The Minister for Finance, Paschal Donohoe T.D., has today announced that the Government has approved the publication of the Insurance (Amendment) Bill 2018.

The purpose of the Bill is to repeal and replace certain provisions of the Insurance Act 1964, as amended, to clarify the role of the Insurance Compensation Fund (ICF) and to implement the recommendations of the Review of the Framework for Motor Insurance Compensation in Ireland Report (2016);  The Bill also provides for the retrospective  compensation of 100% of third-party claims in respect of Setanta and Enterprise who are currently under liquidation, which was outside the scope of the 2016 review.

The Bill, when enacted, will increase the level of insurance compensation fund coverage for all future third party motor claims from its current 65% level to 100%[1] in order to bring it into line with the compensation levels paid out by the Motor Insurer’s Bureau of Ireland (MIBI). This additional coverage will be financed by the motor insurance industry through the establishment of an ex-ante fund into which industry will make regular contributions. This fund will be held and managed by the MIBI.  The Bill also provides for the transfer of the administration of the ICF from the Accountant of the Courts of Justice to the Central Bank of Ireland, as well as a more formal role for the State Claims Agency in the event of a failure of an insurance company.

Welcoming the Government decision approving the publication of the Insurance (Amendment) Bill 2018, Minister Donohoe said:

“I am pleased to announce the publication of the Insurance (Amendment) Bill 2018.  The Setanta insolvency and the subsequent Supreme Court ruling has highlighted an inequity between awards for third party claimants from MIBI in respect of uninsured or unidentified drivers, where personal injuries are compensated in full, compared with compensation from the ICF in the event of an insolvency where limits of 65% of the claim or €825,000 whichever is the lessor apply. 

Consequently, the Government decided in July 2017 to bring forward legislation to address the uncertainty this case has highlighted in relation to compensation arrangements for third party motor claimants in any future motor insurer insolvency. In January this year, I announced my decision that the State will ensure that Setanta and Enterprise third party claimants are compensated in full.  Once enacted, the Bill will allow for the payment of 100% of the compensation due to these third party motor insurance claimants including the additional 35% to those who have settled their claims and have already received compensation of 65% of their claim subject to the limit outlined previously. I hope that my decision and the publication of this Bill will continue to facilitate and accelerate the settlement of those claims which are outstanding.

The Bill will therefore provide greater certainty for both consumers and industry, regarding the insurance compensation framework in Ireland”

The Minister of State for Insurance and Financial Services, Michael D’Arcy TD, said:

“A key focus of the Government is on addressing the difference in compensation levels for third party motor insurance claimants between cases of insurer insolvency and the amounts paid by the Motor Insurance Bureau of Ireland to those involved in collisions with an uninsured driver.  I welcome this Bill which aims to maintain confidence in the motor insurance system in Ireland.”

 

ENDS

 

Contact:

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

 

Notes to Editors:

Summary of the proposed Insurance (Amendment) Bill:

(a)  to increase the level of insurance compensation fund coverage for all future third party motor claims  from 65%  to 100% for personal injuries and to €1,220,000  per claim for property, regardless of the number of claimants, in order to bring it into line with the compensation levels paid out by the Motor Insurer’s Bureau of Ireland (MIBI);

(b)  to require that the increased coverage of the ICF be funded by a contribution from the motor insurance industry to cover this extra 35%;

(c)   to provide a legal basis for motor insurers operating in the Irish market to contribute an amount equivalent to 2% of gross written motor premiums to an ex-ante fund to be held by MIBI in order to build up a fund to enable industry meet its 35% commitment should a motor insurer be liquidated in the future;

(d)  to provide that where there is a shortfall in the industry ex-ante fund that the ICF act as a backstop and covers the amount outstanding. In such a situation, it is proposed that industry increase their contribution to their fund to an amount equivalent to 3% of gross written motor insurance premiums in order that the Exchequer is repaid as quickly as possible;

(e)  to provide for the transfer of the administration of the ICF from the Accountant of the Courts of Justice to the Central Bank of Ireland;

(f)   to provide for a more formal role for the State Claims Agency in the event of a failure of an insurance company resulting in a draw on the ICF;

(g)  to amend the time limit for making applications to the High Court for payments from the ICF from once in any 6 month period to once in any 3 month period, to allow payments to be made more frequently.

 

 

 

ENDS

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, updated Cabinet this week in relation to the terms of reference for the Government’s planned review of bank remuneration policy.

 

Minister Donohoe said: ‘Government policy on banking remuneration has remained unchanged since the financial crisis and impacts c.23,000 staff across AIB, Bank of Ireland and PTSB. I indicated recently in light of changes in the economy and the potential impact of Brexit on the financial sector, my intention to carry out a review of banking remuneration policy to determine if it remains fit for purpose. I am therefore today outlining the terms of reference for the review which will be carried out by my Department with the assistance of an external consultancy firm which will be appointed shortly. I expect to complete the review towards the end of this year.’ 

 

The review is not limited to but will include an analysis of current bank senior executive compensation arrangements in AIB, Bank of Ireland & Ptsb with a comparison against both those in the Irish market and an appropriately selected European peer group and will, where appropriate, include relevant benchmarking analysis in terms of compensation quantum and composition.

 

There will also be a review of general compensation arrangements across junior and middle ranks in the retail and commercial banking sector in Ireland with a focus on the structure and composition of compensation there.

 

ENDS

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

 

 Notes to editors

 

A consultant will be appointed following the completion of a mini competition run by the Shareholding and Financial Advisory Division (SFAD) of the Department of Finance. Prospective tenderers will be drawn from the Department’s Advisory Panel (Panel Two) which was constituted via open procurement in October 2014.

 

The restrictions on bankers pay are far-reaching and include all forms of variable pay and impact c. 23,000 staff across the three banks in which the State has a shareholding.

 

 

2,238,000 people now at work in Ireland

 

  • Employment in the first quarter of this year was 62,100 (2.9 per cent) higher than the same period last year
  • After adjusting for seasonal factors, the level of employment is now at its highest level ever
  • The increase in employment remains broad based – with annual gains across most sectors and regions
  • Unemployment continues to fall, with the unemployment rate declining to 5.3 per cent in May

The Government has today (Wednesday) welcomed the Labour Force Survey (LFS) data from the Central Statistics Office, which shows continued strong momentum in the labour market with robust jobs growth.

Welcoming the figures, the Minister for Finance & Public Expenditure and Reform, Paschal Donohoe said: ‘Today’s seasonally adjusted figures show that there are now more people at work than ever before, with 62,100 additional jobs created over the year to the first quarter of 2018. The total number of people at work in Ireland now stands at 2,238,000’.

“We have now seen 23 consecutive quarters of employment growth.  Crucially, this growth remains broad-based with annual gains recorded in most sectors and regions. In parallel, unemployment continues to fall, with the unemployment rate reaching 5.3 per cent in May.  Encouragingly, we are also seeing declines in long-term unemployment – now at 2.1 per cent – and the youth unemployment rate – to 12.5 per cent.

“The labour market is the best barometer of how the economy is performing and today’s figures are very encouraging.  We now have 2¼ million people in work in Ireland and the unemployment rate is at its lowest since the beginning of 2008.

“Our main objective is to maintain and, indeed, to build on this momentum and the Government is committed to ensuring the positive trends in the labour market are maintained.  We will continue to implement active labour policies and work to safeguard the gains in competitiveness made in recent years.

“With employment at its highest level ever and the economy approaching full-employment we must also be wary of possible capacity constraints in some sectors which could lead to overheating in the economy.  As such, the Government is mindful that budgetary policy is not pro-cyclical.  This is the main message that is set out in the Summer Economic Statement which the Government published yesterday.”

The Minister of State at the Department of Business, Enterprise and Innovation, with Special Responsibility for Training and Skills, John Halligan TD said: ‘I’m particularly delighted to see such strong, sustained regional jobs growth. A key target of the Action Plan for Jobs is to support the creation of 200,000 new jobs by 2020, 135,000 of which are outside of Dublin and it is great to see that growth in our economy is benefiting every part of Ireland. Balanced regional development is a key driver of Ireland’s national growth and the creation of employment.”

 

Ends

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

 

Notes to Editors:

  • The figures for employment take account of seasonal factors – which is the appropriate way to measure the level of employment.
  • The largest employment increases in the first quarter (in annual terms) were in construction (+12,400), public administration and defence (+9,800), education (+9,200), administrative and social support services (+9,200) and accommodation and food (+8,400)
  • Peak youth unemployment rate was 33.4% in 2012
  • Peak long-term unemployment rate was 9.8% in 2012.

Photos released by Robbie Reynolds

 

 

Government plans to further reduce deficit to 0.1 per cent of GDP next year with Budget Day package of €3.4bn to accommodate target

 

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., today (Tuesday) published the Government’s Summer Economic Statement (SES).  The SES forms a key element of the reformed budgetary process by providing a policy background for the discussions in the Dáil and, subsequently, at the National Economic Dialogue on 27th and 28th June. 

 

The SES 2018 sets out that:

  • The Government is targeting a deficit of 0.1 per cent of GDP next year, or better;
  • This would accommodate a budgetary package of €3.4 billion;
  • €2.6 billion has already been pre-committed to expenditure measures as outlined in the Stability Programme Update;
  • This leaves €0.8 billion for further allocation in Budget 2019;
  • Any unfunded taxation or expenditure measures that go beyond this would involve more borrowing and result in a subsequent deterioration in the deficit position;
  • Furthermore, using all the available ‘fiscal space’ – would allow the allocation of an additional €0.9 billion in Budget 2019.
  • However, this would increase the deficit by an additional 0.3 per cent of GDP and would represent the wrong choice for the economy at this stage of the cycle. It would also mean that we would miss our Medium Term Objective (MTO) target for 2019 and that Ireland would be in breach of the fiscal rules;
  • Budgetary policy will instead be framed to reduce borrowing, rebuild our fiscal buffers and support steady, sustainable increases in living standards to ensure we are protected into the future.

 

Speaking at the launch of the SES, Minister Donohoe said: ‘Our economy is in good shape at the moment and this is reflected in the labour market.  The level of employment is close to its highest level ever and we are approaching what could reasonably be called ‘full employment’.  This is a welcome development but as capacity constraints are increasingly becoming a feature of some sectors this, in turn, could lead to overheating of the economy.  In this context, it is vital that Government policy does not add fuel to the fire but that we make sensible and prudent decisions now to secure our hard-won gains and ensure the continuation of sustainable future growth.

 

“While the economic situation is relatively healthy at present, it is clear that the external environment is also becoming increasingly challenging. A crucial policy response is to build up our capacity to respond to these challenges.  This is why the Government is prioritising reducing public debt, further working down the deficit, establishing a Rainy Day Fund and avoiding pro-cyclical budgetary policies. While there are risks ahead there are also opportunities; our goal is to position our economy to minimise these risks and to maximise the opportunities that lie ahead.  The objective is to ensure the progressive and steady improvement of living standards and the further improvement in public services, along with continued incremental and sustainable investment in the future to ensure the delivery of lasting prosperity for all of our people.”

 

https://www.finance.gov.ie/updates/summer-economic-statement-2018/

 

ENDS

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

The Minister for Agriculture, Food and the Marine, Micheal Creed T.D., and the Minister for Finance and Public Expenditure, Paschal Donohoe T.D., today announced progress made on agri-taxation policy issues. The ‘Agri-taxation Review’, a joint initiative between the two Departments, put in place a comprehensive taxation strategy for the sector with specific policy objectives to increase the mobility and the productive use of land; assist succession; and complement wider agriculture policies such as environmental sustainability.

 

Both Ministers today confirmed that following consultation with the EU Commission on State Aid clearance, a commencement order will be signed for the Stamp Duty relief for farm consolidation, which was contained in Finance Act 2017.

 

In addition, administrative arrangements have now been finalised to allow commencement of the Stamp Duty relief for long-term leases.

 

Minister Creed stated, “I am pleased that the commencement of the consolidation relief completes the package of measures I agreed with Minister Donohoe following the increase of the general stamp duty rate in the last Budget. Consolidation Relief is important environmentally and economically for farmers seeking to consolidate fragmented holdings”.

 

He added, “I am also pleased that we can introduce the Stamp Duty Relief for long-term leases, which is part of a package of measures promoting long-term leasing and increases the mobility and the productive use of farmland. This is especially important for young farmers and those seeking to increase the productivity of their farm”.

 

Minister Donohoe stated, “I am pleased to commence these two measures, involving a Stamp Duty relief for farm consolidation and a Stamp Duty relief for long-term leases. The agricultural sector and the wider rural economy are vital to the success and well-being of our country. Both of these measures should work to support sustainable rural development, vibrant and sustainable communities and promote the productive use of farmland”.

 

The Stamp Duty relief for long-term leases will commence on 1 July and the Stamp Duty relief for farm consolidation will commence on 1 August.

 

Notes:

Stamp Duty Relief for farm consolidation allows for a 1% rate of stamp duty (as opposed to the general rate of 6%) where the land transactions qualify for a “Farm Restructuring Certificate” for the purposes of Capital Gains Tax Relief on Farm Restructuring. It will apply in relation to instruments conveying or transferring agricultural land that are executed on or after 1 January 2018 and on or before 31 December 2020.  Where there is a purchase and sale of land within 24 months of each other that satisfy the conditions of consolidation, then stamp duty will only be paid to the extent that the value of the land that is purchased exceeds the value of the land that is sold. In addition both the purchase and sale must occur between 1 January 2018 and 31 December 2020.  In such a situation stamp duty will only apply at the rate of 1% on the excess. The main conditions for the relief are:

 

  1. There must be a valid consolidation certificate issued by Teagasc in relation to the purchase and sale of land, occurring within 24 months of each other. The Minister for Agriculture, Food and the marine has made the necessary guidelines detailing how applications for consolidation certificates are to be made to Teagasc under capital gains tax and also setting out, amongst other things, the conditions of consolidation.
  2. The purchaser or purchasers must retain ownership of the land for a period of five years.
  3. The conveyance must contain a certificate stating that the purchaser is entitled to the relief
  4. A clawback of the relief will apply where the land or part of the land purchased is disposed of or partly disposed of before the end of the 5 year holding period. Such a clawback will not occur where the land purchased is compulsorily acquired.

 

More information is available at: https://www.agriculture.gov.ie/agri-foodindustry/agri-foodandtheeconomy/agri-foodbusiness/agri-taxation/indicativelistofagri-taxmeasures/capitalgainstaxmeasures/

 

The Revenue Commissioners have advised that it is not possible to claim the relief prior to the commencement order being issued. However, once commenced, the relief will be available where the conditions above are met and the purchase and sale occurs on or after 1 January 2018 and on or before 31 December 2020.

 

Stamp Duty Relief for long-term leases is a full relief on Stamp Duty payable on long-term leases of farmland and was a recommendation of the Agri-Taxation Review. The delay in commencing this measure was due to finalising administrative arrangements for collecting EU State Aid data, which necessitated legislative change.

 

 

ENDS

Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, received Cabinet approval on Tuesday for the publication, in the coming days, of the Home Building Finance Ireland (HBFI) Bill 2018. This will give effect to the measures announced in October as part of Budget 2018 for the establishment of a new body; the purpose of which is to increase the supply of financing for residential developments within the State. Minister Donohoe was joined today by the Minister for Housing, Planning and Local Government, Eoghan Murphy TD, in making the announcement.

HBFI will receive funding of up to €750 million from the Ireland Strategic Investment Fund (ISIF) from which it will lend, on commercial terms, to developers who may be experiencing difficulty obtaining adequate funding for commercially viable residential projects. With this funding it is estimated that HBFI could have capacity to fund in the region of 6,000 homes in the coming years, making a significant contribution to addressing the current shortfall in residential supply in the market.

Passage of the legislation is a priority for the Government and the Bill will now commence through the Houses of the Oireachtas.

Minister Donohoe stated ‘I welcome the publication of the Home Building Finance Ireland Bill as a measure to increase financing for much needed residential developments. Not only will HBFI contribute to addressing the current shortfall in the supply of new housing, but it has the potential to benefit small to medium-sized developers with viable sites in locations that are currently not receiving adequate investment’.

“HBFI will be funded through €750 million, which is being made available by Ireland Strategic Investment Fund (ISIF), which is managed and controlled by the NTMA. It will be established as a temporary measure to address a shortage of funding in the market and its continued operation will be reviewed regularly. It is envisaged that HBFI will commence lending activity by the end of 2018, with the capacity to have a significant impact on residential market property development across the coming years.”

Minister Murphy, added: ‘HBFI will play an important part of the Government’s overall strategy to increase the supply of new housing within the State.  Together with the action plan laid out in Rebuilding Ireland, I am confident that HBFI will help provide a further impetus for the continued increase in home building across the country’.

ENDS

Thursday 14 June, 2018

 

Notes to editors

  • HBFI is being established to increase the availability of debt funding on market terms to commercially viable residential development projects in the State. The lack of such finance has been identified as a key contributory factors to the shortfall in residential supply. Increased access to debt funding will broaden the availability of credit generally and particularly for viable projects which are not currently the focus for the main banks or alternative lenders operating in the market.
  • HBFI will be established as a private company formed under the Companies Act 2014 with shares held by the Minister. HBFI will be governed by its own board of directors and, similar to NAMA and the Strategic Banking Corporation of Ireland (SBCI), HBFI will be provided with staff and support systems from the National Treasury Management Agency (NTMA) on the basis of a management agreement.
  • HBFI will be funded through €750 million, which is being made available by Ireland Strategic Investment Fund (ISIF), which is managed and controlled by the NTMA.
  • HBFI lending will be on commercial, market-equivalent terms and conditions. The exact terms of lending will depend on the risk profile of each project, the quality of collateral and the creditworthiness of the borrower.
  • This lending will be regularly benchmarked to the market to ensure that HBFI is lending on market equivalent terms. It is essential that HBFI’s undertakes lending on such terms in order to ensure that its operations are compatible with EU State Aid rules.
  • Sites eligible for lending must have full planning permission, be under the control of the borrowers, have a minimum delivery capacity of 10 units and be commercially viable to develop.
  • HBFI will be audited by the C&AG and accountable to the Oireactas in the normal manner.
  • HBFI will be established as a temporary measure to address a shortage of funding in the market and its continued operation will be reviewed regularly.
  • Subject to successful passage of the Bill, it is envisaged that HBFI will commence market engagement later this year and will commence lending activity by the end of 2018.

Tuesday, 5th June 2018

 

  • An Exchequer deficit of €24 million was recorded to end May 2018. This compares to a surplus of €383 million in the same period last year. The €407 million year-on-year decrease in the Exchequer balance was primarily due to an increase in expenditure (both voted and non-voted), which was somewhat offset by increased tax revenue.
  • Tax revenues of €20,544 million were collected to end-May 2018, an annual increase of 5.0% or €973 million on end-May 2017. This was in line with profile, up 0.4% or €77 million.
  • Overall, total net voted expenditure to end-May 2018, at €19,336 million, was 1.3% or €249 million below profile, and up €1,504 million or 8.4% in year-on-year terms.
  • Combined receipts from non-tax revenue and capital receipts of €3,322 million were up 8.4% (€258 million) year-on-year.
  • Non-voted expenditure of €4,554 million was up year-on-year by 7.6% or €320 million. This annual increase was driven by a higher EU budget contribution due to both Ireland’s increased share of EU budget obligations and timing associated with the call-up of funds by the Commission, and an expected increase in debt servicing costs.

Fiscal Monitor – May 2018

ENDS

Contact:

Aidan Murphy, Press Officer, Department of Finance – +353 85 886 6667
Ben Sweeney, Press Officer, Department of Public Expenditure and Reform – +353 85 806 9313

pressoffice@finance.gov.ie
pressoffice@per.gov.ie

Fifth Progress Update received from the Special Liquidators of IBRC

The Minister for Finance, Mr. Paschal Donohoe T.D. today published the fifth Progress Update Report on the Special Liquidation of IBRC. This report was formally requested by the Minister for Finance, through the Department of Finance, from the Joint Special Liquidators of IBRC, Mr Kieran Wallace and Mr Eamonn Richardson and is now available on the Department of Finance website.

Commenting on the continued progress being made on the liquidation, the Minister for Finance, Mr. Paschal Donohoe T.D. stated:

“This latest Progress Update Report continues to highlight the progress being made by the Joint Special Liquidators in winding up IBRC. In December 2017, they began issuing a second interim dividend payment of 25% to admitted unsecured creditors of IBRC bringing the total dividend paid so far to 50%. This report also highlights that the Joint Special Liquidators intend to make a further dividend announcement before the end of this year with the continued expectation that the eventual unsecured creditor dividend will be in the range of 75%-100% of all eligible claims. However, the ultimate level of dividend paid to each creditor cannot be known until all remaining tasks have been completed.”

Minister Donohoe also welcomed the inclusion of an estimation of a timeline for the completion of the liquidation:

“As this Report shows, a large amount of work has been completed in the liquidation, however there still remains a range of workstreams which will take time to complete, particularly the resolution of the remaining legal cases. The Joint Special Liquidators have indicated their expectation that the liquidation of IBRC should be substantially completed by the end of 2022 at a total estimated liquidation cost of between €291m-€306m, however it is important to note that this is subject to change depending on future events which are outside the control of the Joint Special Liquidators”.

“I would like to thank the Joint Special Liquidators and their staff who have worked on this project over the past five years and I note that this report highlights the progress which they have made while also highlighting the remaining tasks which they will be required to complete over the coming years. I am confident that their remaining work on this liquidation will be completed with the same effort as has been shown since the outset of the liquidation.”

Thursday 31st May 2018

ENDS

 

For Further information contact:

Aidan Murphy, Press Officer, Department of Finance

085 886 6667

pressoffice@finance.gov.ie

Notes for editors

  1. The estimated timeline and estimated fees for the completion of the liquidation which is included in this Progress Update Report are based on a number of key assumptions including:
  • The on-going management of c. 136 sets of legal cases to which IBRC (in special liquidation) remains party are concluded and any appeals heard within the projected period.
  • No new material regulatory reviews or investigations which IBRC would be required to establish a special project team is assumed. Ongoing day to day regulatory interaction assumed.
  • No new material creditors attempt to submit a claim in the liquidation.
  • Liquidation of the remaining subsidiaries.
  • Wind down of the remaining loan book of c. €3.5bn during the projected period.
  • The realisation of all remaining assets during the projected period (majority can only be sold upon resolution of ongoing litigation) in an orderly manner without incurring significant transaction and tax costs.

* Please see page 37 of the Progress Update Report for further information on the estimated timeline and estimated fees.

 

  1. The estimated liquidation fees of between €291m-€306m for the completion of the liquidation should be considered in the context of the scale of the activities undertaken by the Special Liquidation which has seen almost €22bn of assets prepared and brought to the market since 2013 and raised inflows to date of €17bn which has been to repay the outstanding liabilities of IBRC.

 

  1. Tasks which remain to be completed include:
  • The on-going management of circa 136 legal cases (which has reduced from c. 175 cases since May 2017).
  • The completion of the creditor adjudication process.
  • The work with the Commission of Investigation.
  • The management of the remaining loan book.
  • The realisation of all remaining assets.
  • The continued compliance with regulatory and other required reviews.

Minister of State at the Department of Finance, Michael D’Arcy TD is in Cork today (Monday) for a series of official engagements in his capacity as Minister for Financial Services and Insurance.

 

Minister D’Arcy will meet with financial services companies and host a roundtable discussion with Cork Chamber to discuss developments in the international financial services sector. The Minister will also visit the Financial Services Innovation Centre at UCC.

 

Later today, as part of a series of regional insurance engagements, Minister D’Arcy will host a meeting in Cork City to update Cork businesses on the Government’s work to address the cost of insurance. The meeting will be attended by local businesses, public representatives and business groups.

Speaking ahead of the visit, Minister D’Arcy said “Cork is a well-established location for foreign direct investment and has led the way in achieving a critical mass of financial services companies. In delivering the Government’s 5 year strategy for International Financial Services, I placed particular emphasis on the growth of the sector in the regions. Over 30% of the jobs in the IFS sector are now located outside of Dublin. I look forward to further supporting Cork and replicating its model in other regional hubs across the country.”

 

In relation to the meeting on insurance, Minister D’Arcy said: “These regional meetings provide an important opportunity for me to hear first-hand from local businesses across the country, about the issues they face in obtaining insurance. I am aware of the considerable impact that the cost of insurance has on businesses and acknowledge that some premiums are very difficult to justify. The Government has prioritised work to address rising costs for individuals and businesses, and as Chair of the Cost of Insurance Working Group, I can confirm that significant efforts are being made to address many of the issues in the sector which will ultimately lead to a more stable insurance market.”

ENDS
 

Contact:
Aidan Murphy – Press Officer, Department of Finance – 085 886 6667 / Aidan.murphy@finance.gov.ie
Presssoffice@finance.gov.ie

 

 

Notes to Editors:

The regional meeting on insurance will take place at the Republic of Work, on South Mall, Cork at 18:30.

 

In Brussels today (Friday), the ECOFIN Council, which was attended by the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, reached agreement on a package of measures aimed at further strengthening the resilience of banks, enhancing financial stability in the EU and protecting taxpayers in the event of a future European banking crisis.

The measures will implement reforms agreed at international level following the 2007-08 financial crisis. Today’s agreement builds on the post crisis regulatory reforms which amongst other things implemented consistent capital requirements for banks, introduced a single rule book and established the Single Supervisory Mechanism and the Single Resolution Mechanism.

Speaking from Brussels today, Minister Donohoe said: ‘This package of measures is another step in the delivery of Banking Union in the EU. The measures will further reduce risk in the banking sector and ensure that our banks are stronger and better supervised, that they are adequately capitalised and that appropriate safeguards are in place to protect the taxpayer into the future. I thank the Bulgarian Presidency, and their predecessors, for their hard work on this file and I look forward to constructively supporting them in their negotiations with the European Parliament’

Ends

Contact:
Deborah Sweeney – Press Adviser to Minister Donohoe – +353 86 858 6878
Aidan Murphy – Press Officer, Department of Finance – +353 85 886 6667
pressoffice@finance.gov.ie

Wednesday 23rd May 2018

Fund aims to strengthen public finances and improve Irish economy’s resilience to external economic shocks

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., today (Wednesday) welcomed the Government’s decision to approve drafting of a Rainy Day Fund Bill.

Announcing the decision, the Minister said: ‘The Rainy Day Fund is an important element of this Government’s strategy to strengthen public finances and improve the Irish economy’s resilience to external economic shocks. Setting up the Fund is part of a prudent budgetary and financial strategy, and will fulfil an important commitment in the Programme for a Partnership Government’.

Minister Donohoe set out his plans for the Rainy Day Fund in the Summer Economic Statement 2017, and again in Budget 2018. His intention is to transfer an initial tranche of €1.5 billion from the Ireland Strategic Investment Fund (ISIF), with further annual contributions of €500 million each year from 2019 to 2021. This will see the Rainy Day Fund reach €3 billion by the end of 2021.

The purpose of the Fund is to act as a counter-cyclical buffer to protect against severe economic shocks. The proposals also allow the annual €500 million to be held as an in-year ‘contingency reserve’ so that, in the event of an unforeseeable natural or other disaster, some of the annual contribution may instead be spent on remedying the effects of that event.

Commenting on the Fund, the Minister said: ‘We have seen in our recent history just how vulnerable Ireland is to external economic shocks. We have worked very hard to stabilise our public finances, and it is vital that we build on this work and put in place longer-term mitigation strategies that can help protect us against extremes in the economic cycle. I intend to advance this legislation as soon as possible to achieve this goal’. 

Ends 

Note for Editors

The purpose of the Rainy Day Fund is to mitigate severe economic shocks, in excess of the normal fluctuations of the economic cycle. In view of the unpredictability of such events, the Minister does not propose detailed economic triggers: this is to ensure that time-lags in assessing such triggers do not operate to make the Rainy Day Fund essentially inaccessible in case of need.

The drawdown criteria will be based on an assessment by the Department of Finance. Based on this the Minister of the day may ask Government to decide that drawdown is justified; if Government agrees, the Minister will then seek a resolution of the Dáil authorising drawdown of funds to the Exchequer.

This process ensures that Dáil Éireann will be fully involved in any future decisions regarding drawdown, and further decisions on expenditure of the monies will be subject to voted expenditure procedures.

The in-year contingency reserve is intended for events which are not reasonably foreseeable, such as, for example, a recurrence of foot-and-mouth, or multiple very severe weather events.

21.5.2018

Minister for Financial Services and Insurance, Michael D’Arcy TD is in Galway today (Monday) as part of a series of regional events to update on the Government’s work to address the cost of insurance. The meeting, arranged by the Department of Finance, will be attended by local businesses, public representatives and business groups.

Speaking ahead of the meeting, Minister D’Arcy said “These regional meetings provide an important opportunity for me to hear first-hand from local businesses across the country, about the issues they face in obtaining insurance. I am aware of the considerable impact that the cost of insurance has on businesses and acknowledge that some premiums are very difficult to justify. The Government has prioritised work to address rising costs for individuals and businesses, and as Chair of the Cost of Insurance Working Group, I can confirm that significant efforts are being made to address many of the issues in the sector which will ultimately lead to a more stable insurance market.”

As part of his visit to Galway, Minister D’Arcy will also conduct a round table with IFS companies as part of the regional focus of the Government’s five year strategy for the International Financial Services sector, IFS2020.

Monday 21st May 2018

ENDS

Friday, 18th May 2018

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, on behalf of the Government, confirms that the collection of the alleged State aid from Apple has commenced today (Friday) with the payment of the first tranche of [circa €1.5 billion] being deposited in the Escrow Fund. This is the first of a series of payments with the expectation that the remaining tranches will flow into the fund during Q2 and Q3 of 2018 as previously outlined.

There will be no further official comment on collection of the alleged State aid until the full recovery has been effected which is expected by the end of Q3 2018.

The Government does not accept the Commission’s analysis in the Apple State aid decision and have lodged an appeal with the European Courts. However, we have always been clear that we are fully committed to ensuring that recovery of the alleged Apple state aid takes place without delay and have committed significant resources to ensuring this is achieved.

ENDS

Contact:
Deborah Sweeney, Press Adviser to Minister Donohoe, +353 86 858 6878
Aidan Murphy, Press Officer, Department of Finance, +353 85 886 6667
pressoffice@finance.gov.ie

The Cost of Insurance Working Group – chaired by the Minister of State for Financial Services and Insurance, Michael D’Arcy TD – has published its Fifth Progress Update.  This quarterly report is the first to provide details on the implementation of the Report on the Cost of Employer and Public Liability Insurance, which was released last January, as well as continuing to outline developments in respect of the Report on the Cost of Motor Insurance recommendations.  Both of the primary Reports and all five quarterly updates are available on the Department of Finance website.

In relation to the Liability Insurance Report, all eight actions scheduled for delivery in the first quarter of the year have been fully completed.  While it is appreciated that some of these are stepping stones to the implementation of broader policy initiatives, it is envisaged that further significant progress can be made over the next six months, with the vast majority of the total number of actions (26 out of 29) due for completion before the end of 2018.

Of the four actions in the Motor Report with a Q1 2018 deadline, one has been met in full and it is expected that at least two of the other three will be concluded during the second quarter.  The Action Plan Monitoring Dashboard for the Motor Report currently indicates that 40 of the 50 separate deadlines set thus far have been met.

Taking implementation of the action points from the two Reports into consideration, therefore, 48 of 58 separate deadlines overall have been met since January 2017.  Minister of State D’Arcy has stated that while he is looking for the rate of achieving such targets to be further improved upon, he wishes to acknowledge “the continued determination of the members of the Working Group to push for all of the proposed measures to be put in place in their entirety as soon as possible and believes that the pattern of decreasing average motor premiums can be sustained and translate to similar price movements across all classes of insurance.”

The Working Group and associated sub-groups have been continuing to meet regularly in order to ensure the focus remains fixed upon the timely implementation of all the recommendations of the Report on the Cost of Motor Insurance and the Report on the Cost of Employer and Public Liability Insurance.

 

ENDS

11 may, 2018

 

Further information from:

Aidan Murphy (Press Office) – pressoffice@finance.gov.ie

Background Note to Editors:

The Cost of Insurance Working Group was initially chaired by the Minister of State at the Department of Finance, Mr Eoghan Murphy T.D.  However, following his appointment as Minister for Housing, Planning and Local Government, he was replaced as Chair by Minister of State for Financial Services and Insurance, Mr Michael D’Arcy T.D. The Working Group is comprised of representatives from the Department of Finance, the Department of Business, Enterprise and Innovation, the Department of Justice and Equality, the Central Bank of Ireland, the State Claims Agency, and the Personal Injuries Assessment Board.

The Report on the Cost of Motor Insurance was published in January 2017 and made 33 recommendations with 71 associated actions to be carried out in an agreed timeframe.  The Report on the Cost of Employer and Public Liability Insurance was published in January 2018 and made 15 recommendations with 29 associated actions to be carried out in an agreed timeframe.

There is a commitment in both Reports that the Working Group will prepare quarterly updates on its progress. The first update was published in May 2017, the second in July 2017, the third in October 2017 and the fourth in January 2018 and all four provided details on how the implementation of the recommendations were progressing, with a particular focus on the action points which were due for completion during the respective quarters – 10 in the first quarter, 17 in the second quarter, five in the third quarter and 14 in the fourth.

This Fifth Progress Update is the first such quarterly report to encompass both the Motor and EL/PL Reports and provides details on how the implementation of the recommendations is progressing, with a particular focus on the 12 actions which were due for completion during Q1 from both Reports. 9 of the 12 actions have been completed.  This consists of one action point from the Motor Report and all 8 from the EL/PL Report.

The three action points which have not been achieved on time in Q1 2018 have, it is envisaged, been in effect merely pushed back one quarter.  One relates to the extension of the deadline at EU level for transposition of the Insurance Distribution Directive, another is due to the agreed amalgamation of two separate Personal Injuries Commission reports into a single report, while the final delayed action is due to the emergence of issues of a technical and data protection-related nature in the development of a register of personal injuries proceedings.

Second Motor Insurance Key Information Report

Cost of Insurance Working Group

11 May 2018

Minister of State, with special responsibility for Financial Services and Insurance, Michael D’Arcy T.D., today published the second Motor Insurance Key Information Report of the Cost of Insurance Working Group (the Working Group).  The Report is the second in a series of reports designed to address Recommendation 12 of the Cost of Insurance Working Group, which aim to increase the level of transparency of the insurance sector in advance of the National Claims Information Database.  The Report follows up on the first report, published in July 2017.

This Report provides information on overall ultimate claims costs trends from 2011 to 2016 for the main insurance companies operating in the Irish motor insurance market, who are Insurance Ireland members.  It sets these out broken down into Third Party Injury ultimate claims costs and Non-Injury ultimate claims costs including claims cost arising from damage, fire and theft, as well as windscreen claims.  In addition, it provides details on earned premium income and exposure in the sector for the same years.

Some key findings in the Report include:

  • Total claims costs per policy, for all claims types, based on projected ultimate costs, increased by about 2.7% per year, or 14% over the period from 2011 to 2016. These costs include both the general and special damages elements of compensation as well as associated costs such as legal, medical and other fees.
  • Driving this increase is the ultimate costs associated with third party injury claims, which represent 77% of the proportion of total ultimate claim cost per policy in 2016, as increase from 68% in 2011.
  • At the same time, the proportion of total ultimate claim cost per policy arising from non-injury claims (except Windscreen claims) was 29% in 2011, falling to 21% in 2016. This is primarily as a result of a fall in the frequency of non-injury claims.
  • The data also suggests that frequency of third party injury claims in Ireland is lower than in the UK but that the costs associated with those claims, including compensation, legal and other costs, are significantly higher than the same costs in the UK.

Commenting on today’s publication Minister D’Arcy noted that,

This report continues the process to improve data transparency in the motor insurance sector, particularly with regard to identifying trends with regard to the costs and types of claims being made.  The information contained in this second report, comes from companies representing approximately 90% of the Irish motor insurance market over the period 2011 to 2016, and has never before been published in this way on an aggregate basis across the industry.  The series of reports being published by the Department in advance of the establishment of the National Claims Information Database, demonstrate the potential usefulness of the Database in the future.  I would like to thank the insurance industry for their willingness to engage constructively on this project and look forward to the next report later this year, as well as progress on the National Claims Information Database legislation.”

 

ENDS

Further information from:

Aidan Murphy (Press Office) – pressoffice@finance.gov.ie

 

Detailed Information for Editors

 Preparation of the Report

A Sub-group of the Working Group, chaired by the Department of Finance, was established in January 2017 to implement this and other recommendations to improve data transparency.  The Sub-group includes members from the Department, the Central Bank, the State Claims Agency, the Personal Injuries Assessment Board and the Central Statistics Office.

The Sub-group engaged extensively with Insurance Ireland who indicated that a number of the metrics identified in the Working Group’s Report were not available in a consistent fashion due to different definitions and different ways for reporting and recording data.  A data set was agreed and a data request was issued to Insurance Ireland in March 2017.

This request sought information in two tranches.  The first tranche was received on 13 June 2017 and resulted in the publication of the first Motor Insurance Key Information Report in July 2017.

In line with the complexity of the additional data being requested in the second tranche, it was agreed that industry would not provide this data until 29 September 2017.  Insurance Ireland engaged independent consultants Verisk to collect and compile the data in the case of this more complex data set.  On 18 December 2017, a return, in the form of a report by Verisk outlining certain data and conclusions, was submitted to the Department by Insurance Ireland.

The Department while accepting that the process to collate the data was rigorous, emphasises that any conclusions reached on the data are Verisk’s and have not been subject to any further actuarial analysis by it or the Central Bank.  This is because, from a practical and cost perspective, there was little to be gained in the subgroup’s view from procuring a further actuarial analysis to verify the return, as to do so was unlikely to result in a major difference in outcome due to the fairly detailed approach to the gathering of this data by Verisk.  However, some clarifications in relation to the data and conclusions arrived at were sought and received from Insurance Ireland and Verisk.

Content of the Report

The attached Report has been prepared by the Sub-group using the data provided by Verisk on behalf of Insurance Ireland.

The key difference from the first report is that the claim costs presented in this report are ultimate claim costs.  In that regard, detailed information is provided on:

  • the projected ultimate frequency (i.e. the number of claims per policy) and average cost per claim for:
    • Third Party Injury claims, split into those claims where the Incurred Cost was always less than or equal to €250,000, and claims where the Incurred Cost was ever greater than €250,000;
    • total Third Party Injury claims;
  • the projected ultimate frequency and average cost per claim for non-Injury claims, split into Third Party Damage, Own Damage (i.e. claims made by an insured party for accidental damage to their own vehicle), other property-related claims (such as Fire and Theft), and Windscreen claims; and
  • the projected ultimate claim cost per policy for each claim type.

The Report includes a Summary of Key Data at the outset and appendices at the end setting out some of the relevant data received, the market coverage of those surveyed, the data return rates and methodologies used.

  • Part 1 of the Report sets out general information on the motor insurance sector.
  • Part 2 provides information on overall ultimate claims costs trends.
  • Part 3 looks at Third Party Injury ultimate claims costs trends.
  • Part 4 looks at Non-Injury ultimate claims costs trends.
  • Part 5 provides details on earned premium and exposure.

The Report is neutral in its presentation of the statistics and does not seek to engage in extrapolation or speculation.

Conclusions of the Exercise

The Sub-group believes that this exercise continues to lay the groundwork for the effective establishment of the National Claims Information Database as it helps to get insurers into the right frame of mind in terms of preparation for this next step.  However, the significant scale of the exercise also demonstrates how complex this whole area is and reinforces the importance of having a National Claims Information Database type framework arrangement in place sooner rather than later.

The Minister of State for Financial Services and Insurance, Michael D’Arcy TD has announced the commencement of a selection process to identify an international member for the International Financial Services 2020 Strategy’s Industry Advisory Committee. This is a voluntary position and is advertised on the Department website (details below) and on StateBoards.ie.

Commenting on the launch of the process, Minister of State D’Arcy said: ‘The role of the International Member of the Industry Advisory Committee have proved invaluable as a way to provide us with an international perspective on developments in the international financial services scene which helps us to ensure our offering for the sector remains competitive and responsive to the global environment’

‘Given the nature of the role we are looking for a person with significant experience in the international financial services sector with a broad knowledge of the global IFS industry’

The closing date for expressions of interest is 6pm on 25 May 2018 and applicants are invited to submit an Expression of Interest and CV to ifs2020@finance.gov.ie with the subject ‘International Member – Industry Advisory Committee’.

Applicants should demonstrate their suitability for the post in terms of the skills and experience necessary to effectively undertake the role of International Member to the Industry Advisory Committee.

Expressions of Interest

ENDS

9th May, 2018

Note to Editors:

More information on the Government’s International Financial Services Strategy is available here: https://www.finance.gov.ie/what-we-do/international-financial-services/

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, met with Klaus Regling, Managing Director of the European Stability Mechanism (ESM) today (Tuesday). The two discussed the successes of the Irish economy after the crisis, and the economic situation in the wider euro area. They agreed on the need to continue to strengthen the monetary union, and reviewed the possible development of the ESM in that context.

Speaking about the meeting, Minister Donohoe said: ‘The creation of the European Stability Mechanism (ESM) was one of the key euro area reforms after the crisis. It has quickly established itself as a very effective and important institution. Four of the five countries that received EFSF or ESM loans have now successfully ended their programmes, and have among the highest growth rates in the euro area’. 

Together with all other euro area Member States, Ireland is a member of the ESM. As part of the EU-IMF Programme of Financial Assistance, Ireland was also a beneficiary of its predecessor, the European Financial Stability Facility. Officials from the ESM therefore continue to visit Ireland on a twice-yearly basis, participating in Post-Programme surveillance reviews for the purpose of its Early Warning System. The next review will take place next week.

“Ireland has made a remarkable recovery since the crisis, and represents one of the clearest success cases of Europe’s strategy to fight the crisis,” said Mr Regling.

Mr Donohoe expressed Ireland’s appreciation for the support of the ESM in agreeing to Ireland’s early repayment in full of its outstanding IMF Programme loans and the bilateral loans to Sweden and Denmark. This was an important milestone for Ireland in its recovery, which continues at a robust pace.

It is essential that euro area Member States continue to explore how to make the economic and monetary union more effective. Part of the current discussions are focused on the future role and remit of the ESM. Discussions on the ESM lending toolkit, and on whether the ESM should play a greater role in programme design and monitoring in the future, are ongoing at both the technical and  political level. Ireland agrees that the ESM should be strengthened and is open to exploring options for its development into a European Monetary Fund (EMF). The potential role of the EMF of course requires careful consideration and deliberation.

“While discussions remain ongoing, it is clear that the ESM will continue to play a key role in safeguarding the financial stability of the euro area,” said Mr. Regling.

Notes to Editors

  • Klaus Regling is the Managing Director of the European Stability Mechanism (ESM)
  • The ESM was established in October 2012 as a successor to the EFSF (the European Financial Stability Facility) which was created as a temporary crisis mechanism in June 2010.
  • The ESM can provide financial support to Euro Area Member States where it is found to be indispensable to safeguard the financial stability of the Euro Area as a whole and of its Member States.
  • The ESM operates on a ‘cash for reform’ basis, similar to the International Monetary Fund, as it includes strict conditionality in its lending.
  • The lending toolkit of the ESM comprises direct loans to Member States, Precautionary Credit Lines, indirect and direct bank recapitalisation and bond market purchases. To date, the only instruments activated have been ESM loans and indirect back recapitalisation. The ESM has, to date, provided financial assistance to Cyprus, Greece and Spain (the assistance to Spain was used for the sole purpose of restructuring its banks). The EFSF has provided financial assistance to Ireland, Portugal and Greece.
  • The ESM implements an Early Warning System to detect loan repayment risks (preparing a quarterly payment overview for each beneficiary Member State)

Ends

8 May, 2018

88% of impacted customer who have been identified have now received offers of redress and compensation

Remaining 12% expected to receive offers by end-June 2018

Rate rectification has now been completed in 98% of cases requiring it.

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D., has today (Wednesday) welcomed the Central Bank’s latest progress report on the Tracker Mortgage Examination. This progress report is the eighth public update since the Central Bank initiated its industry-wide Tracker Examination in October 2015. 

Minister Donohoe said: ‘I am pleased to note that this update demonstrates the progress lenders have made in providing impacted customers who have been identified with adequate redress and compensation. As at end-March, approximately 37,100 customers have now been identified as having been impacted by the tracker failings of their lenders. This is an increase of 3,400 on last December’s figures and includes 7,100 impacted tracker borrowers who were identified prior to the commencement of the industry-wide examination’. 

“Significant progress has also been made in terms of redress and compensation. A total of €459 million has now been provided for customers identified up to the end-March. This includes €47 million paid in redress and compensation to customers identified outside of the industry-wide examination. Of the customers identified so far, 88% have now received offers of redress and compensation. The Central Bank expects the remaining 12% to have received offers by end-June 2018. It is also encouraging that 98% of those customers that were on the wrong rate have had the situation rectified and their appropriate rate restored.” 

While The Central Bank now believes that the vast majority of impacted customers have been identified, the Bank will continue to carry out its review and supervisory work, and it is expected that there will be some further increase in the number of impacted customers before the examination is concluded. 

The Central Bank has also commenced enforcement proceedings against all of the main lenders. During the course of its investigations the Bank will consider all possible angles, including potential individual culpability. 

Minister Donohoe concluded: ‘The progress shown in this update demonstrates that the Central Bank Tracker Examination is succeeding in restoring impacted tracker customers to their correct mortgage interest rate and in providing them with redress and compensation that reflects the level of detriment they have suffered. The Minister also believes that lenders’ behaviour has been completely unacceptable and that as the Central Bank has noted in its update, ‘the Examination has exposed a clear lack of consumer-centred culture in lenders’’. 

“I would like to thank the Central Bank for its work on the Examination and fully support it in its remaining endeavour to complete the Examination as quickly as possible. All impacted tracker customers must receive appropriate redress and compensation. I forward to receiving a final report from the Central Bank upon its completion of the Examination.” 

ENDS

25 April, 2018

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, Minister for Health, Simon Harris TD and Minister of State for Health Promotion Catherine Byrne TD today (Tuesday) welcomed the finding of the European Commission that the upcoming sugar-sweetened drinks tax does not constitute State aid.

This allows for the commencement of the Sugar-Sweetened Drinks Tax on 1st May 2018.

The tax on Sugar-Sweetened Drinks was announced as part of Budget 2017 with the launch of a public consultation which ran from Budget night until January 2017. Following on from that process, a series of technical consultations took place with officials from the Department of Finance and the Revenue Commissioners, together with representatives from the soft drinks industry.  This positive engagement with industry continued throughout the process. Budget 2018 provided for the final details of the tax including the rates and thresholds.  

The legislation governing the tax was delivered through the Finance Act 2017.  For reasons of clarity, a legislative amendment will be made in this year’s Finance Act to impose a calcium threshold on products in three exempted subheadings under the EU classification system to ensure exempted products are comparable to dairy.

Ireland has engaged in extensive and constructive discussions with, and submitted a formal notification to, the European Commission to ensure that once commenced, the Sugar Sweetened Drinks Tax does not infringe EU State aid law. With today’s announcement that process is complete and the tax can commence on 1 May 2018.  

Commenting on the sugar-sweetened drinks tax, the Minister Donohoe said: ‘The Department of Health recommended the introduction of a tax on sugar-sweetened drinks to help reduce rates of overweight and obesity in Ireland. The sugar-sweetened drinks tax is an important signal to industry to reformulate their products to reduce the sugar content offered to consumers.  From the consumer perspective, the imposition of a financial barrier on sugar sweetened drinks will result in reduced consumption by incentivising individuals to opt for healthier drinks.  The introduction of the tax delivers on the commitment made in the Programme for Partnership Government and will ultimately benefit society as a whole’.

Welcoming the introduction of the tax, Minister Harris said: ‘This is significant and positive news and represents major progress under Healthy Ireland towards tackling obesity. With one in four children on the island of Ireland either overweight or obese, this tax is one of a range of measures that can help change parents’ and children’s behaviour. There is no nutritional value in these sugar-sweetened drinks and it has been proven that the intake of these beverages, particularly in children, leads to weight gain and tooth decay’.

“Our Healthy Weight for Ireland – Obesity Policy and Action Plan 2016 sets out a range of policy measures and interventions to reduce the number and proportion of overweight adults and children in Ireland and this is one of the significant measures outlined. Industry also has its part to play in this and we hope to see continued reformulation of products to reduce levels of added sugar in these products.”

Minister of State for Health Promotion, Catherine Byrne TD said: ‘I am delighted that this sugar tax in now being introduced. This is a very practical measure under Healthy Ireland’s obesity policy and will greatly help parents in their efforts to keep themselves and their children healthy. I believe it will really contribute towards making the healthy choice the easier choice’.

ENDS

Tuesday 24th April 2018

 

Notes to Editors:

The Sugar-Sweetened Drinks Tax will apply to:

  • Water and juice based drinks with an added sugar content of over 5 grams per 100 millilitres.
  • There are two rates of tax with the first rate of 20 cents per litre applying to drinks with 5 grams or more but less than 8 grams per 100 millilitres.  The second rate of 30 cents per litre will apply to liable drinks with 8 grams or more of added sugar per 100 millilitres.
  • Pure fruit juices are not subject to the tax.  However, once sugar is added to pure fruit juice the entire sugar content becomes liable.
  • Dairy products are outside the scope of the tax on the basis of the nutritional value they offer, such as calcium and protein which are necessary for good health.

The tax is estimated to yield in the region of €40m in a full year, however, it is expected that as industry reformulates and consumers opt for healthier options this figure will reduce over time. The tax will be levied at the first point of supply in the State and taxpayers are required to register with the Revenue Commissioners.  A Sugar Sweetened Drinks Tax – General Taxpayer Guide, which provides detail around the operation of the tax, is available on the Revenue website here.

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe, +353 86 858 6878

Aidan Murphy – Press Officer, Department of Finance – 085 886 6667

Press Office pressoffice@finance.gov.ie

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD,  has confirmed that the Escrow Framework Deed which sets out the detailed legal agreement regarding the recovery of the alleged State aid will be signed by the Minister and Apple today (Tuesday).

This is a significant milestone with regard to the commencement of the recovery of the alleged State aid, as the Escrow Framework Deed is the overarching agreement which will govern the collection and eventual payment of funds.

It follows on from the recent announcements that the Bank of New York Mellon, London Branch has been selected as preferred tenderer for the provision of escrow agency and custodian services and that Amundi, BlackRock Investment Management (UK) Limited and Goldman Sachs Asset Management International have been selected as preferred tenderers for the provision of investment management services.

The signing of the Escrow Framework Deed by both the Minister for Finance and Apple now allows for the appointment of the Escrow Agent / Custodian and the Investment Managers. This in turn activates the process for the collection of the alleged State aid. It allows for the opening of the formal accounts into which the funds will be paid and ensures the timeline for the flow of funds in Q2 and Q3 of 2018 will be adhered to.

It is anticipated that the funds will flow into the Escrow Fund in significant tranches. It is expected that the full recovery will be effected by the end of Q3 2018. 

Speaking today Minister Donohoe said: “The Government fundamentally disagrees with the ruling of the Commission. However, as committed members of the European Union, Ireland is intent on complying with our binding legal obligations in this regard. This is the largest recovery fund of its kind ever to be established and due to the complexity of such, together with our duty to comply with EU procurement rules, it has taken some time to get to this point. I am happy that I can sign the deed with Apple today, which has been the subject of difficult and intensive work. Once the infrastructure associated with the escrow is put in place, following the execution of the deed, I expect that recovery of the funds will be completed by end Q3 2018.”

ENDS

Tuesday 24th April 2018

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe, +353 86 858 6878

Aidan Murphy, Press Officer, Department of Finance, +353 85 886 6667

pressoffice@finance.gov.ie


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