Header Item Written Answers Nos 74-93
 Header Item Credit Union Restructuring
 Header Item Credit Union Services
 Header Item Tax Yield
 Header Item Tax Data
 Header Item Stability and Growth Pact
 Header Item Exchequer Returns
 Header Item Help-To-Buy Scheme Data
 Header Item Stamp Duty
 Header Item Tax Reliefs Eligibility
 Header Item NAMA Loans Sale
 Header Item Revenue Commissioners Investigations
 Header Item Exchequer Returns
 Header Item Sale of State Assets
 Header Item Sale of State Assets
 Header Item Protected Disclosures Data
 Header Item Cyber Security Policy
 Header Item Home Repossessions Rate
 Header Item Economic Growth Rate

Thursday, 18 May 2017

Dáil Éireann Debate
Vol. 951 No. 2
Unrevised

First Page Previous Page Page of 72 Next Page Last Page

Written Answers Nos 74-93

Credit Union Restructuring

 74. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the position regarding the establishment of the credit union advisory committee; when the first meeting of the implementation group will take place; and if he will make a statement on the matter. [23606/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Credit Union Advisory Committee (CUAC) in its Review of Implementation of the Recommendations in the Commission on Credit Unions Report (the Report) recommended the establishment of an Implementation Group for a specified period of time to oversee and monitor implementation of its recommendations in a methodical manner and to advise the Minister for Finance on progress.  The Implementation Group has now met four times. 

Publication of the Report in July 2016 was just the beginning of the process. From September 2016 onwards CUAC continued working to enable a coherent implementation plan be devised and the Department worked closely with CUAC on this.

In line with CUAC's recommendations, the Department invited one nominee from each of the stakeholder groups. The Implementation Group consists of one representative from each of the following: Irish League of Credit Unions; Credit Union Development Association; Credit Union Managers' Association; National Supervisors Forum; and the Central Bank. The Implementation Group also has a CUAC representative and is chaired by the Department. This broad membership will ensure participation and contribution from all credit union perspectives.

The Implementation Group has held four monthly meetings to date, from February to May 2017 which were also attended by CUAC members.  It is intended that each CUAC recommendation will be addressed separately with a view to implementation at the appropriate time.  Meetings will continue to take place on a monthly basis with the next meeting scheduled for late June 2017. The term of the Implementation Group is for one year which may be extended at the discretion of the Minister. I look forward to receiving regular progress reports on the implementation of these very important recommendations.

Credit Union Services

 75. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the progress his Department has made with the Central Bank on the request by a number of credit unions to expand their debit card and mortgage services; and if he will make a statement on the matter. [23607/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As previously referred to in Parliamentary Question number 197 on 4 April 2017, the Credit Union Act, 1997 (1997 Act) sets out the services that a credit union may provide to its members. In addition, the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 (2016 Regulations) provides for services exempt from additional services requirements. Where a credit union wishes to provide services to its members, other than those services that are provided for under the 1997 Act or the list of services exempt from the additional services requirements set out in the 2016 Regulations, an application may be made to the Central Bank for approval to provide such additional services in accordance with the provisions in sections 48-52 of the 1997 Act.

Debit card provision (and the necessary underlying payment account service) is an additional service and as such requires Central Bank approval. The Member Personal Current Account Services (MPCAS) which provides for a current account and a range of services including payment instruments such as debit cards, has been available to eligible credit unions since October 2016. A number of credit unions have already been approved for this service which is granted under additional services provisions (sections 48 to 52) within the Credit Union Act 1997 (as amended).

There has been significant interest in this service from eligible credit unions and the Central Bank is currently processing a substantial number of additional applications. The service approval provides for a shared services support, to bridge necessary technical expertise and scale considerations. It is expected that once MPCAS is fully established and embedded, it is likely to be available to smaller credit unions with necessary risk understanding. Details of MPCAS and the approval process, along with the application requirements and related guidance are on the Central Bank's website. The Central Bank has also indicated it is open to applications for alternative debit card proposals and recommends the MPCAS framework as a template for such alternative proposals.

Currently credit unions can and some do provide mortgages to members.  These type of loans are subject to certain maturity limits contained in the 2016 Regulations. Those Regulations set out the percentage of a credit union's loan book that can be outstanding for periods exceeding both five years and ten years, as well as limits on the maximum outstanding liability to an individual member. Under the 2016 Regulations credit unions continue to be allowed to lend up to 30% of their loan book over five years and up to 10% of their loan book over 10 years, subject to a maximum maturity of 25 years. In addition, credit unions can apply to the Central Bank for an extension to their longer term lending limits (up to 40% of their loan book over 5 years and up to 15% of their loan book over 10 years).  Approval is subject to conditions set by the Central Bank. 12 credit unions are currently approved to avail of increased longer term lending limits.

The Central Bank informs me that the December 2016 Prudential Return indicates that for the sector overall, total gross loans over 10 years amount to c. 2.7% of total loans in the credit union sector compared to the limit of 10% (and in some cases 15%). 

The Central Bank has indicated that while it can see longer term lending, including mortgages, as part of a balanced portfolio of total lending, in their analyses, credit unions need to consider the impact of longer term lending on interest margins, return on assets and on balance sheet structure – the issue of funding longer term lending with short term funding is a challenge for the credit union business model.  The Central Bank further informs me that consumer mortgage lending is an activity that has its own unique risk profile, and proposals to become involved in mortgage lending in a significant way must be supported by an evidence based business case.

The Registry of Credit unions is currently developing a paper on key risk considerations for credit unions intending to engage in longer term lending/mortgages, to support their understanding of the nature of risks involved and provide a degree of clarity on minimum expectations.

The Credit Union Advisory Committee's (CUAC) recent report provides a number of recommendations, one of which is to conduct a full review of lending limits. I have established an Implementation Group which has met on four occasions and is currently assessing each of CUAC's recommendations with a view to implementing as appropriate.  Central to its work is ensuring a full examination of lending limits and concentration limits is carried out as recommended.  I look forward to regular progress reports from the Implementation Group as these recommendations are developed and implemented.

Tax Yield

 76. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the yield from the special domicile levy on high net worth persons; the number of persons subject to the levy; the number of non-residents paying the levy; and if he will make a statement on the matter. [23618/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The Domicile Levy was introduced in the 2010 Finance Act and is payable on or before 31 October in the year following the valuation date on a self-assessment basis. For example the due date in respect of 2010 was 31 October 2011. The valuation date is 31 December each year. The legislation providing for the levy does not require an individual to indicate their residence on the return made to Revenue.

  The following table sets out the number of persons who have filed Domicile Levy returns and the amount collected since commencement. The table excludes information on 2016, returns on which are not due until 31 October 2017.

YearNo. of PersonsAmount Collected (€m)
201032€3.43
201133€3.69
201224€2.44
201320€1.90
201412€1.99
201513€2.30

Tax Data

 77. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the estimated loss of income to the Exchequer in respect of bogus self-employment which forces low income workers to register as self-employed; and if he will make a statement on the matter. [23619/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am informed by Revenue that, as there are no statistics available to it in respect of the number of individuals who would come within the terms of the Deputy’s question, it is not possible to provide the estimate sought. 

  However, Revenue continually monitors developments to ensure that its compliance programmes, including joint initiatives with the Department of Social Protection, are tailored to meet evolving risk areas.  Revenue’s focus is on protecting the various income streams to the Exchequer across all tax heads, including VAT, customs duties, income tax, USC and corporation tax.  Revenue conducts a full range of interventions to combat tax evasion.  These include risk management interventions, Revenue Audits and Investigations, in addition to site visits.  This process is aided by Revenue’s Risk Evaluation Analysis and Profiling (“REAP”) system and other third party data sources.  

  Of particular interest in the context of the Deputy’s question is that in 2016 Revenue carried out a comprehensive programme of site visits in the construction sector.  This involved 2,126 site visits during which 11,699 interviews were undertaken.  The programme resulted in 345 reclassifications from self-employed contractors to employees, 848 employee registrations and 84 employers registering to operate PAYE.  

  In addition, in the course of a range of Revenue outdoor activities outside of the construction sector during 2016, Revenue activity resulted in 184 re-classifications from self-employed to employees and 1,192 employee registrations.  

  As the Deputy is aware, the consultation process on "the use of intermediary-type employment structures and self-employment arrangements and their impact on tax and PRSI" invited submissions from interested parties on possible measures to address the loss to the Exchequer that may arise under two sets of arrangements:

  - where an individual, who would otherwise be an employee, establishes a company to provide his or her services, and

  - where an individual, who is dependent on, and under the control of, a single employer in the same  manner as an employee, is classified as a self-employed individual.

  I understand that officials from my Department and the Department of Social Protection, with technical support from Revenue, are currently in the final stages of completing a report on the consultation.  As soon as the report on this process reaches me, and my colleague the Minister for Social Protection, we will consider its contents and then I expect we will publish it.

Stability and Growth Pact

 78. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he has made progress in the reform of EU fiscal rules in view of allowing capital investment and the ongoing review of the capital plan; and if he will make a statement on the matter. [23620/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The fiscal rules - formally known as the Stability and Growth Pact (SGP) - have direct application through a number of EU regulations. Changes to these regulations would have to follow the normal EU approach starting with a proposal from the Commission before consideration by Member States and the European Parliament.

However, there are matters within the SGP subject to the discretion of the European Commission. The Commission regularly issues updated guidance on how it will implement the SGP. It is in this context that I sought and secured a major change from the Commission in achieving an annual update of the reference rate used in the expenditure benchmark.  The former practice had been to fix the reference rates for three years at a time. This new approach significantly increases the permitted room for expenditure growth, which would not have been possible under the former practice.  In line with the principle of equal treatment for all Member States, the annual update of reference rates applied to all Member States.

The SGP also includes flexibilities that are designed to promote capital investment. For instance, within the expenditure benchmark, capital formation increases are smoothed over four years with the result that only one quarter of the increase in public investment must be funded in the first year from within the fiscal space. This provision, which means increases in capital spending for housing and other purposes can be front-loaded within the EU rules, has been utilised in Ireland's budgetary plans.

It should also be noted that there are other flexibility provisions within the rules designed to encourage capital investment. These are the investment clause and the structural reform clause. Specifically, these provisions allow for temporary deviations from the required structural budgetary adjustment if spending on capital investment can be shown to qualify for either the investment clause or the structural reform clause. Both of these provisions are subject to strict conditions; and while Ireland has not yet been in a position to apply given where we are in the business cycle, the situation is kept under constant review by my officials.

The Government is very conscious of the need to boost the supply of critical infrastructure. Investment in public infrastructure is vital for the medium and long-term competiveness of the economy as well as for underpinning social cohesion through the provision of vital services to people in the form of schools, public transport, housing, etc. The public capital plan provides for €42 billion of capital investment up to 2021 and the Government remains committed to this.  Further to this the Government set out in the 2016 Summer Economic Statement proposals for an additional cumulative €5.1 billion in capital spending over the period 2017 -2021. From this additional capital, €2.2 billion was allocated to the Government's initiatives aimed at tackling the housing crisis, as detailed in the Action Plan on Housing and Homelessness. Taking account of further allocations made in Budget 2017, approximately €2.65 billion remains to be allocated over the period 2018 - 2021.

In addition, the Government has been exploring the objective to create 'off-balance' mechanisms that bring investment into social housing which is additional to the funding being provided directly by the State. There is ongoing engagement with a broad array of domestic actors and European authorities to explore achievable solutions.

The Capital Plan is now being reviewed to ensure that capital spending is strictly aligned with national economic and social priorities, consistent with Programme for Partnership Government objectives.  This includes examining how available capital funds can best be allocated to underpin sustainable medium-term economic growth and future growth potential. 

The process will comprise a focused review of priorities aimed primarily at advising Government, in the context of Budget 2018, on how the additional capital funding committed by Government should be allocated over the remainder of the plan. This will examine priority areas for investment, consistent with the objectives of the existing Capital Plan and the specific investment priorities contained in the Programme for Government.

Finally, I would point out that we are still running a deficit and our public debt remains high by international standards. The answer, therefore, is not simply about spending more; it is about getting more from each euro of taxpayers' money that is spent.

Exchequer Returns

 79. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the reason for taxes which his Department has identified as being behind profile in view of the failure of the recent Exchequer returns to meet profile as set out in budget 2017; and if he will make a statement on the matter. [23621/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The following table below provides a breakdown of the various tax-heads performance at end-April 2017 against published profile.    

Tax-headEnd-April 2017 Outturn €mEnd-April 2017 Target €mExcess/Shortfall €mExcess/Shortfall %
Income Tax (Including USC)6,1796,378-198-3.1
VAT4,7684,5112575.7
Corporation Tax587811-22327.6
Excise Duties1,7401,858-177-6.3
Stamp Duties290368-78-21.2
Capital Gains Tax10610510.7
Capital Acquisition Tax5860-2-4.0
Customs98109-12-10.8
Local Property Tax25324862.3
Other24024-
Total14,10414,447-344-2.4


  The position is that cumulative Exchequer tax revenues at the end of April 2017 were slightly below profile, coming in just 2.4% or €344 million under expectations. In terms of the “Big 4” tax heads, corporation tax, income tax and excise duties recorded shortfalls against profile, while VAT was ahead of target.

  Corporation tax receipts of €587 million were collected to end-April. As a result, cumulative revenues were down 27.6% or €223 million against target.  It is important to point out that Exchequer receipts from corporation tax can vary throughout the year and just over 10% of the total annual receipts was expected in the first four months.  By comparison, over 60% of corporation tax receipts are expected during May, June and November. Due to the non-linear nature of corporation tax receipts, the potential for company-specific factors and the low proportion of the annual receipts received to date, it would be premature to draw any conclusions about corporate tax at this stage of the year.

  Income tax receipts to the end of April were 3.1% or €198 million below profile.  It is important to point out that income tax encompasses a broad range of elements, some of which are not directly impacted by employment or wage developments. These include Deposit Interest Retention Tax, Life Assurance Exit Tax, Dividend Withholding Tax, Professional Services Withholding Tax and Back Duty.  These payments, by their nature, can be non-linear and timing can vary from year to year. I am informed by the Revenue Commissioners that the majority of these specific components are having a drag on overall income tax receipts in the first four months of 2017.

  Notwithstanding this, the performance of USC is lower-than-expected, and my Department is currently reviewing its performance, in conjunction with the Revenue Commissioners.  The initial indications are that the Revenue Commissioners are satisfied that the overall estimate of the Budget 2017 package in respect of USC changes was costed accurately at €335 million.

  At the time of Budget 2017, the apportionment of the total USC package between PAYE and Schedule D was expected to be €263 million and €72 million respectively, in line with previous norms.  However, subsequent analysis by Revenue, indicates that the allocation of the USC package between PAYE and Schedule D should have been €311 million and €24 million respectively, due to the dynamics of the USC package.  While, this helps to explain the current under-performance against profile for USC paid by PAYE taxpayers, it is important to point out that this reapportionment should have no adverse impact on the overall collection of USC receipts as this should equalize later in the year, when self-employed returns are made.

  Furthermore, as part of the continuous efforts to improve the Department’s tax forecasting performance, the ESRI and my Department jointly examined the sensitivity of income tax and USC revenues to changes in income. As a result of this work which was published in March 2017, the Department has revised the income tax and USC revenue elasticities used in the forecasting process. This will affect these forecasts from 2018 onwards.    

  Significantly, the Revenue Commissioners have also informed me that PAYE, the most important component of overall income tax, has closed the first third of the year, broadly in-line with profile, and is up 7.9% year-on-year, which is consistent with the improving labour market.

  Receipts from Excise duties amounted to €1,740 million in the first four months of the year and were 6.3% or €117 million below profile. The under-performance is evident across a broad range of excise components, while others such as vehicle registration tax remains in line with profile for the year to date.

  In relation to Stamp duties, receipts of €290 million were collected to end-April 2017, which represents a 21.2% or €78 million shortfall against target.  The under-performance in the year-to-date, is primarily due to property and shares transactions.  However, it is important to point out that while both components are currently below target, they are up in year-on-year terms.       

  With regards to other minor taxes, these are generally broadly in line with profile.  Finally, my Department along with the Revenue Commissioners will continue to examine these tax-heads and consider all relevant developments.

Help-To-Buy Scheme Data

 80. Deputy Joan Burton Information on Joan Burton Zoom on Joan Burton asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the number of applications for the help-to-buy scheme; the amount it has cost to date; the value of homes acquired through the scheme below €200,000, €250,000, €300,000, €350,000, €400,000 and €450.000 respectively, in tabular form; and if he will make a statement on the matter. [23622/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan There were 6,084 applications for the Help to Buy (HTB) incentive up to 11 May 2017; in the same period there were 1,677 claims.

  The following table sets out the numbers of applications for the incentive.

Application Stage20162017Total
Stage 1: Applications made (approved)1,0412,5803,621
Stage 1:Applications made (pending)2722,1912,463
Stage 2:Claims made8947831,667


  The purpose of the application stage of the HTB process is to allow would-be first-time buyers to determine whether, and to what extent, they qualify for the incentive.

  In the above table "pending" means that the applicants either have to file an outstanding return or address a compliance issue, the application is to be reviewed by a Revenue caseworker, or the applicant needs to finalise his or her application. The processing time for pending applications depends on the time it takes an applicant to resolve any outstanding matters and Revenue is encouraging prospective applicants to file any necessary tax returns and resolve any outstanding issues before making the HTB application.  The bulk of applicants to date are PAYE taxpayers and if a Form 12 tax return is outstanding it can be filed online very quickly by using "PAYE Services" in myAccount.  If there is a tax liability outstanding it can be paid using the 'Payments' facility in myAccount.  A HTB application can be approved automatically, and very quickly, on the online system where there are no outstanding issues.

  Once an application is successful, the time taken for the claim to be submitted depends on the claimant. If he or she has the necessary evidence, which is a signed contract, mortgage agreement, deposit details, details of the property for first-time purchasers or, in the case of first-time self-build claimants, evidence of drawdown of the first tranche of the mortgage, the claim can be submitted.  However, many applicants may never proceed to make a claim.  Reasons for not making a claim include; individuals who do not go on to obtain mortgage approval, applicants may decide to purchase a second-hand property, or in situations where applicants are not able to source the new home that they desire.

  There have been 1,677 claims to date.

  More detailed information and guidance regarding the requirements for the scheme is available on the Revenue website.

  The estimated total value of HTB claims paid to 11 May 2017 (including claims in respect of 2016) is €17.2 million. This represents approximately 70% of the claims made.

  Value of homes

  Revenue publishes HTB house value statistics in bands of €75,000 from €150,000 to €450,000. The following table sets out the most recent statistics (to 11 May 2017). 
ValueNumber of claims
€0-150,00047
€151-225,000249
€226-300,000579
€301-375,000484
€376-450,000210
Over €450,000108
Total1,677


  HTB incentive statistics, including information on the value of properties availing of the incentive, are updated regularly by the Revenue Commissioners and can be accessed on their website at: http://www.revenue.ie/en/about/statistics/htb-incentive-stats.html.

Stamp Duty

 81. Deputy Clare Daly Information on Clare Daly Zoom on Clare Daly asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan the amount of stamp duty paid by a company (details supplied) for the 7,000 loans if bought from IBRC. [23623/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by Revenue that by virtue of the taxpayer confidentiality obligations imposed by section 851A of the Taxes Consolidation Act 1997, they are prohibited from disclosing the information requested by the Deputy.

Tax Reliefs Eligibility

 82. Deputy Brendan Griffin Information on Brendan Griffin Zoom on Brendan Griffin asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on a matter (details supplied) regarding tax relief; and if he will make a statement on the matter. [23626/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by Revenue that the applicable provision giving a right to repayment of tax is section 865 of the Taxes Consolidation Act (TCA) 1997, where a person has paid an amount of tax which is not due. However, section 865(4) of the TCA provides that that right is subject to the making of a claim within a statutory limit of four years after the end of the chargeable period to which the claim relates. That statutory limit is binding on Revenue as well as on taxpayers.

Section 865 was introduced in 2003 and provides a statutory general right to repayment of tax as well as payment of interest, subject to the four year time limit.  It provides that no repayment may be made based on claims submitted more than four years after the end of the period to which they relate. Prior to its introduction there was no statutory right to repayment.  

At the same time as section 865 was introduced, Revenue’s general right to raise assessments or make enquiries as respects taxpayer returns was also reduced to four years, except in certain circumstances where Revenue's right to enquire or raise assessments is not time limited, for example where fraud or neglect is suspected or in the context of the application of general anti-avoidance rules. Previously, the general time limit on the raising of assessments by Revenue had been ten years.

The Minister at the time indicated that, in introducing the new arrangements, he was satisfied that they achieved the necessary balance between establishing a fair and uniform system for taxpayers while providing necessary protection for the Exchequer.

While I am satisfied that that continues to be the position I will ask my officials to examine the issue.

NAMA Loans Sale

 83. Deputy Mick Wallace Information on Mick Wallace Zoom on Mick Wallace asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan further to a statement (details supplied) by NAMA's head of residential delivery to the Committee of Public Accounts on 25 October 2016, the NAMA loan sales that were initiated by reverse inquiry; the names of the loan sales and the successful bidders, in tabular form; and if he will make a statement on the matter. [23645/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan The information sought by the Deputy is set out in the following table.

Loan salePurchaser
EagleCerberus
AspenStarwood
HollyLonestar
TowerBlackstone
SpringDeutsche
MaeveDeutsche
BoyneDeutsche
JewelHammerson/Allianz
AbbeyApollo


  I am advised that, of the nine significant loan sales which have been triggered by credible reverse inquiries, in only three out the nine cases has the party that made the original reverse inquiry been the successful bidder after a competitive sales process involving other bidders.

Revenue Commissioners Investigations

 84. Deputy Catherine Murphy Information on Catherine Murphy Zoom on Catherine Murphy asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if the Revenue Commissioners are investigating financial matters relating to its brief at Templemore college in view of the ongoing issues relating to the audit report that were discussed at the Committee of Public Accounts over the past two weeks; and if he will make a statement on the matter. [23721/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I am advised by Revenue that by virtue of the taxpayer confidentiality obligations imposed by section 851A of the Taxes Consolidation Act 1997, they are prohibited from commenting on the matter referred to by the Deputy.

Exchequer Returns

 85. Deputy Gino Kenny Information on Gino Kenny Zoom on Gino Kenny asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if the proceeds of moneys captured in criminal drug hauls are included in GDP figures; and if he will make a statement on the matter. [23822/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan In general, certain illegal activities such as drug smuggling and prostitution are recorded as part of GDP. A requirement to include such activities in the National Accounts has existed since the European System of Accounts (ESA) 1995 version of the standards were introduced. However, lack of data sources for the relevant illegal activities caused measurement issues for all EU Member States. As a result, a transversal (EU-wide) GNI reservation was placed on all member states and required comprehensive estimates for these activities to be produced.  Estimates were produced in September 2014 and the reservation has been lifted, which also coincided with the introduction of the ESA 2010 standards.

However, the proceeds of money captured in criminal drug hauls does not relate to production and as a result would not be included in GDP. It is treated in the National Accounts as a fine and recorded as a current transfer.

Sale of State Assets

 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 the differences in terms of Eurostat rules or other restrictions in terms of the use of proceeds, between the sale of State assets such as Aer Lingus and Bord Gáis and the pending sale of a share in a bank (details supplied); and if he will make a statement on the matter. [23829/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan There is no functional difference between the terms of use for the proceeds of the sale of Aer Lingus and proceeds from the partial disposal of AIB shares. In statistical terms, the disposal of the shares is considered a financial transaction, meaning that the proceeds will not be recognised as general government revenue and will not improve the general government balance.  Proceeds from the disposal of shares would, in the first instance, go to the ISIF.  These can then be transferred on to the Exchequer if the Minister for Finance so directs. 

These type of transactions do not result in a beneficial impact to the General Government Balance (GGB) under the European System of Accounts 2010 (ESA 2010) framework.  This is due to the fact that it is classified as a 'financial transaction' whereby it is essentially the exchange of one form of asset (shares, equities, loans) for another kind (cash). 

Subsequent to the sale of Aer Lingus, a ‘Connectivity Fund’ was formed to invest the €335 million proceeds from the sale of the State's shareholding in Aer Lingus with the aim of enabling and enhancing Ireland's physical, virtual and energy connectivity. This fund is overseen by the ISIF which, as the Deputy will be aware, has a strict commercial mandate.

The Bord Gáis sale was treated differently as it was not the sale of a State asset. Rather, Bord Gáis made a decision to sell an asset and remitted the proceeds to the State as dividends. As these payments were "at or below the entrepreneurial income" of Bord Gáis they passed the Super Dividend test (ESA 2010, 20.206) and, as such, were recorded as dividends. Dividends are recorded as property income in the ESA framework. Therefore these dividend payments were recorded as General Government Revenue and thus improved the General Government Balance.

Sale of State Assets

 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  the way in which proceeds will be treated within the ISIF and the NTMA following the sale of a portion of the State's share in a bank (details supplied); if it is technically possible from a Eurostat perspective to transfer the proceeds to the discretionary portfolio within the ISIF; and if he will make a statement on the matter. [23830/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan As I have previously stated for the Deputy in Parliamentary Question number 87 of the 09/03/2017 the proceeds from the partial disposal of AIB shares would, in the first instance, go to the ISIF.  Such proceeds can then be transferred on to the Exchequer if the Minister for Finance so directs.  In statistical terms, the disposal of shares will be a financial transaction, which means that the proceeds will not be recognised as general government revenue and will not improve the general government balance. 

Regarding the sale of financial assets, these type of transactions do not result in a beneficial impact to the General Government Balance (GGB) under the European System of Accounts 2010 (ESA 2010) framework.  This is due to the fact that it is classified as a 'financial transaction' whereby it is essentially the exchange of one form of asset (shares, equities, loans) for another kind (cash). Consequently, the sale of any shareholding in Allied Irish Bank (AIB) would not count as general government revenue. Accordingly, if the proceeds are then used for general government expenditure at any time, the general government balance will worsen.  If the proceeds are lodged to the Exchequer, then the NTMA will, in the normal course of events, take them into account in their funding plans and, all things being equal, it would result in Ireland’s Exchequer borrowing requirement reducing and, consequently, Ireland’s gross debt and debt to GDP ratio being reduced.

A lower level of debt is not only beneficial in terms of the fiscal sustainability of the State but would also result in reduced interest payments in future years. The strategy of reducing the national debt is consistent with the Government policy of repaying the borrowing previously undertaken to finance the recapitalisation of the banking sector during the financial crisis.  It is my view, therefore, that because public indebtedness rose partly due to the recapitalisation of the Banks, it is appropriate to use one-off revenue from divesting the State of its banking assets to reduce debt

Protected Disclosures Data

 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 the number of protected disclosures that were made to the Central Bank in each of the years 2008 to 2016 and to date in 2017; the number that led to further investigation from the Central Bank; the number which led to findings being made by the Central Bank against the financial institutions; the penalties imposed by the Central Bank for each of the successful cases; and if he will make a statement on the matter. [23831/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan New protections for persons making protected disclosures to the Central Bank came into force on 1 August 2013. This also introduced new obligations on certain categories of persons in regulated firms to disclose breaches of financial services legislation to the Central Bank. The Central Bank has established a whistleblower desk and put in place policies and procedures to ensure that such disclosures are dealt with appropriately. The Central Bank also has a designated channel through which it receives various protected disclosure reports from people external to the Central Bank (members of the public, employees working in regulated firms etc.) regarding alleged breaches or contraventions of financial services legislation by financial services entities. The Central Bank considers the receipt of such protected disclosure reports as an important supervisory tool in allowing members of the public or staff members of regulated entities to provide such reports in a confidential form to the Central Bank. 

  The number of protected disclosures made to the Central Bank from 1 August 2013 to year end 2013 was 10, 42 in 2014, 49 in 2015, 50 in 2016 and in excess of 40 to date in 2017.

  As outlined on page 60 of the Central Bank's 2016 Annual Report, various supervisory actions have been initiated following the receipt of protected disclosures reports including: enforcement action, on-site inspections conducted, Risk Mitigation Plans issued and firms placed on a watch list. Not all reports received will result in supervisory action being initiated as the information may not be sufficient to take action; or the information received was not substantiated when investigated; or information was provided anonymously and contact for further supporting information could not be made.

  The Central Bank is currently considering approximately 50 whistleblower allegations.

  The Bank has not provided the penalties imposed on foot of protected disclosures.  However, the  Bank imposed fines totalling €12.05 million in 2016, the largest figure for fines imposed by the Bank in a single year to date. A fine of €4.5 million was imposed on Springboard Mortgages Limited for serious failings in its obligations to tracker mortgage customers.

  Since 2006, 108 Settlement Agreements have been reached for regulatory breaches, with fines totalling approximately €57 million. The notices for all Settlement Agreements are published on the Central Bank’s website: https://www.centralbank.ie/news-media/legal-notices/settlement-agreements

Cyber Security 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 amount of money spent in his Department and in the State entities under the remit of his Department on cyber security in each of the years 2012 to 2016 and to date in 2017; the number of employees dedicated to cyber security in the same entities; the number of job vacancies in the area of cyber security; and if he will make a statement on the matter. [23832/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I understand that the Deputy is interested in cyber security arrangements for my Department and a number of Bodies under the Aegis of my Department, namely the National Treasury Management Agency (NTMA), the Central Bank, the Financial Services Ombudsman and  the Office of the Revenue Commissioners.

  In relation to my Department, I wish to advise that ICT services are provided by the Office of the Government Chief Information Officer (OGCIO) under the Department of Public Expenditure and Reform.  On behalf of my Department, the OGCIO implements a multi-layered approach to cyber security and to protecting ICT systems, infrastructures, and services.  The threat landscape is constantly evolving and significant effort is expended to continually enhance and strengthen ICT security to mitigate against emerging threats, risks, vulnerabilities and cyber security issues. In addition to deploying intrusion protection systems, software vulnerabilities are managed by maintaining up-to-date versions.  OGCIO also continues to work closely with the National Cyber Security Centre (NCSC). The NCSC is a division of the Department of Communications, Climate Action & Environment and encompasses the State's national/governmental Computer Security Incident Response Team (CSIRT-IE). 

  In relation to the Bodies under the Aegis of my Department as requested, I am advised of the following responses from three of the Bodies as set out as follows. It was not possible for the National Treasury Management Agency to provide the information sought in the time available and therefore I will make arrangements to provide the outstanding information in line with Standing Orders.

  Central Bank of Ireland

  The Central Bank does not comment on its IT security arrangements. The Bank actively monitors potential threats and implements measures wherever possible to prevent threats to its information security.

  Financial Services Ombudsman Bureau/ Financial Services Ombudsman Council

  The Financial Services Ombudsman’s Bureau and the Financial Services Ombudsman’s Council apply a multi-layered strategy to cyber-security.  The threat landscape is constantly evolving and significant effort is expended to continually enhance and strengthen ICT security to mitigate against emerging threats, risks, vulnerabilities and cybersecurity issues. In addition to deploying intrusion protection systems, software vulnerabilities are managed by maintaining up-to-date versions.

  Office of the Revenue Commissioners

  Revenue implements a very comprehensive approach to cyber security to protect technical infrastructure, taxpayer data and services. Revenue Data centres operate at and are independently audited to the ISO27001 standard for IT security and ISO22301 for business continuity.  Security is fundamental to all of our online services and built-in to all our systems from the design stage. Amongst the numerous initiatives taken to reduce the risk are the careful design of hardware and software architectures, firewalls, intrusion protection systems, penetration testing, hardening of operating systems and maintaining software patch levels etc.  As a result of this integrated approach, it is very difficult to specifically cost the spending on cyber security on an annual basis.

  IT security is a key role for all Revenue IT staff.  Revenue has a number of specialised technical teams that constantly monitor all systems and evaluate the dangers posed by new and existing threats and take appropriate actions as required. These Revenue ICT staff also work closely with the National Cyber Security Centre (NCSC) and the OGCIO in evaluating the threat landscape.

The following deferred reply was received under Standing Order 42A

  As I indicated in my response, it was not possible for the National Treasury Management Agency (NTMA) to provide the information sought in the time available. The NTMA has since advised that cyber security is an area of particular focus to its operations. Reflecting this, the NTMA bases a high priority on cyber security, which forms an integral part of the Agency's business continuity planning and IT infrastructure investments. NTMA operates standard industry protocols to take account of known threats. Its systems are monitored on a continuous basis by both internal and external experts. NTMA has a dedicated cyber security team which has been in place throughout the period referenced in the Deputy's question. Please note the NTMA provides cyber security support to NAMA and the SBCI.

Home Repossessions Rate

 90. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his plans to deal with home repossessions by the main lending institutions, their subsidiaries and others in view of the implications for homelessness; his further plans for a new code of conduct for financial institutions to ensure an easing of the regulations in such circumstances; and if he will make a statement on the matter. [23866/17]

 91. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if the lending institutions have indicated to him the extent to which home repossessions are likely in the twelve months from May 2017; if steps will be taken to ensure the retention of the family home in circumstances in which borrowers continue to make payments up to and exceeding one third of the person's disposable income; and if he will make a statement on the matter. [23867/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 90 and 91 together.

The  Government attaches great importance to the resolution of mortgage arrears and wants to keep families in their homes and avoid repossessions insofar as possible.  The Deputy will be aware of the recent establishment of the Abhaile mortgage arrears resolution service to ensure that those either in mortgage arrears or at risk of going into mortgage arrears on their primary residence are able to access State-funded professional legal or financial advice on their resolution options. 

The Deputy will also know that the Code of Conduct on Mortgage Arrears (CCMA) sets out statutory requirements for mortgage lenders and credit servicing firms dealing with borrowers in or facing arrears on the mortgage loan secured by their primary residence. 

Lenders may only commence legal proceedings for repossession of the borrower's primary residence after it follows a number of steps.  The steps include:

- Making every reasonable effort under the CCMA to agree an alternative restructure arrangement (ARA) with the borrower;

- time bound requirements to inform the borrower the regulated entity is not willing to offer an ARA and of his/her options;

- time bound requirements to inform a borrower, who is not willing to enter into an ARA, of his/her options; and

- Inform the borrower of a decision to classify the borrower as non-cooperating. 

Last year I wrote to the Governor of the Central Bank to request that an assessment be undertaken of the range of available sustainable restructure solutions offered by banks and non-bank entities.  The Central Bank completed its assessment and their report is published on the Department of Finance website.  The assessment finds a comprehensive range of available restructuring solutions being offered and delivered by both bank and non-bank entities and notes considerable progress in addressing mortgage arrears since the peak.  The Central Bank notes further that  there is strong evidence that both banks and non-banks look to exhaust available restructure options before moving to the legal process.  In addition, the Central Bank considers the range of restructures offered by banks to be broadly appropriate in balancing consumer protection imperatives, and maintaining a mortgage market for all borrowers, and a functioning banking system.

I have no information with respect to the anticipated level of repossessions for the coming year, Court activity levels being a matter which comes under the responsibility of my colleague, the Tánaiste and Minister for Justice & Equality, Frances Fitzgerald TD.  It is important to also note that the commencement of the court process is not a signal that a repossession will occur – it may often be the case that the process then prompts borrowers to re-engage with their bank and to find a solution.  Often these cases are adjourned to allow both parties time to find a sustainable solution.

In conclusion I would draw the Deputy's attention to Mortgage Arrears and Restructures Data released by the Central Bank on 13 March, which shows that to end-Q4 2016, the number of mortgage accounts in arrears for principal dwelling houses (PDH) has declined for the last fourteen quarters.  Almost 121,000 PDH accounts were also classified as restructured, of which some 87 per cent were reported to be meeting the terms of their arrangement.  It is clear that where a borrower actively engages with their lender it is more likely that an equitable arrangement will be found and that the borrower will be able to remain in their family home.

Economic Growth Rate

 92. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if the economy continues to meet its social and economic targets in line with all others within the EU and eurozone; his views on whether corrective measures are required; and if he will make a statement on the matter. [23868/17]

 93. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if the economy meets its performance targets under the main economic headings; and if he will make a statement on the matter. [23869/17]

 96. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on whether the basic fundamental indicators remain positive and constant for the economy notwithstanding the potential threat of Brexit; and if he will make a statement on the matter. [23872/17]

 99. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan if he is satisfied with the strength of the main economic indictors in view of the challenges of the future; and if he will make a statement on the matter. [23876/17]

 102. Deputy Bernard J. Durkan Information on Bernard Durkan Zoom on Bernard Durkan asked the Minister for Finance Information on Michael Noonan Zoom on Michael Noonan his views on whether the economy remains economically competitive; and if he will make a statement on the matter. [23879/17]

Minister for Finance (Deputy Michael Noonan): Information on Michael Noonan Zoom on Michael Noonan I propose to take Questions Nos. 92, 93, 96, 99 and 102 together.

In general, recent indicators have been very positive, indicating that the economic recovery is continuing at a robust pace. The preliminary estimate for full-year GDP growth in 2016 is 5.2 per cent, based on National Accounts data for the fourth quarter of the year, making Ireland the fastest growing economy in the European Union again last year.

Importantly, domestic demand made a strong positive contribution to growth in 2016 with consumption increasing by 3.0 per cent. This is crucial as domestic sectors are both jobs-rich and tax-rich. This is consistent with the strong labour market performance last year with employment increasing by 2.9 per cent (56,000 jobs) in 2016 on an annual basis. As a result, the unemployment rate fell to 7.9 per cent in 2016.

Recent data published indicate that robust growth in the domestic economy has continued in 2017:

- The volume of retail sales increased by 2.9 per cent year-on-year in the first quarter of 2017. Core sales (excluding motor trades) were up by 5.9 per cent over the same period.

- Expansion in the construction sector continued in April with the Purchasing Managers’ Index for the sector recording its forty-fourth successive month of expansion.

- The Consumer Sentiment Index rose slightly to 102.0 in April 2017, from 101.9 in March. The index remains well above its long run average.

- The seasonally-adjusted monthly unemployment rate for April was 6.2 per cent, down from 8.4 per cent in April 2016.  As a result, the unemployment rate has fallen by 9 per cent since its peak of over 15 per cent in early-2012.

Further, the exporting sector appears to be holding up well despite the weakness in sterling with the value of merchandise exports increasing by 10.6 per cent in the first quarter of 2017 year-on-year. The latest data also show that Ireland continued to record a large current account surplus last year of 4.7 per cent of GDP.

An important factor in strong export performance is competitiveness. In this regard, significant progress has been made in recent years.  The latest figures from the Central Bank of Ireland, show that Ireland's real harmonised competitiveness indicator (a widely used measure of competitiveness in Europe) has improved by over 20 per cent between 2008 and March 2017.

The gains in Irish competitiveness achieved since 2008 have been hard-won through productivity improvements and wage and price moderation. It is important that this competitiveness is preserved and continues to support growth.  This is all the more important given the several sources of uncertainty which could negatively impact on the economic outlook. In particular, the UK’s decision to leave the EU has added to concerns about the international outlook while the change in policy direction by the new US administration has also added to concerns about the international economy. Weaker than expected trading partner growth would negatively impact on Irish growth through reduced exports.

In summary, I am confident that significant economic progress can be made in the years ahead. This positive outlook is reflected in the latest forecasts published by my Department in the Stability Programme Update for 2017. My Department is projecting robust growth this year of 4.3 per cent while medium term growth is expected to average around 3 per cent per annum. The labour market recovery is also set to continue with robust employment growth projected over the coming years and, on this basis, by the end of this decade there will be more people at work in Ireland than ever before.  However, such progress is critically contingent upon implementing appropriate polices and that is what this Government will continue to do.


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