Oireachtas Joint and Select Committees

Wednesday, 3 November 2021

Committee on Budgetary Oversight

Remit, Terms of Reference and Priorities: Commission on Taxation and Welfare

Photo of Seán CanneySeán Canney (Galway East, Independent) | Oireachtas source

I thank the professor and all her team. There are very interesting conversations going on. I want to concentrate on a few principles. Professor Moloney talked about social welfare and taxation. The main challenge I see in our country is ensuring that work pays. It needs to be the case that people are better off when working so they can pay for whatever is required, be it childcare or otherwise, rather than having circumstances in which the difference between going to work and staying at home and not working is marginal. Work that pays is a vital cog in the economy. If we are to have a sustainable economy, we need to make it attractive for people to go to work. The margins are too thin now. Increasing pay might be an obvious approach but that decreases our competitiveness. It is in the area of taxation that we need to consider this.

Let me address the other areas I am concerned about. We tax people. We must do the analysis to see whether we are extracting tax from people, businesses and other sources – it is all coming from people – in a fair way, and whether we are allocating the revenue, through social payments, in a fair and reasonable way.

One of my bones of contention is business premises having to pay rates regardless of whether they are profitable. I am not talking about multinational companies but ordinary people in towns and villages. We have got into circumstances in which local authorities are relying heavily on rates. They are a tax on business as opposed to a tax on profit or turnover. They are paid in accordance with the size of one's premises. It is very much a draconian approach in that when somebody sets up a business, the tax is foisted on that business. In many cases, businesses say they do not get a return for paying rates.

When taxing people, be they the super wealthy, business people or others, there is always a tipping point beyond which they would be overtaxed. How can that be managed? What are the commission's comments on that and my other views? It is time that a commission examined taxation and social welfare. We should not be waiting for this; it should be done regularly, such as every five years, to inform politicians and policy on how we perform.

I like Professor Moloney's freshness. She is clear in her mind on what she is going to be dealing with and recommending. I like that and compliment her on it.

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