Alice-Mary Higgins (Independent) | Oireachtas source

First, I welcome the Minister to the House. I look forward to engaging with him within the same period of time. It is always unfortunate when Bills are pushed through on all Stages, but hopefully we will get to Committee Stage this afternoon. I hope to have the opportunity to engage with the Minister on a number of amendments, one or two of which are recommendations regarding procurement. Unfortunately, the Minister of State with responsibility for that area has just left the Chamber. Some of my amendments have been ruled out of order, but there are others I will talk to. I want to cut across two or three key themes. They are significant and I would appreciate the Minister's thoughts in respect of them.

First, in respect of capital gains tax, I have an ongoing concern that an error or a miscalculation has taken place regarding how we have approached capital gains tax and start-ups in Ireland. I support the idea of enterprise and innovation grants, the IDA and all those other measures to support start-ups, innovation and indigenous business, something which will probably be even more important than ever in the changing international climate. However, we also then have these measures in capital gains tax that strongly reward and effectively, I believe, even perversely incentivise the sale of these companies, because we have capital gains tax policies which lower capital gains tax when a company or new start-up is sold on. Again, that has been complemented by the measures that were brought in last year and have been mentioned in the Minister's speech, including the angel investor reliefs, where there is a reduced rate of capital gains tax at the point when these innovative start-ups and the investments in them are being disposed of.

In our approach to innovation and nurturing indigenous business, we should consider the need for companies not just to start up but also to continue, given the considerable public investment that goes into each of them. If they fail, the public money is lost. If they succeed, they are very often sold on. They are not always sold on to become operational. Sometimes they are sold on to continue their operations in another jurisdiction or to simply stop them because they are competition. They are sold on and bought by those who wish to remove a competitor from the playing field. Yet, the sale of the new company is the point where we are giving this huge boost in terms of capital gains tax, rather than the levelling-up of the company within Ireland. I am concerned that we end up in a company farming mindset. The real innovation we have seen in satellite technology, for example, came from Irish businesspersons who have won European innovation awards and whose companies have been there for 20 years. Often, a lot of the best innovation, and certainly the best innovation attached to employment, can come from businesses that have reached level 2 or 3, rather than this culture of continuous start-ups without a translation into actual business. From a pure business perspective, this needs to be examined. Are we creating a somewhat perverse incentive that is not, in fact, nurturing our indigenous industries and businesses at a time when we really need them to grow and not simply flower and be removed?

Similarly, there needs to be a stronger, more robust and joined-up approach to research and development and our research and development grants. The Minister mentioned the tax reliefs. Considerable money goes into research and development tax relief, including through the knowledge development box. However, there still is not a joined-up approach that links that funding and the general research and development agenda for the State, because public money is foregone for tax reliefs for research and development to sometimes very large and very wealthy corporations. This is something for which I have tabled an amendment later. To what extent is the research and development that is taking place through the knowledge box and other tax relief measures linking with our higher education institutions given that, as we know, there is a huge shortfall in funding for research? There are very poor conditions for those working in research in our higher education institutions and other public research bodies. At the same time, a huge amount is foregone in tax relief in the form of research and development. At some point, there needs to be a better joining up.

I know there is commercial sensitivity and so forth, but measures can be taken to try to join the dots and ask someone getting tax relief for research and development if it is leading to manufacture and to further productive activity, what the employment gains from it are, and whether there are partnerships with institutions in Ireland. We should start looking for a little bit more information out of the knowledge box in order to ensure we are not just giving a short-term tax relief that will keep investors and companies happy. I know that it is often a very big focus for the Government, but we need to make sure we are getting benefit from it that will translate into our own indigenous industries and actual research and development. We must ensure that Ireland becomes not just a place that is good to do research and develop in because of tax reliefs, but also a place that is known for the quality and content of its research and development and for the companies that may spring from it or the institutions that may underpin it. I will touch on one or two of these areas in my amendments, but they are areas where an ambitious rethink might be needed to ensure we get a little bit more from what we are doing.

I want to focus on two other areas. I flagged the private pension tax relief with previous Ministers in the same position. I am concerned about the huge amount of money that goes into the private pension tax relief, of which there is more in this budget. It has increased. Yet, we see a huge shortfall in addressing the actual inequalities in our system. Again, I raise the question of gender and equality proofing our pension tax policies. This is urgent, particularly when we have the issue with the new auto-enrolment scheme. We should learn from the fact that we have gender inequality gaps within our public pension system and within the private pension tax relief, which research has shown predominantly benefits men on higher incomes. More than 70% of people who benefit from the current system, which will increase under this budget, are men. In the context of gender and equality proofing, I would like to know what steps have been taken in terms of gender inequality proofing the pension measures put forward in this budget, as well as the general policies in respect of pensions. Explicitly, there also seems to be a lack of a gender and equality proofing of the new auto-enrolment scheme.

I want to highlight an issue I highlighted when the legislation regarding the new auto-enrolment scheme was coming through. There is a worrying lack of ethical oversight in respect of the new auto-enrolment scheme and its investments, which becomes more crucial in the context of things such as the International Court of Justice's ruling. We have a situation where there were at least provisions in other funds such as the Future Ireland Fund in terms of divestment of the fossil fuel divestment legislation, anti-cluster munitions and so forth. These are issues I highlighted. I also highlighted the question of divestment from illegally occupied Palestinian territories. There are mechanisms within those Bills. Within the auto-enrolment scheme, there was a very clear washing of hands of any obligation, even though there is a committee in the body that is being established to oversee this new auto-enrolment scheme.It has a committee on investment policy, but there is no reference to our obligations under the Fossil Fuel Divestment Act 2018, the Cluster Munitions and Anti-Personnel Mines Act 2008 or, indeed, to what ethical guidelines in terms of exclusions may be put in place. I am very concerned that we have a situation where large amounts of public money may be placed into an auto-enrolment scheme and into funds via the auto-enrolment fund without any choice for the State to exercise ethical oversight in the context of how that money is invested. That is a massive lacuna when it comes to this new scheme. At a time when pension funds around the world are trying to divest from unethical products, we should not set up brand-new pension funds that lack ethical safeguards and proper measures for ensuring compliance with domestic and international law and, for example, the ruling by the International Court of Justice.

As I said, those are key issues in terms of pensions. I hope the Minister can address-----