06/05/15 Senator Daly Speaks to the Seanad and Minister of State for Finance Simon Harris on the Spring Economic Statements

Senator Daly: I welcome the Minister and I hope he does not have to run for President because I am sure he will be Taoiseach. Maybe he will run for President after he has been Taoiseach.

Last week a survey of 27 countries ranked people’s trust in Government, business, NGOs and the media. Ireland ranked the worst, with only one in five having trust in those former pillars of society. We all know the various reasons for that, the crisis in charities in the case of NGOs and the banking sector in the case of business. In Ireland, people’s level of trust in the elites was the lowest of all the 27 countries surveyed. Those countries included China, which says a lot about Irish people’s confidence in politics.

The reason for this is the lack of equity in our system. I do not know if the Minister read it but there was an interesting piece in the Irish Independentat the weekend which stated that some 260 people controlled €76 billion in assets and that the bottom half of the population have €56 billion among them all. That is a level of inequity that is staggering and it is not going to get any better as the wealthy have got wealthier in this crisis. I recall the infamous words of former US President George W. Bush when, addressing a crowd at a fundraising event, he welcomed the haves and the have-mores. Some of these people caused the crisis and now people view them as having profited from it.

Some of the issues brought up by my colleagues opposite show why there is a lack of confidence in the political system, such as the charge against this and previous governments that they are borrowing money to buy votes. When we cannot balance the books, the idea of giving ourselves a pay increase as politicians is hardly likely to improve our poll ratings. The confidence of the Irish people and people in the 27 countries that were polled will not be restored when they understand that the proposal for public sector pay increases involves politicians also getting a pay increase, and borrowing money to do so. That is, unfortunately, one of the proposals.

—Later—

Senator Daly: Thank you. Unfortunately, the Department and the Minister for Social Protection stated that the advisory group was not convinced that there was a need for an extension of social insurance for the self-employed to provide cover for jobseekers. The Senator might take that up with his Minister and, if we were to put down a motion, I hope he would support it.

There should be equity for all. There should be a living wage but how we get to the concept of a living wage is a difficult matter because a minimum wage is not the same as a living wage. When one is better off on social welfare than working there is a problem. When families are better off not accepting jobs and remaining on social welfare the system is not working. Equity is what we are looking for. A levy on banks was suggested because they would not bring down their variable rates and we could do that. We could also bring in legislation. There are a number of other things the Government could do but it must do something because the banks are causing another crisis in our housing sector by putting people under so much pressure. They are vetoing the mortgage resolutions and forcing the taxpayer to pick up the bill because when people lose the roof over their heads they require housing at the expense of the taxpayer.

The spring economic statement is part of the new requirements under the fiscal treaty but another new Commission proposal is of great concern and would affect us all. It is one of those creeping, incremental proposals that they keep talking about in Europe until people get so used to hearing it being mentioned that they think it will never happen. Then, one bright breezy day, it does happen. There are ongoing manoeuvres to ensure corporation tax is paid in the countries in which earnings are generated. This is the Commission’s agenda and its aim is to achieve that agenda. As the Minister will be aware, Ireland lost a vote on this being an issue of subsidiarity, having argued that it was for Ireland alone to make the decision. Ireland alone sets its corporation tax rate but the issue is of concern for us because big countries such as France, Germany and Italy would like corporation tax paid where a product is purchased. This might be very hard to prove in the case of Google, which makes many sales through its search engine in Ireland but to Italian customers, as a result of which Italy is demanding its share and Ireland is losing the battle. Our corporation tax rate of 12.5% counts for nothing – what matters is the fact that these companies pay their tax here based on the fact that we are in the European Union. If the proposal for corporation tax to be paid in the country where revenue is generated is successful and Ireland loses the case there will be no money to pay for the things we were talking about. I ask the Minister to continue the fight to prevent companies which are based here because of our corporation tax rate from moving as a result of the big boys in Europe getting their way once again.

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