Paschal Mooney (Fianna Fail) | Oireachtas source

I welcome the Minister of State. As my party colleagues have said, we have given the Government parties a fair wind. The public has a positive attitude towards the Government?s efforts in trying to get us back to where we were. While I do not think we will ever get back to that position, we can at least get to a point where we will have reduced our deficit and met all the economic targets the Government has set. I wish the Government parties continued success in their efforts in that regard.

I would like to focus on competitiveness, an issue I raised on the Order of Business. The Minister of State said this included the Government?s commitment to the 12.5% rate of corporation tax and maintaining and enhancing its pro-business tax policies. He referenced a number of multinationals. The Government is correct to maintain the line that we stick solidly and rigidly to the 12.5% rate and there is an all-party consensus in this regard. We are under increasing pressure again, particularly as we seek a quid pro quo from Europe to review the rate again. The tax policy pursued by the Government and previous Administrations going back over many decades has been correct. It is the right strategy and it has shown that Ireland, as the Minister of State rightly pointed out, is a proactive location for multinationals.

However, an investigation in the past few days by a parliamentary committee in the UK has highlighted anomalies in the UK's tax policies relating to multinationals and pointed out flaws. Companies such as Google, Amazon and Starbucks allegedly are not paying any tax. Starbucks, amazingly, said it had been operating at a loss for 15 years in the UK. This is a tax avoidance rather than a tax default issue. Deputy Richard Boyd Barrett received a reply to a parliamentary question a few weeks ago from the Minister of Finance which stated companies were paying a corporation tax rate of 4% or 5% and not 12.5%. When the Government tries to balance the books and is searching for money, inevitably vulnerable people will suffer as a result of budgetary measures. Has the Minister of State a response to the real corporation tax take at a rate of between 4% and 5%? How will the Government address this? If the Government tried to ensure it extracts more tax revenue from the multinationals, will they walk away? Is there is a belief in government that this is a sacred cow, which cannot be touched?

This issue should be reviewed because if the rate is 12.5%, then that is the rate that should be levied. The multinationals are operating tax avoidance measures, including the Dutch sandwich and another which relates to Bermuda, where they hive off their profits to separate companies on the basis that their royalties can be set against their tax liabilities. All this is legal and I do not wish to give the impression that I am bashing them but in the current climate with the Government trying to find ¤3.5 billion, the Minister of State referred to 1,000 multinationals. I do not know how many are paying 4%, 5%, 10% or 12.5% but it would be interesting to know. There is anger among the people about bankers' pensions of ¤400,000 and so on yet multinationals are generating billions of euro. Recently, Google announced it made an ¤8 billion profit, yet it only paid a measly few million euro under the corporation tax regime. Its response was to ask people to look at what it is contributing in other areas to the Exchequer. I accept that and believe it is right and proper to pursue the strategy of attracting more multinationals to the country. They are contributing to a reduction in unemployment and they generate economic activity wherever they are located. They are good for the country but the question remains as to how the Government will square the circle. If the rate is 12.5%, that is what companies should pay, not 4% or 5%. I am sure if the Government knew it would be able come up with a few hundred million euro more from the multinationals, it would spare those who will be in the firing line next month, particularly those reliant on the Department of Social Protection whose budget must be reduced.