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

To be honest, I do not accept the connection of corporation tax with growth and jobs, etc., in the very clear way that the Minister would like to put it forward. Mr. Michael Burke, an economist in Britain who writes often enough about Ireland, did an amount of research on this, including the relationship between corporation tax rates and growth. He concluded there is no effective relationship in that regard and I read another paper with the same argument.

If there is no corporation tax and there must be public services, what will be the consequence? It is the imposition of other direct and indirect taxes on workers, which also have a impact in terms of consumption. The Government and the right wing would like to portray a simple scenario where if taxes are cut, more growth will be created and we might even end up with a bigger tax take at the end of the day. It relates to the Laffer curve. Instead, there is a race to the bottom with the likes of corporation tax. Hungary is aiming for a rate of 9%, US President-elect will go for 15% and British Prime Minister May will go with whatever she wants. What will we do here if the North has a rate of less than 12.5%? It is a race to nowhere from the point of view of ordinary people.

The Government gets itself into trouble with the gymnastics involved. I listened to Pat Kenny on the radio, whom I would broadly view as being part of the establishment, when he interviewed the US ambassador on the day Mr. Trump was elected. He asked if it was a real problem that Mr. Trump was talking about reducing the corporation tax rate to 15%. The ambassador replied it would only be a problem if Ireland was a tax haven and had low corporation tax rates as a main selling point. On the one hand the Government is trying to say we are not a corporate tax haven and we have other offerings but on the other hand it is a core part of the Government's strategy.

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