Economic & Business

Bank bailout debt costing State €1.6bn a year

 

 

€41bn of national debt associated with cost of rescuing financial sector

 

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Minister for Finance Michael Noonan: “Of the projected 2014 general Government interest bill of just under €8 billion, my department estimates that circa €1.6 billion relates to rescue operations in the context of the financial crisis.” Photograph: Stephen Collins/Collins Photos

Ciarán Hancock

First published: Mon, Jun 16, 2014, 01:00

The annual cost of servicing the debt associated with the financial sector bailout in Ireland in 2008 is estimated at about €1.6 billion, according to figures provided by Minister for Finance Michael Noonan.

This is from an expected cost of €8 billion to service Ireland’s sizeable national debt this year.

The Department of Finance has also estimated that about €41 billion of our national debt is associated with the cost of rescuing the financial sector, said the Minister in a written reply to Fianna Fáil’s finance spokesman Michael McGrath.

On the interest charge, Mr Noonan said: “Of the projected 2014 general Government interest bill of just under €8 billion, my department estimates that circa €1.6 billion relates to rescue operations in the context of the financial crisis, of which around €800 million relates to interest payable on the floating rate Government bonds used to replace the [Irish Bank Resolution Corporation] promissory notes in 2013.”

Mr Noonan added that interest payments on the floating rate bonds contribute “significantly” to the surplus income of the Central Bank, up to 80 per cent of which is paid to the central fund in the following year.

Mr Noonan said that at the end of 2013, the general government debt was estimated by the Central Statistics Office at €202.9 billion or 123.7 per cent of GDP. This is a gross figure.

“The deputy will be aware, however, that the IBRC promissory notes were cancelled in 2013, and replaced with a portfolio of eight floating rate Government bonds for a total amount of €25 billion,” said Mr Noonan. “Furthermore, the €3.06 billion promissory note instalment due to IBRC at end-March 2012 was settled with a Government bond.”

The Minister said that by the end of 2013, it is estimated that another €10 billion had been paid to the banking sector.

This excludes the €1.3 billion paid in 2012 for Irish Life, which was flipped to Canadian group Great-West Lifeco for the same amount last year. Recapitalising the sector since 2008 is put at €64.1 billion.

Best news in years for BALLYMUN

Dublin City Council who currently owns 47% of Ballymun Shopping Centre has identified that acquiring a 100% interest in the existing Centre, could assist with the overall regeneration of Ballymun and help to increase economic activity and to create jobs in the area.  Following very constructive discussions with NAMA and its Receivers, the Council has reached agreement to acquire the 53% NAMA secured interest in the Centre.

The proposed acquisition is in line with the Council’s on-going strategy to rejuvenate Ballymun and promote job creation and development in the area. The major construction aspects of the regeneration programme are almost complete. All families and community organisations have moved from the flat blocks to new accommodation with thirty three of the original thirty six flat blocks demolished. Some 3,000 new homes, parks, playgrounds and recreational and local facilities have been provided. In addition, town centre developments accommodating City Council and HSE local services, a Garda Station, Social Welfare offices, hotels, Leisure Centre and office, residential and retail premises have been provided.
Both parties believe that the current issues affecting the Centre can best be dealt with by a single owner, in this case being the Council, given its objectives and wider interests in the area. In this context NAMA and its Receivers have agreed to facilitate this structure by disposing of the 53% interest to the Council.

 

Dick Brady, Assistant City Manager with Dublin City Council said “This acquisition, working with existing tenants of the Centre, along with placing on the market a site just to the north of the existing centre which will hopefully secure a major retail outlet, will create the conditions necessary to advance the complete redevelopment of the site and the completion of a new modern heart for Ballymun town”.

Pyrite in houses

The Minister for the Environment, Community and Local Government, Phil Hogan T.D, today (14 May 2014) announced that the Government has approved further Exchequer funding for the pyrite remediation scheme to be implemented under the auspices of the Pyrite Resolution Board (PRB).  This brings to €20m the amount of funding available to date.

“I have stated before that it would not have been reasonable or defensible that affected homeowners, who have no viable option for redress, would be left without a resolution, said Minister Hogan. “My officials and I have worked during the past year to put in place an alternative funding model for the pyrite remediation scheme.  While this has not been an easy task having regard to budgetary constraints in the current climate, I am pleased to announce that the Government which initially approved €10 million to kick start the scheme, has now added as promised, additional funding to be allocated over the next two years from the Capital Stimulus Programme.”

While the PRB estimates that there are approximately 1,000 dwellings affected by significant pyritic heave and requiring immediate remediation, a total of 418 completed applications have been received by the PRB as at the middle of last month and a further 146 individuals are at various stages of the application process.  Today’s additional funding therefore will ensure that the scheme is significantly funded into 2015. The PRB, with support from the Housing Agency, will implement the remediation programme in line with the scheme outlined on the Board’s website (see www.pyriteboard.ie).

The Minister added, “Solid progress for affected homeowners, in terms of applications being processed and remediation works
commenced has been achieved. The online application process was launched on 26th February 2014 and can be accessed by applicants on the Board’s website www.pyriteboard.ie.”

The scheme will be reviewed on an on-going basis and any post-2015 funding requirement will be dealt with, having regard to developments over the next 18 months.  While it is difficult at predict with any degree of certainty, the indications at this stage are that the number of dwellings requiring remediation may not be as great as previously thought.

“The case management system has been developed for tracking and storing documents related to the remediation scheme and applicants are able to track progress on their application and the remediation works to their dwelling.”

In addition, the Minister said that a freephone number (1890 252 842) has been provided  to answer any queries regarding the scheme  and to provide assistance with completion of the application form and uploading of documents.

The Minister concluded: “I am acutely aware of the long wait that many affected homeowners have had to endure in waiting for solutions to the pyrite problems in their homes.  It has not been an easy time for those people and I understand how stressful such situations can be but I want to assure those homeowners that it has always been and, will continue to be, a high priority for me to bring about a final resolution to this problem as quickly as possible.  I am pleased to acknowledge that solid and meaningful progress has and continues to be made in the resolution of this most serious problem.”

 

Notes:

While the State is neither culpable nor liable for the pyrite problem, it nevertheless took responsibility to provide solutions for home-owners, whose homes through no fault of their own, have been significantly damaged by pyritic heave and who have been left with no viable means of redress following the withdrawal of cover for pyrite damage by HomeBond in the summer of 2011.

BALLYMUN KICKHAMS

“The North West Area Committee acknowledges the work of Ballymun

Kickhams in recent years and calls on Development Department to

initiate disposal procedures which will facilitate their relocation into the

centre of Ballymun Town”

The motion  was unanimously adopted at the April Meeting

ORDER: E. Farrelly was asked to meet with the Club to discuss any

opportunities that may be available to them and to have a proper

evaluation as to what their needs and expectations are. The Committee

agreed to write to Ballymun Kickhams to inform them that the motion

had been adopted.

Postal Services review to assess how Government can support future of our Post Offices

17 Post Office closure from 2011 to 2013, compared with 72 in 2010 alone

Fine Gael TD for Donegal, Joe McHugh, today (Friday) welcomed the announcement of the establishment of a cross-departmental group to assess how the State can play a role in securing the future of our Post Offices. This would be achieved by encouraging all departments to consider the potential of the Post Offices to assist in the service they deliver.

“There is no doubt that the postal service in Ireland plays a vital role in communities, and that this role is magnified in rural communities. The local post office is more often than not located at the heart of local towns and villages, oftentimes acting as a social outlet for those who are in more isolated areas, people like farmers or the elderly.

“This Government is committed to the long-term viability of An Post and figures I had requested from the Department of Communications, Energy and Natural Resources highlight how this commitment has translated in real terms. Over the last three years, there have been 17 post office closures while in 2010 alone, 72 Post Offices closed their doors. Any closures are regrettable and we are doing our very best to avoid them, but we must accept that there is a very serious issue facing postal services throughout Ireland.

“While we must acknowledge that as communication is ever-changing and the mediums by which we connect evolve, the Post Office as we know it is not fit for purpose. It is essential that they adapt in order to continue to fulfil a sustainable role in society.

“There are a number of actions which could be taken to add strength to the role of Post Offices throughout Ireland. For example, Bank of Ireland’s UK entity has been an exclusive partner to the Post Office in the UK and has been providing financial services and products to customers since 2003. This partnership has, according to the bank ‘become one of the UK’s fastest growing financial service providers with almost three million customers and a savings book of £18 billion and the leading supplier of foreign exchange in the marketplace”.

“There is no reason why something similar couldn’t work here in Ireland. I understand that some of these financial services and transactions can be complex and there are legacy issues regarding trust in banks that the UK is not facing. However we need to explore these avenues which are having very positive effects on the UK Postal service to see if they can be tailored to suit the Irish market. An alliance between Post Offices and customer banking/ financial services has the real potential to strengthen the offerings of Post Offices around the country.

“Another possibility could involve Post Offices taking responsibility for all driver license issuing. In Co. Donegal, for example, many people are finding it difficult to renew their driver’s licenses as they now have to travel to Letterkenny or Donegal Town, since the cross over to the National Driver Licence Service (NDLS) came into effect. This service could be offered through a local Post Office, saving people time and money while increasing the responsibility of the postal service.

“I have been working closely with An Post and my colleagues on the ground, meeting with Postmasters from around Co. Donegal to further this project. I very strongly welcome the Government’s announcement that there is to be a cross-departmental group established.

“I think it is important to highlight that it is not in anyone’s interest to see Post Offices closing down. The Government has repeated its commitment to ensuring the viability of as many Post Offices as possible. The Postmasters in local offices have long played a vital role in the community and we want to ensure that this tradition continues into the future, while adapting to changes in communication.”

 

Please Click here for a table of the number of post offices closed on an annual basis over the last ten years.

 

 

Why we should pay for water

Opinion: Privatising water appears to make it cleaner, but more expensive

 

unnamed‘The World Economic Forum estimates that by 2030 across every sector there will be a 40 per cent global shortfall between the forecasted demand of water and available supply.’ Photograph: Getty Images

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First published: Mon, May 12, 2014, 12:01

How to be unpopular: agree we should all pay for water. Water costs. It’s running out. Water security is going to be one of the biggest concerns over the next three decades. We should pay for water, as long as the money it generates goes back into building a decent, reliable, safe infrastructure that’s worth paying for, along with a clean supply that doesn’t have to be boiled within an inch of its life in order to annihilate cryptosporidium. In several pockets of the country, such unacceptable inconveniences are still the case.

A PR disaster coupled with an angry public and small local protests are distracting from the topic of water security. Of course, Irish Water and the Department of the Environment have done everything possible to put themselves into the public’s bad books by tossing the entire process around with butter fingers, fumbling it all the way to its conclusion. But the broader context is a global issue that is hugely worrying.

American in hot water
If you want to know about the future of water, the US is a good place to start. In the American southwest, the Colorado river, which supplies water to about 40 million people in arid spots such as LA, Vegas and Phoenix, is drying up.

The water source region has experienced 14 years of drought, a remarkable occurrence. The reservoir Lake Mead, created by the Hoover Dam in 1935, is the biggest problem. Some 90 per cent of Vegas’s water comes from the lake. Soon, one of the city’s two main intake pipes could actually be above water. Nevada is rushing to install another pipe, digging a three-mile tunnel 650ft underground.

The city of Las Vegas has paid homeowners $200 million to dig up their lawns to curb water usage. Parts of California are looking west for solutions, namely San Diego, banking on a desalination plant to be operational in 2016, converting Pacific ocean water into the city’s water supply.

Remarkably, 15 per cent of Americans supply themselves, taking water from their own wells. The more rural you get, the more likely a local co-operative will be the supplier. But 11 per cent now receive water from private companies. American Water, the largest private supplier, has 15 million customers. United Water, the second largest, has seven million. United Water is owned by the French company Suez Environment, a global giant in the privatisation of water, supplying and treating water in Spain, Slovenia, Canada, Mexico, China, Indonesia, Morocco and elsewhere. Bigger still is the other French behemoth of water supply, Veolia.

The World Economic Forum estimates that by 2030 across every sector there will be a 40 per cent global shortfall between the forecast demand of water and available supply. In the next 15 years or so, it’s possible this lack of water will create a global food crisis with a projected shortfall of up to 30 per cent in cereal production. Giant corporations have been putting their heads together to try and sort out this problem since 2008 when the 2030 Water Resources Group formed, featuring the World Bank, Coca-Cola, Standard Chartered, Nestlé, and our French friends, Veolia.

Considering the number of conflicting reports, figures and conclusions, it’s hard to discern what the real impact of water privatisation is. Given the budgetary constraints on local and national government in terms of sprucing up the water infrastructure effectively, privatisation does at least appear to make the supply safer and cleaner. Child mortality in Argentina fell 8 per cent in the 1990s in cities that privatised their water and sewer services. In the poorest areas, that reduction was 26 per cent.

On the flipside, privatisation of once public utilities has a habit of excluding the least well off. Usually, once you start charging the price of water only goes up. Analysis of 30 major US cities last year by Circle of Blue (an information resource on the water crisis worldwide) found that the price of water in 2013 was 7 per cent more than in 2012, and a staggering 25 per cent more than in 2010.

Cash flow
In the category of the lowest usage, (a family of four using 50 gallons per person per day), the average monthly bill varied dramatically: $11.49 in Memphis, $54.78 in Santa Fe, $27.12 in New York, $51.10 in Seattle. America’s water infrastructure is creaking too. A water main breaks every two minutes in the US. People dancing on the sidewalk in the mist of spraying fire hydrants isn’t a music video cliche for nothing.

In the UK, water charges went up 2 per cent this year, and 3.5 per cent last year, making the average annual bill €475. That’s nothing compared to the first decade of privatisation, from 1989, across England and Wales, when charges increased by nearly 50 per cent.

What we do know about charges here is that the annual average bill will come to €240, and will stay that way until 2016. After that, you can only assume that water charges will flow uphill. But, while the issue of charges here rubs everyone up the wrong way, we do need to get serious about the wider issue. Because our local misgivings are just a drop in the ocean.

Irish Water – Charges and Blancmange (Press Release)

Dear Councillor,

Yesterday, Irish Water welcomed the Government’s announcement regarding water charges and allowances.  There is a critical need to invest in Ireland’s water infrastructure to bring it up to the standards needed for a modern country. Water charges provide an essential part of the investment required.

We also welcome the Government’s announcement of €200m in additional funding for capital projects for 2015 and 2016, which brings total capital investment to over €1.1bn between now and 2016.  This will allow us to ensure better water quality, reduce leaks and accelerate metering.

We have attached yesterday’s Government press release.  Highlights include:

  • The average household charge will be around €240 until the end of 2016, with no fixed standing charge.
  • Water usage for children under 18 will be effectively free.
  • Every household will receive a free allowance of 30,000 litres of water (and a corresponding allowance for waste water) per year.
  • Average charges will be similar whether you have a meter or not.  No one is disadvantaged by the timing of meter installation – the assessed charge will be closely aligned to metered usage and a rebate scheme will be in place.
  • Households with meters installed will pay for actual usage.
  • Other households will pay an assessed charge approximating actual usage, based primarily on the number of adults in the home.
  • The pace and extent of meter installation will be increased.
  • Free first fix policy – householders who have leaks on their property will have access to this scheme, reducing their water charges and helping with conservation.

 

Together with the regulator, Irish Water will provide public information and consult with the public on the operational details.  As these details become available, they will be published on the Irish Water website for all at www.water.ie or householders can contact us at 1890 278 278  (this service is available 24 hours a day, 7 days a week).

 

For your further information, please see the attached Press Release and Frequently Asked Questions from the Department of Environment Community and Local Government, as well as a related Statement from the Department of Social Protection in relation to Water Charges, also issued yesterday.

 

If you are looking for further information, or have a specific question for Irish Water, please feel free to respond using this email address localrepsupport@water.ie . As the operational details contained in today’s announcement become available we will continue to use this channel to provide you with the information in as timely a manner as possible.

 

Yours sincerely,

Senator colm burke newsletter

Colm Burke is a striking example of what a good Senator should be. He’s worth every penny of his pay.

Untitled14Click this image to view the full PDF.

New Building Regulations & Self-Build Scenarios

On 26 February 2014 Dept Environment issued an Information Note on the Implications of SI No. 9 of 2014 for Self-Builders to local authorities and industry stakeholders, including the Irish Association of Self-Builders.

·         The Building Control (Amendment) Regulations 2014 place no restrictions on self-build. There is no difficulty with a self-builder signing the statutory form of undertaking by the builder at commencement stage or the statutory certificate of compliance on completion.

·         The twin aims of the new regulations are to:

1.       ensure that buildings are designed and constructed in accordance with the requirements of the Building Regulations, and

2.       strengthen competence and professionalism on site.

·         From a self-build perspective, the new regime will work as follows:

·         The owner will, as before, assume responsibility as the builder for ensuring that the building works will comply with the building regulations.  They must also satisfy themselves that any one they employ to undertake part of the works is competent to do those works.

·         At commencement, they will notify the local authority that they themselves are the builder and sign the builder’s undertaking required for building control purposes.

·         At commencement a Self-Builder must also assign a competent, registered construction professional (i.e. architect, building surveyor or chartered engineer) to:

o   certify the design, and

o   inspect the works and certify the completed dwelling (the assigned certifier).

·         The Assigned Certifier will be the point of contact with the building control authority for lodgement of compliance documentation and certificates, etc.

·         At completion the Self-Builder and the Assigned Certifier will both certify the building.

·         Work involving repair, renewal and renovation work or extensions less than 40 square metres to existing dwellings do not come within the scope of the Building Control (Amendment) Regulations.

Equality before the law. Letter from a constituent.

Dear Bill,

Article 40 of the Irish Constitution and Article 20 of the Charter of Fundamental Rights of the European Union hold that all citizens must be treated equally before the law.

The following three quotes are clear on how citizens are to be treated equally before the law and as the Dáil and Seanad seems to continually ignore the constitutional force pertaining to this I must conclude that TDs and Senators are either ignorant of the facts or deliberately willing to act unconstitutionally and unlawfully.

 

“This conclusion, that there is a right of bodily integrity, gets support from a passage in the Encyclical Letter, “Peace on Earth”:-

“Beginning our discussion of the rights of man, we see that every man has the right to life, to bodily integrity and to the means which are necessary and suitable for the proper development of life; these are primarily FOOD, clothing, SHELTER, rest, MEDICAL CARE, and finally the NECESSARY SOCIAL SERVICES.””

(G Ryan v. Attorney General.) http://supremecourt.ie/supremecourt/sclibrary3.nsf

 

“Those entitled to State aid by constitutional right SHOULD NOT HAVE TO DEPEND ON NUMERICAL STRENGTH AND OR POLITICAL CLOUT to achieve their just desserts. Needs should be met as a matter of constitutional priority and savings, if necessary, should be made elsewhere. A citizen’s constitutional right must be responded to by the State in full. A partial response has no justification in law, even in difficult financial circumstances which may entail the raising of new tax revenue to meet such claims – happily a situation which has not pertained for several years.”

(Sinnott v. Minister of education.)

http://www.supremecourt.ie/supremecourt/sclibrary3

 

“I am satisfied that the provisions of the Constitution which enact that all citizens shall, as human persons, be held equal before the law require that, prima facie, EVERY CITIZEN HAS THE SAME RIGHTS AS EVERY OTHER CITIZEN, but I am also satisfied that the concluding part of the section indicates that the enactments of the State may have due regard to differences of capacity, physical and moral, and of social function. This gives a wide scope for differentiation between individual citizens, but it DOES NOT ALLOW FOR THE ARBITRARY PREFERENCE OF ONE CITIZEN TO ANOTHER.

(East Donegal Co-operative Livestock Mart Limited and Others v. Attorney General)

http://www.supremecourt.ie/supremecourt/sclibrary3

 

If I earn €100 and you €50 and the tax rate is 10% I pay €10 and you €5 that is I pay twice as much tax as you and you end up with €45, me €90, i.e. I twice as well off before and after tax or charge. We both have been treated equally before the law.

 

If we are both charged €10 however, I end up with €90 and you with €40 whereas before at a 10% rate you ended with €45. That is an arbitrary preference of one citizen to another so is unconstitutional and unlawful. It is also making you pay the same tax though earning less and leaving me more than twice as well off after the charge as I was before it. In other words, I have been treated more than equally to you.

 

If I don’t receive a reply to this within a reasonable time I’ll assume that you don’t care about the lower earners being cheated out of more of their income than higher earners through unlawful charges and will vote accordingly.

Government is not a private commercial company. It must treat all citizens equally and if it doesn’t it can be taken to court and in this case, I think, be forced to refund all unlawful charges.

 

Sincerely,

Michael

Shangan Ave.,

Ballymun,

Dublin 9.