Paul Murphy (Dublin South West, Solidarity) | Oireachtas source

We have dealt extensively with the general questions of the budget previously and, therefore, I do not intend to rehash them, except to say this is a budget for the 1%. It is a small-state budget. This budget will not resolve any of the crises facing people in this country.

Something very interesting was said yesterday by Deputy Michael McGrath. He said that the bedrock of our industrial policy is our competitive corporation tax regime.

It is very revealing to have it said in such stark terms by the so-called Opposition, but we know it is a view shared by the Government. It illustrates the very limited nature of strategy that exists from the point of view of the capitalist class in this country and its political representatives. The notion that being a tax haven is an industrial policy is laughable. Nowhere in the world, apart from tax havens, do they say that an industrial policy is made up of a "competitive corporation tax regime". It is laughable in terms of a description and there is a real problem if that is the policy but it also sums up the reality of Ireland functioning as a corporate tax haven.

To starkly illustrate the point I will give the figures for corporation profits and the effective rate of corporation tax paid on them over the past five years to 2015, the year for which the latest figures are available. In 2011 total profits declared before deductions was €77.5 billion and total corporation tax paid was just over €4 billion, which is an effective rate of corporation tax of 5.37%. In 2012, just over €80 billion in total profits was declared and €4.4 billion was paid in tax, which was an effective rate of tax of 5.4%. Total profits in 2013 was €87 billion, while total corporation tax paid was €4 billion, which means an effective rate of corporation tax of 4.7%. In 2014, total profits were €103 billion in profits and close to €5 billion in tax paid which was an effective corporation tax rate of 4.75%. In 2015, which are the latest figures available, corporation tax profits have doubled in the period to €156 billion, while only €6 billion was paid in tax, giving an effective rate of corporation tax of less than 4%.

That is utterly wrong. It represents a robbery of working-class people in this country and of developing countries in particular. It robs from their public services and has real consequences for real people. The other thing is that it is utterly unsustainable and to stick to the idea that one's industrial policy is going to attract corporations here on the basis of paying little or no tax due to low rates of tax, little regulation and everything else is utterly blind and shows the short-sighted nature of the strategists for capital in this country.

When one looks around the world and, for example at Brexit and the possibility of a bargain-basement Brexit driven by the Tories, it will include also slashing regulation on corporations if the Prime Minister gets away with it. Donald Trump repeatedly makes reference to Ireland's corporation tax rates and the need to slash to 20% US corporation tax rates. One can also look for examples elsewhere in Europe. It is a dead-end strategy. It is a race to the bottom in which everybody loses except for corporations and does not provide any sustainable future.

An industrial policy must be based on public investment, supporting research and development and investing in infrastructure. A socialist industrial policy must have its bedrock of public ownership and investment in the likes of green energy, in which the private sector simply refuses to invest. There is a daily consequence of that for the people on trolleys in hospitals. There was a very impressive protest yesterday by pupils, parents and teachers of Gaelscoil Chnoc Liamhna who have been in prefabs for 21 years and those involved have encountered obstacles but they have not been promised school buildings that do not involve going in and out of separate prefabs and having cold classrooms for another five years. They rightly do not believe those promises without an indication that something will happen. They are dealing with the consequences of what is happening in terms of industrial policy.

Social Justice Ireland produced stark figures indicating 17% of the population are at risk of poverty, 25.5% are experiencing deprivation and that without the social welfare system, 46% of the population would have been living in poverty in 2015. They face the consequences of the political choices which, as Deputy Boyd Barrett outlined, are encapsulated in the Government’s attitude to Apple.

There has not been sufficient debate in this House on the so-called sugar tax, which is obviously a tax on particular soft drinks, as opposed to sugar full stop. I am opposed to the soft drinks industry. I agree wholeheartedly that soft drinks play an important contributory role to health crises in this country and lead to obesity and it would be much better if people drank fewer soft drinks. What I do not agree with is introducing another regressive tax. We have had so-called green-washing before whereby austerity taxes were introduced under the guise of being environmental taxes such as water charges but now we have health-washing of taxes and taxes being brought in on the basis that they are somehow to improve people's health. The reality is that it will be a regressive tax. Ireland has a regressive, not a progressive tax system, whenever one takes into account the amount of indirect tax paid by people. The Government, Fianna Fáil and other right-wing elements always say we should just look at the income tax, which is progressive. Yes, the income tax on its own is progressive but it could be a lot more progressive, as we will outline, but when one takes into account all the indirect taxes such as VAT, of which consumption taxes are a major part, then it is not a progressive system where the bottom decile of household income earners pay 27.75% of their gross income in tax in total and the top 10% only pay less than 2% extra, namely, 29.2%.

The so-called sugar tax on soft drinks in reality will be another regressive tax. It became a matter of controversy in the US presidential election whereby it was introduced in Philadelphia and Bernie Sanders, the self-proclaimed socialist, opposed the tax while Hillary Clinton was in favour of it. There was a dispute, some fact-checking was done and the conclusion was that the so-called soda tax in America would disproportionately increase taxes for low-income families and people of colour. That is the consequence of sugar tax. The vast majority of it will be passed on to consumers and will disproportionately affect low-income earners.

If we are serious about public health what we should have is a proper amount of physical education, PE, in primary schools. According to a UCD study we are the third lowest in 37 European states, with the average time spent on PE being 46 minutes in a week. That is not impressive when one looks at the reality of physical education. That compares with religion getting two and a half hours a week, regardless of ethos. If we really wanted to improve public health we would invest in a national health service in order that people's poor rate of visiting dentists and tooth brushing would be tackled by people having access to and a connection with a dentist and doctor among other health professionals. Ireland would increase its spending on health promotion, which relatively speaking is low.

If the Government is serious about tackling soft drinks companies then it should regulate where and how soft drinks are available, for example, not having can machines in schools and it would tax those companies. Ultimately, soft drinks companies, which are part of major conglomerates, should be in public ownership and under democratic control. A secondary issue is the fact that the by-product of the sugar tax will be to incentivise further the sale and consumption of artificial sweeteners, which are also not without complications. Some studies show they can lead to an increased consumption of sugary foods because they make people crave the taste of sweetness and are potentially addictive. Studies involving saccharine and rats have shown a link to weight gain and an increased risk of type 2 diabetes. I am opposed to the sugar tax, which is regressive. There are better ways of tackling the issues, as I have outlined. We will bring forward amendments on Committee Stage.

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