Cian O'Callaghan (Dublin Bay North, Social Democrats)

I speak in support of this proposal. It is an area that we need to have taxation reform in. It warrants a careful consideration and I have urged the Minister to do this. There are a number of benefits for having employee ownerships. We have a situation at the moment where there are good enterprise supports for people establishing businesses and enterprises. They often reach a certain scale where the founder or founders want to sell. That could be after 20 years or it could be more. What often happens then at that point is that a private equity firm may come in and buy the enterprise or business into which a huge amount of blood, sweat and tears has gone and into which a huge amount of State supports, which are often very effective, has gone.

At that stage, there can be an asset stripping of that company or there can be rationalisations. The kind of long-term work that has gone in is sometimes lost and a lot of the value from that is lost. Getting a company where the owners and founders want to get that into the ownership of the employees is much better for that business and enterprise in the long run but it has also got real benefits in productivity. All the evidence shows that companies, businesses and enterprises owned by the employees in them are much more productive. They are better at problem solving, creating efficiencies and driving innovation and growth. These are all things that we want to do and support in our economy. This is good proven model of doing this and is an absolute win-win. However, at the moment the taxation code is prohibitive against people selling into employee shares or ownership trusts. At the very least, the taxation system should be changed in order that it is a level playing field at least for this type of company, if not actually incentivised. I urge the Minister to look at this.