I support the motion that Deputy Dukes be nominated for appointment as a member of the Government. Deputy Dukes is an exceptionally experienced Member of the Dáil, having been a Member since 1981 and having held ministerial office in three demanding Government Departments: Agriculture, Finance and Justice. The experience he has built up will be invaluable to him in tackling the issues he will face as Minister for Transport, Energy and Communications and this experience will be a considerable asset around the Cabinet table in the collective approach of the Government to the various issues which must be dealt with over the next year.
Transport, Energy and Communications is a demanding portfolio. Deputy Dukes will have responsibility not just for key policy decisions in regard to transport, energy and communications but will also oversee ten commercial semi-State companies which, between them, employ almost 60,000 people and which have a turnover of around £4 billion. These include some of the largest and most important enterprises in the country — like the ESB, Bord na Móna and Aer Lingus — which contributed so much to making modern Ireland. Public enterprise has made an immeasurable contribution to the social and economic development of this country over six decades, and will have an equally important role to play in the decades to come.
The importance of these companies was recognised in the programme, A Government of Renewal which committed this Administration to revitalising public enterprise and which guaranteed that State assets will not be sold except where it protects employment and is in the long-term strategic interest of the company and its shareholders. However, as the programme for Government noted, "...the twin drivers of technological change and EU competition rules ...", are radically altering the environment in which these companies operate and, to survive and prosper, they must change.
Much change has been effected in this area under the former Minister, Deputy Lowry, with major restructuring agreed for vital companies such as the ESB, Telecom Éireann and Aer Lingus. Much more remains to be done and in this Deputy Dukes faces a formidable challenge. He can be certain of my full co-operation and that of my Democratic Left colleagues in implementing the commitments in the programme for Government in the area for which he now has responsibility.
I wish Deputy Dukes well in his new ministerial appointment but I share the sentiment he expressed when he wished the appointment had come about in different circumstances. In all my dealings with Deputy Lowry as a member of the Government over the past two years, I have always found him to be an honourable and efficient Minister committed to the work of his Department and to the implementation of the programme of the three party Government. His contributions at the Cabinet table were valued by us all and he still has much to contribute to politics and to public life. The developments of the past few days must have been traumatic for him, his family and his party and constituency colleagues but, in his response to these developments, Deputy Lowry acted with propriety and dignity and in the interests of good government. That is not in any way to minimise the issues raised in the Irish Independent article or to ignore the questions which remain to be answered.
In his statement of resignation on Saturday night, Deputy Lowry said categorically that there was no impropriety on his part in respect of any payments for work carried out on his house. He made two further important points: that it was not possible to fulfil his commitments to the Department and to the Government and, at the same time deal adequately with the issues which had been raised, and that to fully and satisfactorily answer in the public arena all the questions which have been raised would involve the disclosure to competitors of information which would place his company at a serious disadvantage in a competitive market. I have no doubt that Deputy Lowry will take the time and find the mechanism, consistent with the need to protect the interests of his company, to answer all the questions which have been raised as fully and promptly as is humanly possible. I want to see Deputy Lowry clear his good name. His interests and the interests of politics generally will be greatly served by his doing so.
The public controversy created by the Irish Independent article has once again focused attention on the relationship between business and politics. It has also focused attention on the relationship between Dunnes Stores and those in various walks of public life. Further media claims are now being made which, if true, will raise further doubts in the public mind about the interaction of business, politics and the media. The Price Waterhouse report, which was apparently commissioned privately as part of the internal struggle within the Dunne family for control of its company, seems vital in this regard. According to newspaper reports at the weekend, the report lists payments from Dunnes Stores to up to 100 people from various walks of public life, including politics and the media. At a minimum, this report must be made available to the Revenue Commissioners to assess not just whether Deputy Lowry and the other figures named complied with all tax requirements but also to assess whether Dunnes Stores complied with all its obligations.
It may also be in the public interest that the report is published in full. We have claims by people who are reported to have seen the document that other prominent persons have been identified as receiving money from Dunnes Stores. It has been suggested that a prominent RTÉ broadcaster also received substantial sums from Dunnes Stores. What is RTÉ doing to investigate this allegation? It has been claimed that a prominent former Fianna Fáil Minister and his wife received a substantial sum of money. It is claimed that sums of more than £1 million were paid into bank accounts in Britain, using cover names, during the early 1990s. It is of critical importance to know if these allegations are true and if the person concerned was a serving Minister at the time. If so, it has the most serious ramifications.
Dunnes Stores is an enormously powerful company, which has often seemed to consider it itself free to ignore the norms of industrial relations and business practice, set its own rules and dictate its own terms. Many people, not just those on the left or in the trade union movement but also responsible commercial people and independent commentators, have been critical of the business practices of Dunnes Stores. It is an enormously powerful institution and one of the biggest supermarket and clothing chains in the State with 73 outlets and the ability to make and break supplier companies. It is tightly controlled by a small group of the Dunne family. It does not publish accounts but it is estimated that it has a turnover of around £900 million each year generating profits of around £45 million. Dunnes Stores has faced two major industrial disputes over the past two years arising from its abysmal treatment of its workers. Its insistence on the recruitment primarily of part-time staff, the use of zero hour contracts, compelling personnel to undertake Sunday work, and the rock bottom wage rates and conditions offered reflect no credit on the company. Until recently it has refused to recognise or accept the standard industrial relations structures established by the Oireachtas to help prevent, and where necessary, settle industrial disputes.
On the basis of such information as we have to date it seems probable that Dunnes Stores has as much to learn about good business practice as it has to learn about good industrial relations practice. Let me illustrate the point. In June 1995 there was an industrial dispute between Dunnes and its employees. The issues in dispute were Sunday trading and zero hour contracts. The core of the dispute, however, was an unwillingness on the part of the company to consult its employees in a reasonable manner about significant changes in work practices.
This is not just my view. The judgment of the independent Social Welfare Adjudication Tribunal which considered the case was that "the dominant feature of this dispute was the failure of the company to engage reasonably and consistently in discussions or negotiations or to have adequate consultation with the union on the issues". The tribunal concluded that the employees in question were "unreasonably put in a position where, by normal standards of industrial relations practice, they had no reasonable alternative to taking strike action".
No doubt Deputies Mary Harney and Michael McDowell would say "So what? Any employer has the right to play hardball with their employees". The point is that the unreasonable behaviour of Dunnes cost the taxpayer approximately £600,000 in unemployment payments to the 5,800 persons who found themselves in an industrial dispute through no fault of their own.
The question of possible tax fraud needs to be tackled with the same urgency, commitment and sense of fairness applied to social welfare fraud. I am confident that there are the powers to do this. Under the provisions of the tax Acts and related fiscal legislation, the Revenue Commissioners can access the salient details in the Price Waterhouse report. We must ensure that it is done.
The Revenue Commissioners, in their statement of Strategy 1997-99, state that they "will pursue non-compliance, be it for failure to furnish returns, failure to furnish correct returns, failure to comply with statutory obligations or outright evasion". They further add that they "aim to maintain public confidence in the equity of Revenue administration by adopting a tough stance on tax evasion and avoidance, the black economy and other illegal activity". They conclude by stating that they will "initiate the prosecution of offenders in cases of serious evasion or fraud".
It is inevitable that there will be links between business, politics and the media, especially since a considerable number of Members of the Oireachtas have a business background. It is inevitable that business people would want to contribute to political parties or to individual politicians, and there is nothing wrong in principle with that. The media will want to protect their advertising income from business. However, it is essential that any relationship between business and politics and the media be entirely above board and open to full public scrutiny.
In the political area, some progress has been made in recent years, largely as a result of public concerns generated by a sequence of controversial events during the lifetime of the last two Fianna Fáil-led Governments — the Greencore affair, the Ballsbridge site story, Carysfort, the Masri/passports for sale episode. Public concern resulted in the introduction of the Ethics in Public Office Act which now obliges ministerial officeholders, Members of the Dáil, senior civil servants, directors and senior executives of semi-State companies, as well as senior political appointees working to Government Ministers to make extensive disclosures in regard to any business or property interests they hold and any gifts, services or loans they receive. In addition, in the case of officeholders certain disclosures are required in regard to spouses and children.
The Ethics in Public Office Act is intended to be one part of a twin-track strategy to ensure greater openness and accountability about the financial interests of politicians and political parties. The second track was to be the 1994 electoral Bill which was to provide for payments from public funds to political parties, to require the disclosure of substantial donations received by political parties and Members of both Houses of the Oireachtas and impose limits on election expenditure by political parties and candidates during election campaigns.
When the Bill completed its Second Stage, problems arose regarding the formula set out for providing funds for political parties as a result of the McKenna judgment in the Supreme Court last November. The issues raised are difficult and complex and the Government has been working to overcome them. However, this second track needs to be quickly enacted as soon as possible. Exchequer funding for political parties would be acceptable to the public in return for disclosure of private donations to political parties and the sources of their funds. Most people would prefer that political parties receive open, accountable funding from the State than that they become subject to pressures by powerful boards or media interests contrary to the public interest.
The other important dimension to events leading to Deputy Michael Lowry's resignation is that of tax and compliance with all requirements of the tax regime. I note Deputy Lowry has said that the deal involving Dunnes Stores was legitimate in regard to tax, that this is the professional advice available to him, that he is confident that it will be upheld by the Revenue Commissioners and that he will co-operate in any investigation undertaken by the tax authorities. I hope Dunnes Stores will adopt a similar approach to co-operation with the Revenue Commissioners and that the matter will be clarified beyond doubt as soon as possible.
However, it does focus attention once again on the whole question of tax evasion and avoidance. Tax evasion is illegal, while tax avoidance is legal, but often ethically questionable, especially as the devices used to legally avoid tax are not normally available to the majority of taxpayers — the PAYE sector. In recent months much public and media attention has been focused on the question of abuse of the social welfare system, and especially social welfare fraud. As a result of improved control measures introduced by my Department, 20,000 people have signed off the live register and a further 11,000 have had their payments suspended pending further investigation. This has led to projected savings in 1996 and 1997 of £84 million to the taxpayer. A major advertising campaign is now under way using television, radio and press, stressing that social welfare fraud is an antisocial offence which will not be tolerated.
Now is an appropriate time for a similar offensive in regard to tax fraud. I fully acknowledge the trojan work done by the Department of Finance and the Revenue Commissioners in recent years in tackling evasion, closing off loopholes and generally ensuring greater compliance. However, it often seems like a vicious circle. No sooner does the Government close one loophole than the professional wise boys find another. There is a need to tackle the social culture which results in some people in the business and professional sectors seeming to regard tax evasion as a sort of national sport. If it is conceded as illegal at all, it is often viewed with about the same seriousness as parking on double yellow lines.
If those who abuse the social welfare system are generally on lower income levels, the majority of those who abuse the tax system are wealthy businesses and individuals. One only needs to look at the most recent report of the Revenue Commissioners to read the list of the pillars of society who were forced to make settlements and pay financial penalties as a result of irregularities in their tax affairs. More than 500 individuals and companies made payments of more than £10 million. They include farmers, publicans, wholesalers, retailers, builders, company directors, engineers, property developers and many others.
The report of the Comptroller and Auditor General comes out each year showing astronomical sums outstanding in uncollected taxes — almost £2,000 million at the end of May 1996, according to the most recent report. While it is accepted that much of this is a notional figure based on sums assessed which were never realistically expected to be paid, there are still huge sums that are genuinely owed and that can and must be collected — more than £552 million according to the Comptroller and Auditor General.
We must build on the work done by the Minister, Deputy Ruairí Quinn, and a number of his predecessors, including Deputy Ahern, to totally end equivocation in regard to public attitudes to compliance with tax law, to close off remaining loopholes, to bring in all arrears and to ensure the highest possible level of compliance from now on.
Some commentators have questioned whether this issue will affect the cohesion of the Government. The answer is no. This Government will hold together because there is confidence in all three parties that when an issue arises, especially in relation to ethical questions, it will be dealt with promptly, efficiently and without equivocation.
The Taoiseach, Deputy John Bruton, has shown exceptional qualities of leadership, courage and judgment. He has overseen the successful resolution of various and inevitable political controversies that Governments face, as well as dealing with the ongoing Northern Ireland peace process and fulfilling his duties as President of the European Council. The EU Presidency has placed an enormous additional burden on him in terms of the time required and travel commitments involved. The leadership the Taoiseach has shown is widely acknowledged throughout Europe and will be reflected no doubt in a very successful summit in Dublin in ten days' time.
I wish Deputy Dukes well as Minister for Transport, Energy and Communications and reassure the Opposition parties they will remain in opposition for at least another year and after the next general election for another four to five years.