Mick Wallace (Wexford, Independent) | Oireachtas source

-----and maximise what we receive under the 12.5% rate, which by any measure is light. Given that the rate of corporation tax in the United States is 35%, I do not think companies will run away from here if we ensure we receive our full 12.5% rate.

When the Minister, Deputy Bruton, was on "Morning Ireland" this morning, he was at pains to point out that tax avoidance is legal. I agree that it is. That is the sad part about it. I do not think it should be. Tax avoidance is not just a problem here - it is a worldwide problem. It is creating problems for all Governments as they try to make ends meet. In 2002, corporation tax accounted for 3.65% of this country's GDP, but that figure had decreased to 2.25% by 2011, representing a reduction of approximately 40%. That was a big change. I have pointed out previously that in the US, corporation tax accounted for 7.2% of GDP in 1945, but that figure had decreased to 1% by 2009. I do not think this can continue. We have had the courage to tackle welfare fraud and rightly so. Governments throughout the world should deal with tax havens in the same way because they represent a massive problem. Irish companies can move to Holland, for example, and pay 1% over there. It is a bit crazy. I appreciate that Ireland cannot solve this problem on its own, but it would be good if we could speak out and encourage others to take action. I also think we should give our approval to the transaction tax idea. The financial institutions have caused many problems. They caused the financial collapse. They are not really rectifying the problems they have had. In 2008, there was a great deal of talk about things being regulated in a different fashion. We have seen a gradual erosion of the will to regulate financial institutions in a way that would make them more responsible and transparent in how they operate.

The fact the lending environment is so difficult continues to be a massive issue for the Irish economy, especially the domestic economy. Having listened to their constituents, I am sure most Deputies are aware that many people are finding it difficult to access money. Sadly, it is difficult to believe the banks when they say they are meeting their lending targets. They have already lost a great deal of credibility. We can be forgiven for suspecting that they are being economical with the truth when they tell us they are meeting their lending targets. I have heard many stories of companies that appear to be doing reasonably well, but are finding it difficult to access finance from the lending institutions. I was interested to note last week's decision by President Hollande to establish a state-owned investment bank, in line with one of his election promises, that will offer €42 billion in financial backing to small and medium sized enterprises in France. I regret that the Irish Government has not established a strategic investment bank to lend to small and medium sized enterprises here. It has proven fruitless to depend on the existing banks and financial institutions to do so. We need a strategic investment bank that we can control. We need to be 100% certain that such a bank is open for business and eager to assist the economy and the businesses that participate in it.

We were informed by the credit union movement today that credit unions are in a position to make €7 billion available for lending. The Government has asked where it can find the money it needs. I remind it that the credit unions have money that can be used for investment purposes. If we do not invest in the economy, I do not see how we can make serious inroads into our unemployment figures. We need to invest if we are to create a serious number of jobs, especially in the domestic economy. We cannot depend on multinational companies to create jobs for us. When one of them opens, another one closes. We have to start looking after our own house. We need to invest more in indigenous industries. We must get involved in developing our infrastructure once more. Such an approach will create the jobs needed to deal with the huge problems in our society at present. Until we manage to do that, it will be difficult for us to get out of the very difficult place we are in.

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