advised by Revenue that despite the fact that on three separate occasions a phased payment application form was provided to the person concerned, the completed form and supporting documentation required has not been provided to Revenue.
Given the fact that the person concerned has been afforded numerous opportunities to put forward a payment proposal and has failed to do so, I am advised that Revenue will have no option but to very shortly take the appropriate enforcement action to secure collection of the debt concerned. To avoid such action by Revenue, the person concerned needs to take urgent and tangible action to engage with Revenue and put a payment arrangement in place.
165. Deputy Bernard J. Durkan asked the Minister for Finance if the Revenue Commissioners will facilitate a deferred payment schedule for a person (details supplied); and if he will make a statement on the matter. [31177/18]
Amharc ar fhreagraI am advised by Revenue that having regard to the circumstances of the person concerned, a temporary 6 month stay on collection was agreed in January 2018. If the person concerned wishes to now seek a deferred payment arrangement it will be necessary to complete an application for such an arrangement and provide the required supporting documentation.
The person concerned should make contact with Mr. Pat Flaherty (telephone 061 488132) for any assistance or clarification he may need in making such an application.
166. Deputy Pearse Doherty asked the Minister for Finance his views on the use of securitisation vehicles by banks in which the State has an interest to reduce the liabilities on its balance sheet; and if he will make a statement on the matter. [31191/18]
Amharc ar fhreagraAs the Deputy will be aware, securitisation allows banks transfer the risk of some loans to other banks or long-term investors such as insurance companies and asset managers. This allows banks to use the capital that was set aside to cover the risk in those loans to create and sell new loans.
The reputation of securitisation was tarnished during the global financial crisis due to the problems created by some complex, opaquely structured asset-backed securities vehicles that contained poorly underwritten loans.
However the concept of securitisation retains value and institutions like the European Central Bank still support its use. When used well it can generate funding and transfer risk away from the banking sector, which may support monetary policy as it can help banks free up bank capital, allowing them to extend new credit to the real economy.
Across the market we live in an era of far more stringent regulation and the securities market is no different with new standards requiring simple, transparent and standardised backed securities products. It seems likely that in a normalising European and Irish financial landscape that securitisations will play a role.
Notwithstanding the fact that the State is a significant shareholder in a number of banks, I must ensure that they are run on a commercial and independent basis. The day to day running of the banks and decisions around securitisation options are the responsibility of management within those banks.
167. Deputy Billy Kelleher asked the Minister for Finance the number of part-time and full-time media advisers employed in his Department; the Civil Service grade of each media adviser; and the cost over a full year of employing all such advisers. [31247/18]
Amharc ar fhreagraI wish to inform the Deputy that my Special Adviser Ms Deborah Sweeney acts as my Press Adviser.
Ms Sweeney's salary is the 4th point of the Principal Officer (Standard) PPC scale.
Ms Sweeney's appointment was made in line with "Instructions to Personnel Officers - Ministerial Appointments for the 32nd Dáil" which include "Guidelines on staffing of Ministerial Offices" issued by the Department of Public Expenditure and Reform.
168. Deputy Barry Cowen asked the Minister for Finance the specific projects which will receive the €25 million in capital funding allocated in 2019; the amount each project will receive of the €25 million in tabular form; and if he will make a statement on the matter. [31291/18]
Amharc ar fhreagraA sum of €25 million is currently profiled as Capital for 2019 for the Finance Vote Group. Allocations are made under two Votes; €23 million to the Office of the Revenue Commissioners and €2 million to the Department of Finance.
My Department's Capital Allocation provides for the routine acquisition of IT equipment and systems and certain premises expenses relating to the buildings it occupies. Aside from these types of expenditure, my Department does not have any long or medium term Capital Projects.
At present, my Department has not made allocations beyond 2018 although some of the work currently in progress may not be complete by the end of the year. We will be setting our 2019 allocation during the Estimates process.
Revenue Commissioners:
Revenue’s Capital expenditure largely relates to expenditure on Information and Communications Technology (ICT). Continued investment in ICT has been a major driver of productivity growth in Revenue, as well as enabling better service levels for the public and enhanced governance. Every year Revenue needs to develop and implement a series of urgent ICT projects that ensure Revenue's ICT infrastructure can support budgetary and legislative changes as introduced by the Government or the EU, very frequently within tight timeframes. The €23 million can be summarised as follows:
|
Projects |
€ |
|
|
IT Systems Development |
It is expected that some €16m will be spent on IT Systems Development. Projects will include Union Customs Code, Local Property Tax, Debt Management and PAYE Modernisation – next phases. |
€16m |
|
Storage and Hardware |
Revenue need to invest on an ongoing basis to replace end of life equipment. This includes storage and infrastructure hardware which ensures, among other things, that Revenue systems are available to the public on a near 24/7 basis and that Revenue staff can access critical data in real-time in both Revenue offices and in external locations. |
€5.5m |
|
Vehicles and Specialised Equipment. |
These would be mainly related to Revenue’s enforcement activities. |
€1.5m |
169. Deputy Peadar Tóibín asked the Minister for Finance the tax relief achieved under section 481 by the 12 largest applicant companies for each of the past five years. [31333/18]
Amharc ar fhreagraDeputies may be aware that the film tax credit was re-structured with effect from 1 January 2015, following a review of the relief published by my Department in 2012. Prior to 2015, film relief took the form of an investor tax relief which provided an incentive to individual and corporate taxpayers to invest in Irish film production. The restructured relief, available from 2015 on, takes the form of a payable tax credit of 32 per cent, payable directly to a producer company.
I am advised by Revenue that based on tax returns for the years 2011 to 2015, the latest years for which comprehensive data are available, the total amount of Section 481 tax credit claimed on the 12 largest claims made by companies is as shown in the following table. Data for the year 2015 relates to the restructured credit available to producer companies. Data for the years 2011 to 2014 inclusive relates to the former investor-led section 481 relief, under which tax relief was granted to individuals investing in a qualifying company. The cost figure for those years relates to the income tax relief received by individuals investing into the 12 largest claimant companies in the relevant year.
|
Tax Year |
Amount of Section 481 Tax Credit Claimed (12 largest claimants per year) |
|
2015 |
€73.5m |
|
2014 |
€71.8m |
|
2013 |
€49.8m |
|
2012 |
€32.9m |
|
2011 |
€25.0m |
I am advised by Revenue that the lists of beneficiaries under the scheme from 2016 to June 2018 are available on the Revenue website at this link which also identifies the largest applicant companies for each year. While the exact amounts of relief claimed are not published, data in relation to the amount of relief claimed are displayed in bands.
170. Deputy Catherine Murphy asked the Minister for Finance the amount of tax foregone due to relief from alcohol products tax since the relief was introduced; the amount of repayment or remission of the tax made by the Revenue Commissioners to qualifying microbreweries since the relief was introduced in tabular form, by year and amount; and if he will make a statement on the matter. [31338/18]
Amharc ar fhreagraThe information sought by the Deputy on the relief for small breweries is outlined on the following table:
Relief for Small Breweries: 2005 to 2017
|
Year |
Total Repaid/remitted (€) |
Total No. of Claimants |
|
2005 |
186,704 |
5 |
|
2006 |
294,357 |
7 |
|
2007 |
242,302 |
8 |
|
2008 |
351,500 |
9 |
|
2009 |
286,848 |
10 |
|
2010 |
251,997 |
10 |
|
2011 |
420,304 |
17 |
|
2012 |
840,651 |
20 |
|
2013 |
1,112,897 |
20 |
|
2014 |
2,334,409 |
53 |
|
2015 |
3,994,745 |
69 |
|
2016 |
4,089,794 |
71 |
|
2017 |
5,674,086 |
86 |
The total amount of tax foregone since 2005 is €20,080,594.
