Written Answers Nos. 71-82
71. Deputy Clare Daly asked the Minister for Finance why military personnel who disembarked from a plane of the United States of America (details supplied) on 26 June 2016 at Shannon Airport with military rucksacks and travelled to a Limerick city hotel did not go through customs prior to leaving the airport; and if he will make a statement on the matter. [19017/16]
Amharc ar fhreagraI am advised by Revenue that the necessary Customs formalities were complied with in the instance referred to by the Deputy.
72. Deputy Michael Healy-Rae asked the Minister for Finance the status of local property tax for a person (details supplied); and if he will make a statement on the matter. [18821/16]
Amharc ar fhreagraThe Finance (Local Property Tax) Act 2012 does not provide for any exemption from LPT in the circumstances outlined by the Deputy.
However, Part 12 of the LPT Act provides for deferral and partial deferral (50%) options that can apply to liable property owners under certain conditions including, income level, hardship, personal insolvency arrangements and where a personal representative is in place on behalf of a deceased person. The deferred tax remains as a charge on the property and must be paid before a sale or transfer can be completed. Interest is charged on the deferred amount at a rate of 4% per annum and the duration of the relief normally coincides with the valuation period (1 May 2013 to 31 October 2019).
Revenue has advised me that it made direct contact with the person in question on foot of the Deputy's Question to offer advice in regard to the general operation of LPT and in particular to explain how the deferral system operates. The person opted to defer her liabilities on foot of her income level and the Revenue official assisted her in completing the necessary updates to her LPT account. The person was also provided with a direct telephone contact number in case she has any further queries or concerns.
73. Deputy Brendan Griffin asked the Minister for Finance when he will issue a tax rebate to a person (details supplied); and if he will make a statement on the matter. [18914/16]
Amharc ar fhreagraI am advised by Revenue that the tax repayment was delayed because the person concerned had not provided details of a bank account to which the repayment could be made. Those details have now been provided and the repayment will be made directly to the nominated bank account very shortly.
74. Deputy Róisín Shortall asked the Minister for Finance further to the ongoing review of insurance policy in his Department if he will set out the consideration he is affording to the massive premia hikes faced by the small and medium-sized enterprise sector; the actions he is taking to urgently address this problem; and if he will make a statement on the matter. [18917/16]
Amharc ar fhreagraAs Minister for Finance, I am concerned that there should be a stable insurance sector and that the risks to policyholders and to the wider financial system are limited. An adequately-reserved, cost-competitive insurance sector is a vital component of economic activity and financial stability.
The current high cost of insurance is a concern for the Government. While the provision and pricing of insurance policies is a commercial matter for insurance companies, this does not preclude the Government from introducing measures which may, in the longer term, lead to a better claims environment. This is a complex matter to address and it involves a number of Government Departments, State Bodies and private sector organisations. I have established a task force in my Department to undertake a Review of Policy in the Insurance Sector.
The first phase of the work of the task force is a Review of the Framework for Motor Insurance Compensation. This is being carried out jointly with the Department of Transport, Tourism and Sport. My colleague the Minister for Transport, Tourism and Sport and I expect to receive this first report this week.
Separately, the broader work of the task force includes an examination of the factors underlying the recent increases in the cost of motor insurance but also including other aspects of insurance policy such as the availability of insurance at reasonable cost to particular businesses and sectors of the community which are reported to be having problems in this regard.
This work of the task force is being undertaken in consultation with the Central Bank of Ireland, other Government Departments, Agencies and interested bodies, including the insurance industry, as represented by Insurance Ireland. The aim of the review is to recommend measures to improve the functioning and regulation of the insurance sector in Ireland, identifying the issues that can be addressed on a more immediate basis and those that need more long-term policy implementation. This work will be completed over the coming months.
75. Deputy Michael McGrath asked the Minister for Finance the revised fiscal space in net terms for each of the years from 2017 to 2021 arising from the British referendum outcome; and if he will make a statement on the matter. [18948/16]
Amharc ar fhreagraThe impact of the UK (United Kingdom) exit from the European Union (EU) is currently difficult to ascertain given the volatility of the current fiscal and political sphere. Until Article 50 Lisbon Treaty is invoked by the UK and negotiations on the terms of their interaction with the EU, and with Ireland, begin it remains to be seen precisely what the impact on the UK economy will be in the medium to long term. Much will depend on the new arrangements, including on trade, that are yet to be agreed between the UK and the EU.
The fiscal space of just under €1 billion for 2017 set out in the Summer Economic Statement (SES) is not expected to change materially as almost all the factors used to calculate it under the expenditure benchmark are included the European Commission's 2016 Spring Economic Forecast. Utilisation of this fiscal space in 2017 is consistent with compliance with the balanced budget rule based on the forecasts in the SES and this will be checked again in the forecasts to be prepared for the Budget in October.
For the ensuing years, 2018-2021, the impact is difficult to estimate given that the fiscal space estimations are based on Department of Finance projections for the GDP deflators, reference rates and convergence margins. Any negative impact on the UK economy in the medium term could have potential implications for the actual variables used to calculate the fiscal space in these years. The actual final calculation for each year using the expenditure benchmark methodology will use the factors set out in the European Commission's Spring Forecasts of the previous year.
My Department's next official forecasts will be provided in October in the context of the Budget. The prudent economic and fiscal policies implemented over recent years have placed the State in a stronger position to weather any prolonged economic shock that may be caused by this result.
76. Deputy Paul Kehoe asked the Minister for Finance if a person (details supplied) can receive a statement confirming that the person has no tax liabilities for the purpose of the processing of a medical card application; and if he will make a statement on the matter. [18955/16]
Amharc ar fhreagraI am advised by Revenue that as a number of tax returns are outstanding from the person concerned, a tax clearance certificate will not be issued. The person concerned should contact his local Revenue District with a view to regularising matters following which an application for tax clearance can be considered.
77. Deputy Niall Collins asked the Minister for Finance the impact the recent decision by the United Kingdom to leave the European Union will have on funding allocations in budget 2017 with respect to incentivising domestic entrepreneurship and small and medium-sized enterprise start-ups through taxation measures; and if he will make a statement on the matter. [18991/16]
Amharc ar fhreagraAs recognised by the Taoiseach on 27 June, the UK has not for now left the EU. The UK remains a full member until such time as it formally leaves, following the invoking of Article 50 and subsequent negotiations. These negotiations may not begin for some time. In the meantime, it is important that people are aware that until the UK leaves the EU, it remains a full member with its existing rights and obligations. There will be no early change to the free flow of people, goods and services between our islands.
In relation to the available fiscal space for 2017, the position is that the Summer Economic Statement (SES) 2016, set out a macroeconomic assessment of the impact of a UK decision to leave the European Union. It should be noted that the fiscal space of just under €1 billion for 2017, as set out in the SES, is not expected to change significantly. This is due to the fact that the factors used to calculate the fiscal space are largely finalised at this stage. My Department's next official forecasts will be in October in the context of the Budget. These will set out updated estimates of economic growth, the public finances and fiscal space.
In the context of the current ambitious package of reform measures relating to enhanced involvement of the Oireachtas in budget scrutiny, the Government is committed to engaging with the Oireachtas as a partner throughout the budgetary and Finance Bill processes. I look forward to seeing the results of that engagement. However, the Deputy will appreciate that, as has been longstanding practice, any tax measures that may be introduced cannot be expected to be announced before Budget Day.
78. Deputy Pearse Doherty asked the Minister for Finance if he will release an updated version of the summer statement, given Britain voting to leave the European Union; and if he will make a statement on the matter. [18996/16]
Amharc ar fhreagraThe Summer Economic Statement (SES), published last week, included a macroeconomic assessment of the impact of a UK decision to leave the European Union. This decision will have an adverse impact on the growth outlook. In this context, the more traditional exporting sectors are particularly exposed, especially to bilateral euro sterling exchange rate developments. My Department's initial estimate, based on the assessment in the SES, is that GDP growth could be about 0.5% lower than projected in 2017.
The fiscal space of just under €1 billion for 2017 set out in the Summer Economic Statement is not expected to change very much because the factors used to calculate it are largely fixed at this stage.
Looking to 2018 and beyond, the estimates of fiscal space depend on the impact on our macroeconomic and fiscal position. At this point, it is far too early to speculate on the potential impacts.
As noted in the Summer Economic Statement, the Department of Finance will prepare a full macroeconomic projection in advance of Budget 2017 in October, and this will include updated estimates of economic growth, the public finances and the fiscal space, taking account of developments up to that time, including the UK decision.
However, it is important to note that there is uncertainty around many aspects of the impact of the UK decision, and particularly the economic and fiscal impact.
As you are aware, a whole-of-government contingency framework has been put in place in response to the UK vote, within which key policy issues, including economic developments, will continue to be tracked and the Budget 2017 forecasts will be a critical part of that process.
Finally, the prudent economic and fiscal policies implemented over recent years have placed Ireland in a stronger position to weather this shock. Our economy is growing strongly, employment has increased for 14 successive quarters, unemployment has fallen to 7.8%, the deficit this year is expected to be 0.9%, and the debt has fallen from a peak of 120% to an expected 88% at the end of this year. The Government is confident that our economy is resilient and that appropriate economic and fiscal policies are in place to deal with the challenges arising.
79. Deputy Pearse Doherty asked the Minister for Finance for details on how water charges were treated in the summer statement financials over the five year period 2017 to 2021 with regard to revenue projections, expenditure projections, fiscal space projections and allocations; and if he will make a statement on the matter. [18997/16]
Amharc ar fhreagraThe figures in Table 3 on page 16 of the SES illustrated the impact of the use of the fiscal space estimated for the period 2017-2021 on the revised SPU fiscal position. The revised SPU fiscal position and indicative fiscal space is detailed in Annex 1 of the SES.
This fiscal space includes the full impact of Irish Water operating and capital expenditure estimates as based on the Irish Water Business plan.
No decision has been made as to the charging structure of Irish Water in the period 2017-2021 so in the context of the no policy-change basis of the revised SPU fiscal position no revisions were made to the revenue projections for Irish Water over the period 2017-2021.
Any future decisions on Irish Water's future charging model will be made in the context of the report of the Expert Commission on Domestic Public Water Services and will be incorporated in forecasts by this Department.
80. Deputy Michael McGrath asked the Minister for Finance the change in the value of each of the Irish bank shares the State owns from the opening of markets on 24 June 2016, when the impact of the British referendum result took effect; and if he will make a statement on the matter. [19004/16]
Amharc ar fhreagraOver the four trading days from Friday morning the 24th June to close of business on Wednesday 29th June, the share price of Bank of Ireland fell by 30% and Permanent TSB over 26% as the market reflected the impact of the UK Referendum result on the UK, Irish and European economies. Over the same period, leading UK banks have fallen by a range of 23%-28% while the European bank sector has fallen by 17%. Clearly these moves suggest investors believe bank profitability in the coming years will be materially impacted. Indeed analysts have already moved to downgrade their earnings projections for UK and Irish banks and companies in many other sectors too.
Given our substantial financial interest in the banking sector, these developments are disappointing and we are closely monitoring events as they evolve. As I indicated in recent PQ responses, the current volatility in the stock markets are such that I expected that any market event involving our shares in the banks was more likely in 2017 than this year. As such the State had no plans to dispose of any of its bank shares in the coming months and no sale proceeds are included in the 2016 budget, so there is no immediate impact on our finances. In fact next month AIB is still scheduled to redeem its Contingent Capital Note of €1.6bn plus accrued interest.
As part of their day-to-day role, officials in the Shareholding Management Unit will continue to monitor market conditions, review all strategic options relating to our banking investments and will consider from time to time whether the sale of shares would be beneficial for the State. Having said that I have no current plans to sell shares in any of the banks, notwithstanding the flexibility to do so within the Programme for Government.
Note: AIB's share price has fallen by circa 13% over the same period though the very small free float involved means this is not a reliable indicator of the change in the bank's underlying value.
81. Deputy Michael McGrath asked the Minister for Finance the United Kingdom financial institutions who passport their services into Ireland under European Economic Area rules; the potential implications for these activities from the United Kingdom leaving the European Union; and if he will make a statement on the matter. [19005/16]
Amharc ar fhreagraThe result of the Referendum means that the people of the UK have declared their wish to leave the EU. It is important to be clear: the UK has not for now left the EU. Until the Article 50 negotiations are concluded the UK remains a full Member, with all of its existing rights and obligations. The result marks the beginning of a new phase of negotiated withdrawal one that is expected to take place over at least two years and possibly longer. Separate negotiations on the new relationship between the UK and the EU will also take place, if that is what the UK seeks. The key priority for Government is to protect and promote Ireland's interests to the greatest extent possible. Based on the analysis carried out by all Departments, including the Department of Finance, a framework has been developed on a whole of Government basis to identify contingencies that may arise in the days, weeks and months that follow the outcome of the UK referendum.
In its latest Macro Financial Review (MFR) the Central Bank noted that the effects on the profitability and business models of Irish-based financial institutions, including banks and insurers, could be material and could vary across firms and sectors depending on the nature of the new relationship agreed between the UK and EU and their exposure to UK markets. The Central Bank has been engaging with firms across all parts of the financial sector, with a particular focus on the firms with the largest UK exposures, to ensure they are prepared for risks associated with the UK leaving the European Union.
In terms of the implications of the United Kingdom leaving the European Union on the passporting regime, it is unclear at this time and will depend on the negotiations on the UK's future relationship with the EU. The situation is complex as financial institutions in Ireland can passport services to the UK while financial institutions in the UK can passport services into Ireland. The range of possible new arrangements is wide and it is too early to speculate at this stage.
The Central Bank maintains lists of firms which have notified it of the intention to offer services in Ireland through a passporting arrangement. These lists are available at http://registers.centralbank.ie/ and are maintained by industry sector (i.e. Credit Institutions, Insurance Undertakings etc.).
In that MFR it was noted that an exit from the EU could have implications for insurance firms located in Ireland conducting business in the UK market, while the possible removal of UK competitors may benefit other firms operating in Ireland. Premium volumes written by life and non-life firms on an "outward" and "inward" basis between Ireland and the UK in 2014 were €3.8 billion and €8.6 billion, respectively.
The Department of Finance and the Central Bank do engage regularly on material issues relevant to the financial services sector and will continue to do so as the process of withdrawal progresses.
82. Deputy Michael McGrath asked the Minister for Finance the implications for Allied Irish Banks' activities in the United Kingdom if that country is outside the European Economic Area; the proportion of Allied Irish Banks' revenues which arise in the United Kingdom; and if he will make a statement on the matter. [19006/16]
Amharc ar fhreagraI have received the following response from AIB in response to the Deputy's question:
"Ahead of the United Kingdom s referendum on whether to remain in or leave the European Union AIB engaged in a comprehensive programme of customer engagement on the risks of Brexit and the potential impact of Brexit on the economy and financial markets. This programme was designed to ensure that the bank s customers were well prepared if the UK voted to leave the EU.
AIB notes that while the UK has now voted to leave the EU, the British government has yet to give effect to this decision. The precise details of how and when the voters decision is implemented in practice are not entirely clear, but there will be a minimum two-year negotiation period before any UK exit from the EU.
AIB s UK activities accounted for c. 12% of the bank s profit and revenue for 2015 (page 250 of AIB s 2015 Annual Financial Report). In the meantime, it is business as usual for AIB s customers in both the Republic of Ireland and the UK".
