Dáil debates

Wednesday, 3 November 2021

Finance Bill 2021: Second Stage (Resumed)

 

6:02 pm

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

For the record, it is People Before Profit-Solidarity by the way.

I have just come from the Committee on Budgetary Oversight, which was an unfortunate clash so I missed the Minister's introduction. I heard some but not all of it and I apologise for that. At the meeting, Professor Niamh Maloney discussed the consultation process the Commission on Taxation and Welfare will have. It was an interesting contrast in that the group is trying to step back from the taxation system and obtain a strategic view of what we are trying to achieve in the taxation and welfare systems, and to get wider public opinion on big questions about what is the purpose and strategic direction of our tax system. This is a welcome development because all too often - this is not necessarily a criticism - finance Bills contain many bitty parts, and the Bills can be large and quite technical which makes it difficult, and one does not understand how it all knits together into an overall strategic direction for taxation. The contents of a budget can often be the result of a reaction, understandably, to individual pressures at a given time rather than being considered in an overall strategic context.

I wanted to start with that point because it seems to me that we never consider that. In the week when the Conference of the Parties, COP, has been discussed more than ever before, we must do this. The discussion on the climate emergency, and the radical measures we need to introduce to address it, give added weight to arguments we have made on the left for many years about wealth and income redistribution, in regard to the concentration of wealth controlled by corporations and a relatively small number of billionaires who control those corporations, and wealthy people who tend to control a disproportionate amount of wealth and income in this society and societies throughout the world. In the context of climate change, we must ask the question whether it is possible to address the climate emergency if we do not do something about the grossly unequal distribution of wealth in our society. The answer is that there is no chance at all of doing that. We need to think about that from a strategic point of view. It is apparent when one considers carbon tax and some of the measures in the budget, from the reaction of those who are less well-off, how people perceive these measures. They view climate action as an economic and financial threat to them. They are right insofar as even the Economic and Social Research Institute has stated that measures, such as carbon taxes, are regressive. The Minister might respond by saying he has taken counter measures to obviate that, but it is a fact that people who are less well-off perceive climate measures like carbon tax - and rightly so at present - as a threat. They should not, and we will lose the battle if that is the case.

When one considers the massive investment we need to make the transition to address the climate crisis, who has the wealth and resources to do it? We know the answer from the figures on the concentration of wealth in the world that are repeated year after year and become more obscene and staggering, in the hands of Jeff Bezos, Bill Gates and Elon Musk. I could go through the list of these spectacularly wealthy individuals who have staggering amounts of profit that grows and, indeed, grew during the Covid pandemic. It also includes the fossil fuel companies etc. When we consider data centres we think of Jeff Bezos and other people. I used to think the cloud was something in the sky but now I know it is in a warehouse on the Naas Road that is pumping out huge amounts of CO2 emissions to make money for Jeff Bezos. These people are doing things that are destroying the environment. They control massive amounts of wealth. Governments are frightened of them in that they dare not impose extra taxes on them in case they run away. Those actions are a problem in addressing climate action and we are afraid even to think about taking some of their profit off them in order to get the funds to make investments in the areas needed to address climate change. That is a problem for us. One can go through the list of big industries and corporations - the fossil fuel companies being another obvious example - that have no interest in addressing the climate crisis. If we do not wrest some of that money from them, we will not have the resources to make the massive up-front investment needed in public transport, in the development of renewable energy, in the massive retrofit programme in housing - I will not exhaust the list - in forestry and biodiversity measures to address the crisis, because they control all that wealth. I always found the inequality in wealth distribution was obscene and gross, but it seems to me now that we cannot talk about addressing the climate emergency unless we talk about the redistribution of wealth. That is where the micro measures come into view.

I refer to the examples used by the Minister in his Budget 2022: Tax Policy Changes report. He said that most people would be better off as a result of the budget. However, he explained in the budget booklet, and based on his comments on inflation, how that is not true. He rightly pointed to the fact that inflation will be at 3.7%, and possible higher. Let us consider the examples provided, which I went through in a speech after the budget. The Minister gave the example of Roan and Nicole as a case study, who will receive universal social charge, USC, changes that will amount to 0.45% of their net income. They will receive €165 a year from the USC changes the Minister introduced. This is couple who receive €40,000, which is about an average income. Another example was given of Mairéad who has an income of €30,000. I picked these two examples because they are median to average industrial wage earnings. Mairéad will receive an increase of 0.5%, which equates to €115 over the course of a year. Half of a percentage increase as a result of budget changes against an inflation rate of 3.7%, which the Minister highlighted, does not mean these people will be better off. It means they will be worse off. Let us consider energy costs. Even before the carbon tax, there were several energy-price hikes. Bin charges have also increased. Not only are the benefits wiped out, but I argue there will be a net loss in income. In addition, the cost of rent continues to rise. Therefore, people will actually lose out. On the other side, we know corporate profits of the people I referred to earlier - this is where it relates to the big picture - increased dramatically this year and have consistently done so for the last yen years.

In our budget submission, we set out a table which detailed that 2012 corporate profits amounted to €74 billion. In 2020, profits amounted to €203 billion, which is extraordinary. That equates to a 127% increase in profits in less than a decade's time. How much do corporations, which include the Besozes, the Gates, and the Microsofts of the world, pay in tax? In 2020, they paid €11 billion while generating €203 billion. Let us contrast that with pay as you earn, PAYE, workers and self-employed people.

How much did they earn in 2020? They earned €130 billion. These figures should be borne in mind. Corporations took in €203 billion last year and paid €11 billion in tax. Some 2 million or more workers earned €130 billion between them. How much tax did they pay? They paid €27 billion. That is more than twice what the corporations paid in absolute terms having earned a little bit more than a half of the corporations' income between them. That is extraordinary. It is not a slogan to say the rich are getting richer and the poor and the workers are getting poorer. If you look at those figures, you see it is a fact. They are absolutely stunning figures. With this Bill, we are looking at some more tax reliefs for them but workers will get less than nothing when inflation is taken into account. That accumulation of wealth by the rich is borne out again in Central Bank figures. I now love it when the Central Bank's quarterly reports come out because they show the accumulation of wealth in this country which, again, is absolutely extraordinary. The net worth of households in this country is now at a record high of €883 billion. That is up €89 billion in one year, the year of Covid. Do the vast majority of workers out there feel they have seen a massive increase in their household wealth? They do not because it has not happened. However, the Central Bank does not lie. Some have seen a massive increase in their wealth. The Minister's own Department showed the distribution of wealth a few years ago. It should do that more often. The top 10% held 53% of that wealth while the bottom 50% have less than 2%. We know who got a massive increase in wealth last year. It was the top 10%. That is absolutely extraordinary. The top 5%, some 85,000 households, are worth an average of €3 million each when you break down the figures. Between them, they have €331 billion. It is so mind-boggling that people cannot believe it but it is a fact.

Comments

No comments

Log in or join to post a public comment.