Joan Burton (Dublin West, Labour) | Oireachtas source

As some of the previous speakers were debating I recall a press conference given by the Northern Ireland Deputy First, Minister Martin McGuinness, MLA, during the course of the recent elections in the North in which he made the case for the North adopting the corporation tax regime of the South. This case has been put forward by Sinn Féin representatives at every North-South meeting that I have attended in recent years, including - I may say to Deputy Adams - in private discussions which took place. When the Deputy First Minister was asked about it and the concerns expressed that this would result in a reduction in services and tax available for services he gave a very specific answer. He said, "I do think it will be affordable". He said the reason he supported the move was because it would create potentially 37,000 new jobs through new investment. In a nutshell, he made the case for having a competitive tax regime that is just and fair on the whole island of Ireland

In this context we have heard just recently an exercise in outrageous cant. In other words, the 37,000 new jobs that might be created according to Deputy Adams's leader in the North would be very important for the North. Yet, what about the 6,000 jobs in Cork connected with Apple, which have put Ireland at the cutting edge of world technology upon which we all depend in our daily lives, technology that has generated huge profits globally and specifically for the Apple Corporation? Do the 6,000 jobs in Cork, the 6,000 families in Cork, the communities in Cork, Munster and Dublin not matter? By God, the 37,000 jobs matter in the North. What kind of rigmarole approach is that?

In the period since the Commissioner launched a fairly large Exocet in the direction of Ireland and its position in regard to foreign direct investment I have been shocked with the performance of the Government. It has been unfocused and all over the place. I understand there are competing tendencies within the Government just as there are on the left, as we know, but playing out all of the differences, all of the time in public, sends a great message of uncertainty about what this country is about. It amounts to a dereliction of duty. I was sad to see that the Taoiseach and the Minister for Finance, Deputy Noonan - two people for whom I have a lot of respect - were not on top of their game and were not really present in terms of a prompt response on the argument. Ireland is open for business but we also want tax justice.

In a previous Dáil, when I was Opposition spokesperson, I persuaded over a long period of time - about three years of detailed discussion - the then Minister for Finance, Brian Cowen and the subsequent Minister, the late Brian Lenihan, to accept the notion of a minimum effective rate of income tax. Deputies who have been in the Dáil here a long time will remember the reports lodged in the Oireachtas Library, at my request, from the Revenue Commissioners which showed that quite a number of people with annual incomes in excess of €1 million were effectively paying a zero rate of tax because of the huge array of tax breaks that existed. It was obvious that people on ordinary salaries, large and small, would never have access to those breaks. In fairness to the Government at that time, it did adopt the changes I proposed.

When the Labour Party entered government one of the things I persuaded the Minister for Finance, Deputy Noonan to do was to review the tax rate and to raise it further. Now if one looks at the Revenue reports those very high earners - no matter what their tax breaks may be - do pay minimum rates of tax. That is why I recommend the Labour Party's amendment as has been set out by Deputy Howlin. The proposed changes in the amendment have been thought through to be effective and they will bring tax justice forward in Ireland. I am not saying they are perfect because they are cast in a general sense as to how we would deal with the Finance Act and the budget to progress tax reform.

Tax reform is never finished. What the Minister said about section 110 is very welcome and we will look at it closely. We now have very extensive business in tax, accountancy and legal services not just for Ireland but internationally. There are very few people in the world who can keep up with how tax practice keeps changing. It changes on a weekly, national and international basis. Keeping up with that is almost impossible. This is why the Labour Party amendment contains a number of very simple proposals which can be implemented on a continuing basis over a period of years so that we constantly pursue fair and just taxation but which also allow us as an island to keep our competitive advantages, bring the jobs to Ireland and keep them there. As we are talking here today about tax, many people here can decide that jobs do not matter but of course they matter. We would be very foolish to deny that.

We want to support the work of the OECD and the EU through the BEPS process so that we tackle aggressive cross-border tax planning. We cannot do that on our own, we can only do it in a multilateral context and anyone who says differently is either not fully familiar with the facts or is lying. It is not possible do it other than on a multilateral basis.

Second, we need to look at all of the loopholes that emerge or that are contained in the Irish tax structure so that we move to a system of effective corporation tax rates. We have a headline corporation tax rate of 12.5% and headline income tax rates but the headline rate is not what really matters to individuals or businesses with very high incomes or very high taxable profits because people employ accountants and tax lawyers to address that. The key factor is the effective rate. Therefore, our proposal is that the effective rate on taxable profits - revenue less allowable costs of the business - should over a period of time be moved to 12.5% so that we come close to that figure really being 12.5% in terms of revenues less expenses.

Some years ago, the G20 was held in Fermanagh in Northern Ireland - I forget what "G" it was. The then British Prime Minister made developments in tax law and tax justice a key feature of that summit. Not a huge amount was achieved as a result of that except that people's consciousness, particularly that of younger people, of the need for tax justice is now an accepted fact. It is appropriate that the Dáil would move to acknowledge that.

There was a bit of tittering on my left in respect of Oxfam, international aid and what the developing world was missing. As somebody who spent three years working on development in developing countries, I can say that Ireland alone is unable to solve all of the problems of developing countries but our €600 million per year in development aid to countries in different parts of Africa and the East is extraordinarily important to the lives of many people. It is wrong for a previous speaker here and Deputy Adams in particular to cheapen the contribution that Irish taxpayers make. Many people in Ireland would identify many uses for €600 million. That €600 million out of our annual income goes to fund education, water and sanitation - basic services - in countries where that is a significant amount of money.

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