Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I want to return to some of the points touched on by Deputy Derek Nolan, particularly the concept being put forward by Sinn Féin of a wealth tax being the panacea and the only solution that is needed to the terrible difficulty the country is facing. If Deputy Stanley or any other representative from Sinn Féin was still in the Chamber, the only question I would ask of him is exactly what wealth he is talking about taxing. As the year goes on, the Sinn Féin Deputies appear to be excluding more and more forms of wealth from their definition. What they are already saying is that they want to tax wealth but that wealth will not include farm income, the value of some private residences and some of the money within our banking system. In addition, all of the assumptions they used for calculating their figures were based on a level of wealth that existed before our economy collapsed.

The real name for the so-called wealth tax Sinn Féin is putting forward is actually other people's wealth. What those in Sinn Féin are trying to do is to create this political idea, this narrative, so they can look in the eye those who are already struggling and going through difficulty and tell them that somebody else can pay - somebody else can always pay and the money is available because somebody else will take the hit, take the sacrifice, and those people do not have to do it.

The question members of Sinn Féin have to answer as they approach the budgetary process is what exactly are the forms of wealth they propose to tax to fill the gap between public spending and taxation that this Government has to narrow. Are they saying it will be the money on deposit in our banking system, which is an issue I have not heard them clarify yet? If they are going to tax people's savings, and people then make the decision to take savings out of Irish banks and put them into banks across Europe, where will Sinn Féin find the money to fill the gap in the capital ratios of our banks? If there is one thing that felled our banking system in the run-up to 2008 and afterwards, it was that a deposit flight from our country took place. Irish people and investors did not have confidence that if they left their money in Irish banks, they would be able to get it back a month or a year later.

If Sinn Féin proposes to tax people's savings and if those savings are going to leave our banking system, who will fill the gap and put the money back into our banking system to keep it stable? The answer to that question, as we have learned to our terrible cost, is the Irish taxpayer. In a situation where huge amounts of money leave our banking system, the Government, supported now by new European mechanisms, has to stand in to provide a backstop to the banking system. If Sinn Féin is proposing a wealth tax on people's savings in banks, it should come clean on that and on two related issues in the run-up to the budget. How much will the average Irish depositor have to pay as a result of the introduction of a wealth tax and, if the same Irish depositor decides to take money out of Irish banks such as Allied Irish Banks and Bank of Ireland, where will Sinn Féin find the money to fill the gap?

If the party is looking for credibility and to build its credentials in dealing with the tough decisions it must make, at a bare minimum it must answer two questions concerning its response to a wealth tax as the solution day after day. It does not matter what the question to Sinn Féin is; the answer is always the same, a wealth tax. One could say “Good morning” to a Sinn Féin Deputy and he would respond with “Wealth tax”. I can imagine them passing each other in the corridor and instead of saying “Hello” they say “Wealth tax” to each other. That is Sinn Féin’s answer to every question posed to it. As the party puts the answer forward, it must clarify how much the average Irish person would pay as a result. If the average Irish person decides to take his or her money out of the bank then where would Sinn Féin find the money to fill the gap?

I wish to make three broad points on the Bill in response to some of the points that have been put forward by speakers, including Sinn Féin and others, in the debate. The first point is where we are trying to get to at the end of this terrible journey, following all of the changes and sacrifices people are making. The answer to the question is simple. We must get to a point where Irish schools, hospitals and pensions are all paid for by Irish taxes. We must reach a point where the amount of money we raise in the country every year is sufficient to pay for the level of public services people want in the same year. Any money we borrow must be reinvested in the country. What we want is a situation in which Irish taxes, on the one hand, equal Irish public services on the other. All of the changes we seek to make to the tax system, the social welfare system and how we spend money on schools and hospitals are getting to that point.

One could ask why that matters and why it is a goal worth attaining. There are two reasons, and that is why the Fiscal Responsibility Bill is so important. The first reason it is so important to deliver is that if we do not get ourselves to that point then other countries might well decide they do not wish to lend to us to pay for the level of public services we want. Other countries might say that if we want to have a certain level of wages, social welfare and taxes, that it is not sustainable and they will not lend to us on that basis. The second and more pressing reason the goal is so vital is that if we do not do this, as each year goes by we will be putting more money into servicing our national debt and the cost of interest on the amount of borrowing we require. Deputy Olivia Mitchell referred to this in her contribution. The challenge in that regard has nothing to do with bondholders, banks or the rights and wrongs of the bank guarantee. It has to do with the terrible challenge we face: that if the taxes we raise each year do not equal what we want to spend on hospitals and schools, all we are doing is storing up the cost for the future. This is not the cost our children will pay, which is far greater than that. It is a cost all of us will pay in our lifetime as taxpayers and probably, after that, as pensioners. I hope Members who retire will, please God, lead lives beyond this House. If we do not get the equation right it will mean there will be less tax available to spend on the public services we want.

I hear again and again from Sinn Féin about our loss of sovereignty, which is so important. I dispute the notion that our sovereignty was clobbered and ripped from our hands when the troika arrived into town on a bleak October morning. The moment we lost our economic sovereignty happened on two different levels. The first was when this country could not borrow for itself. We lost our sovereignty when nobody would lend money to us. The arrival of the troika was not the cause of our loss of sovereignty; it was just a symptom of it. The second point at which we lost our sovereignty was when the value of our banking system was a multiple of everything we made within the country. When one gets to those two points, that is when one loses one’s sovereignty. The arrival of the troika - and its departure next year - did not signal the point at which we lost our sovereignty. It signalled the point at which we realised that decisions we had made had created an environment in which our destiny could be taken out of our hands. We left ourselves vulnerable to decisions that were made by institutions such as the European Central Bank that have not been in our favour at times. The cause of our vulnerability was allowing ourselves to get to a point at which we could not pay for the public services we wanted.

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