Joan Burton (Dublin West, Labour) | Oireachtas source

I do not believe there is too much distance between the various arguments being made around the table. Perhaps it might be helpful to look at some principles. One of the first principles relates to someone who is earning a good deal or has a business where that business is making a large profit. If that business is a key domestic business, such as banking, and it is profitable on a current basis notwithstanding a history of losses, then it should contribute. That should apply notwithstanding the extraordinary history of the collapse of the banks and their extraordinary behaviour, which contributed to that collapse. I presume we can agree that this is what the common good requires as well as common decency and any notion of fairness or equality. All of these aspects are fairly accepted principles in a good taxation system. The Minister has indicated that he broadly supports such a system.

Essentially what we are talking about here, in the context of Irish law, custom and practice, as referred to by the Minister, is the recognition of losses. What this is doing is restricting the ability of the banks to avail of the losses over time, or indefinitely, as is now the case now, and for as much loss as has accrued, and without any recognition - because it would probably be very difficult to apply it to all businesses - of whether they were at fault in any way regarding the creation of these losses.

Previously when I was in opposition and the late Brian Lenihan was in government, we came to an agreement that there should be a restriction on the ability of very high-net-worth individuals to use losses here and now so that, in the current period and not the indefinite future, they would have to make a minimum contribution. The reason for that was very simple. A series of reports was produced by the Revenue Commissioners on my request to show there were people with incomes in excess of €500,000 and €1 million. It sounds like much more innocent days because those sums were considered to be a great deal ten or 15 years ago. The agreement was that the individuals concerned could not end up paying zero tax while those working in their houses, estates, farms or stud farms would be paying tax on a much more modest weekly income. The Government at the time in question agreed to increase the levy, as the Minister knows. His officials will say the agreement was very successful. Did it result in a flight of people from Ireland? Did it result in a collapse of their enterprises? If their enterprises collapsed, it was not because of the agreement but it was a matter of basic equity.

If the Minister examines the history of this — he said he will revert to the committee on this — he will note it is very offensive to somebody who is going to take the new Luas through St. Stephen’s Green to point to the Bank of Ireland, tot up what it cost people in this country, notwithstanding that it is in recovery mode, and say it is great and that while it is currently making €0.5 billion in profit, it will, I am sure, be making a profit well beyond €1 billion in a couple of years. The same will be said about AIB. It is very difficult to understand. Losses do not matter when profits are not being made because the banks have nothing to claim against. That is why the argument is only gaining ground now and why we are only understanding it now. I discussed this matter when in government and I am not going to talk about the details of the discussions. The levy, which the Labour Party put forward, is still a lesser mechanism than actually restricting the use of the losses.

On grounds of broad business efficiency in the economy, the hangover from the losses is wrong. It is wrong from the perspective of other people in business, perhaps competing with the same banks or perhaps having an interest in providing services, that the banks have this extraordinary leeway.

At a minimum, the reports should be produced but the Government should also consider my proposal actively. It is a bit of a warning shot across the banks' bows but it also tells the people who bailed them out collectively and ensured much hardship and many reductions that there is some notion of fairness, equity and horizontal equality in the Irish tax system that addresses the matter of significant earnings. We can pick a figure. We could create a company earnings threshold of €200 million, for example. With regard to the indefinite hangover, we have been talking about using or losing development land. It is wrong, at a time when we need significant funds to fund the kinds of services we expect and, more particularly, the infrastructure we need to remain competitive after Brexit, that they are not being asked to make a contribution. Their not doing so makes them feel like masters of the universe all over again. Hence, they do not feel obliged to treat their customers with the kind of sensitivity and understanding the Minister is displaying towards them because of what they experienced. Their former leadership was much more culpable than an ordinary person who bought a mortgage in good faith and went into debt. At times, the banks suggested to couples that they hold on to their existing apartment and let it, with the result that they ended up with the nightmare of being accidental buy-to-let landlords in the market.

I welcome the fact that the Minister sounds open to discussing and examining this. I do not believe it is difficult for the Department to support the production of the reports. If the Minister has an alternative basis on which a report might be produced - he might bring it to us on Report Stage - I, for one, would certainly be prepared to consider it. It relates to an important issue concerning principles in the Irish tax system.