Parliamentary Question: Mortgage Interest Relief Extension

Question to the Minister for Finance (Mr. Michael Noonan, TD)

To ask the Minister for Finance if he will consider a further extension to the tax relief for mortgage interest scheme for persons who bought during the period 2004 to 2008, as persons who bought during this period did so at a time of very high prices and are now repaying very large mortgages, and many of these persons are in negative equity, and it would be extremely beneficial, as it would assist them in keeping up full mortgage repayments; and if he will make a statement on the matter. – Jerry Buttimer

For WRITTEN ANSWER on 12, May, 2015.

REPLY

The Deputy will be aware that mortgage interest relief has been abolished for homes purchased since 1 January 2013. Up until 2018 however, tax relief continues to be available for interest paid on all qualifying home loans taken out on or after 1 January 2004 and on or before 31 December 2012, regardless of whether the individuals concerned are first-time buyers or non-first-time buyers.

This Government is committed to helping address the particular problems faced by those that bought homes at the height of the property boom between 2004 and 2008. In this regard, in Budget 2012, I fulfilled the commitment in the Programme for Government to increase the rate of mortgage interest relief to 30 per cent for first time buyers who took out their first mortgage in that period. This was the period during which house prices peaked. This 30% rate will continue to be applicable to these first-time buyers for the remaining years that mortgage interest relief continues to be available. In the absence of this change the mortgage interest relief available would have gradually reduced to a rate of 15%.

Single individuals, married couples and civil partners that are first-time buyers, qualify for mortgage interest relief for the first seven years of their mortgage up to a maximum ceiling of €10,000 and €20,000 respectively. Thereafter relief is restricted to ceilings of €3,000 and €6,000 respectively.

The system of mortgage interest relief is designed and targeted in such a way that the relief is of greater value in the early years of a qualifying loan where the interest represents a greater proportion of the repayment.  Mortgage interest relief is of lesser value to individuals whose repayments are made up of a higher proportion of principal than interest, as would generally be the case for those who move in to the eighth and subsequent years of their loans.

Given the additional relief already available to those that purchased their homes between 2004 and 2008, over and above that available to other qualifying homeowners and given that mortgage interest relief has now lapsed in terms of new qualifying loans, I am not convinced of the merits of revisiting the provisions at this stage.

Posted under Economic, Finance, Parliamentary Questions

Parliamentary Question: Competition Law

Question to the Minister for Jobs, Enterprise and Innovation (Mr. Richard Bruton, TD)

To ask the Minister for Jobs, Enterprise and Innovation the circumstances in which it is permissible for wholesale suppliers to refuse to supply their products to certain retail outlets; if there are laws precluding such measures that aim to distort open competition; the remedies available to businesses affected by such practices; and if he will make a statement on the matter. – Jerry Buttimer

For WRITTEN ANSWER on 21, April, 2015.

REPLY

Commercial relationships between firms at different levels of the supply chain, such as wholesalers and retailers, are governed in the first instance by the Competition and Consumer Protection Commission (CCPC) Declaration in respect of Vertical Agreements and Concerted Practices and, more generally, under section 4 of the Competition Act 2002, which prohibits anti-competitive agreements between undertakings. Under competition law, wholesalers may refuse to supply retailers for a wide range of legitimate reasons and there is no general obligation under that Act whereby a wholesaler must, in all circumstances, fulfil supply requests from retailers. Legitimate refusals to fulfil such requests may benefit from the exemptions from competition law set out in the Declaration, and in section 4(5) of the Competition Act 2002. Refusals to supply, which arise pursuant to an agreement between competitors, or as part of a dominant firm’s strategy to remove a competitor from the marketplace, may give rise to concerns under competition law, although such cases are invariably very specific.

If the Deputy is aware of matters that may require investigation, he should refer any specific complaints directly to the CCPC. Investigations and enforcement matters generally are part of the statutory function of the CCPC and I, as Minister for Jobs Enterprise and Innovation, have no direct role in the matter.

Posted under Economic, Parliamentary Questions

Parliamentary Question: Common Agricultural Policy Subsidies

Question to the Minister for Agriculture, Food and the Marine (Mr. Simon Coveney, TD) 

To ask the Minister for Agriculture, Food and the Marine the subsidies available to tobacco growers under the Common Agricultural Policy; his plans to alter these; and if he will make a statement on the matter. – Jerry Buttimer

For WRITTEN ANSWER on Tuesday, 31 March 2015.

REPLY

Tobacco is grown in 12 countries in the EU. The main producers are Italy, Bulgaria, Greece, Spain and Poland. These countries account for 85% of the EU tobacco growing. Tobacco cultivation represents 100,000 hectares along with 60,000 specialist producers for this sector. The EU produces up to 200,000 tonnes of dried tobacco leaves per year which is less than 3% of the global yearly raw tobacco production, and imports some 400,000 tonnes a year, mainly from Africa and America. The EU exports up to 100,000 tonnes a year.

In April 2004 the EU Council of Agriculture Ministers decided to reform the raw tobacco sector along the same principles as the CAP reform of June 2003. The system of production quotas was abolished and financial support was decoupled from production. EU Member States covered by the tobacco regime were given a transition period to adjust between 2006 and 2009. During this period, these Member States could either completely break (decoupling) the link between production and the financial link provided to the tobacco sector or continue to link part of the provided aid to production. Decoupling aid from production allows producers to grow other crops if they wish while maintaining incomes.

Since 1st January 2010 the EU has not granted any specific subsidies for raw tobacco production with 50% of the previous tobacco aid incorporated in to the direct payment system and the other 50% went into the EU’s Rural Development Programmes, particularly in tobacco growing regions. The tobacco crop is now treated along with other crops for example cereals under the Single Payment Scheme of the Common Agriculture Policy.

Posted under Agriculture, Economic, Parliamentary Questions