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 Header Item Written Answers Nos. 246-263
 Header Item Bank Guarantee Scheme Bond Repayments
 Header Item State Debt
 Header Item Tax Code
 Header Item Ministerial Staff
 Header Item Euro Coins Production
 Header Item International Bodies Membership
 Header Item Tax Code
 Header Item Tax Code
 Header Item Property Tax Application
 Header Item Credit Availability
 Header Item NAMA Operations
 Header Item State Debt
 Header Item Revenue Commissioners Expenditure
 Header Item Customs and Excise Controls
 Header Item Revenue Commissioners Expenditure

Tuesday, 25 March 2014

Dáil Éireann Debate
Vol. 835 No. 1

First Page Previous Page Page of 118 Next Page Last Page

Written Answers Nos. 246-263

Bank Guarantee Scheme Bond Repayments

 246. 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 specify in detail the contingent liability exposure of the State relating to banking sector guarantees, including debts that have not yet matured under the eligible liabilities guarantee scheme and the also potential liabilities under deposit guarantee scheme; and if he will make a statement on the matter. [13629/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The outstanding Government Guarantees as at 31 December 2013 in relation to the Irish banking sector and the National Asset Management Agency are set out in the attached table. It should be noted that the total guarantees include a "double count" of €11.715 bn, as this risk is effectively covered both by the NAMA senior bond guarantee and by the guarantee to National Asset Resolution Limited.

   The Deposit Guarantee Scheme (DGS) provides that all eligible deposits, up to a limit of €100,000 per depositor per credit institution, are guaranteed to be repaid by the DGS. The Central Bank of Ireland is responsible for the operation of the DGS, which covers licensed credit institutions operating in the State. Each credit institution covered by the DGS is required to maintain a balance in the Deposit Protection Account (DPA) equivalent to 0.2% of their total deposits in order to fund the DGS.

  Where a depositor is entitled to compensation under the DGS, the Central Bank will make the payment in accordance with the DGS Regulations and will charge this payment on the deposit protection account. The Financial Services (Deposit Guarantee Scheme) Act 2009 provides that if the Central Bank charges on the deposit protection account any payment out of its own funds in accordance with the DGS Regulations, the amount of the payment shall, with the approval of the Minister for Finance, be repaid to the Central Bank out of the Central Fund or the growing produce of that Fund within 3 months. Section 8(2) of this Act provides that any amounts payable from the Central Fund to the Central Bank for such purposes shall be repaid to the Central Fund from the deposit protection account.

  As outlined above, the deposit protection account is funded by the credit institutions that are covered by the DGS. As such, any exposures under the deposit guarantee scheme will ultimately be recouped from credit institutions with the effect that any liability for the State should only ever be temporary in nature.

Guarantees to Irish banking sector/NAMARelevant StatuteAmount Outstanding End 2013 (€m)
Credit Institutions (Financial Support) Act 2008 Eligible Liabilities GuaranteeCredit Institutions (Financial Support) Act 200820,091
Exceptional Liquidity AssistanceCredit Institutions (Financial Support) Act 20080
National Asset Management Agency:

  
Senior Bond Guarantee

National Asset Management Agency Act 2009

34,618
Guarantee to National Asset Resolution Limited (this guarantee covers much the same risk as the senior bond guarantee)

Credit Institutions (Financial Support) Act 200811,715
Irish Bank Resolution Corporation Ltd (formerly Anglo Irish Bank)Credit Institutions (Financial Support) Act 2008n/a
Total 66,424

State Debt

 247. 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 breakdown of Ireland's off-balance sheet debt; and if he will express the total as a percentage of our GDP; and if he will make a statement on the matter. [13633/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Under the European System of Accounts, the public sector consists of all entities controlled by government. It is split between general government and the public corporations.

  - General government in Ireland consists of the Exchequer, Government departments and offices, Local Authorities, and all public entities that are mainly financed by those bodies. General government debt is the consolidated debt of this sector.

  - The public corporations sector in Ireland consists of such bodies as the ESB, Bord Gáis and CIÉ in the non-financial corporations sector; and AIB and IL&P in the financial corporations sector; the Central Bank is also part of the public sector. The debts of these entities and other public corporations are not part of general government debt and are thus considered 'off-balance sheet'.

A register of public bodies is maintained by the CSO and is available at http://www.cso.ie/en/media/csoie/surveysandmethodologies/documents/pdfdocs/RegPublicSectorBodies.pdf  

  The CSO currently compile estimates of the liabilities of public corporations for transmission to Eurostat on a confidential basis, however from end 2014 these data will also be published nationally.  The current estimate for the total stock of liabilities of public corporations end-2012 amounts to 216% of GDP. Of this amount, 120% is debt of financial corporations and 82% is debt of the Central Bank.

  Notes

  1. The percentages above represent the liabilities of public corporations. A measure of net debt of public corporations is not currently available. In the case of financial corporations and the Central Bank, the liabilities are largely matched by assets in the same asset classes that are used by the CSO to compute net debt.

  2. It is worth adding that the NAMA SPV is classified in the financial corporations sector in the national accounts. That is to say that the NAMA SPV is a private corporation and therefore its liabilities are not be included in the debts of public corporations. The liabilities of NAMA are, however, fully guaranteed by government and are therefore included in statement 1.11 of the Finance Accounts where it is shown for 2012 that NAMA held debt amounting to 16% of GDP. 3. The EU-wide definition of debt does not include pension liabilities of general government. An estimate of the pension liability of government of €116bn is given in the CSO Government Finance Statistics publication. This figure is based on a 2009 estimate by the C&AG which is currently being updated by the Department of Public Expenditure and Reform.

Tax Code

 248. Deputy Arthur Spring Information on Arthur Spring Zoom on Arthur Spring asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan under the tax agreements with the United States, the obligations an Irish citizen residing in Ireland has to pay income tax to Irish revenue on income from a US pension if tax is already paid to the US Government based on the income from the pension to pay income tax to Irish revenue on income from a US pension if the income amount is lower than the income tax threshold in the United States. [13649/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I assume that the Deputy is referring to a pension that, in the hands of a United States citizen, would be regarded as income for the purposes of United States tax.  On that basis,  I am informed by the Revenue Commissioners that, having regard to the terms of Article 18  of the Ireland-United States Double Taxation Agreement, a United States pension in consideration of past employment or a United States social security pension derived by an individual who is tax resident in Ireland is taxable only in Ireland.   In addition, under the terms of Article 19 of that Agreement, a pension paid out of funds created by the United States to an individual in respect of services rendered to the United States is only taxable in Ireland where the individual is a national of Ireland and is tax resident in Ireland.

The question of whether  an individual ultimately would have a tax liability in Ireland will depend on the amount of his or her total income, including pension income, and his or her personal circumstances, for example marital status, entitlement to tax credits etc.  Where under the terms of the Double Taxation Agreement income is taxable in Ireland, any US income tax thresholds would not be relevant.

For the sake of completeness, I should add that if a United States pension (other than a Social Security pension) would not be regarded as income for the purposes of US tax where it is received by an individual who is resident for tax purposes in the United States and not resident elsewhere, then such a pension would be exempt from Irish tax if received by an individual who is resident in Ireland for tax purposes.

Ministerial Staff

 249. Deputy Mary Lou McDonald Information on Mary Lou McDonald Zoom on Mary Lou McDonald asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the number of civil servants engaged in constituency work on his behalf; and the salaries, accommodation costs and expenses involved or associated with these duties. [13684/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan In my Department, the following civil service staff are assigned to work on constituency matters (no additional accommodation or expenses are involved or associated with these duties):

  

GradeSalary Scale (per annum)  Wholetime equivalent
1 Personal Assistant  €43,715 - €56,0601.00
1 Executive Officer€30,516 - €49,8371.00
1 Clerical Officer €20,859 - €33,6071.00
1 Clerical Officer (Worksharing)€23,042 - €36,2670.40

Euro Coins Production

 250. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his plans and that of the Central Bank of Irelands for 1 cent and 2 cent coins following the rounding trial in Wexford; and if he will make a statement on the matter.  [13755/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have received from the Central Bank, the final report of the 'Wexford Rounding Trial', held in Wexford town last year. The report is being examined in my Department. Following that examination, a decision will be taken on any further action with regard to general use of 1c and 2c coins.

  Question No. 251 answered with Question No. 185.

International Bodies Membership

 252. Deputy Timmy Dooley Information on Timmy Dooley Zoom on Timmy Dooley asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the reason Ireland is not a listed, non-regional member of the African Development Bank (details supplied); and if he will make a statement on the matter. [13766/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As indicated in the Government s policy document One World, One Future Ireland's Policy for International Development published in May of 2013, the potential benefits of membership of the African Development Bank are under on-going consideration. Ireland is currently a member of several Multilateral Development Banks (MDBs) such as the World Bank, Asian Development Bank, Council of Europe Development Bank and the European Bank for Reconstruction and Development. Ireland considers MDBs to be an effective channel through which to distribute aid because contributions to the MDB can be aggregated with other countries contributions and be spread across a wider number of regions and thematic areas than would be possible through a bilateral aid programme. In this way, the multilateral channel is an efficient and effective complement to Ireland's international aid programme which focuses selectively on key partner countries and priority areas.  As the Deputy may be aware, Africa has been the main focus of Ireland's aid programme for many years and eight of Ireland's nine partner countries are in Africa.

As the Deputy will be aware, the Government is conscious of the importance of seeking new sources of growth opportunities for Irish business and this has been a priority of this Government since it entered office. Joining an MDB enables companies from that country to tender for contracts for development projects, however it should be noted that there is not an automatic entitlement or a minimum country allocation for the awarding of contracts. Instead, the focus of the MDB when awarding is on quality and competitiveness, and each tender is evaluated on its own merits.

Joining an MDB is a long-term decision and involves the consideration of many factors such as the strategic fit between the MDB and the country s own development priorities, complementarity with the country s bilateral aid programme and the performance of the MDB and its impact on development issues. Therefore, there are wider considerations than procurement and business opportunities. In addition, I would like to remind the Deputy that Ireland's aid is 100% untied and there is great pride in not mixing development priorities and business opportunities by tying our aid contributions. Another important factor in considering MDB membership is the financial implication for a country, arising from the initial capital requirement and the regular contributions thereafter. As a result of the tight fiscal and budgetary constraints of recent years, Ireland was unfortunately not in a position to consider joining additional MDBs.

I can advise the Deputy that a review of Ireland's MDB membership is in progress. Discussions have been on-going between officials in my Department and colleagues in the Department of Foreign Affairs and Trade regarding potentially joining the African Development Bank. These discussions are in the early stage, with options currently being explored, and this matter will continue to receive careful consideration in the months ahead.   Ireland's development policy takes a whole-of Government approach and as such, decisions relating to MDB membership will be taken on that basis and only when all options have been considered and all relevant stakeholders have been consulted.

I would refer the Deputy to Ireland's Africa Strategy which was launched in 2011. This sets out an overarching framework for Ireland's development and trade strategy for Africa. As part of the Africa Strategy, support will be provided this year to assist Irish companies in bidding for contracts tendered under the European Development Fund, of which Ireland is a member, for the Africa region.

Tax Code

 253. Deputy Billy Timmins Information on Billy Timmins Zoom on Billy Timmins asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the position regarding a tax-free allowance in respect of a person (details supplied); and if he will make a statement on the matter. [13863/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I have been advised by the Office of the Revenue Commissioners that in this case (details supplied) the person concerned is assessed jointly with her husband. The Department of Social Protection pension paid to her husband is taxed by a reduction of the credits and rate bands as outlined on the Tax Credit Certificate that issued on 10th January 2014.   Wicklow District, Office of the Revenue Commissioners will contact the person concerned directly to discuss the possible redistribution of her tax credits.

Tax Code

 254. Deputy Denis Naughten Information on Denis Naughten Zoom on Denis Naughten asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to his Department's discussions with the Department of Agriculture, Food and Marine, his plans to address taxation issues which arise as a result of the transfer of leased single farm payment entitlements; and if he will make a statement on the matter. [13900/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan A single farm payment entitlement is a chargeable asset for capital gains tax (CGT) purposes and once acquired it may be disposed of by way of sale, gift etc. Accordingly, gains arising from the disposal of single farm payment entitlements are chargeable to CGT in the same way as gains made on any other chargeable assets. Where total gains in any year do not exceed €1,270 they are not chargeable to CGT.

With regard to the transfer of single farm payment entitlements for VAT purposes, where a payment entitlement is sold without land then VAT is due at the standard rate on the sale if the sale proceeds exceed the relevant threshold for VAT registration (currently €37,500). However, where a payment entitlement and land are sold together to a person who intends to carry on the farming business, then the sale may be treated as the transfer of a business and not subject to VAT. There may be other less significant tax implications in certain instances.

As the Deputy has noted, officials in my Department are considering this issue with officials from the Department Agriculture, Food and the Marine.  However, I have no plans at this time to alter the tax treatment referred to above. 

Property Tax Application

 255. 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 person responsible for the payment of the local property tax where a receiver has been appointed to the property by a financial institution; and if he will make a statement on the matter. [13905/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan Under the Finance (Local Property Tax) Act 2012 (as amended), the person who is the liable person on the liability date for a particular year is the person who is responsible for the payment of Local Property Tax (LPT) for that year. Thus, for example, the person who is the liable person on 1 November 2013 is responsible for the payment of LPT for the year 2014.

In general, the owner of a residential property is the liable person and continues to be so notwithstanding the appointment of a receiver. However, where a financial institution enforces its security over a property by taking possession of the property, the financial institution, as a mortgagee in possession , displaces the owner of the property as the liable person.

While a receiver is not a liable person under the Finance (Local Property Tax) Act 2012 (as amended), it can happen that he or she may assume responsibility for payment of LPT. However, such responsibility does not come within the scope of the LPT Act.  It is not possible to give a definitive answer about the circumstances in which this might happen as it will depend on the terms of the particular mortgage deed between the property owner and the financial institution, the terms under which the receiver is appointed and whether, depending on when the mortgage deed was created, it is governed by the Conveyancing Act 1881 or the Land and Conveyancing Law Reform Act 2009. 

Credit Availability

 256. Deputy Dara Calleary Information on Dara Calleary Zoom on Dara Calleary asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on the Central Bank of Ireland figures that show only €1.9 billion in new lending to small and medium enterprises in 2013 versus the €4 billion target; and if he will make a statement on the matter. [13911/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy is aware, the Government has imposed SME lending targets on AIB and Bank of Ireland for the three calendar years, 2011 to 2013. Each bank was required to sanction lending of at least €3 billion in 2011, €3.5 billion last year and €4 billion in 2013 for new or increased credit facilities to SMEs. Both banks have achieved their 2011 and 2012 targets. I am informed that both banks sanctioned circa €4bn in lending in 2013.

The figure of €1.9bn referred to by the Deputy relates to gross new lending to non-financial, non-property related SMEs during 2013 and is contained in the Central Bank publication "Trends in Business Credit and  Deposits: Q4 2013". This document is available on the Central Bank website: http://www.centralbank.ie/polstats/stats/cmab/Documents/2013q4_ie_trends_in_business_credit_and_deposits.pdf  

  The Government recognises that SMEs are the lifeblood of the economy and play a vital role in the continuing recovery of employment growth in our country. In this regard specific measures to promote access to finance for SMEs are a central feature of the Government's Action Plan for Jobs 2014.

  Question No. 257 answered with Question No. 209.

  Question No. 258 answered with Question No. 218.

NAMA Operations

 259. Deputy Thomas P. Broughan Information on Thomas P. Broughan Zoom on Thomas P. Broughan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if the review of the operations of the National Asset Management Agency, which is being carried out by the Comptroller and Auditor General, will be made publically available. [13963/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As per Section 226 of the NAMA Act I will lay the report before the Houses of the Oireachtas following its completion by the Comptroller and Auditor General. I am advised that this review is being conducted and the report should be finalised and presented to me shortly.

State Debt

 260. Deputy Thomas P. Broughan Information on Thomas P. Broughan Zoom on Thomas P. Broughan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the amounts of senior debt he expects the National Treasury Management Agency to have repaid by the end of each of the following years 2014, 2015, 2016 and 2017. [13964/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As the Deputy will be aware to date NAMA has redeemed a total of €10.5 billion of the Senior Bonds which were issued as consideration for the original loans acquired from the participating institutions in 2010 and 2011. This represents 35% of the senior debt issued in 2010 and 2011 by NAMA to acquire its original loan portfolio.

 I am advised that the Chairman of NAMA recently stated that, by the end of 2014, 50% of its senior debt may be repaid if it can achieve all the sales that are currently in the pipeline. I am further advised that the NAMA Board reviews, on a regular basis, the timeframe over which it expects to repay its liabilities and, in doing so, it takes into account its asset disposal projections, cash generation and broader market conditions. I am advised that senior debt redemption targets for 2015 and subsequent years are currently under consideration by the Board. When the Board has agreed these targets they will be submitted to me for approval. 

In the context of my Departments review, I have asked NAMA to evaluate their disposal timing and strategy in the context of current market demand and explore the advantages and disadvantages of accelerating its disposal strategy, which includes accelerated bond redemptions.

Revenue Commissioners Expenditure

 261. Deputy Seán Kenny Information on Seán Kenny Zoom on Seán Kenny asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the additional equipment or resources the customs and excise division of the Revenue Commissioners have received in 2013 via the EU; and if he will make a statement on the matter. [14029/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that a scanner van, an additional detector dog and three modern replacement baggage x-ray scanners, which were all part-funded under the EU's Hercule II programme, were brought into service during 2013.

The scanner van is a specialist vehicle that incorporates x-ray and radiation detection facilities. It is used for monitoring baggage and cargo at ports and airports for drugs, tobacco products, radioactive materials and other contraband. It also allows Revenue enforcement officers to perform controls at other locations such as warehouses and courier depots.

The additional detector dog brought the complement of detector dog teams to 14. Three more teams are being commissioned at present, and further funding under the Hercule II programme has been made available for that purpose. The three replacement baggage x-ray scanners are located at Dublin and Shannon Airports and Rosslare Ferry Port. This additional or improved scanning capability, and the additional detector dog, will play an important part in Revenue's work to detect and seize illicit products and substances. The Revenue Commissioners will keep their requirements in this field under review, taking account of technological developments and emerging circumstances and requirements, and will seek to avail of EU support for capability enhancements, where available.

Customs and Excise Controls

 262. Deputy Michelle Mulherin Information on Michelle Mulherin Zoom on Michelle Mulherin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the number of customs and excise cutter patrol boats that are assigned to patrol the coastline of the west of Ireland; and if he will make a statement on the matter. [14041/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that they currently have two cutters in service, RCC Suirbheir (brought into service in 2004) and RCC Faire (brought into service in 2009).  They are managed and operated by the Revenue Maritime Unit which is based in Cork.

The Maritime Unit has a national remit as specialists in coastal risk.  The Unit works very closely with locally based staff in all coastal areas, helping with the development of onshore intelligence as well as patrolling and conducting targeted operations using the cutters.  Details of cutter deployment are not divulged for operational reasons, but there is an annual plan agreed with the management of each Revenue Region to ensure that the cutters and Maritime Unit staff are deployed as required in all parts of the coastal area.  In 2014, the management of the Border Midlands West Region have agreed an extensive programme of work with the Maritime Unit, including surveying and assessing risk in the Region.  This will require the presence of the Maritime Unit and of the cutters along the West coast for extended periods this year.

The Maritime Unit is involved on an ongoing basis in the patrol and monitoring of the State's maritime jurisdiction and adjacent waters.  These patrol and monitoring activities are aimed at the prevention, detection, interception and seizure of prohibited and restricted goods (including drugs) smuggled or illegally imported into, or intended to be exported out of, the State/EU. They are also involved in servicing national and international Memoranda of Understanding and Mutual Assistance requests from other jurisdictions. 

The Revenue cutters are part of a multi-faceted strategy employed by Revenue in combating drugs trafficking and other smuggling by sea. This strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis and ongoing review of operational policies.

Revenue Commissioners Expenditure

 263. Deputy Michelle Mulherin Information on Michelle Mulherin Zoom on Michelle Mulherin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the number of drug sniffer dogs that are allocated by the Revenue Commissioners to patrol the Border, midlands and west region; and if he will make a statement on the matter.  [14042/14]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by the Revenue Commissioners that they currently have 14 detector dogs at their disposal, 8 of which are specifically trained in drugs detection. One detector dog team focused on drugs is based in Revenue's Border, Midlands and West Region, and teams from other areas of the country are available for deployment within the Region as required, on a risk assessment basis.

The experience of the Revenue Commissioners is that detector dog teams play an important part in detecting and seizing illicit drugs, cash and tobacco.  Three additional dog teams are being commissioned at present, two of which will have drugs detection capability. This will bring the total number of teams with drugs detection capability to 10. The Commissioners consider that this complement will provide the requisite support for their detection and enforcement work, but the position will be kept under review on an ongoing basis, in light of emerging circumstances and requirements.


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