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Budget Statement 2019 (Continued)

Tuesday, 9 October 2018

Dáil Éireann Debate
Vol. 973 No. 2

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(Speaker Continuing)

[Deputy Paul Murphy: Information on Paul Murphy Zoom on Paul Murphy]  My final couple of points are on taxation. The Government will try to make much out of tax changes which will see average-paid workers getting maybe €4 extra a week without mentioning that it will be wiped out overnight by the increases in rents. With the big things that are happening, there is misdirection going on. One is told to look at the €4 or €5 one will get, but not at the way those at the top of society are getting away with paying little or no tax. The recent Comptroller and Auditor General report revealed that a quarter of those with wealth of over €50 million paid less than an average PAYE worker in tax. Another 40% paid less than €120,000. That is not even the biggest scandal.

The biggest scandal is the massive tax avoidance of the multinational corporations actively facilitated by the Government. The Government keeps repeating the rate of 12.5% but the big corporations do not pay 12.5%. The figures are in. One can look at them. They are clear. In 2016, total profits before deductions were just under €160 billion. Total corporation tax paid was just over €7 billion, amounting to an effective rate of corporation tax, after deductions, of 4.5%.

Some of the worst companies for using Ireland as a tax haven conduit are the big technology companies, such as Apple, Google and Facebook, but the other big participants that have been revealed by a recent report by Oxfam are the big pharmaceutical companies. Four of the largest, Abbott, Johnson and Johnson, Merck and Pfizer, are using Ireland to avoid paying tax. For example, Abbott paid no tax whatsoever on profits of €1.2 billion declared in Ireland in 2015 - not a single cent. That is a loss for the public of €155 million from one company for just one year and yet the Government still tries to claim that it is tackling tax avoidance.

We should be clear that this is not a victimless crime or a simple matter of tax competition which Ireland just happens to be good at. We live in a world of galloping inequality, where 82% of wealth generated across the world last year went to the richest 1%, with the bottom 50% getting none of it. A key factor in that inequality is the race to the bottom in corporate tax rates, in which Ireland is leading the way. Ordinary people in this country pay a price in terms of the housing crisis, health and education as a result of not collecting tax from the likes of Apple, Google, Facebook, Abbott, Pfizer etc. Developing countries and those who need public services in developing countries pay a price. It is also a model which is fundamentally unsustainable, given the situation in terms of Brexit, the situation in terms of Trump and the race to the bottom in terms of corporate tax rates in which others are engaging. An alternative model is needed.

People should be clear that there is a considerable amount of wealth in our society, not only wealth that already sits there but wealth that is generated on a yearly basis. Gross domestic product, GDP, per person this year will be €60,000. There is loads of wealth in our society but it is a question of how that wealth is distributed and how the sources of that wealth are owned. A very radical alternative to what is put forward today by the Government is possible but it means breaking from the fiscal straitjacket of the EU. It means breaking from a model of capitalism and the reliance on the free market to deliver. It means saying that the interests of society as a whole should come before the interests of the profiteers and privateers. It means using the wealth in society to address all of the social crises that are present.

The wealth exists in our society to tackle the housing crisis, to build a national health service, to provide free public childcare, to provide free public transport and for a just transition to a zero carbon economy but it requires radical socialist policies. Look even at the amounts of wealth that could be raised through taxation: a millionaires' tax of 2% would raise over €3 billion; a doubling of the corporate tax rate for big businesses and a cutting of the loopholes would raise over €10 billion; increasing PRSI for employers could raise €1.4 billion; and repudiating odious bankers' debt would generate a yearly saving of around €3 billion. There are many more examples.

Of course, taxation alone is not enough. One cannot control what one does not own and therefore we need democratic public ownership of the key sectors of our economy to resolve the crises we face. When one looks concretely at the crises that we face, that is obvious. When one looks at the housing crisis, it is obvious that we should use the resources that are going into the rainy day fund, that exist in NAMA and ISIF, to set up a public construction company to build the necessary housing on public land. In terms of climate change, it is obvious that the energy companies need to be taken into democratic public ownership, and the oil and gas should be left in the ground, in a situation where private companies have refused to make the kind of investment in wind and wave energy which is necessary and which could see Ireland being a leader in green energy. In terms of moving away from the disastrous tax haven model that leads nowhere, it is clear that public investment and public ownership of the key sectors of the economy are necessary for a sustainable plan of economic development. None of the major parties here stands for such a programme but it is what is necessary to resolve the crises facing people in this country and what is possible on the basis of the resources that exist here.

This landlords', neoliberal, anti-young person budget underlines yet again the need to build a mass party of the left to fight for a left government which would introduce a socialist budget which would really transform people's lives.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl I believe Deputy Wallace is sharing with Deputies Broughan, Joan Collins, Connolly, Pringle and Clare Daly.

Deputy Mick Wallace: Information on Mick Wallace Zoom on Mick Wallace This is the eighth budget since I became a Member. I suppose they have one thing in common in that they were very similar and none of them was inspiring. Little has changed in how budgets have been done over those eight years that I can remember.

I heard some people saying today that this was an election budget. I do not think so. After listening to Fianna Fáil kissing Paschal's feet, I would be surprised if this marriage made in heaven does not continue for another while.

The Minister told us today that, most importantly, this is a caring budget. One would have to wonder, "Caring for whom?"

I come from Wexford, one of the most underprivileged areas of the country. Our unemployment rate is still 14%. We have significant challenges around mental health and all the other social problems that go with it. I was amused to hear the Minister, Deputy Donohoe, say that there was €587 million to be invested in the ports in Ireland, Dublin, Cork, Shannon and Foynes, to enhance national and international connectivity. The Minister also told us that the Government is bulletproof ready for Brexit. Has the Government heard of a place called Rosslare, because there is a port down there? It is the nearest port to Europe. After the Brexit vote, in 2016, there was a study set up at the Irish Maritime Development Office to look at the use of the UK land bridge. The purpose of the report was to establish the volume of traffic using the UK land bridge currently, the potential consequences that Brexit will have on land-bridge usage and the various alternative options that may be viable. Two and half years later, there is still no report. Does the Government give a damn? It would be such a lift if there was State investment in Rosslare. The Government was happy for Irish Rail still to own the place and bleed it of the profits every year. There has been no investment in it for years. It could make a big difference to Wexford but I do not see any appetite for or interest in it.

When they see deprived areas that need help such as Wexford, why was there nothing in the budget today to target them? Wexford is not the only one. In terms of deprivation, we are in the top three, with Donegal and Longford. We do not see proactive Government action to address the problems in these places.

I heard the Minister say that the Government is fully committed to supporting the sustainable development of Ireland through the Department of Rural and Community Development.


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