Tag Archives: Michael Noonan

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Minister for Finance Michael Noonan in the Dáil, on October 11, delivering his sixth budget speech since 2011

Minister for Finance Michael Noonan has delivered six budget speeches since 2011.

On October 14, 2015, in relation to Budget 2016, he said:

“There will be no return to the past where tax incentives for developers drove supply.”

On October 11, 2016, in relation to Budget 2017, he said:

“There is an acute shortage of new houses being built in Ireland and I am introducing a Help to Buy Scheme to address this problem.”

Further to this…

First-Time Buyer writes:

No one would deny that we have a housing and homelessness problem. However despite house prices increase ranging from 20% to 50%, there has been very little increase in output.

So what is the problem?… Land hoarding.

Brendan McDonagh recently told the Housing and Homlessness Committee that since the start of 2014, NAMA has sold land that could provide up to 20,000 units – but just 5% of that has so far been delivered in new homes.

In addition, local councils have zoned enough land to provide for 16 years’ demand but many of these sites are not being developed because owners are holding onto sites in the expectation that prices will rise, allowing them to maximise profits.

Unfortunately, councils have no legal powers to force owners of zoned lands to build, even if planning permission is in place and demand for homes is high.

The 3% annual level on unused development land that was introduced in the Urban Regeneration and Housing Act does not take effect until three years after the land is identified as being suitable for housing and the earliest owners will have to pay is 2019.

Furthermore, the CGT exemption that was brought in 2012/2013 allows people to buy land, hold it for seven years and not pay any tax on its sale. So, rather than selling the land people are sitting there waiting until 2019 before they’ll release it to the market.

Even at an individual level, the Government has ensured that properties are passed from one wealthy generation to the next rather than be placed on the open market.

The Government increased the inheritance tax threshold by 11% to €310,000 and Noonan has refused to close an openly abused loophole which allows parents gifting homes worth €1m or more to their children and avoid tax.

So, rather than address the supply side issues, the Government has decided to introduce a Help To Buy Scheme. This will do nothing to address the supply side constraints and, according to Davy’s economists, will simply push up house prices next year and the following year.

The best part though is that in 2015 the same Government commissioned an ERSI report entitled “Tax Breaks and the Residential Property Market” in which they concluded that “tax breaks aimed at stimulating house and apartment building should be avoided”.

The Governor of the Central Bank, Philip Lane, is one of the many critics of the new Help To Buy Scheme and has said that it will end up serving as a subsidy for builders…

Anyone?

 

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Now.

In the Dáil.

Minister for Finance Michael Noonan is delivering his sixth budget speech since 2011. To wit:

9% VAT rate for tourism and hospitality industry will be retained

Start Your Own Business scheme to be extended for a further two years

Low cost, highly flexible loan fund for farmers announced

€1,270 income tax credit for fishermen

Help to Buy scheme announced for first-time buyers relating to newly-built homes

Home renovation scheme extended for two years to end of 2018

Rent-a-Room income ceiling up by €2,000 to €14,000

Lower three USC rates to be reduced by 0.5% – USC 1% rate cut to 0.5%; 3% rate cut to 2.5%; 5.5% rate cut to 5%

2.5% USC rate ceiling increased from €18,668 to €18,772

€100 increase in Home Carers’ Credit to €1,100

DIRT will be reduced by 2% each year to 2020 (41% to 33%)

Mortgage Interest Relief will be extended beyond December 2017 to 2020

Earned Income Tax Credit for self-employed increased by €400 to €950

New relief from carbon tax for solid fuels announced

Intention to introduce tax on sugar-sweetened drinks in April 2018 after public consultation

Excise duty on pack of 20 cigarettes to go up by 50 cents

€1.2bn in funding for housing, with 47,000 new social housing units by 2021

Additional €105m to enable 15,000 more households to avail of the Housing Assistance Payment Scheme

Budget 2017: The key points (RTÉ)

Watch live here

Earlier: What About A Radical Alternative?

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Minister for Finance, Mr. Michael Noonan disputing the C&AG Special Report into the National Asset Management Agency’s sale of Project Eagle.

Watch here.

Project Eagle?

Meanwhile…

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Finance Minister Michael Noonan before the Oireachtas Budget Oversight Committee this morning

Minister for Finance Michael Noonan is appearing before the Oireachtas Budget Oversight Committee this morning ahead of Budget Day on October 11.

From the meeting…

Noonan to phase out USC over five years (RTE)

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Minister for Public Expenditure and Reform  Pachal Donohoe (right) and The Fine Gael Minister for Finance Michael Noonan  at Government Buildings this afternoon

This afternoon.

With the Cabinet agreeing to appeal the decision that ireland gave illegal state aid worth 13bn Euro to Apple….the following is reportedly what was agreed:

1. Arrange for annulment proceedings to be brought before the General Court of the European Union (GCEU) on State aid SA. 38373 (2014/C)(ex 2014/NN) (ex 2014/CP) implemented by Ireland to Apple;

2. Request the Attorney General to prepare the legal grounds in support of those proceedings and to take all other steps incidental to the conduct of those proceedings;

3. Propose the following motion before Dáil Eireann:

That Dáil Éireann:

(i) Supports the Government decision to appeal the European Commission’s decision that Ireland provided unlawful State aid to Apple.

(ii) Commits itself to the highest international standards in transparency in the taxation of the corporate sector;

(iii) Resolves that, no company or individual receives preferential tax treatment contrary to the Tax Acts and calls on the Revenue Commissioners to continue to observe this principle;” and

4. To reaffirm Ireland’s 12 and half per cent corporation tax rate

5. To arrange for a review of Ireland’s corporation tax system by an independent expert to be appointed by the Minister for Finance, excluding the 12 and half per cent corporation rate.

Fight!

Apple ruling is aimed at harming Irish tax regime, claims Noonan (Irish Times)

Apple and state aid: the end of the affair (Vincent Boland, Financial Times)

Earlier: Apple Green

Rollingnews

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DAVOS-KLOSTERS/SWITZERLAND, 31JAN09 - Joseph E. Stiglitz, Professor, Columbia University, USA, at the Annual Meeting 2009 of the World Economic Forum in Davos, Switzerland, January 31, 2009. Copyright by World Economic Forum swiss-image.ch

From top: Minister for Jobs Richard Bruton and economist Joseph Stiglitz

This morning.

On the Today with Seán O’Rourke show.

Fine Gael Minister for Education and Skills Richard Bruton, Anti-Austerity Alliance TD Paul Murphy; former IMF director Donal Donovan, and Irish Independent editor Fionnan Sheahan were on the panel to talk about the Apple tax ruling.

Later in the show, Nobel prize winning economist Prof Joseph Stiglitz spoke to Mr O’Rourke.

Grab a tay.

Richard Bruton: “The principle, that the Irish Revenue authorities ruled on in 1991 and in 2007 was a standard approach. The principle that they enunciated was that a company, based in Ireland, should pay tax on its Irish activities and that was the ruling that was applied but what the EU is trying to now used state aid rules to do is to say that Ireland should become the international policeman for dealing with worldwide problems where companies are seen to play one tax code off against another. Very specifically, in relation to the US situation as you know, they offer a deferral tax system where the liability for tax in the US, which is obviously legitimate ultimately by companies like Apple, where all their research and development goes on – they allow a deferral so that tax is not brought back to the US authorities. But the EU itself has recognised that this €13billion is not available to Ireland because the US, it recognises that the US has a legitimate interest in getting access to this tax revenue and, indeed, their deferral rules would see that revenue taxable in the US and Apple have said that so Donal [O’Donovan] is simply wrong. The [EU] Commission isn’t authoritative on this issue, they are seeking to break entirely new ground…”

Sean O’Rourke: “Well no, what they’re doing is using the rules on the single market which prohibit member states from tailoring special inducements to incur rich companies to locate operations on their soil and the very fact that we allowed Apple, and we connived with Apple nationally, not necessarily breaking any of our own rules, but we allowed them to use Ireland as the basis for this, effectively, non-existent headquarters – no employees, no activity, to put money offshore and to avoid paying tax. It stinks to high heaven and we’ve been caught out on it and maybe we should just accept that fact.”

Bruton: “No you’re wrong, Seán. Ireland has a substantial substance from companies like Apple, 350, 000 over all. In the case of Apple, it’s 6,000 employees and they have paid tax on their earnings in Ireland.”

O’Rourke: “But why do we allow, why do we allow the to pay virtually no tax on their worldwide earnings or 90% of them…”

Bruton: “We apply…”

O’Rourke: “Why do we facilitate that?”

Bruton: “Don’t talk me down when I’m trying to answer….”

Later

Bruton: “The EU wants to make Ireland some sort of international tax policeman which would be entirely negative to our interests and so many countries invested here.”

Paul Murphy: “…This argument by Fianna Fáil and the Government is utterly disingenuous and dishonest. The idea is that somehow Ireland stumbled into this situation of being a tax haven and different companies are managed together in the different loopholes of different countries and they all just happened to set up in Ireland. It was designed to do that. That’s the point of the tax ruling in 1991. So it isn’t about the [EU] Commission now asking Ireland to be a tax policeman in retrospect, because in 1991 and 2007, a ruling was designed to say to Apple: we don’t mind if you come here and you set up Apple Sales International and Apple Operations Europe. And you have head offices that have nobody working for them whatsoever and you funnel through $22billion of profits a year, in the case of Apple Sales International and, don’t worry, we won’t charge you tax on it. So we didn’t stumble into this situation, it was a designed thing and now the Government is trying to like make things not clear because the Government has a real problem on it.”

O’Rourke: “Donal, you don’t often agree or nod when Paul Murphy is speaking but you’re nodding vigorously there.”

Donal Donovan: “Well, you know, you’re right, I don’t often agree with Joseph Stiglitz either but actually I do think there’s a great deal of truth in what Paul says. This is something that has not happened by accident. This is a long-plan strategy and we did remove parts of this last year, and the year before but we did so at the point of a gun. I mean Minister [for Finance] Noonan was quite right when he removed the ‘double Irish’ and his [inaudible] residency but he waited until he had absolutely overwhelming pressure arising for the US and elsewhere and public opinion. And I think we’ve been on the back foot of this, Sean. We have reacted when we’ve been pushed into reacting, there’s no doubt about it that we have not been proactive in earlier years in trying to change the situation. And really, it’s a much bigger issue than the technical question of the legal matters who approved what in 1991. Really this has become a political and moral issue. We’ve seen ever since the US Congress held hearings, we’ve seen it with Panama Papers, Lux Leaks, everything, our 26% [rise in GDP] figure is related to this. All of this, the world is changing and, again, I wouldn’t always agree with Fintan O’Toole on many things but, this morning, he said we have to be on the right side of history and we should get on the right side of history.”

O’Rourke: “So, Richard Bruton… if the situation is changing, and you’ve highlighted yourself how the Government had introduced measures last year, if the situation is changing, why don’t we sort of shrug our shoulders and say to Apple, ‘look, sorry guys, the world is moving along, you’ve got a massive cash pile, something in the order of, is $230billion, we have to take a sizeable slice out of it’, the rules have changed and maybe we’re not going to lose a load of jobs if we do that.”

Donovan: “Well I think that’s right because the arrangements that gave rise to this, you’re absolutely right, have been changed already so it’s not that we’re relying on this to continue in the future… we should do the right thing and make up for it.”

O’Rourke: “Could we not take that approach, Richard Bruton?”

Bruton: “No, because we have established in the OECD a process whereby these sort of reforms will be done on a collective basis, with countries acting together and that is the approach that has already brought the sort of changes we’re talking about where, the way in which companies can aggressively play one tax off, one country off another is being wound back. There is numerous examples of where that occurs in the treatment of interest, the treatment of capital, the treatment of company resident, the treatment of intellectual property, the treatment of deferral of tax and so on and what we have to do is collectively sit down and work out agreements that will be applied universally. What the EU wants to do is to make Ireland the international policeman – to go out and say to the US, ‘you should not be applying deferral system’, ‘you should be collecting money from Apple straight away’ so Ireland should go and collect that money….Let’s not forget that if the word of the Irish authorities, independent Revenue Commissioners, independent of Government, if that cannot be relied upon, on companies who have invested and employed 350,000 people in Ireland, up and down the country…”

O’Rourke: “But we gave our word and then showed we were up to no good. We were conniving with these guys to avoid paying tax…”

Bruton: “That is precisely what we will be fighting to appeal against. There is no, it is not the case that we were conniving with anyone. We made legitimate rulings with the Revenue Commissioners made independently and they offered their opinion and companies have made their decision…”

O’Rourke: “But to quote [European Competition] Commissioner Margrethe Vestager yesterday, if my tax bill was 0.05%, falling to 0.005%, I would think I would need to have a second look.”

Bruton: “But those are bogus numbers because what that ruling is saying is that the activities of Apple in the US, where they do all their research and development, their manufacturing in China, should be taxed, that tax should be collected in Ireland. There is no basis for that, the US authorities will collect tax from Apple on the so-called deferral system that they have and, as you know, this is hotly debated in the US, how they should reform that and whether they should have instruments to bring that money…”

Later

Donovan: “I just want to say…if the Minister Bruton could say: when these rulings were issued in 1991 and 2007, and I accept that they were rulings by the Revenue, did the Revenue check with Brussels at the time, as to whether these rulings were, or would be considered consistent with state aid rules? Because if we went ahead and did them, and issued them without getting the OK from Brussels, then we can’t really complain if, later, Brussels, says: ‘well, no I’m sorry you did these rulings but they were illegal.

O’Rourke: “Minister?”

Bruton: “These are rulings on tax matters and the Irish authorities took a view that is absolutely common across tax world that you are taxed in the jurisdiction on the activities in your jurisdiction. The issue then around tax structures that companies have – that involves much more elaborate collaboration across the system and we’ve sent up vents to precisely address that, this process at the OECD…”

Talk over each other

Murphy: “Minister, you know you’re being dishonest there, you do. You know that the thing was set up to facilitate it, that’s the point of the tax rulings and I think the Government’s spin around this is designed to make it seem all so very complicated right.”

Bruton: “That is not the case.”

Murphy: “And the reality is extremely clear: one of the biggest, multinational corporations in the world didn’t pay tax to the tune of €13billion-plus. It’ll get close to €19billion when you add on interest to Ireland and we are owed that tax. Now, Government would like to make it seem. Yesterday they said, first of all, well, at least the Commission has given us a clean bill of health in terms of Google and Facebook, the Commission had to come out and say, ‘no, we haven’t, we haven’t looked at them’. Then, the Government said, ‘but sure even if we got the money, we could only spend it on paying down the debt’, the Commission came out and said, ‘no, that’s not the case, you can spend it on capital expenditure. And the Government has a major political problem – this is their bank guarantee moment..”

O’Rourke: “And this is my cue to bring in [Irish Independent editor] Fionnan Sheahan. Just speaking of the Government’s political problem. Do you think they’re going to give us a decision today based on Michael Noonan’s recommendation – an immediate decision to appeal?”

Fionnan Sheahan: “No. I think, as Donal has said, they will take time to assess the ruling. You said at the start, the Government’s decision was to appeal – that was half the government the other half was saying something very different. And if you look at the government’s handling of this: the European Commission versus our Government has been a bit like {Danish TV series] Borgen versus Ballymagash [fictional rural town in RTÉ’s Hall’s Pictorial Weekly]. We have Margrethe Vestager basically cleaning us out for an hour yesterday on the steps of the European Commission building, quite authoritatively setting out her case on the basis of the European Commission’s ruling and then we have Michael Noonan basically floundering around, talking about all folksy tales about seed potatoes and so on and so forth. Well, to give you an old folksy analogy to match that: she ate him without salt. And I think there are major questions about Michael Noonan’s handling of this entire affair over recent months.”

Meanwhile, later in the show, Nobel prize winning economist Prof Joseph Stiglitz also spoke to Mr O’Rourke, saying:

“I think they’re [the Irish Government] wrong [to appeal]. I think, it was an interesting discussion [above]. I thought, to put it frankly, what the minister was saying is all utter balderdash. The fact is that you were encouraging tax avoidance, you knew it, let’s not make any pretence about it. You got  a few jobs at the cost of stealing revenues away from countries around the world and that’s the kind of activity that has to be stopped.

Listen back in full here

Meanwhile…

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Last night.

On RTÉ’s Six One.

Minister for Finance Michael Noonan spoke to Brian Dobson about the ruling.

During their discussion, Mr Noonan said:

This isn’t a moral issue. This is a financial and a taxation issue.”

There you go.

Watch back in full here

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Finance Minister Michael Noonan

The Irish Times reports:

Minister for Finance Michael Noonan and Ryanair chief executive Michael O’Leary will both attend this year’s secretive Bilderberg conference which begins in Dresden, Germany on Thursday.

They will feature among a list of leading names in global politics and industry at the three day event where a number of topics are up for discussion including China, European migration, the Middle East, Russia and the US “political landscape”.

See full list of expected attendees here.

Michael Noonan to attend Bilderberg conference in Germany (Irish Times)

Rollingnews

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Chairman of NAMA Frank Daly and Finance Minister Michael Noonan

You may recall the sale of Nama’s property loan portfolio in Northern Ireland – the biggest loss on a Nama loan sale for Irish taxpayers.

The sale is now the subject of investigation by the National Crime Agency in the UK and the Securities and Exchange Commission in the US.

You may also recall how Stormont’s Committee for Finance and Personnel carried out a ‘fact-finding’ review of the sale for eight months.

Publication of an 18-page report on the progress of this review was embargoed until just after midnight this morning.

It criticised Nama and Finance Minister Michael Noonan – specifically for Nama refusing to give oral evidence to the committee; for Minister Noonan not encouraging Nama to give the same; and for Minister Noonan not stopping the sale of the Northern Ireland portfolio once he became aware that bidders PIMCO were due to send a sum of money to Northern Ireland Nama advisor, Frank Cushnahan.

From the report…

For its part, DFP [Department of Finance and Personnel] provided initial oral evidence and papers on 23 July 2015, but subsequently delayed providing further evidence until 9 October 2015, after it had concluded an internal file review and engaged with the NCA.

NAMA, on the other hand, while agreeing to answer questions in writing, refused to give oral evidence. The reason cited by NAMA is that the appropriate forum to which it should account for its activities is the Oireachtas and to committees established by the Oireachtas.

While the Committee does not dispute this point, it believes greater co-operation from NAMA would have assisted it in fully understanding the DFP-NAMA relationship since 2009.

And:

As with the oral and written evidence received from the other stakeholders, including the documents received from the Republic of Ireland’s (RoI) Department of Finance and NAMA, the Committee placed the DFP papers in the public domain, except for seventeen documents relating to individual borrowers.

In this latter case, DFP cited data protection and commercial sensitivity concerns for its request that the documents were not to be released. The Committee, however, took legal advice on this matter and continues to pursue the issue with DFP.

And:

In addition to the aforementioned evidence gathering exercise, the Committee accepted an invite from the Dáil Public Accounts Committee (PAC) to make a formal address on the progress of the review. This invitation was made in light of the respective committee inquiries into the Project Eagle sale.

During the address on 1 October 2015, the Chairperson also took the opportunity to point out that there was an increased onus on NAMA to appear before the Committee, even simply out of courtesy and respect for the institutions in Northern Ireland.

And:

The Committee notes with regret the decision of the NAMA Board not to suspend the Project Eagle sales process once PIMCO had disclosed to the Agency in March 2014 that PIMCO’s proposed fee arrangement with the Brown Rudnick international law firm included also the payment of fees to Tughans, a Belfast law firm, and to a former external member of NAMA NIAC. From the evidence to date, the Committee considers this development to be a core area of concern within the entire sale and purchase process. The need for further information and clarification in this regard underlines the case for NAMA attending an oral hearing of the Committee.

Whilst it is does not fall to this Committee to pursue, given the seriousness of the revelation by PIMCO, it is unclear why the Irish Government’s Minister for Finance, Michael Noonan, did not intervene at this point, by exercising his general powers of direction over NAMA to suspend the sales process until matters were investigated fully. The Committee also notes that Minister Noonan did not inform the Northern Ireland Executive of this development. In addition, the Committee regrets that Minister Noonan did not encourage NAMA to attend an oral hearing of the Committee.

And:

The Committee established that NAMA ‘…had no knowledge of meetings between Mr Cushnahan and prospective purchasers of NAMA-secured assets in Northern Ireland…’ including whilst he was on the NAMA NIAC. This is deeply concerning to the Committee.

And:

The Committee also noted from the BBC (NI) Spotlight programme that the other former external member of the NAMA NIAC, Mr Brian Rowntree, stated that the NIAC members had access to information which was of a ‘commercially sensitive nature’ and which offered ‘commercial opportunity’ and would have been of some value to a bidder for Project Eagle.

This is of particular significance as it appears to contradict the position adopted by NAMA to date. For example, in written evidence to the Committee on 27 November 2015, NAMA stated that the external members of the NAMA NIAC ‘never had access to confidential information’. Furthermore, in evidence to the Dáil PAC on 9 July 2015, the NAMA Chairman, Mr Frank Daly, stated that the external members of the NAMA NIAC ‘did not gain any confidential information or any useful insider information from being a member of that advisory committee’.

Therefore, given these seemingly contradictory positions, the Committee recommends that a full examination is made of what precisely was discussed at the NAMA NIAC meetings and what information was shared with the NIAC members.

And:

The Committee found the refusal of NAMA to attend an oral evidence session particularly unhelpful. NAMA needed to be more open and accessible given the importance of the Project Eagle portfolio to the Northern Ireland economy. The Committee does not accept NAMA’s rationale for not attending an oral hearing of the Committee, especially given that Agency representatives have previously held many meetings with Ministers and officials in Northern Ireland.

Read the report in full here

Previously: Spotlight Falls On Noonan

Mark Stedman/Rollingnews

H/T: Namawinelake