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

I move amendment No. 70:

In page 23, between lines 20 and 21, to insert the following:"14. The Minister for Finance is to order a study to be carried out on the operation of Relevant Contracts Tax, particularly in relation to rise in self-employment in the construction industry, and is to report to the Dáil within six months of the enactment of this Bill on the findings of the study.".

This relates to the concern about bogus self-employment, particularly in the construction sector, and the need to take action to curtail what construction workers and I believe to be wholesale abuse of the category of self-employment in the sector by big building contractors. We have raised this issue with the Minister a number of times and I have correspondence from the Minister and the Revenue Commissioners stating that they are doing their best, the criteria are good, they are trying to enforce them and so forth. However, I do not accept that we are serious about dealing with abuses taking place in this sector. I note that in the controversial and prominent case of J.J. Rhatigan & Co., the contractor who was building a school in Kishoge in Clondalkin, there was a long dispute in which building workers claimed that they were victims of this abuse of the category of self-employment. They were vindicated when they took a case in that regard, even though at the time of the dispute there were denials that there was a problem.

There has also been an interesting variation in the figures given by the Department in response to questions as to how many people are categorised as self-employed in the construction area. At one point I received a reply stating that there were approximately 30,000 and then we were told it was over 60,000. In fact, there is also a figure that puts it as high as 70,000. To have that level of self-employment among the 130,000 people working in construction immediately tells one that it is being abused. I do not believe for a minute that more than half of all those working in construction are self-employed entrepreneurs. It makes no sense in terms of how construction operates. Signs of it are seen in cases such as the Kishoge dispute. The workers at the centre of it believed themselves to be employed by the main contractor. Then they were not paid for weeks, after which one of them was paid and was told that he was a sub-contractor and the boss of all the rest. They were unaware of this. This is what is happening, and it is on a widespread basis. Frankly, everybody knows this is happening, but there is no serious effort to deal with it.

Many of the people who are categorised as self-employed simply do not fit any of the criteria that should apply to the self-employed, such as having offices and the like. They do not have any of this stuff. Clearly, they are people who have been taken on by the contractor but he does not wish to pay the various contributions, sick pay and so forth which he would have to pay if the person was categorised as directly employed on PAYE. As a result, there is evidence to suggest that the taxpayer is losing a huge amount of tax revenue due to people being wrongly categorised. Unfortunately, I do not have the figures with me now but I have quoted them to the Minister in the past. There have been parliamentary questions on this issue and the replies show a minus figure in some years under the RCT tax heading. In some years the State pays out more in refunds under this heading than it receives, in a situation where 60,000 people are categorised as self-employed. The State ends up with a minus figure. Even when the figure is a plus, it is a very small amount of money compared to the number of people employed. If those 60,000 people, or even half of them, were categorised correctly as PAYE workers there would be tens of millions, possibly hundreds of millions, of euro in additional tax revenue for the State. There is wholesale abuse.

There is a further piece of evidence of how this is continuing. The latest Purchasing Managers' Index shows that jobs growth in the construction sector is now at its weakest in 18 months, but we know that construction is growing at present. The index points out that it is because outsourcing is accelerating, so there is job displacement. As the construction sector begins to take off again our old friends, the developers, are up to the same old tricks again. They are displacing properly paid jobs with these outsourced jobs to supposedly self-employed people who are not, in fact, self-employed people. They are bricklayers, labourers and so forth who are being falsely categorised as self-employed. This is Italian mafia style stuff taking place in the construction sector and there must be a serious move to deal with it. It is very unfair to the workers, obviously, and it is also costing a huge amount of money for the taxpayer. The Minister for Finance should be far more concerned about the urgent need to deal with this. We are asking that a serious study be carried out in this area to get to the bottom of what is, regardless of how one looks at it, a very controversial and disputed matter.