Paul Gavan (Sinn Fein) | Oireachtas source

I move recommendation No. 15:

In page 96, between lines 3 and 4, to insert the following:

“Report on the treatment of capital gains tax with respect to worker-owned cooperatives

40.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the treatment of capital gains tax in instances where a company or shares of a company are purchased by a worker-owned cooperative, and options to amend the capital gains tax regime to promote worker-owned cooperatives and employee ownership.”.

This amendment calls on the Minister to prepare a report on the treatment of capital gains tax in instances where a company or shares in a company are purchased by a worker co-operative and to consider options to amend the capital gains tax regime, including exempting such purchase from capital gains tax in order to promote employee ownership. Sinn Féin is committed to developing an economy in which workers have a greater share of ownership through worker co-operatives. These are businesses in which the workers of the enterprise own at least 51% of the shares.

In a worker co-operative, ownership and labour work together. By giving workers control, you give control to their communities and their local economies to stimulate community and regional wealth building. They put worker outcomes, worker well-being and community sustainability at the forefront of their objectives. Worker co-operatives retain wealth both at a local and a regional scale. They allow community wealth building that is sustainable. They perform well at meeting local employment needs and tend to look for local suppliers, thereby rooting business locally and strengthening community economies. Worker co-operative businesses are more likely to pay the living wage and have lower pay differentials between the top and lowest earner. They show exemplary degrees of corporate social responsibility and a strong commitment to sustainability. For companies who have converted to the worker co-operative model, a majority of them find that employee well-being has increased.In 2005, the Scottish Government established a State agency known as Co-operative Development Scotland, a subsidy of Scottish Enterprise, tasked with the responsibility of developing Scotland's co-operative sector. Between 2005 and 2012, the sector experienced modest growth. This was followed by a substantial 300% increase in the number of worker co-operatives in Scotland, from 30 to 100. Among the measures introduced was an exemption from CGT, up to a certain threshold, on the sale of a controlling interest in a company to an employee ownership trust or worker co-operative. A report would allow us to explore this area further, introducing incentives to support this ownership structure. I encourage the Minister to give this serious consideration.

One of the big issues we have is business succession. It makes perfect economic sense to incentivise the workers in a business to convert that business to a co-operative when, for example, a business owner wishes to retire. This is a sensible proposal. It has been proven to work in Scotland. I urge the Minister, at the very least, to adopt the report.