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

There is a lot of stuff to deal with in the Finance Bill. It is a big document. We will no doubt tease through a lot of it in more detail on Committee Stage. It is a telling fact that, faced with an unprecedented cost-of-living crisis and a shocking, disastrous, catastrophic – you just run out of adjectives to describe how bad the housing crisis is – housing crisis, the ESRI and Social Justice Ireland were before the Committee on Budgetary Oversight, of which I am a member, and they stated unequivocally that if we strip out the once-off measures of cash payments, which occur primarily before Christmas, and some of the other once-off measures, the budget is regressive. That is not the left saying that; it is the ESRI and Social Justice Ireland. They were very clear. In real income terms, people on social welfare payments, pensions, students, and workers on average pay and low pay are going to be considerably worse off next year than they were this year. That is the simple inescapable fact. Insofar as the Government responded to that unprecedented cost-of-living and housing crisis, the measures it took – setting aside the once-off measures – were more favourable to the better off. That is the truth about the budget. Most people will be worse off next year. They are paying the price and the Government’s response was to favour the better off on an ongoing basis. It is true that some of the once-off measures will blunt, for a few months, the crippling impact of the energy price hikes and the general rise in inflation. They will blunt it, but overall, they will not compensate for the scale of inflation and the broader rise in the cost of living.

That is happening at the same time when big business is enjoying an absolute bonanza in profits. I do not know if the Minister can give us an update, for example, on corporate profits, because as we know, we do not get the full details of corporate profits until a couple of years after those profits are recorded, but the trajectory on corporate profits is unmistakable and quite frankly staggering in recent years. In 2012, corporate profits were €74 billion. By 2020, corporate profits were €193 billion. That is a staggering increase. Corporate profits have almost trebled. Although we do not have the figures for 2021 and 2022 yet, it would seem clear from the Government’s own projections on corporate tax receipts that this year they will be €20 billion.

In 2020, they were €11 billion. The corporation tax that is coming in is almost doubling, and that can only happen if there has been a further staggering increase in the profits made by corporations. As we know, the bulk of those profits is being made by a few hundred incredibly, staggeringly, obscenely profitable corporations. The 2020 figures show €193 billion in total pre-tax profits and €11 billion paid, which works out at about 6.1% tax paid on their gross, pre-tax trading profits. If we extrapolate from the €20 billion we are estimated to get in receipts this year, that suggests extraordinary increases in profits.

Of course, we know all this. They are the broad, macro figures on dizzying increases in profits but there is a lot of other evidence from particular sectors. In the energy sector, the large energy producers and companies have witnessed staggering profits over the past two years in particular, at precisely the same time when people are being crushed with energy price hikes on an unprecedented scale and when people are experiencing increases in their bills at an unaffordable level. There has been nothing yet, although there have been promises, in terms of windfall taxes to be imposed on the profits of these companies.

I was looking at the figures for Cement Roadstone Holdings. The Government has this misguided notion of bringing in the concrete levy, which will increase the cost of homes for people, instead of taxing the profits of people who are really profiting in the area of concrete, cement, construction materials and so on. I was leafing through CRH's accounts for 2021 and, again, they are just staggering. The earnings per share for 2021 at CRH increased in one year by 130%. There is no cost-of-living crisis for those who own lots of shares in CRH or for the people who own shares in private energy companies. There is no cost-of-living crisis for people who own substantial shares in those corporations that are seeing staggering increases in profits. Other people's misery is generating additional income, profits and dividends for the rich. That is the reality.

In property, again, it is self-evident. I mentioned earlier the Tathony House situation unfolding in Dublin 8. A landlord who inherited from a family member, as I understand it, a 35-unit apartment complex is now evicting all the people in the complex, who received notices to quit last week. Imagine the shock and fear that induces in those families. One person is a nurse in St. James's Hospital, while another happens to be a People Before Profit councillor. They are ordinary working people, now faced with eviction by a landlord who, they have worked out, based on the average rents in that apartment block, must have a rent roll of about €700,000 a year on that property alone, for which one of the residents went so far as to check with the Companies Registration Office the taxes paid and it is recorded that about €69,000 is paid in tax. That is €69,000 on a rent roll of about €700,000. That landlord is doing pretty well but not well enough, it seems, because he now wants to cash in on the increased value of property. As property prices go through the roof, is there a windfall tax, that is, an increased capital gains tax, for all those who bought property from the National Asset Management Agency, NAMA, at the bottom of the market, the sorts of people who are trying to cash in on the extortionate value of property at the moment? No, there was no such tax in the budget, although there should have been because these people have made a stunning fortune from the terrible decisions of the Fine Gael-Labour Party Government of 2011-2016 to unload property assets at a nominal value of about €42 billion, which must be worth three or four times that now, as these people cash in - or cash out - on the enormous capital gains they have accrued, where they have paid little or no tax on the rents they have received. The large, international investors will pay little on their capital gains but they can cash out tax free, with no serious measures to capture some of those incredible windfall gains these people have made.

That is the reality of the inflation, cost-of-living and housing crises. A relatively small cohort of supremely wealthy individuals and corporations are making shocking, obscene profits, that is, a bonanza like we have never seen before, while ordinary people are crushed to the point where they do not how they will pay their bills. They simply cannot sustain the levels of rent being charged, but there are winners in all of this. They are the broad facts and the Government’s budget against that background is, even by the assessment of the ESRI, regressive.

I might outline some of the specific measures in the Bill. I do not support the renter’s tax credit at all, and while I accept Sinn Féin believes in a higher renter’s tax credit, I am afraid I just do not believe in renters’ tax credits as a way to address this problem, whether it is €500, €1,000 or whatever it is, because it is chasing rents that are off the Richter scale. I am sure people will be glad of the €500 or €1,000 but it is a drop in the ocean, it is not dealing with the problem and it is public money ultimately going into the pockets of private landlords. What we need is not something one could include in a Finance Bill but it would be a better way to deal with the problem. As the Minister knows, we have advocated that we introduce proper rent controls whereby we actually control rents and ensure they are set at affordable levels. We believe, and we have put forward a Bill to this effect, that rents should, as a matter of law, amount to no more on average than about 25% of anybody's income. I was reading an interesting paper, of which the Minister might be aware, relating to the income thresholds and the review he carried out. It is incredible. The review he carried out estimates that people in Dublin, for example, are paying about 60% of their income on rent. It is absolutely shocking stuff. Many of those people are not even entitled to social housing or housing assistance payment, HAP, support for the extortionate rents they are paying. Against that background, the €500 renter's tax credit is a joke. It is not going to make any difference and it will be money into the pockets of landlords who are making an absolute fortune.

The only response the Government gives when we suggest serious rent controls that would reduce the cost of rent is to say landlords will exit the market. If that is the case, good. We should take the properties off them. The properties do not have to exit. If landlords want to exit because they want only to follow maximum profit, just buy the properties off them. We have a lot of money, which the Minister has I think mistakenly put into the rainy day fund, totalling €6 billion. Why would we not use that money to expand dramatically the State's stock of public and affordable housing? If we do not do that, we will end up just making cash payments to landlords, whether through the rental accommodation scheme, RAS, HAP, leasing arrangements or renters' credits. We will end up just subsidising extortionate rents and pouring well in excess of €1 billion a year in current expenditure when this credit is added.

That is the thing we cannot afford. When talking about our debt position and our financial position, we cannot afford to allow current expenditure to grow exponentially. The way to deal with that is for the State to have its own social and affordable housing stock on a much better scale than we have now. That capital investment is expensive at the outset but it saves billions over the medium to long term. It begins to generate revenue to the State and, of course, not least, ensures that people who are in what is essentially publicly subsidised housing - the HAP, the RAS and all these things are publicly subsidised - will have security and will not be facing the prospect of eviction but will have affordable housing and social housing. That is the alternative. We will get there eventually.

The Minister should have a read about what they do Finland. In Helsinki, 70% of all the building land is in the hands of the city. They have their own state construction company and 55% of everything that is built is social and affordable housing. What is the point in building stuff that nobody can afford? The State ends up paying for it anyway through RAS, HAP and leasing. It is absolute insanity but it suits the institutional investors, vulture funds, corporate landlords and so on.

The vacant property tax is similarly a joke. It is three times the rate of the LPT. It is not going to disincentivise these people. It is just not enough. The capital gains they are making by sitting on empty property is multiples of that. It is still profitable for these people to sit on an empty property. I have been going on about St. Helen's Court in my area for four years. It is right across the road from me. It literally stares me in the face every day in my office. A vulture fund from the North - not even an international fund - bought it and has, essentially, intimidated three quarters of the tenants out. It has been sitting on 15 empty apartments for three years now and is trying to evict the rest of the tenants. It is profitable for it to do that. We allow and facilitate that. We do not make it absolutely illegal. We do not take the properties off it and house the people on the housing list. We let it do this. It will walk away with massive capital gains when it finally sells that property. It is quite honestly beyond belief.

I want to mention the USC and changes around the minimum wage to ensure this tiny pathetic increase in the minimum wage will not accrue an extra USC. That is fine but the problem is that the level of the minimum wage increase at 80 cent is an absolute joke. I have raised the plight of a fantastic group of workers, that is, private security workers, a number of times. Currently, their employment regulation order, ERO, means their minimum pay is €11.65 per hour. Top Security, which is a company that gets public contracts, is resisting that moving up to €12.50. This is a company that gets public contracts and is making an absolute fortune. We do not do anything about that. The way the Government can cut across that is by increasing the minimum wage to something decent or at least to the level of the minimum wage. The minimum wage now is under €13. In our view, it should be as high as €15 per hour.

I will cover other stuff on Committee Stage but I want to signal to the Minister an issue we have discussed many times, namely, the need to further amend the legislation around section 481 regarding the film tax film tax credit. The various stakeholders of the film industry appeared before the Committee on Budgetary Oversight, of which I am a member. Of course, we had the usual chorus of film producers, contractors, guilds, Screen Ireland and so on saying everything is wonderful and rosy in the garden and we should keep it the way it is. Then, we had representatives from Equity, performers, artists and representatives from the Irish Film Workers Association. The picture they presented was not so rosy. To cut a long story short, Equity said that its members' intellectual property rights, and the equitable remuneration they are supposed to get for the ongoing use of their intellectual property on further performances of movies and so on, are essentially being taken off them by the producers. They are forced into signing contracts where, essentially, they waive the rights to proper remuneration on that. They are getting contracts that are far inferior to what actors and performers get in the UK. Similarly, we heard testimonies from crew who said they had been blacklisted. Dozens of workers were blacklisted out of the industry. They take cases to the Workplace Relations Commission, WRC, about unfair dismissal but the designated activity company, DAC, is the employer, and that DAC no longer exists by the time people get a case to the WRC. The recipients of section 481 who set up the DAC, where the DAC is a wholly-owned subsidiary of those producer companies, say they have nothing to do with those employees. It is an absolute scam. The Minister needs to amend section 481 to make it absolutely clear that the producer company that is the recipient of section 481 is responsible for the employees and is the employer. He needs to make sure there is not a situation where artists, performers and so on are essentially being forced to sign inferior contracts where their rights to their intellectual property, royalties and residuals are essentially being taken off them by producer companies.

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