Noonan says Government considering ‘third viable bank’

Minister for Finance tells FG ardfheis his job is to ensure tax system is jobs friendly

Minister for Finance Michael Noonan told the Fine Gael ardfheis in Dublin that a pillar of the Government’s medium-term economic strategy was ensuring that growth could be financed. Photograph: Cathal McNaughton/Reuters

Minister for Finance Michael Noonan told the Fine Gael ardfheis in Dublin that a pillar of the Government’s medium-term economic strategy was ensuring that growth could be financed. Photograph: Cathal McNaughton/Reuters

Sat, Mar 1, 2014, 19:19

The Government planned to initiate talks about the setting up of a third bank, Minister for Finance Michael Noonan told the Fine Gael ardfheis in Dublin today.

“I would like to see a third viable bank in the country, and we have some plans to talk to people to get that level of competition and have a third bank working right across the country,’’ he said.

Addressing delegates at the RDS, Mr Noonan said a pillar of the Government’s medium-term economic strategy was ensuring that growth could be financed.

He added that “the gas in the tank of the economy’’ was credit and, so far, the banks had been reluctant enough to provide it because they were so significantly damaged. “But they are getting into a space now where they are lending seriously, both to the private individual and, more importantly, to SMEs,’’ he added. “And we have to continue with that.’’

Mr Noonan praised the work of the credit unions, adding that they had the full support of the Government. At present, he said, they were taking in an enormous amount of money on deposit but not lending as much as they were traditionally.

“I would say to the credit union movement that the Government has no problem if you get back to lending to households and families to do the house extension and pay family bills and so on,’’ he added.

Mr Noonan said his job was to ensure that the tax system was jobs’ friendly. VAT had been reduced from 13.5 per cent to 9 per cent on the hospitality industry, and the Government had also abolished the travel tax and ensured the cost of transferring land to the next generation of farmers was low.

Foreign investment was encouraged by a capital gains tax spread and so on.

“As we examine our tax policies going forward, the measurement will not be what might get us votes, or how we can buy an election,’’ he added. “We have had enough of that under Fianna Fáil.’’

Mr Noonan said the measurement would be how the tax system could be changed to ensure more jobs were created and that there were better incentives to work and have a better qualified workforce.

Mr Noonan said the economy was now in a recovery phase and, above all else, job creation was the key.

Apart from the economy, delegates are are discussing local government, cross-border co-operation, justice and shaping the future of children.

Taoiseach Enda Kenny will give his keynote address to the ardfheis at 8.30pm.