Dáil debates

Wednesday, 7 September 2016

Government Appeal of European Commission Decision on State Aid to Apple: Motion

 

12:45 pm

Photo of Paul MurphyPaul Murphy (Dublin South West, Anti-Austerity Alliance) | Oireachtas source

We will be moving the amendment on behalf of the Anti-Austerity Alliance-People Before Profit. I also express our solidarity and support for the Dublin Bus workers who go on strike tomorrow. It will be very instructive to watch the difference in how those low-paid workers seeking a modest pay increase are treated compared with how Apple, one of the biggest corporations in the world, is treated by the Government and the media.

A woman called Leona Helmsley coined the phrase, "We don't pay taxes. Only the little people pay taxes". She was a multi-millionaire in the United States who, ironically, was later jailed for tax evasion. If she were in Ireland today, she would be a national hero. The Government would be valiantly fighting in Europe for her right not to pay any taxes. The Irish Independentwould be screaming about our sovereign right for her not to pay taxes. She would be a national hero because when one boils this down, the Government's so-called strategy on tax competition means that only the little people pay taxes. Ireland is, by design of the established political parties, a key tax haven for the biggest corporations in the world with the result that they pay practically zero tax.

The Dáil, to its shame today, will pass a motion that could have been drafted by George Orwell in 1984. It will commit itself to the highest international standards in transparency and resolve that no company or individual receives preferential tax treatment. Both of these simply are not true. War is peace, freedom is slavery, ignorance is strength. If it wishes, the Dáil can vote to say black is white and white is black but it will not change the reality. Those who propose the motion know it is not the truth or the reality. It is very hard for the Government to hear the reality, and it is difficult for this country's reputation, but it is a tax haven. There has been a major campaign of spin over the past week to try to confuse the issue but the reality is very simple.

I will spell it out. The Government, supported by Fianna Fáil and Labour, is waging a fight with public money to defend the right of one of the biggest corporations in the world to pay no tax. It is as simple as that. The same parties, when asked to cut the minimum wage, said "Yes, sir". When they were told to impose 42% of the European banking crisis on the shoulders of ordinary people, they said, "Yes, of course". When they elected to burn the Anglo Irish Bank bondholders, they were told they could not do it and they meekly accepted that. Now they propose to fight for the right of small nations but the difference is that a corporation has this time been asked to pay.

One element of the spin over the past few days is the idea that this money is not really owed to Ireland and the Government has become an advocate of tax justice for developing countries around the world. There is no logic in that whatever. The case being taken by the Irish Government will not say that somebody else is owed this money but rather that Apple should keep the money. It is saying that an extra €13 billion to €19 billion should go on top of the €200 billion cash pile that the company already has.

There is the idea that the State got a clean bill of health in terms of other tax arrangements but that is simply not the case. There is the idea that under EU rules, the money could be used only to pay down debt but that is again not the case. It has been confirmed that it could be used, even within restrictive EU rules for capital expenditure, in building homes, schools, hospitals, public investment in green energy and so on.

The central and core big lie that the Government is using is the idea that Ireland is at the forefront of the fight against tax evasion and tax havens. There are experts around the world laughing at this. The Government knows that is not true. The truth is the exact opposite. Ireland has been, is and continues to be at the forefront of a global chain of tax avoidance and tax evasion by big corporations. That is a fact. Mr. Philip Alston of the United Nations has stated that nobody believes that Ireland is not a tax haven and any number of other experts could be cited. Nobody outside the Government backbenchers, perhaps, believes the idea that Ireland is not a tax haven. Huge amounts of spin are being used to seek to get away from that reality.

Look at the Apple case: two companies, Apple Operations Europe and Apple Sales International, were running profits of over €100 billion through Ireland while paying practically no tax. That is the operation of a tax haven. The Government's response has been to use the euphemism that appears in the briefing about a mismatch of tax jurisdictions. It is this idea that somehow Ireland accidentally ended up as a tax haven and that corporations are taking advantage of a mismatch in order to pay no tax. It was written in such a way and rulings were given to Apple explicitly to tell it that it could operate in such a way. The "double Irish" arrangement was not an accident but was designed so that Ireland could be a tax haven. Deputy Micheál Martin made much of our 12.5% rate, but in the same year that Apple Sales International paid a rate of 0.05%, Google Ireland made profits of €9 billion and paid taxes of €22.2 million, a rate of one quarter of 1%. Facebook Ireland, with profits of €1 billion, paid taxes of €3.2 million, which is a rate of one third of 1%. Apple is not alone. Other multinational corporations also availed of the same tax con on ordinary people thorough the double Irish.

It is not just the operation of the double Irish. The Taoiseach said famously just a while ago that we did not do brass plate operations. He should wander down the road to the IFSC. He should wander down to 70 Sir John Rogerson's Quay, where he will find 78,000 companies with brass plates registered. He should wander down to 5 Harbourmaster Place, where he will find a building that houses 250 companies controlling €2 billion in assets, but will not find any employees. He should look at the fact that Ireland hosts over half of the world's top 50 banks and half of the top 20 insurance companies. They are not here for the weather. These companies in the IFSC employ relatively few people. They are here because Ireland is a key link in a global chain of tax avoidance and evasion. That continues. The double Irish continues today and it will continue until 2020. The knowledge box - of which the Government has made a great deal, pretending it was something that would get rid of tax haven status - is designed to continue the tax haven status because it became too hot to continue with the double Irish. Read what was said about it. Its purpose was to enhance further the competitiveness of Ireland's overall corporate tax regime. This is not a victimless crime. Developing countries lose €100 billion a year as a result of tax avoidance and the operation of tax havens such as Ireland. Up to €1 trillion is lost in the EU through tax avoidance and evasion. In this country, while Apple, Google, Facebook and the rest of them should have been paying tax, we have had the development of a massive crisis in our health service. People on hospital trollies are the victims. In the massive housing crisis, 2,000 children are the victims. In the crisis in education, those who cannot access SNAs are the victims. The double Irish should be dismantled and the knowledge box should not proceed. The appeal should be dropped. We should take the €13 billion and use it to meet people's needs.

The last point is that the political price of this for the Government will be immense, and deservedly so. Let it try to come now for water charges and let it justify the children who are homeless. Let it stand over the hospital waiting lists. Every time, people will say, correctly and simply, that it had a choice and that it used public money to fight to add this money to the cash pile Apple already has. This is the Government's bank bailout moment. It will hang over its head until its hastened departure. It will feel it in the budget. We see it in terms of the role of the Independents. It is broader than that. It is not just about Fine Gael, Fianna Fáil, the Independents and the Labour Party. It proves a fundamental point James Connolly made that Governments in capitalist societies are but committees of the rich to manage the affairs of the capitalist class. It is as simple as that. That is the difference on this issue - a big corporation's massive profits and cash pile were threatened. That is why the Government is standing up for it. All of the establishment parties represent the rich and the 1%. We need to be rid of this committee of the rich and we do not need it replaced with a reconfigured committee of the rich. We need a Government of the left with socialist policies which will represent the majority.

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