Oireachtas Joint and Select Committees

Tuesday, 5 February 2019

Committee on Budgetary Oversight

Scrutiny of Tax Expenditures (Resumed): Dr. Micheál Collins

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

Dr. Collins said that every tax expenditure - and I absolutely agree with him on this - is money that could be spent in a different way on the same sector or on something completely different. Does he believe that as part of proper scrutiny that there needs to be a comparison done on that? Let us take two examples that we looked at recently. The research and development tax credit is up to €700 million a year. It is nearly €1 billion and has jumped significantly. That is overwhelmingly going to benefit that same small group of multinationals we are talking about. They are the ones that benefit most from it. In order to assess whether that is good use of public money, one of the things one would need to do is to ask what would happen if we took €700 million and invested it in public universities for research purposes which would generate a better impact for Irish society, economy, research and development and innovation. To me that is a no-brainer. If we put €700 million into our universities, it would be far better than giving €700 million to Apple, Google and Facebook in terms of the impact on stimulating our own economy and a more sustainable economy. That is just my view. Would Dr. Collins agree that is one of the things we need to look at?

Similarly, in respect of the film industry, section 481 in its existence involved approximately €1.7 billion going to the film industry, comprising between €80 million to €90 million a year between the various sources. There were claims that there were 17,000 jobs in the Irish film sector but when this was scrutinised and challenged, it came down to a figure of 2,000. One could add to that that the film industry got €1.7 billion over ten years but where is the infrastructure? What does the State own for the €1.7 billion forgone? We do not own any studios. We have absolutely nothing. We have hardly any jobs and hardly any infrastructure. What exactly did we get for our money?

Some people will say we got a number of films made, and let them put that argument. A useful way to establish whether that was good or bad expenditure, would be to ask the following question. What would have happened if instead we had invested that money in building public studios and employed people directly to make films? If we did it that way, would there be a greater benefit?

Those are just two examples I can think of. Does Dr. Collins believe that in general we need to look at those sorts of comparisons in order to assess the effectiveness and the usefulness of tax expenditures?

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