Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Thursday, 14 Feb 2019

Written Answers Nos. 66-82

Brexit Preparations

Ceisteanna (66)

Bernard Durkan

Ceist:

66. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he continues to be in contact with all relevant bodies and agencies in the preparation of the post-Brexit conditions; and if he will make a statement on the matter. [7616/19]

Amharc ar fhreagra

Freagraí scríofa

The Deputy will be aware that Brexit has implications across almost all sectors of the economy. Since the UK referendum, Brexit is an integral part of business planning in the Department of Finance and issues relating to Brexit are mainstreamed across all divisions of my Department. In this context, I meet and engage on an ongoing basis with my officials on issues linked to Brexit.

As Minister for Finance, my objective is to protect the economic and financial interests of the State and to support the work of the Revenue Commissioners so as to minimise the Brexit disruption to trade, to the greatest extent possible.

My Department is working within the whole-of-Government approach and coordinating closely with its agencies who are developing and implementing plans and measures to protect our economy. I recently met with the Chief Executive of the NTMA, the Chairman of the Revenue Commissioners and the Deputy Governor of the Central Bank. All are engaging closely in the overall whole- of- Government preparations, and are confident that they have put appropriate contingency measures in place to do everything possible to limit the inevitable disruption to consumers and trade, in the event of a no deal Brexit.

The Central Bank has statutory responsibility for financial stability and has been focused on Brexit since before the UK referendum. It is working closely with financial services firms to ensure that they have contingency plans in place for end March 2019, and that they are adequately prepared to cope with the possible effects of Brexit, with as little disruption for consumers as possible. On the basis of its work and engagement across the sector, the Central Bank has been able to assure me that, while some level of market disruption is inevitable, the financial system as a whole should be resilient enough to withstand a hard Brexit and that the most material ‘cliff edge’ financial stability risks arising from Brexit have been largely mitigated.

Within Revenue, there is a very significant programme of work that has been ongoing in terms of ICT, staffing and engagement across the country with the business community. Revenue have invested in scaling up its Customs ICT framework to deal with the anticipated increase in customs declarations and have accelerated and expanded their recruitment and training schedules to be ready for March 2019 and are on track to have over 400 additional staff in place by the end of March 2019. Revenue is working hard to support trade and businesses to be as prepared as possible and to deal with the outcome of unfolding developments through engagement with trade representative bodies, participation in and organization of events and seminars around the country and targeted correspondence to reach large and small traders across the country who do business with the UK.

In relation to the funding of the State, the NTMA’s strategy continues to take account of the market dislocation risks posed by Brexit and the Exchequer’s funding position is strong with significant holdings of cash.

I am satisfied that the Department and its relevant agencies are continuing to work to ensure that they as prepared as possible to limit the inevitable disruption to consumers and trade, post Brexit.

Question No. 67 answered with Question No. 36.

Economic Data

Ceisteanna (68)

Bernard Durkan

Ceist:

68. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which recovery from the economic crisis continues; if specific issues are likely to impact on the progress; and if he will make a statement on the matter. [7618/19]

Amharc ar fhreagra

Freagraí scríofa

The strong growth recorded over the last number of years has enabled the Irish economy to move from a stage of recovery to a more mature stage in the economic cycle. Importantly growth in the economy has become more broad based in recent years, with both domestic demand and net exports making positive contributions to growth. The latest data from the CSO shows that modified domestic demand increased by over 5 per cent on an annual basis in the first three quarters of 2018.

Arguably, the best indication of the recovery in the economy has been in the labour market, with employment increasing by 3 per cent on an annual basis in the third quarter of 2018. As a result there are now more people working in Ireland than ever before. In parallel, the unemployment rate has fallen a peak of 16 per cent in early 2012 to 5.3 per cent in December 2018.

As I outlined in Budget 2019, the economy is expected to continue to grow strongly over the coming years, with GDP forecast to grow by 4.2 per cent this year and 3.6 per cent in 2020. This in turn will be reflected in the labour market, with the creation of an additional 62,000 jobs in 2019.

Despite this positive outlook, the risks to our economy are numerous and primarily external in nature. First and foremost is the potential fallout from a more adverse-than-expected outcome from Brexit. Secondly, given Ireland’s position as a small open economy with a high degree of integration in global value chains, any further escalation in trade protectionism or a slowdown in global growth would have a disproportionate impact on the Irish economy. In addition, a faster-than-expected normalisation of monetary policy, changes in other jurisdictions that affect the competitiveness of Ireland’s corporate tax regime and rising geopolitical uncertainty all have the potential to undermine growth in the economy.

As a number of these factors are beyond our control, the best way we can mitigate against them is through prudent budgetary policy, careful management of the public finances and by focusing on competitiveness-oriented policies. That is what this Government has done and will continue to do.

Financial Services Regulation

Ceisteanna (69, 71, 72)

Bernard Durkan

Ceist:

69. Deputy Bernard J. Durkan asked the Minister for Finance if the activities of primary and secondary lenders will be monitored with a view to ensuring that they deal with their customers in a fair and equitable manner (details supplied); and if he will make a statement on the matter. [7619/19]

Amharc ar fhreagra

Bernard Durkan

Ceist:

71. Deputy Bernard J. Durkan asked the Minister for Finance if lending institutions are encouraged to give similar consideration to their customers who found themselves in a difficult situation arising from the banking collapse (details supplied); and if he will make a statement on the matter. [7621/19]

Amharc ar fhreagra

Bernard Durkan

Ceist:

72. Deputy Bernard J. Durkan asked the Minister for Finance if the Central Bank can ensure that customers who are in indebted to the banking system have the benefit of a code of conduct in which all avenues to resolve their difficulties are explored in all cases before taking recovery action; and if he will make a statement on the matter. [7622/19]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 69, 71 and 72 together.

As the Deputy will be aware, a key priority for the Government and the Central Bank of Ireland is ensuring that the interests of consumers of financial services are protected. A key element of the Central Bank’s role is ensuring that the consumer protection regulatory framework is fit for purpose and ensures that consumers best interests are protected.

The Central Bank's approach to mortgage arrears resolution is focused on ensuring the fair treatment of borrowers in keeping with its remit and responsibilities for safeguarding stability and protecting consumers. This is achieved through a strong consumer protection framework and ensuring that lenders have appropriate arrears resolution strategies and operations in place.

The Code of Conduct on Mortgage Arrears (CCMA) forms part of the Central Bank’s Consumer Protection Framework. This statutory Code was first introduced by the Central Bank in February 2009, with the current CCMA becoming effective from 1 July 2013. The CCMA provides a strong consumer protection framework, aimed specifically at the process to be followed by relevant firms, to ensure borrowers in arrears or pre-arrears in respect of a mortgage loan secured on a primary residence are treated in a timely, transparent and fair manner and that due regard is had to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits.

Banks, retail credit firms and credit servicing firms are all required to comply with the CCMA. The CCMA recognises that it is in the interests of borrowers and regulated firms to address financial difficulties as speedily, effectively and sympathetically as circumstances allow. It sets out the Mortgage Arrears Resolution Process (MARP), a four-step process that regulated entities must follow:

Step 1: Communicate with borrower;

Step 2: Gather financial information;

Step 3: Assess the borrower’s circumstances; and

Step 4: Propose a resolution

Each regulated entity must consider the borrower’s situation in the context of the solutions they provide, which may differ from firm to firm. The CCMA does not prescribe the solution which must be offered.

Under the CCMA, a regulated entity may only commence legal proceedings for repossession where it has made every reasonable effort to agree an alternative repayment arrangement (ARA) with the borrower and other clear requirements are met or the borrower has been classified as not co-operating. This framework requires lenders to exhaust the options available from the suite of ARAs offered before taking action which may result in the borrower losing his/her home (whether by voluntary sale or repossession). During the legal process, borrowers have opportunities to re-engage with lenders to find a solution. In some circumstances, however, loss of ownership may be unavoidable.

As you will recall last year, I asked the Central Bank to carry out a review of the CCMA to ensure it remains as effective as possible. The key finding was that for borrowers who engaged with the process, the CCMA is working effectively as it is intended in the context of the sale of loans by regulated lenders. On foot of this review, the Central Bank also stated that although strategy, commercial decisions and contractual rights of regulated entities cannot be interfered with, they will investigate any patterns of behaviour it becomes aware of that suggests the CCMA is not being followed, and they will engage with industry on providing fuller information to borrowers on the assessment of their case in relation to arrangements being considered or not.

There are two other pieces of legislation that are relevant here. The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 (the 2015 Act) was introduced to fill the consumer protection gap where loans are sold by the original lender to an unregulated firm. Under the 2015 Act, if the firm that bought loans from the original lender is an unregulated firm, then the loans must be serviced by a ‘credit servicing firm’ which is regulated by the Central Bank. Credit Servicing Firms are typically firms that manage or administer credit agreements such as mortgages or other loans on behalf of unregulated entities.

Credit servicing firms must act in accordance with the requirements of Irish financial services law that applies to ‘regulated financial service providers’. This ensures that consumers, whose loans are sold to another firm, maintain the same regulatory protections that they had prior to the sale, including under the various statutory Codes of Conduct issued by the Central Bank.

Last year, the Government supported and assisted Deputy Michael McGrath's Private Members Bill, now the Consumer Protection (Regulation of Credit Servicing Firms) Act, 2018 (the 2018 Act) which requires owners of loan books to be authorised and regulated by the Central Bank of Ireland. Specifically three activities, which were not regulated, are now regulated:

- holding the legal title to credit granted under the credit agreement,

- determination of the overall strategy for the management and administration of a portfolio of credit agreements; and

- maintenance of control over key decisions relating to such portfolio.

The 2018 Act gives owners of the legal title to credit 90 days from the commencement of the Act to apply for authorisation, i.e. by 21 April 2019. A loan owner must keep the existing authorised credit servicing firm in place until their application for authorisation is approved or refused.

The Government, along with the Central Bank, will continue to monitor and ensure that the consumer protection framework in place is applied appropriately.

Credit Availability

Ceisteanna (70)

Bernard Durkan

Ceist:

70. 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. [7620/19]

Amharc ar fhreagra

Freagraí scríofa

Supporting the availability of finance for SMEs is a cornerstone 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. In this regard 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, particularly in light of Brexit.

In terms of monitoring the working capital and other requirements for SMEs, my Department biannually surveys the demand for credit by SMEs. The latest Department of Finance SME Credit Demand Survey, covering the period April to September 2018, can be found at www.finance.gov.ie. The results of this survey show that working capital/cash flow requirements are provided as the main reason for applying for bank finance with 42% stating this is why they requested bank finance. When asked about sources of finance for working capital, internal funds/retained earnings were the main finance source of working capital with 85% of working capital coming from this source (up 4%) since Sept. ‘17.

A €300 million Brexit Loan Scheme was announced in Budget 2018 and launched at end March 2018. The purpose of the Scheme is to provide short term working capital to assist Irish small businesses adapt and innovate in response to the challenges posed by Brexit. Loans provided under the Scheme are between €25,000 and €1.5 million with a maximum interest rate of 4%, a meaningful reduction compared to the current cost of credit for SMEs. In addition, loans below €500,000 do not require security. The Scheme is offered by the Strategic Banking Corporation of Ireland (SBCI) through participating finance providers, including Bank of Ireland, Ulster Bank and Allied Irish Bank, a key objective of the SBCI is to ensure that SMEs can access low cost flexible loans from a variety of sources. Due to state aid rules, the Scheme is not available to primary producers in the agriculture sector or to the fishing sector; however, it is open to food businesses.

The Microenterprise Loan Fund, administered by Microfinance Ireland, is an additional source of credit that provides loans for up to €25,000 to start-up, newly established, or growing micro enterprises employing fewer than ten people. Up to the end of Q3 2018, €26.7m in loans have been approved, supporting 4,407 jobs.

The Credit Review Office is another government initiative that helps SMEs who have had an application for credit of up to €3 million declined or reduced by the main banks, and who feel that they have a viable business proposition. This is a strictly confidential process between the business, the Credit Review Office and the bank. The Credit Review Office supports the appealer in more than 50% of cases.

The Government remains committed to the Farming and SME sector and sees it as the key engine of ongoing economic growth. I can assure the Deputy that my Department, working with other relevant Departments, Bodies and Agencies, such as the Credit Review Office, will continue to advance policies to ensure the availability of both bank and non-bank credit so as to ensure that viable Irish business have sufficient access to finance.

Questions Nos. 71 and 72 answered with Question No. 69.

Corporation Tax Regime

Ceisteanna (73)

Bernard Durkan

Ceist:

73. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that foreign direct investment here does not become affected by measures to apply corporation profits tax here on profits earned abroad (details supplied); and if he will make a statement on the matter. [7623/19]

Amharc ar fhreagra

Freagraí scríofa

I understand that my officials sought to speak with staff in the Deputy's office seeking clarification regarding the substance of the question posed. In the absence of a response from the Deputy's office it is with regret that I cannot answer this question at this time.

However I would like to assure the Deputy that my officials are available to discuss this matter, and if he wishes to subsequently ask the question again I would be happy to reply substantively.

Tax Code

Ceisteanna (74)

Bernard Durkan

Ceist:

74. Deputy Bernard J. Durkan asked the Minister for Finance the position in regard to discussions at EU level to remove taxation policy from member states, having particular regard to Ireland's peripheral location; and if he will make a statement on the matter. [7624/19]

Amharc ar fhreagra

Freagraí scríofa

As the Deputy will be aware, a Commission communication entitled, "Towards a more efficient and democratic decision making in EU tax policy" has recently been published. This communication sets out a roadmap which aims to start a debate around changing the system of voting for tax files from unanimity to qualified majority voting, QMV.

The Commission roadmap identifies the "passerelle clause" as being the most feasible option for moving away from unanimity. This provides that the European Council could unanimously decide to move an entire policy area or part of a policy area from unanimity voting to QMV. The support of the European Parliament, as well as national parliaments, including Dáil Éireann, would also be required. This is a highly sensitive suggestion for many member states, including Ireland, as any move to change the voting method used for tax files would reduce member states' sovereignty.

Ireland believes that the current unanimity based voting procedure is the most appropriate voting system in the area of taxation. Indeed, over the last 4 years, over 21 Taxation initiatives have been agreed by Member States through this voting process. This is an average of one initiative being agreed every 3 months. This includes important Directives on VAT, administrative co-operation, Anti-Tax-Avoidance and also the EU list of non-cooperative tax jurisdictions.

Ireland’s tax sovereignty is an important issue for Irish citizens. During the referendum on whether or not to adopt the Lisbon treaty a political commitment was given by EU leaders to confirm that nothing in the Treaty impacted on Member States’ tax sovereignty.

Given the large volume of important agreements reached at EU level on tax issues, I do not see the need for, or merits of, any proposals to move away from the requirement for unanimity.

The issue was discussed at the ECOFIN meeting earlier this week. While I was unable to attend the meeting personally, I understand that a significant number of my fellow Ministers made clear that their Governments do not support any proposed change to how tax decisions are made at European level.

Capital Expenditure Programme

Ceisteanna (75)

Jonathan O'Brien

Ceist:

75. Deputy Jonathan O'Brien asked the Minister for Finance the capital projects completed by his Department since 2011; the initial contract value of same; the final cost of same; and the final cost of the capital projects that have had an ex post review, in tabular form. [7850/19]

Amharc ar fhreagra

Freagraí scríofa

Based on the clarification received from the Deputy's office stating that this PQ is concerned with projects with a cost of €10 million or more I can confirm that my Department has not had any capital project in excess of this amount since 2011.

National Children's Hospital Expenditure

Ceisteanna (76)

Mattie McGrath

Ceist:

76. Deputy Mattie McGrath asked the Minister for Public Expenditure and Reform the details of the information regarding the cost overruns associated with the new national children’s hospital prior to the delivery of budget 2019; and if he will make a statement on the matter. [7409/19]

Amharc ar fhreagra

Freagraí scríofa

Budget 2019 was published on 9 October 2018. The first full assessment of the cost overrun and the reasons for it was received by my Department in the form of a report from the National Paediatric Hospital Development Board submitted by the Department of Health on the 19 November. My Department reviewed the report and met with the Department of Health to discuss it on the 23 November and made a formal submission to me on 26 November.

Public Sector Staff Remuneration

Ceisteanna (77)

Bernard Durkan

Ceist:

77. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which public pay, conditions and agreements continue to be met; and if he will make a statement on the matter. [7615/19]

Amharc ar fhreagra

Freagraí scríofa

I refer the Deputy to my reply to PQ Ref: 6225/19 and PQ Ref: 6219/19, which were answered together on 07/02/2019.

Capital Expenditure Programme

Ceisteanna (78, 79, 82)

Mattie McGrath

Ceist:

78. Deputy Mattie McGrath asked the Minister for Public Expenditure and Reform if an assessment has been conducted by his Department with respect to the implications for capital expenditure projects in view of the cost overruns associated with the new national children’s hospital; and if he will make a statement on the matter. [7516/19]

Amharc ar fhreagra

Jonathan O'Brien

Ceist:

79. Deputy Jonathan O'Brien asked the Minister for Public Expenditure and Reform the status of the reallocation of €50 million from the capital health budget for 2019 and the allocation of €50 million across other departmental capital budgets; the capital projects to be delayed and deferred; and the original dates of commencement and revised dates of commencement, in tabular form. [7418/19]

Amharc ar fhreagra

Seán Sherlock

Ceist:

82. Deputy Sean Sherlock asked the Minister for Public Expenditure and Reform the Ministers he has met to discuss capital projects in their Departments since budget 2019; when the meetings took place; the projects discussed; if the projects discussed will be allocated extra funding; and if not, if money will be deducted from its budget, in tabular form. [7536/19]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 78, 79 and 82 together.

In my role as Minister for Public Expenditure and Reform I am responsible for setting the overall capital allocations across Departments and for monitoring monthly expenditure at a Departmental level. Responsibility for the management of individual projects rests with the relevant sponsoring Department or Agency.

We have examined all projects and programmes across government in order to meet the funding pressures accruing on the National Children’s Hospital project. This has allowed us to reschedule €75 million from projects such as in the case of the A5 Motorway in Northern Ireland, which is paused due to external issues. The Department of Health will also re-profile €24 million in capital funding across both 2019 and 2020 to facilitate multi-annual management of projects and works within the capital envelopes and to ensure the timely delivery of the National Children's Hospital project. A full list of the adjustments is set out below:

- re-scheduling of €27m arising in relation to the A5 Motorway in Northern Ireland;

- re-scheduling of €10m arising in relation to the National Forensic Science Laboratory;

- advance payment of a sum of €10m from the Department of Education and Skills in respect of higher education facilities at the National Children’s Hospital;

- an updating of the scheduled draw-down of €16m from the two Project Ireland 2040 Regeneration Funds, which are being profiled for expenditure throughout the course of both 2019 and 2020 without delays in project planning, design and delivery;

- re-profiling of payments of €4m under certain programmes of investment in Communications, Climate Action & Environment;

- €3m from the re-profiling of investment under the Flood Risk Management Programme of the Office of Public Works to allow for capacity to be built up over the course of the NDP period;

- revision of the schedule of drawdown of funding in the PER and Finance Groups of Votes totalling €3m; and

- €2m through changes to the timing of payments relating to certain capital works by the Department of Culture, Heritage and the Gaeltacht, with full project delivery scheduled across both 2019 and 2020.

While it is important to recognise and acknowledge the increased costs of the National Children’s Hospital project it is equally important to acknowledge the many projects that have been delivered on time and on budget through Project Ireland 2040.

We are continuing important investment programmes for roads and light rail, improving our environment, with 90 new schools under construction in 2019 and 700 benefitting from minor improvements. Investment will provide 10,000 social housing units and support better health outcomes with primary care facilities to be opened or upgraded in 18 locations nationwide.

Courts Service Properties

Ceisteanna (80)

Maureen O'Sullivan

Ceist:

80. Deputy Maureen O'Sullivan asked the Minister for Public Expenditure and Reform the plans of the Office of Public Works for a building (details supplied). [7432/19]

Amharc ar fhreagra

Freagraí scríofa

The property referred to by the Deputy is not in the control of the Office of Public Works but is vested in the Courts Service in accordance with section 26 of the Courts Service Act 1998.

National Children's Hospital

Ceisteanna (81)

Michael McGrath

Ceist:

81. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform when his officials were first informed of the contents of the memo to the Minister for Health dated 27 August 2018 regarding the new children’s hospital construction project cost update; and if he will make a statement on the matter. [7530/19]

Amharc ar fhreagra

Freagraí scríofa

I understand that the memo referred to is an internal Memo provided to the Minister for Health from his officials in the Department of Health.

The first full assessment of the cost overrun and the reasons for it was received by my Department in the form of a report from the National Paediatric Hospital Development Board submitted by the Department of Health on the 19 November. My Department reviewed the report and met with the Department of Health to discuss it on the 23 November and made a formal submission to me on 26 November.

Question No. 82 answered with Question No. 78.
Barr
Roinn