Tommy Broughan (Dublin North East, Independent) | Oireachtas source

I thank the Minister, Deputy Shortall and the other Deputies for their contributions here. I hope we will move forward with the approach advocated in the Bill. Given that we desperately need an approach along these lines, it is disappointing that the Government is not accepting the legislation. The High Pay and Wealth Commission Bill is about transparency and full information on high pay and levels of net wealth. During the 27th Dáil, the first Dáil of which I was a Member, the then Labour Party leader, Dick Spring, often spoke to the parliamentary party about the tough budgetary choices Ireland still faced because of the limited scope for taxation at the relatively low levels of higher income and wealth as indicated to him and the Government by reports from the Revenue Commissioners.

I felt instinctively at that time, however, that the party leader, Dick Spring, was misinformed. It was after all in the period between two extraordinary tax amnesties and before the astonishing revelations of the DIRT, Ansbacher, Flood, Mahon and Moriarty inquiries and scandals. Those amnesties and revelations showed clearly that the savage cuts of the Haughey-MacSharry-O'Malley Governments, which Dick Spring ferociously opposed, were unnecessary as were the later penny-pinching budgets of Bertie Ahern and Ruairí Quinn in the mid-1990s. In the present era of continuing brutal austerity, the Noonan-Howlin fiscal juggernaut has refused to examine the scope for larger contributions to the national budget from the higher paid and those with significant wealth.

The first step, of course, is at least to find out the levels of higher income and wealth. That is why I referred to the Bill on First Stage as the "Paddy and Patricia like to know the story" Bill. Many surveys in Ireland and the UK have shown that people generally have not got a clue about high incomes and levels of wealth. The majority of people on much lower incomes just do not realise the levels of wealth and income in this country and in others. Deputies are included, of course, under the high pay definition of this Bill and the public is already familiar with Deputies' levels of assets and economic interests from the annual publication of our statements of registrable interests. In the past, I have called for similar statements to include all journalists and commentators on national affairs. But in fact, even anonymised as is provided for in this Bill, the fullest information on all higher incomes and wealth levels should be available to citizens and policy makers.

The Minister of State indicated that a key problem he saw with the Bill was locating it within the CSO. However, we are always constrained on these Friday morning debates because we cannot bring in legislation that will incur a charge on the Exchequer. I looked at different methods of obtaining this vital statistical information. There is also the whole mantra around Revenue. Every time I asked the Minister for Finance, Deputy Noonan, for reports on the HSBC scandal, for example, and asked him detailed questions on Revenue, all we got were very general, vague answers.

During the preparation of the Bill, I examined two main approaches to obtaining information. These were changes to Irish and EU company law and corporate governance on the one hand and on the other, the creation of a high pay and wealth commission. Regulatory changes introduced in 2013 under the UK Companies Act 2006 apply to all large and medium sized companies and groups and require that directors' remuneration reports must compare on a percentage basis the salary and bonuses of executives with those of their average employee. This legislation does not include executives' long term incentive plans, LTIPs, however. As the Minister of State is aware, that is usually the largest single component of executive pay in large companies. In late 2013, the US Securities and Exchange Commission also required US companies under the Dodd-Frank law of 2010 to disclose how full CEO salaries compare to those of their median worker. In the EU, Commissioner Barnier spoke about a directive in 2015 making disclosure of the remuneration policy of companies mandatory.

The broad second approach, and that which I have followed in this Bill, is to establish a high pay and wealth advisory body on a permanent basis. In the UK, such a body, the High Pay Commission, was established by Compass with the support of the Joseph Rowntree Charitable Trust and it showed clear evidence of runaway executive salaries over the past 30 years. Under section 25 of the Statistics Act 1993, the Taoiseach may issue an order compelling the CSO to conduct a survey and compelling enterprises in particular categories which are listed in that order to respond to the survey. We clearly do have the power to obtain this information on a statistical basis. Under the amended section 10 of the Statistics Act 1993, in this Bill, the high pay and wealth commission is placed within the Central Statistics Office. The commission and CSO will also have access to data on executive level pay in reports of listed companies, in surveys from private consultancies like Mercer and IBEC and from the Revenue Commissioners, which could be used anonymously for the purpose of the commission.

In my first speech, I referred to the TASC report, Cherishing all equally: Economic inequality in Ireland, and to its crucial insights into the level of income and wealth inequality in this country. The publication of the CSO's first household finance and consumption survey on 29 January also adds significantly to our knowledge of Irish income and wealth. That survey was based on 5,419 relevant respondent households, out of 10,522 surveyed, and showed that 71% of all households which replied own their main residence, 10.8% own land and 13.8% own other property. Households in the bottom two deciles of income distribution have 11.4% of net wealth compared to nearly 40% for the top two deciles. A total of 56.8% of the households that replied have some form of debt - the fifth highest in the euro zone - with a median value of debt of €63,000 for indebted households. While this survey is a snapshot of households at one period, it again highlights the inequalities in Irish wealth distribution. The role for the commission as proposed in this Bill would have a much broader reach effectively detailing the income and wealth of every adult Irish person.

The reaction of many media commentators, of course, is to question or try to rubbish the implications of the information provided by research bodies like TASC, NERI and the CSO. Chris Johns asserts that the inequality debate is "one of the worst instances of statistical abuse since Pythagoras" and identifies a "thinly hidden agenda" to target the richest 1%. Dan O'Brien, in his typical manner, declares that "claims of Ireland being very unequal are utter bunkum". My former colleague, Deputy Joanna Tuffy, also took a rather complacent view of the levels of inequality in Ireland and the devastating impacts of her Government's austerity policies in a February article in The Irish Times.

We know of course from the brilliant study of the Irish newspapers and broadcast media by Julien Mercille, The Political Economy and Media Coverage of the European Economic Crisis: The Case of Ireland, with which the Acting Chairman may be familiar, how profoundly journalists of the right-wing dominated newspapers and media ignored and greatly benefited from the massive property bubble from 2000 to 2007. Indeed, Dr. Mercille was in this House just a few days ago. Those media outlets strongly backed the blanket guarantee and the horrendous austerity policies which still accompany it. The same newspapers and journalists rarely, if ever, mention the huge information deficit regarding high income and wealth.

Section 5(2)(D) of the Bill requires the commission to carry out an equality audit of each national budget and based on this independent assessment to make recommendations about the manner in which a fair distribution of wealth and income in Irish society can be ensured when making budgetary adjustments. This section is in response to the longstanding criticism of the brief equality and poverty impact sections in budget day papers which of course are not equality audits at all. Particularly critical is the equality budgeting campaign, a broad coalition of trade unions, NGOs and citizens which was founded in July 2012 due to the increases in inequality and poverty, and which I hope the Minister of State will support through the final budget of this Government.

All of the research so far points to dangerous levels of inequality in Irish society. The Government has insisted on continuous austerity measures to target the most vulnerable in Irish society, as Deputy Shortall has shown, pushing those who did not cause the crash and recession into poverty, negative equity and national debt. The recent European Commission annual report on Ireland showed that we have the highest proportion of jobless households in the EU and very clearly points the finger at the high cost of child care. Our two-tier healthcare sector is also highlighted in the report.

One other area I wish to bring to the Minister of State's attention, which I believe will also increase inequality over the next couple of years, is the commencement of the huge operation of quantitative easing, QE, by Mario Draghi and the ECB. From this month, the ECB is making monthly purchases worth €60 billion of public and private assets including government bonds, asset backed securities and covered bonds. The aim is to bring inflation back to the ECB's official target of below, but close to, 2% and the QE purchases should total €1.08 trillion by September 2016. Approximately 80% of the new purchases, of course, are the responsibility of national central banks. It is feared, however, that most of the new money will be tied up in the eurozone's banking, financial and corporate sectors rather than trickling down. This is happening on the Minister of State's watch - quantitative easing may well make the inequality worse because the money is going to stay with those bankers with their bonuses. Yesterday we read about a basic salary of €1 million in Bank of Ireland, which we still partly own and have propped up for some time. There has been no debate and the Minister for Finance is not interested in talking to me about quantitative easing and the impact it may have on inequality.

Public policy from this Oireachtas should, at all costs, seek to avoid this dangerous growth of inequality and the economic conditions promoting inequality. As a further major tool towards this outcome I again commend the High Pay and Wealth Commission Bill to the House.

I thank the Library and Research Service of the Houses of the Oireachtas and in particular Dr. Catherine Lynch for their outstanding assistance in the preparation of this Bill in late 2013 and early 2014. Solicitor, Dr. Brian Hunt, also did excellent work in drafting the Bill for the Library and Research Service. My former parliamentary assistant, Ms Aisling Dillon, and my current parliamentary assistant, Ms Bernadette Grogan, who also did a terrific job in preparing and presenting this High Pay and Wealth Commission Bill.

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