Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I made a special effort to be here because I feel the Finance Bill deserves that attention even if it is not always given the attention it deserves. The Bill gives effect to many elements of the budget and very significant things often happen in the detail of the Bill which have real consequences for our society. However, because of the nature of those, particularly taxation measures, being complex and technical, it often happens that nobody gets it at the time.

I commend the Department of Finance officials and others who worked on the Bill on producing legislation like this. The consequences of it are not their fault; that is down to policy decisions. However, they have to give technical effect to it, which is a pretty amazing task when one considers some of the complex detail of the Bill, which I still have not got my head around. We will need to do considerable study and scrutiny as we go on to Committee Stage to really see what it all means.

I will make a few general comments about what is at stake in the budget and will deal with a few specific areas that the Bill deals with or does not deal with. Most ordinary people were completely underwhelmed, if not deeply disappointed, at what the budget did not do in respect of the big social crises that face society, most obviously the housing crisis and the lack of local authority housing.

It has just been reported that the homelessness figures are up again, with another 171 people homeless, many of them children. Nearly two and a half years after the launch of Rebuilding Ireland circumstances are getting worse. It is a shame and a scandal; it is a stain on our society. It makes a mockery of the claims of economic success and recovery when we have historic numbers of people and children living in emergency accommodation with no signs of this abating. There is an utter failure to build local authority housing and to control a private market that is out of control in terms of rental costs and property prices. A huge protest prior to the budget pleaded with the Government to make a radical change in policy and allocate a dramatic increase in resources to provide local authority and affordable housing. That was not dealt with.

Some extra money was allocated to address the health crisis, mostly to deal with an overrun in a health service that is completely crumbling. We have shocking statistics and human stories about waiting for basic operations for scoliosis, hips and cataracts. Home care packages are promised to people but not given to them. I could go through the list of failures in the health service.

Something not talked about but which I have mentioned a few times since the budget is the very worrying situation in third level education. The Irish Universities Association is deeply concerned about the dramatic increase in numbers of going into third level not being matched by increased investment in the sector both in capital investment and student investment. Ireland is effectively at the bottom of the European league table for the amount invested per student in third level education. Our universities are tumbling down the international rankings. Students will confirm that poverty is rampant among them, which is why many of them are out on the streets. That is not just a case of injustice and hardship for students and teachers, but is a real threat to the economy.

On climate change, major fines are coming down the line and the Government is doing nothing significant on climate change. In trying to judge what a budget is trying to address and assess its impact, it does not get more basic than housing, health, education and climate change. On all of them, it fails. It does not do anything significant on any of those areas.

Where that general and correct perception relates to the Finance Bill is that when some of us on this side propose dramatic increases in investment in these areas, the Government claims we just do not have the money. The Taoiseach would often say that in an ideal world the Government would do all these things but it just does not have the money. That is the big lie. We do just have the money. Ireland is wealthier than it has ever been. The rate of economic growth would confirm that, would it not? We have spectacular levels of economic growth, outpacing any other European country, but we do not feel it in basic services.

The money is going to vulture funds, banks, property speculators, landlords and corporations which are making mind-boggling profits. The figures are so staggering that they do not even mean anything to people because there are so many zeros at the end of the profits they are making. To put it in simple terms, in the time that Fine Gael has been in government, pre-tax corporate profits have doubled. They have gone from €77 billion to €144 billion. As that comes from the latest available figures which are two years out of date, they are probably even greater than that now. They also pay pitifully low levels of tax.

One of the features of the budget, about which I tweeted the other day is an anti-tax avoidance measure mentioned by the Minister, Deputy Donohoe. This measure will generate nothing. That is how seriously the Government takes anti-tax avoidance when we know there is rampant tax avoidance by multinationals over issues such as intangible assets. There are accusations of abuse of tax reliefs in the film industry. We know that the property sector is benefitting from enormous tax reliefs and there is even pressure to give more tax reliefs to landlords and vulture funds.

We have the absolutely shocking scandal of section 110, which I keep raising. At the Committee on Budgetary Oversight I asked the Minister to tell us how much tax revenue is foregone through section 110, a tax relief given to property investors who came in here and invested at the bottom of the market and have now seen the value of their investment go through the roof in terms of rents and property value. They will pay no tax under the section on the rental revenue they make as long as they keep their investment for seven years, or on the capital gains. Can the Minister tell us how much revenue has been foregone on that bearing in mind what is happening with property? He cannot tell us because he cannot estimate it. He does not know how much tax revenue has been foregone. Imagine giving a tax relief like that. Property developers must love this place. Where else would they get a tax relief worth billions of euro and a Minister who cannot even tell us how much it is worth? It is an absolute scandal.

One of the problems with this guff is that it is necessary to get complex spreadsheets off the Revenue website. Fair play to Revenue for producing them. However, the small print is tiny. This spreadsheet lists all the tax reliefs and there are loads of them.

Some of them really jump out. One of my favourites concerns intra-group transactions, which are transactions between two parts of the same company. The latest available figure is €9 billion in tax reliefs. The Comptroller and Auditor General confirmed some of this. We have been saying this for a few years. In the past few weeks, the Comptroller and Auditor General brought out a report referring to this matter. Ninety of the richest people in Ireland, whose average earnings are more than €50 million per year, are paying less tax than the average industrial worker. The Comptroller and Auditor General states the reason is that there is a myriad of tax reliefs, deductions and allowances that he estimates are allowing €216 billion in profits not to be taxed at all. He estimates this could cost €29 billion in tax revenue over the term of the reliefs. Imagine what €29 billion could do for housing, health, education and the effort to deal with climate change. It is staggering what it would do. It would transform this country. I have outlined what is in the small print.

Does this Finance Bill tackle any of this stuff? That is the big question. I mentioned that the avoidance measure in the budget — the one avoidance measure — has a figure of zero beside it. Clearly, the budget does not do much in this regard.

There are more tax reliefs in some areas than others. We will have to scrutinise them. Some may have merit. There are to be tax reliefs for gyms and childcare facilities in workplaces. These could be good but they could be abused. Therefore, we need to think about them. Of course we want to make child care cheaper and we want people to be fit but we do not want well-paid executives essentially giving themselves free child care and free gym equipment while the relief is not available to ordinary people. It could be just a way of writing off against tax and giving an additional benefit to the wealthy. I do not know whether this is the case; we will have to scrutinise it. I am sure the officials can help. These provisions have to be examined because one never knows what could be included.

There are to be wear-and-tear allowances for biogas vehicles. These could be good. I hope this is an environmental measure. There are to be reliefs for energy-efficient equipment but let us not forget how the renewable energy initiative in the North turned out. There were people in the know buying loads of equipment for which they did not even need to avail of a tax relief. They were burning wood chip they did not need to burn to benefit from the tax relief. I am not saying there are problems but we need to scrutinise all the measures.

I want to say a good word about one provision. There may be more that are good. I am referring to a matter I have been campaigning on a lot, prompted by people in the film industry. I refer to the section 481 tax relief. This is a very generous relief, worth approximately €70 million per year, given to the film industry. I would like to see €140 million going to the industry. In fact, in our budget submission, we doubled the provision for the arts. Much of this would go towards film and other art forms but the investment, given its size, would have to have a real economic and social impact for the country. Prompted by those in the industry, particularly workers, I have raised here the very serious concern that the tax relief has not been policed properly. I also raised the concern that the figures for employment generated through the relief by the relatively small group of production companies that have been getting the overwhelming majority of the benefits from it, were totally made up. I presume generating employment is the purpose of the relief.

I am not a member of the arts committee but I attended a meeting to see what those concerned had to say about this matter. They said there were 17,000 jobs in the Irish film industry. If that were the case, there would be a pretty good return on €70 million. If, however, one talks to people working in the industry, one learns there are not 17,000 jobs. There are not 7,000 jobs, and there may not even be 3,000. There may in reality be about 700 people working in the industry today. This is because nobody has a permanent job in the industry. The people getting the money are getting it through special purpose vehicles through which they essentially absolve themselves of any responsibility for their employees. They have a hire-'em-and-fire-'em workforce whom they hire on a project-to-project basis, but the work is totally precarious. This is despite the fact that section 481 relief has specific requirements.

The Taxes Consolidation Act requires the provision of quality employment as a condition of benefitting from the tax relief. There is, however, most precarious employment, or a lack of employment, in the industry even though it is getting €70 million through a tax relief. This is not acceptable. I could create more than 700 jobs directly with €70 million. If it were 17,000 jobs, it would be great but when there are only about 700 jobs, which are not permanent and which are totally precarious, there is something problematic, to say the least.

In the past few weeks, Mel Gibson made allegations confirming some of these points. He is not the only one. I do not know whether the allegation is true as it has to be investigated but it is worrying if Mr. Gibson says Irish production companies were abusing the system and artificially inflating their claims for expenses in order to benefit more from the section 481 tax relief on the basis that expenses are tax deductible. That is a serious problem. I am glad the Bill does tighten it up. There has been a focus on it. I have certainly spoken on this on several occasions in the House. It was discussed by the arts committee and so on. There was some attempt to address the matter. There is a lot of detail but I am glad to see the matter is to be addressed. It is stated that the Revenue Commissioners will have the power to find out whether the conditions of the relief are actually being met by the production companies. That has to happen. It is a bit like what was going on in the construction sector with bogus self-employment and rogue builders employing people on a completely precarious basis, not paying taxes and so on. In fact, there is a quite strong overlap between what goes on in the construction industry and what goes on in the film industry, particularly for many grades of workers. This has to be addressed.

Let me respond to what some of the producers say about this, in addition to Screen Ireland. The latter tried to defend the status quoby saying film is just a precarious industry and that is the way it is. It claims I do not understand and that film is different. I was chatting to somebody I met on the street who is knowledgeable about animation. We have a big animation industry. There is no precarious work in this industry. Animation is based on film but workers have proper training. They get jobs in animation companies and then make movies. This is episodic work also but it seems that we have got it right in the animation industry. The standard of Irish animation is fantastic. Ireland is a serious player internationally in terms of the big movie industry. Has that anything to do with the fact that we have proper, secure, decent terms of employment for many of the people who work in the animation industry? We need to monitor, in a very tight way, the investment being made absolutely correctly in the film industry. We want to see more of this investment because we have a massive pool of talent in this country. We will not, however, get the best out of the talent pool socially or in terms of employment, the proper treatment of workers or the quality of film production if the staff are not treated properly. They must be given a proper training structure. If one goes to the bother of learning about what are often very technical, creative difficult steps involved in the making of films, one should not have to live a precarious existence for the rest of one's life.

I am glad the Bill is addressing some issues in the film sector that I have not had time to discuss. We will scrutinise it further on Committee Stage. However, credit where credit is due and while most of the credit goes to the film workers who have agitated for this, I am glad the Government has listened.

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