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Roundup-Noonan committed to 3.5b cut

Friday, November 02 08:15:41

The Government remains committed to an adjustment of E3.5 billion in the forthcoming budget, Minister for Finance Michael Noonan said yesterday, adding that this would be achieved through a combination of tax increases and expenditure cuts. Speaking at a gathering of the Leinster Society of Chartered Accountants, Mr Noonan said the goal of the budget is to be "fair and balanced". "We're conscious of the need to bring all the people with us," he said, also confirming to reporters that there will be no extension to mortgage interest relief in this December's budget. While he noted that the details of the property tax would not be revealed on budget day, he reaffirmed that it will apply from July 1st next and the Revenue Commissioners will be responsible for collecting it.

On the domestic economy, he noted that there are signs that it is bottoming out. "We're not there yet, but we are making progress," he said, adding, "I'm going through an optimistic phase. I think things are going to work out." While he expects Ireland to exit the bailout programme next year, he noted that the next measure of success will be whether or not the country can access funds on the markets at equally low interest rates.

"The signs are pretty good," he said, adding that the National Treasury Management Agency (NTMA) is committed to issuing treasury bills on a monthly basis. From a business perspective, he noted that foreign direct investment continues to perform strongly, with the IDA expecting another record year in 2012, while Irish multinationals are also growing. "Big indigenous companies are showing their confidence in Ireland," he said, referring to the recent expansion plans from the Kerry Group and Paddy Power. The Irish Times

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Lloyds Bank cut its Irish loan book by a further £1 billion (E1.25 billion) in the third quarter. Lloyds added that impairment charges on the former Bank of Scotland (Ireland) Irish loan book of almost £22 billion continued to decline in the third quarter, contributing to a 40 per cent fall in its overall bad debt charge on 2011. The bank took an overall impairment charge of £4.4 billion in the nine months, compared with £7.4 billion in the same period in 2011. Two consortiums and two private equity bids were reported this week to be on the shortlist to buy a further E2.2 billion portfolio of up to 700 Irish commercial property loans from the UK banking group.

One consortium comprises Californian property company Kennedy Wilson, Deutsche Bank, hedge fund Och-Ziff and property firm Varde Partners, the property news website CoStar reported. Two investment companies, Carval Investors and Centerbridge Partners, are in the other group. Private equity companies Lone Star and Apollo Global Management have tabled separate bids. The portfolio is being sold at a sharp discount to face value. The Irish Times

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Irish manufacturing bucked the global downward trend again last month with conditions improving for the eighth month in a row. New jobs were recorded during the month, and there were strong rises in both output and new orders. The latest Manufacturers Purchasing Managers' Index (PMI) from stockbrokers NCB shows a rate of 52.1 for last month, up from 51.8 in September. The index is seen as a key indicator of the health of an economy.

It comes as equivalent data for the UK, from financial information services company Market, revealed the manufacturing index shrank for the second month in a row as new orders fell and costs rose. Even the US manufacturing sector edged down slightly last month, bringing it to a 37-month low. Data for the eurozone as a whole released last week from Markit revealed manufacturing had hit a 40-month low. In Ireland, production rose for the sixth successive month and the latest increase was the fastest since June. New businesses also expanded at a faster pace last month. Firms suggested that new product launches and higher new export orders had boosted growth. The Irish Independent

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THE joint administrators of Quinn Insurance Ltd (QIL) have cut the budget for their work next year by between 40pc-50pc, the High Court has heard. There has been a number of positive developments since the court was told last July that it was expected that the taxpayer-funded Insurance Compensation Fund (ICF) would have to foot a total bill of E1.65bn as a result of administrators being appointed to QIL, Bernard Dunleavy, for the administrators, said.

Mr Dunleavy was presenting the 11th report of joint administrators Michael McAteer and Paul McCann, who were appointed by the court in March 2010. High Court President Mr Justice Nicholas Kearns approved a further draw-down of E22m by the administrators from the ICF on top of E786m already approved since October 2011. The judge welcomed the various reductions in costs, particularly in professional fees, saying it showed a good sense of responsibility by all concerned. The Irish Independent