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Finance Bill 2014: Second Stage (Resumed) (Continued)

Wednesday, 5 November 2014

Dáil Éireann Debate
Vol. 856 No. 2

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  5 o’clock

(Speaker Continuing)

[Deputy John Deasy: Information on John Deasy Zoom on John Deasy] Sooner or later, Ireland would have had no choice but to bow to certain tax standards. Second, the European Commission has made it absolutely clear that in its opinion the loophole needed to end quickly by opening up an investigation into two specific rulings granted to Apple. Judging from the comments made several weeks ago by the Commissioner in charge of this, it has been going on for some time. This was not a case of Ireland needing to get rid of this tax avoidance scheme because it is the right course of action. This has been coming down the line for some time. We acted on this because, sooner or later, we would have been made to.

  That is significant because there are other measures over which the Government has unilateral decision-making power. One of those issues directly relates to the companies affected by the ending of the double Irish scheme in this Finance Bill, namely, the inexplicable proposal to introduce mandatory collective bargaining legislation at a time of incredible uncertainty in inward investment and foreign direct investment. Some in government are genuinely concerned about the effect these measures will have on our attractiveness to foreign investment.

  The week after the Budget Statement, it was announced that the rules governing the special tax incentive to attract foreign executives into Ireland were to be relaxed through the removal of the €500,000 cap for very highly paid executives working here, essentially making it a more attractive place in which to work. The day we end one tax avoidance scheme, we introduce a new tax incentive. This speaks volumes. At the same time, we are planning to introduce a disincentive for those same companies by introducing a provision that might not require mandatory union recognition but would allow unions without representation in the workplace automatically to take a case to the Labour Court. The Labour Court could then take a legally binding decision which could be enforced by the Circuit Court. If this provision is passed, then mark my words, with the environment in the country today, those unions will grab any such new power to justify their own existence. All it will take is one union and one dispute for the rest of them to jump on the bandwagon.

  I get the impression some people in government have not considered the implications of this at all. Any mandatory collective bargaining legislation - in other words anything that might compound this country’s potential unattractiveness to foreign investment - should be reconsidered immediately. Why is the Government contemplating such mandatory collective bargaining legislation? I examined the law and regulations governing industrial relations. Even from a cursory look, it is clear there is no glaring deficit in this area, no obvious need for reform. There is also fairly widespread agreement on that point. There have been challenges in the Supreme Court and at the International Labour Organisation but at no point has the current system been found to provide insufficient protection for employees or unions.

  The point is made that we have a voluntarist system when it comes to industrial relations. If we were to bring in a system that would effectively oblige both employees and employers to negotiate via a third party, it would not help. It would only add strains to industrial relations across the country. The relationship between the employer and the employee is already covered extensively by EU and Irish legislation. If the Government persists with mandatory collective bargaining legislation, all that will happen is that those existing protections will become completely subservient. The suggestion is that a union will have the authority to negotiate changes in the terms upon which the employment relationship was founded in the first place. That is unwise, regressive and not positive.

  The logic behind taking such a step, considering where we are economically and what else is proposed in the Finance Bill, is baffling. In Ireland as it stands, serious and strong protections are already in place when it comes to employees and the right to join a trade union. Those protections are bolstered by the Labour Court and the National Employment Rights Authority, NERA. Enforcing mandatory collective bargaining and de facto trade union recognition is unnecessary. It amounts to a step too far in practical terms considering where the country is at. An employer’s right to disassociate is worth protecting also.

  Why was this considered in the first place? One union representative gave it away when he said we cannot let the centenary of the 1913 Lock-out pass without some movement on mandatory collective bargaining. In other words, this has more to do with a political ideology than it does with economic necessity. This country can no longer afford that kind of political thinking. Two weeks ago I said in the Chamber that this has more to do with the Labour Party’s political curriculum vitae and policy wish list than anything else, unfortunately. Governing on the basis of marking a commemoration to Jim Larkin is absurd. We no longer have the luxury to legislate for political whims.

  Much space in today’s newspapers is devoted to predictions on the effect of ending the double Irish tax avoidance scheme in this Finance Bill. The head of Twitter in Ireland said it will be no problem for its company or cause it any grief. The former head of Apple, John Sculley, said yesterday that Ireland needs to retain such measures, however, or else it risks losing its competitive edge. No one knows for sure what impact it will have on our competitiveness and attractiveness when it comes to foreign investment. For that reason, I do not believe the country is in a position to create additional reasons for a company not to locate here. That includes introducing new and unnecessary strains between employers and employees with mandatory collective bargaining measures. Any such legislation needs to be put on hold until we know the effect of this Bill’s proposed other measures on the economy and the companies on which we rely to keep it afloat.

Deputy Joe O'Reilly: Information on Joe O'Reilly Zoom on Joe O'Reilly For any parent who spends a Sunday night on Skype to their child in Australia or watches their unemployed youngster fiddling with a television remote control watching inane television programmes, and despite the other debates occurring in which a fair bit of self-interest is involved, the only issue in this Finance Bill - the only show in town - is job creation. The great moral responsibility on us as legislators is to create conditions where people can get work. This is the basis on which the Finance Bill should be evaluated.

When Fine Gael came into government with the Labour Party, 7,000 jobs a month were being lost. Thankfully, 5,000 jobs are created per month now. Unemployment is now down to 11% but it is still too high. However, it is heading for single figures by the end of our term. We have created 70,000 jobs in the last year with 100,000 in the coming year.

Our duty is to parse the Finance Bill and establish in what way will it contribute to further job creation or otherwise.

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