Sean Barrett (Independent) | Oireachtas source

I thank the Vice Chairman and welcome the visitors.

I would be extremely cautious about suggesting tax reliefs.

I believe that is what Deputy Sean Fleming was saying earlier. The tax reliefs are partly why the country went on the rocks. A much better solution is to have a single low rate of tax across the board, with no deductions or allowances and fewer tax lawyers and accountants. If we are to have this chiselling away at the tax base, or fiscal termites, the country will be going nowhere. There is too much of a premium on lobbying. The Seanad debate on the Finance Bill this year covered nearly three dozen amendments because it bore all the hallmarks of lobby groups chipping away at the tax base. We are broke and that ought to be recognised. It is recognised by people on pensions and so on. What I describe should not be taking place. We need ideas from the private sector on how this country can be put together again but the problem with most submissions to the committee is that they assume there is a budget surplus somewhere. There will probably not be one for five, seven or ten years. We have many ideas on how to spend a surplus but we just do not have one. I do not share the view that the construction industry, which got us into so much trouble, is the one that will get us out of trouble. We tried the experiment and blew up the laboratory on the last occasion.

On page 8, it is implied the 12.5% tax should constitute the final liability. The problem is that most firms do not believe that. They are always seeking to pay less. That has been well documented. If it is a final liability, I support it, but if we are to have another round of fiscal termites chipping away, the country will not be able to afford it. This is an international problem. As one knows, the OECD and the European Union are investigating it also.

The tax avoidance industry is serious. When we raised it with the Department of Finance, it believed we meant tax evasion. Tax avoidance, whereby companies order their affairs to avoid tax, is much more serious than the issue of evasion. The accountancy profession has to face up to that. In addressing accountants, I am disappointed that nothing has been done about the big four and the accounts they prepared for banks on the basis of which the public representatives here paid €64 billion. The figure will probably end up at €90 billion. Do the accountants have any liability in that regard? Are the big four safe from professional scrutiny of what they were doing? It seems the accounts were not a true and accurate reflection of the banks; hence, we have no banks and we are now trying to invent the Department of Finance with tax breaks as a substitute for banks. The evidence presented here last week was that the banking system has not reformed. It still primarily sees itself as property-based and it is not interested in industry. That will seriously prevent us from ever developing this economy.

Page 17 refers to extending the seven year capital gains tax property tax incentive to shares in property companies. We did that and it bankrupted the country. It pushed property prices up faster than in any other country in the world. There is a reference to reviving the property construction and development sector. People such as the delegates have had a go at it already and hundreds of thousands of people have left the country. We have mass unemployment as a result.

Page 20 refers to the penalty for incorrectly reporting offshore funds. As far as most of my constituents are concerned, it could not be enough. The delegates want the penalty of 22% to be reduced and regard it as excessive. Offshore accounts have done so much damage to the social fabric in this country that the penalty should be increased. Creating offshore accounts is an activity we do not want as we try to put this country together again.

I see my old goalkeeping friend, Mr. Jim McCabe, across from me. I believe minimum pricing has already been declared illegal by the European Court of Justice. If someone wants to sell me something for X and we are asked to bring in a law stipulating it should be 2X, the industry pockets the difference. If we have to bring it up to 2X, it will be a matter for the Minister for Finance, Deputy Michael Noonan, the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and the Minister of State at the Department of Finance, Deputy Brian Hayes, who need the money. Minimum pricing is just a way in which the industry is seeking to line its own pockets. There is a view it might promote more temperance. We did that in the past by making publicans the richest people in every town in Ireland, allegedly promoting temperance. Preventing competition in publicans' businesses certainly made them a lot richer. I cannot see minimum pricing running for that reason. It will distort the market and put the money where it should not be. It will go from low cost producers to high cost producers. The European Court of Justice has already ruled against it.

In the private sector, we had the problems with accountants and banks. We have not really addressed those. What we can do with an empty Exchequer is pretty limited. It will be limited for three, four or five more years. That is the reality. The culture of the kind of lobbying I describe grew up and it accounts for the kinds of difficulties we have today.