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 Header Item Written Answers Nos. 86-93
 Header Item Promissory Note Negotiations
 Header Item Banking Sector Redundancies
 Header Item Banking Sector Remuneration
 Header Item Fiscal Policy
 Header Item Additional Voluntary Contributions
 Header Item Pension Provisions
 Header Item Universal Social Charge Payments
 Header Item Alcohol Sales

Thursday, 20 December 2012

Dáil Éireann Debate
Vol. 787 No. 5

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Written Answers Nos. 86-93

Promissory Note Negotiations

 86. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if, in the absence of an agreement with the European Central Bank to restructure the liability, it is his intention to pay the €3.1 billion due to the Irish Bank Resolution Corporation on 31 March 2013 in respect of the promissory note [57613/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have previously stated that I am working to try and achieve a solution before the next scheduled instalment on the Promissory Note scheduled for next March. It would be very difficult for Ireland to make a payment on that date and so we continue to work on a deal with our European partners. I remind Deputies that the Government, together with all other 26 member states at the Euro Summit in October last year committed that:

As far as our general approach to private sector involvement in the euro area is concerned, we reiterate our decision taken on 21 July 2011 that Greece requires an exceptional and unique solution. All other euro area Member States solemnly reaffirm their inflexible determination to honour fully their own individual sovereign signature and all their commitments to sustainable fiscal conditions and structural reforms. The euro area Heads of State fully support this determination as the credibility of all their sovereign signatures is a decisive element for ensuring financial stability in the euro area as a whole.

The Irish Government will honour this commitment and will ensure that we work with our EU partners to address the situation in relation to the overall cost to the State of resolving the difficulties in our banking sector. This Government has consistently worked towards a consensual approach to decisions made with our European colleagues.

Banking Sector Redundancies

 87. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide details of the number of AIB employees who have applied to avail of the voluntary redundancy scheme; the estimated total cost of the voluntary redundancy scheme; if he will confirm the existing number of employees at the bank and the optimum number being targeted on the conclusion of the redundancy programme. [57614/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan AIB announced earlier in 2012 its intention to achieve a minimum of 2,500 voluntary redundancies by 2014 as part of a material cost-cutting drive to return the bank to viability. The voluntary exit programme is comprised of an Early Retirement (ER) programme and a Voluntary Severance (VS) Program. The ER component was opened to all areas of the bank and is now closed for future applications. The VS component has been staggered across different areas of the organisation and will be implemented on a phased basis out to 2014 depending on the needs of the business. I have been informed that as part of its regular reporting cycle, AIB will provide updates on headcount and operational costs, including updated costs with respect to the Exit Programme, as part of its annual results announcement in Q1 2013. AIB has also informed me that to date, the level of applications for ER and VS has exceeded 2,500 and AIB is therefore confident of attaining its minimum target reduction by 2014 on a purely voluntary basis while ensuring appropriate business risks are monitored and contained and appropriate customer service levels are maintained.

Banking Sector Remuneration

 88. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan when he expects to have the Mercer report on remuneration levels within the covered institutions to hand; when he expects to make decisions in respect of same and when he plans to publish the report; and if he will make a statement on the matter.  [57615/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am expecting the consultant’s draft report on a Review of Remuneration Practices & Frameworks at the Covered Institutions to be delivered by the end of the year, whereupon the findings will be reviewed by my Department and consultations with the various stakeholders will commence. I fully recognise that there is a real public interest in the levels of remuneration at the covered institutions. I will endeavour to have the details underpinning the review published in the shortest timeframe possible.

Fiscal Policy

 89. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the anticipated adjustment in budget 2014; if he will confirm the split between taxation and expenditure measures; and if he will confirm the amount of the adjustment that is already accounted for by way of carry forward of measures announced in budget 2013.  [57616/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan In my Budget Statement on 5 December last, I informed the House that the projected consolidation for 2014 and 2015 of €3.1 billion and €2 billion respectively is unchanged from the figures published in the Medium-Term Fiscal Statement three weeks before Budget 2013. The 2014 target for revenue consolidation is €1.1 billion, with €2 billion for expenditure consolidation. Around €600 million of the revenue consolidation will be provided through carry forward from measures announced in Budget 2013. This estimate of carry forward is inclusive of an estimated €200 million yield resulting from changes to take effect in 2014 to the maximum allowable pension fund, which was outlined in the Summary of 2013 Budget Measures. With regard to expenditure measures, over €100 million of the €2 billion expenditure consolidation outlined for 2014 will arise as a result of policy measures implemented in 2013. These savings mainly arise in the areas of social welfare, education and health spending. It should be noted that much of the carryover savings will go towards meeting the 2014 expenditure ceilings as set out for Departments in the Expenditure Report 2013.

Additional Voluntary Contributions

 90. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to his projection that allowing pre-retirement access to funded additional voluntary contributions will yield €100 million in 2013, if he will confirm the total value of draw down in 2013 upon which he is basing this yield; and if he will make a statement on the matter.  [57617/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan In my Budget 2013 speech, I announced that I would make provision in Finance Bill 2013 for persons making Additional Voluntary Contributions (AVCs) used to supplement their retirement benefits to withdraw up to 30% of the value of those contributions. Any amounts withdrawn will be subject to tax at the individual’s marginal rate. The option will be available for three years from the passing of the Finance Bill. This is a measure which will enable rather than incentivise individuals to access certain pension savings prior to retirement as I would also wish that people continue to provide for their retirement. As a result, the estimated Exchequer yield of €200 million over three years is conservative and is based on the assumption that 10% of the value of funded AVCs used to supplement retirement benefits (estimated at about €5.5 billion) will be drawn down over the period with half of that amount being drawn down in the first year.

Pension Provisions

 91. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he will provide a detailed statement of the basis of the estimated yield in 2014 of €250 million from proposed changes to the maximum allowable pension fund; the persons he now intends to consult with regarding this proposal; and if he will make a statement on the matter. [57618/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan On page A10 of the Budget 2013 booklet which accompanied my Budget speech, I indicated that the full-year yield from changes to the maximum allowable pension fund at retirement for tax purposes (the Standard Fund Threshold), together with other possible changes to be put in place in 2014 to give effect to the commitment in the Programme for Government to cap taxpayers' subsidies for pension schemes which deliver pension income of more than €60,000, is estimated at €250 million. The Budget 2013 booklet makes clear, however, that the estimated full-year savings are provisional at this time as further detailed analysis of the necessary changes and their impact will be required. As I mentioned in my Budget Speech, consultation on the specific changes required to the existing pension regime will continue with, among others, the pensions sector and the Departments of Public Expenditure and Reform and Social Protection.

Universal Social Charge Payments

 92. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the estimated number of pensioners that will be affected by the increase in the universal social charge for persons aged 70 years of age and over earning €60,000 or more. [57619/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that the estimated number of income earners aged 70 years of age and over, estimated by reference to 2013 incomes, who will be affected by the budgetary increase in the universal social charge for persons aged 70 years of age and over and earning €60,000 or more is estimated at approximately 8,900. I am also advised by the Revenue Commissioners that while social welfare pensions can be separately identified from other sources of income in Revenue statistics, it is not possible to do so in respect of income from other pensions. Consequently, there is no complete or reliable basis available to Revenue on which an estimate of the number of pensioners that will be affected by the increase in the universal social charge rates could be compiled. The figure is an estimate from the Revenue tax-forecasting model using actual data for 2010 adjusted as necessary for income and employment trends in the interim. It is, therefore, provisional and likely to be revised.

Alcohol Sales

 93. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the budget measures that specifically affect the off licence alcohol trade. [57621/12]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Deputy will be aware of the measures taken in relation to the excise on alcohol products in the Budget, namely an increase of 10 cent on a pint of beer or cider or a measure of spirits, and a €1 increase on a standard bottle of wine (all VAT inclusive), with pro rata increases on other alcohol products. These measures do not specifically affect the off-trade but will, if passed on, affect both the on- and off-trades.


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