Houses of the Oireachtas

All parliamentary debates are now being published on our new website. The publication of debates on this website will cease in December 2018.

Go to oireachtas.ie

 Header Item Labour Market (Continued)
 Header Item Written Answers Nos. 131-150
 Header Item Insurance Industry
 Header Item Tax Code
 Header Item Tax Code
 Header Item Tax Credits
 Header Item Revenue Commissioners Reports
 Header Item Primary Medical Certificates Provision
 Header Item Tax Reliefs Eligibility
 Header Item State Aid
 Header Item Fiscal Policy
 Header Item Tax Yield
 Header Item State Aid
 Header Item State Aid
 Header Item Ireland Strategic Investment Fund Investments

Tuesday, 17 October 2017

Dáil Éireann Debate
Vol. 960 No. 4

First Page Previous Page Page of 86 Next Page Last Page

  2 o’clock

Written Answers Nos. 131-150

Insurance Industry

 131. Deputy Charlie McConalogue Information on Charlie McConalogue Zoom on Charlie McConalogue asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the reason the Government has not agreed to cover 100% of compensation claims against persons (details supplied); if this means former customers are now potentially liable for partial costs of claims; if he will reconsider his approach on this issue; and if he will make a statement on the matter.  [43664/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe Setanta Insurance was placed into liquidation by the Malta Financial Services Authority on 30 April 2014. As it was a Maltese incorporated company, the liquidation is being carried out under Maltese law.

As you are aware, the Supreme Court delivered its judgment on 25 May 2017 and overturned the previous decisions of the High Court and the Court of Appeal that the Motor Insurers’ Bureau of Ireland (MIBI) is liable in respect of third party motor insurance claims made against the policyholders of Setanta Insurance. The consequence of this is that the Insurance Compensation Fund (ICF) has been deemed responsible for the payment of such third party claims.

As the judgment has been delivered, the process of making payments in accordance with the provisions of the Insurance Act, 1964, as amended, has commenced. Under the current legislation payments can only be made out of the ICF, with the approval of the High Court and only if it appears to the High Court that it is unlikely that the claim can be met otherwise than from the ICF. If satisfied, the High Court can order payments out of the ICF up to 65% (or €825,000, whichever is the lesser) due to relevant claimants. 

Over and above the 65% ICF payment, it is expected that a proportion of the balance of money due to third-party claimants will be met from the proceeds of the distribution of Setanta's assets on completion of the liquidation process. The liquidator commissioned actuarial consultants, Willis Towers Watson, to carry out an analysis of Setanta Insurance's claims reserves as at 30 June 2017 and this has now been completed. The report estimates the claims reserves at between €105.9 million and €112.9 million. This is an increase from the first report in 2014, which estimated the claims reserves at between €87.7 million and €95.2 million.

A consequence of this is that based on this actuarial report, the liquidator now estimates that he will not be in a position to meet more than 22% of the claims out of the assets of the liquidation once all matters in the liquidation have been concluded, rather than the not more  than 30% of claims figure previously indicated. 

My Department is currently considering the implications of this actuarial report. In addition, you should note that there is also a legal concern that any Government intervention could undermine the priority status of claimants in the liquidation. The Department of Finance is therefore seeking legal advice on the impact on the State's ability to recover from the liquidated company if it were to compensate third party claimants.

Once this legal concern is clarified, the Government will be in a better position to consider its response to this issue including the implications this may have for all connected persons.

Tax Code

 132. Deputy Pat Deering Information on Patrick Deering Zoom on Patrick Deering asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe if he can confirm if all air crew (details supplied) pay their tax under Schedule E; and if he will make a statement on the matter.  [43668/17]

 133. Deputy Pat Deering Information on Patrick Deering Zoom on Patrick Deering asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe if Schedule E has been operated by all airlines in respect of all crew regardless of whether they are employed under a contract of service or a contract for service since 1 January 2010.  [43669/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe I propose to take Questions Nos. 132 and 133 together.

I am informed by Revenue that Section 127B of the Taxes Consolidation Act 1997 came into effect on 1 January 2011. This section provides for the taxation under Schedule E of employment income arising to any member of a flight crew in circumstances where the duties are exercised on aircraft operated in international traffic and where the place of effective management of the aircraft operator is in the State. The provision applies irrespective of the place of residence of the crew member.

Part 42 Chapter 4 of the Taxes Consolidation Act 1997 imposes an obligation on employers to make deductions at source under the PAYE system from the payment of emoluments to an employee (i.e. an individual operating under a contract of service) where those emoluments are taxable under Schedule E.

Thus, where the provisions of Section 127B apply, flight crew will pay tax on their employment income under Schedule E and will be subject to deductions at source under the PAYE system. In the case of a non Irish resident individual, whether this charge is relieved from Irish tax will depend on whether a Double Taxation Agreement is in place between the State and the jurisdiction in which the employee resides.

Section 127B only applies where the individual is an employee and does not apply in the case of an individual operating under a contract for service (i.e. self employed). Where an individual is operating under a contract for service the individual is required to account for the correct tax due under self-assessment rules. Any such individual is required to file an annual income tax return.

Pursuant to Section 851A of the Act, which provides for taxpayer confidentiality, Revenue cannot disclose information relating to a particular taxpayer or a narrowly defined group of taxpayers.

Tax Code

 134. Deputy Fergus O'Dowd Information on Fergus O'Dowd Zoom on Fergus O'Dowd asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe his views on a matter raised by a person (details supplied) regarding the tax appeals system; and if he will make a statement on the matter. [43690/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The objectives of the Finance (Tax Appeals) Act 2015 are to reform the tax appeals system with a view to ensuring an enhanced and cost effective appeal mechanism for tax cases. The Act, which was commenced on 21st March 2016, inter alia provides for the establishment of the Tax Appeals Commission (TAC) which was established on the same date. A key feature of the legislation is that taxpayers now make their appeals against Revenue decisions directly to the TAC and not through Revenue.

The TAC has recently undertaken a consultative process related to the operation of its rules of procedure involving all stakeholders. This was a listening exercise providing an opportunity to raise issues about the operation of the reformed tax appeals system. I have recently received a report from the Tax Appeal Commissioners in relation to their consultation exercise which is under consideration in my Department.

In relation to the issues raised in the details supplied with the Deputy’s question, Revenue has a statutory obligation to collect tax, pursue recovery of tax debt and ensure that the tax system is administered in a fair and equitable manner. While tax write out features in the overall approach to tax debt management in all modern tax administrations, in the overall context of the collection and enforcement effort, the extent of recourse to write out by Revenue is very infrequent. The only circumstance where tax is written out is where a business/taxpayer is adjudicated insolvent, has ceased to trade with no assets, where collection is uneconomic to pursue, or where collection would cause undue hardship. Where a decision not to pursue a debt is made, the debt effectively becomes dormant. Tax write out only reflects a decision not to pursue the debt for a period of time and in certain cases, the write out can be reversed if and when Revenue considers that the taxpayer’s circumstances have changed. 

All write-out cases are closely monitored by the Comptroller and Auditor General. Chapter 21 of the recent Comptroller & Auditor General ‘Accounts of the Public Services’ report sets out the broad principles underlying Revenue’s approach to tax debt collection and reviews Revenue’s processes for ‘writing out’ debt deemed to be uncollectible, the reasons underlying the write outs and the amounts of debt written out by category of tax.

In relation to Revenue’s use of counsel and appeals to the Courts I am advised by Revenue that it does not always engage counsel irrespective of the size of the case. Revenue has robust internal procedures concerning the use of counsel, both junior and senior. The decision to engage counsel in an appeal is dealt with on a case by case basis. There are appeals where Revenue officers present Revenue’s case and there are appeals, particularly cases in which a point of law, rather than the quantum of a tax liability, is being disputed, where counsel (whether junior or senior) is more likely to be engaged.

Revenue also advises that any decision to pursue an appeal case to the Courts following a determination of Appeal Commissioners follows an analysis of the both the quantum of tax at stake and the precedential nature of the point of law in question. I am advised that certain cases where a relatively small quantum of tax is a stake could result in a significant loss to the Exchequer if an incorrect interpretation of law is accepted and applied generally, and that it is Revenue’s duty to pursue cases where doubt exists as to the correct position.

In relation to an opportunity to settle I am advised by Revenue that all taxpayers with an appeal have had, and continue to have, the opportunity to settle the appeal by agreement with Revenue. On 21 March 2016, the date on which the Finance (Tax Appeals) Act 2015 came into operation Revenue was still dealing with appeals that were made before this date but that had not yet been referred to the Appeal Commissioners. Revenue was obliged under Section 31 of the 2015 Act to refer such appeals to the TAC as soon as practicable after 21 March 2016. However, before doing so, Revenue was required to notify the appellant of this statutory requirement and to request that the appellant indicate whether he or she wished to settle the appeal by agreement with Revenue or to have the appeal referred to the TAC for hearing. Where the appellant indicated a wish to settle the appeal by agreement but agreement was not then reached, Revenue was required to refer the appeal to the TAC.

In addition to this express statutory provision, Revenue advise that they are always willing to engage in discussion with taxpayers and their agents with a view to settling appeals prior to any hearing before the TAC and also prior to any hearing by the Courts where a case proceeds to that level.

As regards opportunities to address backlog I am advised that of the backlog of appeal cases on hands there is a significant volume of cases that may potentially by addressed in groups where the matter in dispute is common across a number of taxpayers. While the authority to consider appeal cases in this manner is statutorily vested in the TAC,  Revenue advises that it is very supportive of this approach and will provide any assistance necessary to the TAC to enable it to address the backlog of cases by considering appeals in groups where this is an appropriate approach.

Question No. 135 answered with Question No. 116.

Tax Credits

 136. Deputy Paul Kehoe Information on Paul Kehoe Zoom on Paul Kehoe asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe his plans to provide tax credits for private well owners, group water schemes or those who have financed their own water supply but are also required to pay for water from general taxation; and if he will make a statement on the matter. [43857/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe I have no plans at present to provide a tax credit for individuals in the manner described by the Deputy. More generally, the funding of water services is a matter for the Minister for Housing, Planning and Local Government.

Revenue Commissioners Reports

 137. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe whether his or his officials' attention have been drawn to the fact the Revenue Commissioners are still working on the implications of a border on trade and customs in Ireland post-Brexit.  [43865/17]

 138. Deputy Micheál Martin Information on Micheál Martin Zoom on Micheál Martin asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe if the Revenue Commissioners' report on customs that was commenced in 2015 was a rolling report; when his Department was informed of its contents; and when this information ceased.  [43866/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe I propose to take Questions Nos. 137 and 138 together.

  I am informed by the Revenue Commissioners that the above mentioned report is now available on their website at www.revenue.ie

  The published draft was an internal working paper and a preliminary analysis which was compiled in September 2016, following the UK vote in June 2016 to exit the EU. It is clear that such working papers are necessary to support the deliberative process.

  However, it is important to note that matters have moved on significantly since September 2016 and in particular since Article 50 was triggered in March 2017. As such, I note that this document remains in draft format and was not finalised as it was overtaken by consequent major developments and policy statements. I am informed that it does not reflect Revenue’s current view on Brexit.

  Like all Government agencies, the Revenue Commissioners are actively engaged in examining a range of scenarios in order to support Ireland's objectives. This work is being undertaken within the whole-of-Government framework previously coordinated by the Department of the Taoiseach and now led by the Department of Foreign Affairs and Trade. The precise customs arrangements that will apply after Brexit will depend on the outcome of negotiations between the EU and UK however it is clear that political solutions must be found before technical resolutions can be applied.

  The Government’s priorities in relation to the unique concerns that arise for Ireland in the context of Brexit are very clear - to maintain the Common Travel Area and to protect the gains of the peace process and the Good Friday Agreement in all its parts, including avoiding a hard border.

  Evidently the closest trading relationship between the UK and EU is best for Ireland. The Taoiseach has reiterated this position on many occasions, most recently in the Dáil last week.

  The Government welcomes that these priorities have been reflected in the EU’s negotiating position and further welcomes and supports the Taskforce’s paper on the “Guiding Principles for the dialogue on Ireland/Northern Ireland”, which was published on 7 September. The paper builds on the European Council Guidelines and reflects the priority Irish issues identified by the Government, including that, in view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required to avoid a hard border, including any physical border infrastructure. This must be achieved in a way which ensures that Ireland's place within the Internal Market and Customs Union is unaffected. The paper also makes it clear that it is the UK’s responsibility to propose workable solutions in this regard. It is the Government’s view that the UK staying in the customs union and single market, or as close as possible to that, would be the best solution.

  However, it is important that internal analysis continues in the meantime. Several helpful reports and working papers have been published by the ESRI, Intertrade Ireland, and business representative bodies. Most recently, my Department and Revenue co-sponsored an ESRI study, ESRI Working Paper 573 on Ireland’s Trade and Transport Connections, which was published on Thursday 12 October 2017.

Primary Medical Certificates Provision

 139. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe when a primary medical certificate will be awarded in the case of a person (details supplied); and if he will make a statement on the matter. [43878/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The provision of a primary medical certificate is based on a professional clinical determination by the Senior Medical Officer for the relevant local Health Service Executive. To qualify for a primary medical certificate an applicant must be permanently and severely disabled within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994.

An unsuccessful applicant can appeal the decision of the Senior Medical Officer to the Disabled Drivers Medical Board of Appeal. The Medical Board of Appeal is independent in the exercise of its functions to ensure the integrity of its clinical determinations.

Tax Reliefs Eligibility

 140. Deputy Paul Kehoe Information on Paul Kehoe Zoom on Paul Kehoe asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe if there is an option available for a retired person living here to receive a refund on medical expenses when only paying tax on their income in the UK; and if he will make a statement on the matter. [43926/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe In the absence of specific information it is difficult to provided a comprehensive reply to the Deputy. Relief in respect of health expenses, granted in accordance with section 469 of the Taxes Consolidation Act 1997, is used to reduce the Irish tax liability of an individual in respect of the year of assessment in which the expenses are incurred. In general, if an individual is tax resident in Ireland, their world-wide income is taxable in Ireland and relief can be claimed for medical expenses. However, where an individual’s sole income for a year of assessment is not taxable in Ireland, for example where that income is a UK Government pension, then it is not possible to claim relief as no tax liability arises against which to claim the relief. 

State Aid

 141. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the dates his Department has received for an appeal by the State against the European Court of Justice, ECJ, ruling on a case (details supplied); and if he will make a statement on the matter.  [43945/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The Government profoundly disagrees with the European Commission’s analysis in the Apple State Aid case.

An appeal is therefore being brought before the European Courts. Such an appeal takes the form of an application to the General Court of the European Union (GCEU), asking it to annul the Commission’s Final Decision.

The Attorney General prepared the legal grounds in support of the annulment proceedings and the application was lodged in the GCEU in 2016. As is normal practice, a summary of these have been published in the Official Journal of the European Union. They were also published on the Department of Finance’s website in December 2016.

The case has been granted priority status and is progressing through the various stages of private written proceedings before the GCEU. It is at the discretion of the court to determine if there will be oral proceedings, either in public or in private. It will likely be several years before the matter is ultimately settled by the European Courts. 

As this is the subject of open legal proceedings, it will not be possible to comment further, in particular on any of the individual elements of the State’s legal case in defence of our position. This is important to ensure that we do not prejudice our own legal case.

Notwithstanding the appeal, Ireland is obliged to comply with binding Articles of the Commission’s Decision regarding recovery. Officials and experts from across the State have been engaged in intensive work to ensure that Ireland complies with all its recovery obligations as soon as possible.

  Question No. 142 answered with Question No. 116.

Fiscal Policy

 143. Deputy Pearse Doherty Information on Pearse Doherty Zoom on Pearse Doherty asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the detailed allocation for fiscal space in budget 2018; and if he will make a statement on the matter.  [43986/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The allocation for fiscal space in Budget 2018 was flagged in note 2, table A8 of the Economic and Fiscal Outlook of Budget 2018 book as being unchanged from that which was presented in Summer Economic Statement 2017. In my Budget 2018 speech, I announced that the remaining unallocated fiscal space for 2018 would amount to a little over €500 million in nominal terms, and that €180 million of that had since been committed to the Public Service Stability Agreement. To augment the remaining fiscal space, I introduced a range of discretionary revenue measures as set out in the Tax Policy Changes document published on Budget day. 

As I am sure the Deputy is aware, the distribution of the Budget day package resulted in additional expenditure measures of just under €900 million and tax reductions of €335 million.

Tax Yield

 144. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the estimated tax revenue that will be generated by increasing stamp duty on commercial property from 2% to 6%; if the estimate was based on current 2017 volume; if it is assumed that 2018 sales volumes will equal 2017 volumes; and if he will make a statement on the matter.  [44052/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The Revenue Ready Reckoner (http://www.revenue.ie/en/corporate/information-about-revenue/statistics/ready-reckoner/index.aspx, on page 18) shows the effect of a 0.5% increase in the Stamp Duty rate on non-residential property (€47m). This is multiplied up to €94m for a 1% increase, or €376m for a 4% increase.

  I am advised by Revenue that the estimated yield for 2018 is based on payments of Stamp Duty on the purchase of non-residential property in 2016 and an assessment of trends in payments in 2017 to date. The estimated yield makes an assumption of no behavioural change.

State Aid

 145. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the organisation which will be underwriting loans for home building finance Ireland, either HBFI itself or NAMA; the way in which NAMA and HBFI will interact; if HBFI has flexibility to provide different types of finance from guarantees to mezzanine finance; if it is strictly confined to providing loans; and if he will make a statement on the matter. [44054/17]

 146. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the percentage of the funding of residential construction projects home building finance Ireland, HBFI, will provide; if there is an upper limit on the amount it can provide; the restrictions in place in terms of collateral needed for projects; and if he will make a statement on the matter.  [44055/17]

 147. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the qualifying characteristics needed for a builder or a developer to obtain finance from home building finance Ireland, HBFI; the protections put in place to prevent HBFI crowding out funding from alternative sources; and if he will make a statement on the matter.  [44056/17]

 148. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the expected cost of funding charged on the loans home building finance Ireland, HBFI, will provide; the way in which the 2,000 houses per year estimate for HBFI was established; the way in which the 6,000 estimate was established; and if he will make a statement on the matter.  [44057/17]

 153. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe when he expects the HBFI to be up and running; when he expects the fund to commence lending; if the scheme has been given state aid approval by the European Commission; the way in which he expects the HBFI to be compliant with state aid rules; if he expects the HBFI to be affected by the state aid complaint already in process on NAMA; and if he will make a statement on the matter. [44062/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe I propose to take Questions Nos. 145 to 148, inclusive, and 153 together.

As announced in my Budget speech on 10 October 2017, it is my intention to establish Home Building Finance Ireland (HBFI) to provide funding on market terms to viable residential development projects whose owners are experiencing difficulty in obtaining debt funding. 

HBFI will be a stand-alone entity which will provide funding directly into the market.

HBFI will be designed to leverage off the extensive experience already available to the State to deliver this initiative and as such existing NAMA staff skills and expertise will be utilised to deliver this funding. However any lending provided in due course will be provided by HBFI which will be fully separate and will not impact NAMA's existing objectives or its Board’s strategic wind down plans. The exact staffing and servicing arrangements are currently being devised by my officials and NAMA and will be confirmed in due course.

In relation to the products that will be offered by HBFI, the fund will be designed to focus on the provision of debt funding to viable residential development projects. As the Deputy will be aware, the State is already providing a number of alternative supports into this market, including equity finance, through the ISIF’s existing residential development funding platforms.  

I am not in a position to confirm the specific product terms and conditions requested by the Deputy, as these will be set by the board of HBFI in due course. I can confirm that HBFI will be lending on commercial, market-equivalent terms and conditions, which would depend on the risk profile of each individual project, the quality of collateral and the creditworthiness of the borrower. This approach would be akin to a bank or private equity investor, in that HBFI would not be directly involved in development – its role would be solely as a commercial lender. Commercial viability testing will also ensure returns are the same as market norms.

With a proposed allocation of up to €750 million, the HBFI could have capacity to fund about 6,000 homes in the coming years. The current estimated shortfall in residential supply is 15,000 – 20,000 units per annum and, accordingly, the HBFI, with an annual average delivery of 2,000 homes, would reduce this shortfall by about 10% (assuming a three year horizon). This would be a significant contribution but it would not make HBFI a dominant player in the residential funding market and it would clearly leave room for banks and other finance providers to increase their contribution to funding much-needed residential development. 

I can confirm that the delivery estimate included in the Budget documentation was based on an assumed delivery cost of €250,000 per unit and an assumption that HBFI would recycle the allocated funding once over an estimated three year time horizon.

In relation to State aid issues, the proposal has been designed to provide lending to the market at commercial rates. The establishment of the fund will be discussed with the European Commission over the coming months and my officials have already had preliminary discussions with the European Commission in relation to the initiative. As advised, there is clear legal separation between HBFI and NAMA and the proposal will not impact NAMA’s mandate or wind down plans. As a result, I do not envisage any impact from this proposal on the existing State aid complaint in relation to NAMA currently under consideration by the European Commission.

Finally, I would be hopeful of bringing the establishing legislation to the Houses of the Oireachtas for approval in late 2017 or early 2018, with a view to HBFI commencing operations in Q2 2018. It is not expected that HBFI will have an indefinite lifespan but it is too early to speculate on how long it may operate as this will depend on the availability of funding in the market to meet demand for homes in the coming years.

State Aid

 149. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the details of the Brexit fund announced on budget day; the type of loans it will provide; the way in which companies qualify for assistance; the rate which will be charged on the funding provided; the organisation that will undertake the underwriting of loans; and if he will make a statement on the matter. [44058/17]

 152. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe when he expects the new Brexit fund to be up and running; when he expects the fund to commence lending; if this fund has been given State aid approval by the European Commission; the way in which he expects the Brexit fund to be compliant with State aid rules; and if he will make a statement on the matter.  [44061/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe I propose to take Questions Nos. 149 and 152 together.

  As the Deputy is aware, the impact of Brexit is currently still unfolding. However, what is clear is that Brexit is likely to affect Ireland’s trade patterns and SMEs. To meet the working capital needs of Irish SMEs and to assist them with adapting and innovating in response to the challenges, and opportunities, posed by Brexit I announced a €300 million Brexit Loan Guarantee in my speech for Budget 2018. This Scheme forms part of the wider Government Brexit Strategy and was developed by the Department of Business, Enterprise and Innovation and the Department of Agriculture, Food and the Marine in conjunction with the Strategic Banking Corporation of Ireland and Enterprise Ireland.

  It is intended that the Scheme will operate under the de minimis State aid rules and be supported by both State and European guarantees. Loans at competitive interest rates will be available to all viable but vulnerable Irish SMEs and small MidCaps, businesses with less than 499 employees, who are exposed to the impact of Brexit. As part of the application process, businesses will be required to produce a business plan that demonstrates how they intend to adjust to the challenges they face because of Brexit. All applications will be assessed for eligibility by the SBCI and then subject to the normal lending assessment criteria of the commercial finance providers involved in the Scheme. Due to State aid rules, the Scheme will not be available to primary producers in the agriculture sector or to the fishing sector.

  I expect the Scheme will launched in March of next year. Further details of the Scheme will be provided shortly by my colleagues, the Tánaiste and Minister for Business, Enterprise and Innovation and the Minister for Agriculture, Food and the Marine.

Ireland Strategic Investment Fund Investments

 150. Deputy Michael McGrath Information on Michael McGrath Zoom on Michael McGrath asked the Minister for Finance Information on Paschal Donohoe Zoom on Paschal Donohoe the details of the proposed transfer of €1.5 billion from the Ireland Strategic Investment Fund, ISIF, to the rainy day fund; if this is additional to the anticipated €500 million per year to be invested from fiscal space; the amount anticipated to be in the rainy day fund at the end of 2021; the closing date for submissions on the consultation; and if he will make a statement on the matter.  [44059/17]

Minister for Finance (Deputy Paschal Donohoe): Information on Paschal Donohoe Zoom on Paschal Donohoe The establishment of the Rainy Day Fund, including the proposed transfer of €1.5 billion from the Ireland Strategic Investment Fund (ISIF), will require legislation.

In addition, the Summer Economic Statement confirmed the Government’s intention to allocate €500 million per annum to the Rainy Day Fund in 2019 and subsequent years to 2021. This would imply, subject to the prevailing budgetary conditions, that the Rainy Day Fund would contain €3 billion by the end of this period.

In advance of any legislative steps and as announced in Budget 2018, I have transmitted a consultation paper prepared by my officials for consideration by the Oireachtas on establishing a Rainy Day Fund as was committed to in the 2017 Summer Economic Statement (SES) published in July.   

The paper outlines some of the proposed operational modalities, including inter alia the trigger for deploying the fund, and the initial establishment of the fund. This consultation paper seeks to scope out some of the design and operational issues around the establishment of such a budgetary management mechanism. I would welcome the views of Oireachtas members on the issues set out in the paper by the end of this year.


Last Updated: 19/02/2020 09:12:09 First Page Previous Page Page of 86 Next Page Last Page