Peter Mathews (Dublin South, Independent) | Oireachtas source

When I left UCD in 1972, my mind was comfortable with the belief in the capitalist market system as a way that would motivate the best production of goods and services in an efficient way, with government policy and establishment behaviour ensuring a fair distribution of the rewards of that production. In the past five years, or even the five years previous to that, suspicions arose in me that all was not well and the inequality across the neoliberal capitalist markets meant the system was not working fairly or well. This came with the arrival of new technologies based on computerisation and information technology. Events and facts have demonstrated this to be the case. That is measurable by people who have devoted their life of work to studying this process and comparing it across the globe, recording events and being honest about what is happening.

I am commending this book, The Price of Inequality by Joseph Stiglitz, to everybody in this House and the Seanad, the Judiciary, senior civil servants and those working in the professions of accountancy and law. The book has just come out in paperback. Stiglitz has visited this country many times, including just after the crisis struck. He pointed out a crisis in the balance sheets of the Government, banks and houses and businesses. This is an honest and well-researched book, and if people do not read it, they are doing the people of Ireland a great disservice.

I thank the Minister for coming to the Chamber at this point in the debate.

The Minister is a member of the Economic Management Council, EMC. He introduced a budget recently and we are now discussing the Finance (No. 2) Bill. I was really put out and I thought it was insulting of a fellow Minister in the dominant country in the eurozone to say what he did when the Minister was presenting his budget. On the RTE website there was a headline, “German Minister Rules out ESM Aid for Irish Banks”. The article reported the German Minister as saying: "Ireland did what Ireland had to do. And now everything is fine.” He just does not get it because as Deputy Keaveney pointed out, there is a clear divisiveness in society. There is a clear inequality and it is measurable. There has been a big vacuum, a hole and a hiatus. There has not been a contribution to the society in which we live, the community in which we live, work, play and in which our young work and grow old, by the corporate sector which is here on a short-term residency. That is wrong.

On one of the earlier pages of his Budget Statement he said that Ireland’s debt is forecast to reach 124%. That is wrong. Ireland’s Government debt is forecast to reach 124% of GDP. We know that because of the structural nature of the economy, the engineering of goods and services production and who owns and controls them that GDP and GNP – our national income – are quite wide apart and not good proxies for each other. Government debt to national income is more in the order of 140%. One could add household debt and the non-financial corporate debt or the SME debt together with their contracting incomes. In September 2011 Stephen G. Cecchetti, M. S. Mohanty and Fabrizio Zampolli published The Real Effects of Debt. One could ask where Ireland would have stood if it had been included in that paper. Two years and two months have gone by and we have not even suggested a figure for debt write-down for the economy. It is an awful shame. What are we afraid of?

An article on bloomberg.comasked “Will Germans Pick up the Tab for Deutsche Bank, too?” The Taoiseach told us the other day on Leaders’ Question that the EMC met 11 times in recent months. That is good, but what were the members discussing? If it is a case of twiddling the knobs on the radio it will not help us. Was it about the subject matter in The Price of Inequality, taxes or the big picture issues of who should pay what taxes? As Deputy Keaveney said, it is easy to take back from children and elderly people. It is not easy to say anything to people at the higher end of the scale where the concentration of wealth is found at an increasing rate. Those with scooped out middle incomes and those on lower incomes are under pressure. That is where we should be courageous and put the spotlight and explain to those who are well to do and earning large amounts of money that they should think about its distribution. When one tries to equalise an unequal economy or society it increases wealth. That is proven too. The book is full of proven research.

One could ask whether we want a society that is composed of the haves, the have-nots and the gone-aways – including one of my adult children. No, we do not. Does the Minister remember the figures I suggested at a parliamentary party meeting? A temporary 4% levy for three years on the income of people earning €120,000 and more than that would have produced more than €700 million. A profit levy on corporations of 2.5% would bring in a similar amount. The CEOs and CFOs of corporations would not go away. They are not going to relocate senior management and their families to countries where there might be tropical climates that are not suitable for raising a family that comes from a different climate. I refer to places that have Dengue fever, cholera, smallpox, poor water supplies and unstable situations. To them, climatically, Ireland is heaven on earth but they will not tell the Minister that. They have told me they would not blink if they had to pay a 2.5% levy for a few years on their corporate profits. According to the Department of Finance corporations have made €70 billion and they paid €4 billion in tax, which is 6.5%. People make the argument that there is a difference between reported profits and taxable profits. If a company is reporting profits of a certain amount then they are the profits the company made. Why should they not pay even 10% tax on them? Such companies are happy to tell their shareholders around the world that such an amount is their reported profits.

It is an awful pity that the EMC does not consider the big, strategic problems. I accept there are some little things that are good about the budget and there are things that are very bad but we do not want illusions or language that misleads us and gives us false understandings and hopes. We do not want short-termism in the budget. People should hear that there will be a steady long-term redistribution to make society more equal. That is what Declan Costello advocated long ago. The just society is the type of approach I thought I would get when I joined Fine Gael.

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