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Wednesday Newspaper Review - Irish Business News and International Stories - - July 04, 2012
By Finfacts Team
Jul 4, 2012 - 8:01 AM
Independent reports that three left-wing TDs should not have used their
taxpayer-funded travel expenses to go around the country canvassing against the
€100 household charge.
The Leinster House authorities finally confirmed they had never intended TDs to
claim travel expenses for attending events outside their constituencies.
But it was unclear last night if they would have to repay the travel expenses
because the authorities are waiting for legal advice before making a definitive
Socialist Party TD Joe Higgins, his colleague Clare Daly and United Left
Alliance TD Joan Collins all had maintained they were entitled to use their
travel expenses to attend anti-household charge rallies around the country.
Mr Higgins and Ms Daly had insisted they were the victims of a "smear campaign"
and that their travel expense claims were entirely legitimate.
But they were forced to backtrack after the Oireachtas Commission -- which is in
charge of Leinster House -- said that travel expenses were designed for journeys
to the Dail, as well as travel around the TD's constituency.
They and Ms Collins are now offering to repay the money -- if the legal advice
rules that they should.
Last night, Independent TD Mick Wallace was the only one of the nine
backbenchers urging a boycott of the €100 household charge to maintain his
silence on his use of travel expenses.
He attended an anti-household charge rally in Swords in Dublin alongside Ms Daly
earlier this year, as well as another protest in Portlaoise.
Ms Daly broke her silence on the issue yesterday by insisting that the travel
expenses controversy would not damage the household charge campaign -- with
700,000 out of 1.6 million households refusing to pay the €100 tax.
"We'll be involved in building that campaign regardless. It will go on," she
And she tried to divert attention by attacking local Fine Gael TD Alan Farrell
for his use of travel expenses.
During an on-air row on local radio station LMFM yesterday, she questioned how
it was possible for Mr Farrell to claim €10,000 last year if he only used it for
travel in Dublin North.
But Mr Farrell told the Irish Independent last night he could stand over his
travel expense claim.
"I've travelled up and around the constituency, which is the largest in Dublin,"
"I do monthly clinics, public appointments and I fill my tank in my car at least
every eight or nine days at €100 a pop," he said.
Mr Farrell said it was "absolutely bizarre" for Ms Daly to have used
taxpayer-funded travel expenses to tell people not to pay a tax.
He said it was "even more ironic" that one of the TDs supporting the boycott was
a tax defaulter.
He was referring to the €2.1m settlement made by Mick Wallace's construction
company with Revenue after the firm deliberately withheld VAT due on apartments.
The controversy over travel expenses has raised questions about the vague rules
governing the travel and accommodation allowance.
The allowance ranges from €12,000 to €37,000 for TDs depending on how far they
live from the Dail.
Independent Tipperary South TD Seamus Healy, who confirmed he had not used
travel expenses for attending a anti-household charge meeting in Kildare, said
that receipts should be required.
Yesterday, Sinn Fein was the only political party which gave an assurance that
all its TDs are only using their travel expenses for constituency travel and
journeys to the Dail.
But just last month, the Irish Independent revealed that the party's finance
spokesman Pearse Doherty had used €8,000 of his travel expenses to hire two
part-time party workers.
Fine Gael said yesterday its TDs were obliged to follow the travel expense
guidelines, while Labour said it was a matter for its individual TDs.
Fianna Fail did not respond.
ULA TD Joan Collins said she had believed that it was possible -- under the
"very confusing rules" -- to claim travel expenses for attending anti-household
charge meetings outside her Dublin South Central constituency.
"If the legal advice comes out that TDs only have their allowance for travel in
their constituency, we'd have to make a decision and pay that money back," she
Independent also reports that Taoiseach Enda Kenny and Tanaiste Eamon Gilmore
once again told ministers to stop talking about the budget yesterday.
Although no individual minister was mentioned, Social Welfare Minister Joan
Burton was regarded as the target of the reminder.
Ms Burton's suggestion that PRSI would have to be increased in December's budget
has attracted controversy. Mr Kenny and Mr Gilmore told ministers it was
"unhelpful" to be commenting on the budget this far out.
The comments came as officials from the troika, the EU/IMF/ECB bailout team,
arrived in Dublin yesterday for their seventh review of Ireland's rescue
Up for review are the on-going reforms of the banking sector -- namely, an
in-depth look at the banks' mortgage books. Progress on the banks' deleveraging
plans will also be assessed as will plans for the impending reorganisation of
the country's credit unions.
The bailout team will also be looking for progress on the unemployment with
particular emphasis on efforts being made to reduce the average duration that
people stay on the live register and tackling the issue of jobseekers refusing
to actively look for work and attend interviews. The review will also focus on
the impending sale of state assets.
Despite the ban on talking about sensitive budget issues, Ms Burton also spoke
at the weekend about the taxation system, raising the tax reliefs high earners
use to reduce their tax bill.
Mr Kenny refused to comment on speculation arising from Ms Burton's speech that
PRSI would increase.
Fianna Fail leader Micheal Martin asked the Taoiseach if he agreed a PRSI
increase was the same as a hike in income tax. But Mr Kenny said he wasn't going
to get into a debate about the Government's plans for the budget.
"I have absolutely no intention of getting dragged into your little game here. I
have no intention of speculating on comment arising from the matters that you
"These are matters for the government to decide as a government and as a
cabinet, and I would remind everybody that that's in the people's interest, that
when the decisions are made by government in respect of the Budget that there
should be then open and public debate.
"Beyond that I don't want to go into it," Mr Kenny said.
Also yesterday, Mr Kenny updated the Cabinet and the Dail on the EU debt deal
agreed in Brussels last weekend as questions remain over its scope.
But the Taoiseach reiterated the budget for next year would not be affected by
The Irish Times reports that
the State is paying over €1 million annually in allowances to Department of
Foreign Affairs staff posted abroad to offset the cost of school fees for their
The Department of Foreign Affairs is also paying
more than €800,000 per year in allowances to cover the cost of top-up health
insurance for its personnel overseas and their dependants as well as in excess
of €280,000 in disturbance allowances for diplomats to assist with the cost of
returning from posts in other countries.
New details have emerged about the scale and type
of allowances given to public service staff both in Ireland and abroad.
A spokeswoman for the Minister for Public Service
and Reform Brendan Howlin said last night he would be bringing proposals to
Cabinet shortly in relation to allowances.
It also emerged last night that the Department of
the Taoiseach is paying a clothing allowance of €444 per year each to a small
number of staff in its protocol section and in the Government Press Office.
Press officers in the Department of the Taoiseach
also receive an “on call” allowance of five hours’ overtime at double time every
week. The Department of the Taoiseach said personal assistants to Government
special advisers received a €7,125 annual allowance. The Taoiseach’s diary
secretary also receives a €7,125 allowance.
Various Government departments said they were
paying allowances of between €14.10 and €45.48 per fortnight on a personal basis
to former Revenue Commissioners staff who were transferred some years ago under
an integration agreement.
Government departments also said they were paying
a special child allowance of just over €2 per week to staff who had been in the
Civil Service from before 1978.
The Department of the Environment confirmed that
22 “field staff” had shared nearly €40,000 last year in untaxed allowances for
making a room available in their homes for use as an office. It said two people
had shared an untaxed payment of nearly €1,000 in respect of an “eating on site
Details of the allowances were provided in
answers to a series of parliamentary questions tabled by Fianna Fáil TD Seán
The Government is currently conducting a review
of 800 allowances paid to public service staff at a cost of €1.5 billion.
Last week Mr Howlin declined to give a list of
the allowances to an Oireachtas committee. It prompted Mr Fleming to seek the
information through parliamentary questions.
Mr Howlin told the committee he had asked
departments to draw up business cases for each allowance which would be
published when the review was completed. He suggested that some of the business
cases were adequate and others “rather inadequate”.
Trade unions have argued that allowances are
covered by the pay guarantees set out in the Croke Park agreement. Some teaching
unions have warned they will ballot for industrial action if allowances are cut.
In its answer last night the Department of
Foreign Affairs said it paid nearly €8 million in untaxed, cost of living
allowances and local post allowances to about 325 staff posted abroad. It said
the cost of living allowance was designed to defray the higher costs associated
with living in some cities abroad.
It said the local post allowance provided
assistance towards the additional indirect costs arising from the
representational role of personnel overseas. Some staff were entitled to a
“hardship” allowance in some locations, it added.
The department said it paid just over €700,000 in
a children’s foreign allowance. It paid nearly €8 million on rent allowance for
265 staff abroad.
It also said 50 staff shared over €97,000 in
furniture allowance while 46 officers shared €1.062 million in school fees
Mr Howlin said some senior staff in his
department received between €48.60 and €121.46 per fortnight in a seniority
The Department of Social Protection said some
former HSE staff currently employed by it had a Gaeltacht allowance equating to
7.5 per cent of salary. It said dual responsibility, cleaning, training and
travel allowances were also paid to some former HSE personnel.
The Irish Times also reports
that the Government will tomorrow attempt to borrow money from private
investors. A target figure of €500 million is to be raised.
The return to financial markets will be conducted
by the National Treasury Management Agency, the State body tasked with managing
the national debt.
Yesterday the agency announced it would seek to
tap financial markets by issuing IOUs known as treasury bills. The bills will
have to be repaid in just three months.
Investor demand for the State’s first new
issuance of IOUs in almost two years will be closely watched at home and abroad.
So too will the interest rate the NTMA offers in order to entice investors.
If demand is high and the interest rate low, the
Government’s planned full-scale re-entry to the market will receive a
considerable boost, thereby enhancing the prospects of Ireland exiting its
EU-International Monetary Fund bailout on schedule next year.
The NTMA plans to increase gradually the amounts
it raises at each successive auction over the remainder of the year and into
2013. The repayment duration of the IOUs it issues will also be lengthened.
Typically bonds of five- and 10-year maturity
account for most government debt in developed countries, with short-term
treasury bills accounting for a much smaller share.
The success of the Government’s plan to wean
itself off bailout funding will depend to a considerable degree on the
performance of the public finances this year and next.
New figures from the Department of Finance,
published yesterday afternoon, showed the fiscal position is on track to meet
targets set out in last December’s budget and under the terms of Ireland’s
The exchequer returns showed the deficit between
public spending and revenues narrowed in the first half of the year, falling
from €10.8 billion in January-June 2011 to €9.4 billion in the same period this
Yesterday’s figures showed tax revenue increased
by more than 5 per cent in June compared with the same month last year.
Total tax revenue for the first six months of the
year was up by more than 11 per cent on the same period in 2011 and 3 per cent
ahead of budget-day targets.
By contrast, public spending exceeded the targets
set out late last year, with the two largest spending departments (health and
social welfare) accounting for the overshoots.
In a statement, Minister for Public Expenditure
and Reform Brendan Howlin said: “Given the importance of meeting our budgetary
targets again this year, I will continue to stress to my Cabinet colleagues the
need to adhere to the 2012 spending targets.”
The Irish Examiner reports
that There is consensus among economic commentators that the European Central
Bank is set to cut its rate by 0.25% tomorrow, in an effort to keep inflation in
European stock indices have been trading strongly
on the expectation that the ECB will pump a monetary stimulus into the economy.
The Irish Stock Exchange recorded its strongest June since 2005. The ISEQ gained
2.3% following losses in April and May.
Davy economist Conall MacCoille said a number of issues came together to cut the
ECB’s lending rate to a historic low of 0.75%.
"Mounting speculation about a 0.25% rate cut has followed the weak short- term
indicators on the health of the euro area economy. And comments from ECB
Governing Council members Ewald Nowotny and Benoit Coeure have hinted at a rate
cut this month.
"Markets are also conscious that over the past year, the ECB has followed up
political progress — like agreeing bailout terms for Greece and treaty
commitments on fiscal discipline — with additional action to calm bond markets,"
said Mr MacCoille.
The ECB has never cut its main refinancing rate below 1% but policymakers say
there is nothing to stop them doing so and they may want to bolster eurozone
At last week’s summit, ECB president Mario Draghi declared his satisfaction with
the agreement to speed up cross-border banking supervision and allow the
eurozone rescue fund to recapitalise banks directly thereafter.
"I think Draghi saying that he is happy with the summit results is a strong sign
that the ECB is ready to do something," said Christian Schulz at Berenberg Bank,
forecasting a quarter- point cut.
But Schulz, a former ECB economist, added: "We think if it’s just a rate cut,
that would be a disappointment for markets because a rate cut would not do very
much at all for the peripheral economies... that’s why something else is
However, Mr MacCoille pointed out that the effective ECB lending rate to banks
was already around the 0.3% level due to the overnight lending rate.
"However, the excess liquidity in the euro area banking system has pushed
overnight borrowing rates to close to 0.2%, well below the ECB’s main
refinancing rate of 1%.
"So a cut in the main refinancing rate may now be largely superficial, with
little impact on the overnight cost of funding for European banks," he said.
The ECB’s rate cut would benefit Irish tracker mortgage holders. Ireland has
almost 400,000 mortgage holders on contracts linked to the ECB’s lending rate.
They will gain €300 a year from the ECB’s moves to battle inflation.
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