Mick Barry (Cork North Central, Solidarity) | Oireachtas source

I wish to speak to amendment No. 70 which proposes that a report be drawn up to look into the question of a doubling of the corporation tax rates from 12.5% to 25%, which is a policy I support.

I will start with a couple of clear facts. The first is that Covid-19 will cost Irish society a large sum of money. The costs that have been heaped on society by Covid-19 are currently being paid, first and foremost, through borrowing. I have no problem with that. One can borrow on the international markets for extremely low rates at the moment. It is not, however, a policy that is indefinitely sustainable and at a certain point, the question will arise as to how this is paid for and who pays for it. I am opposed to working people paying the price the way they did during the austerity crisis. I am also opposed, broadly speaking, to middle class people being made to foot that bill. I believe there are those within Irish society who can afford to pay for it.

It is also incontrovertible that enormous profits are being made by big business and the multinational sector in this country at the moment. The figures of the Department of Finance underline that. The fact the Department of Finance can estimate that corporation tax receipts will raise €12.5 billion this year as opposed to €10.9 billion last year, an increase of more than €1.5 billion, is a sure sign that massive profits are being made at the moment.

In fact, 40% of those profits are estimated to be made by three companies alone, namely, Google, Facebook and Apple. Economists talk about a K-shaped recovery, pointing to the fact that sections of society and of the corporate sector have increased their profits significantly, not despite but because of Covid, in particular in the tech and pharma sectors. The argument against doubling or increasing corporation tax, or even collecting all corporation tax, is that if we go down this road, corporations will do a runner. The argument is that they will go and there will be severe job losses as a result.

Is this the case? Why do corporations come here in the first place? The tax policy, without doubt, is a factor, but there are other, larger factors. The pool of educated, skilled labour in this country is a major one. That Ireland is a country where English is the language that the majority of people living in the country can speak and that it has access to the EU market have always been key factors for multinational investment in this country. A major change is taking place, however, about which there has not been sufficient discussion or debate. Until now, those corporations have had a choice between the UK and Ireland, but Brexit makes Ireland a more attractive country for multinational investment and at the very least would be the basis for a serious review of the 12.5% policy in that regard.

This issue is often presented in sensationalist ways by the media and Government politicians. They say we are talking about a doubling of corporation tax. Yes, I am; I think corporations can afford it and there would not be a flight of capital if that were to be introduced. Looked at another way, if we take 12.5%, corporations are left to keep 87.5%, while if we keep 25%, they will be left to keep 75%. Their profits will be reduced not by one half but by one seventh, a far more modest sum in that regard. If the State had those resources or the majority of them, and if it could collect the moneys that are currently not collected through all the various dodges that exist, what could be done about a national health service, about investment in social and affordable housing or about eliminating the scourge of poverty from society? All those issues would come onto the agenda of what would be possible.

The proposal is that a report be produced on this issue. I commend amendment No. 70 to the House.

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