Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I am sorry to interrupt but my time is short. I appreciate Mr. Barnes's response, which confirms what my fears are. He clearly echoes those.I note two things in passing. It is not Mr. Barnes's responsibility but we should all learn the folly of bailing out the banks, not just for us but internationally. We gave the moneys back to the banks to go off and speculate somewhere else and it is going to blow back on us. That is a bigger international issue.

On the projection side, it is fair to say the downside risk is always mentioned as a "by the way" to cover ourselves, but it is not taken seriously. It is mentioned as a matter of course that there is upward, downward and central, but that picture is changing. The likelihood of the downside risk materialising is now significantly greater than it was when it was mentioned in a perfunctory way three or four years ago. On the domestic side, I find myself again in total agreement with the witnesses. We have been saying for some time that over-reliance on the multinational sector is dangerous. I would be interested to hear from the witnesses what we should do about it. What is the council's role in advising on this? Our view is that we should get as much out of these multinationals as possible now while we can and apply it to the development of our domestic economy. We should invest it in infrastructure that provides a basis and some protection on a medium to long-term basis against the fluctuations, volatility and uncertainties of the global economy, in particular for an open economy like ours. Is that not what we need to start saying? Do we not need to say that we are too reliant on multinationals?

My theory for the boost in corporate tax revenues is as follows, and I do not know if the witnesses agree. Microsoft was recently reported to have bought a huge amount of intellectual property from itself in the game of one subsidiary moving rights and patents from another to avoid tax. I understand that it bought an incredible €1.5 billion worth of intellectual property from itself which means the charging being done previously to subsidiaries in tax havens is now being done here. Some of the profits will be allocated here that were previously allocated elsewhere and that relates to the closing off of the double Irish and the opening up of the knowledge box. It is done precisely in order to benefit in the longer term from the knowledge box and to keep down the tax liability. That is my theory. What must we do and what should we be saying about insulating ourselves from the vulnerability that arises from an over-reliance on the multinational sector? Is it not about investing in our own domestic industrial and infrastructural capacity and so on?

My last question flows from the above. An area of this which is macro in scale as well as a very immediate social problem is the housing market, about which I have spoken to the council on a number of occasions. This is now a big problem. Some of us have been warning about it for a couple of years. I read a very interesting article in The Irish Timestoday which acknowledges that the hope that the private sector would deliver the housing we need is not materialising. In fact, the article explains quite well why that is not the case. I will quote it briefly:

A difficult dynamic of recent years is that very little land in Ireland is owned by developers, instead it’s owned by international funds, receivers, and private equity. Most of the multi-unit planning permissions of recent times have been run through by receivers and banks simply trying to add value to assets they already held, with no intention of ever building houses. Project Clear and Nama among others have been a big driver of planning permission applications and renewals and this is now moving towards a natural end.

Ultimately, the article continues, this land has to get into the hands of capitalised builders or, I might add, the State before houses will be built. The people who bought up all the land and assets have no intention of building. They are just inflating the value of their assets. The private sector does not have the capacity or the will to do it and we have a major problem as a result, including a major social crisis. It will also be a macro-economic problem. If people do not have anywhere to live, it will put upward pressures on pay demands and choke off investment. Who wants to come to a place nobody can afford to live in? This is a developing global problem. I would be interested to hear what the witnesses have to say about it. The answer is for the State to marshal more resources to itself. It must increase taxes on capital and on those who hold all that wealth and those assets to invest them in key strategic areas of the economy. If we do not do that, we will be riding for a big crash.