Thomas P. Broughan
Question:1. Deputy Thomas P. Broughan asked the Taoiseach the referenda he plans to put to the people in 2014. [45727/13]
View answerReferendum Campaigns
Questions (1, 2)
Joe Higgins
Question:2. Deputy Joe Higgins asked the Taoiseach if he plans to propose any referenda in 2014. [53722/13]
View answerOral answers (24 contributions)
I propose to take Questions Nos. 1 and 2 together.
The Government has implemented a substantial programme of constitutional reform, holding six referendums since it took office. While we have no plans to hold a referendum during 2014, we announced that a number of referendums will be held in 2015. Others are under consideration. The details are as follows. Arising from recommendations in reports of the Convention on the Constitution, the Government has announced that it will bring forward proposals in 2015 for referendums on same-sex marriage, reducing the voting age to 16 and reducing the age of candidacy for presidential elections to 21. In addition, the Government has decided to refer to the relevant Oireachtas committee the question of a constitutional amendment to give citizens a say in the nomination process for presidential candidates. The Government has also undertaken to look at making Article 41.2 of the Constitution on the role of women gender neutral, and at including other carers both in and beyond the home. It has also undertaken to look at amending the Constitution to include the principle of gender equality, as well as the use of gender-inclusive language in the Constitution.
Recommendations for amendments to the Constitution in the Convention on the Constitution's later reports are under consideration by the relevant Ministers, and the Government will give its formal response on them in due course. Where the Government agrees to the holding of a referendum, it will give a proposed timeframe in its response.
The Minister for Jobs, Enterprise and Innovation is examining the question of an amendment to the Constitution in relation to a unified patent court, while the Minister for Justice and Equality is examining the question of an amendment to the Constitution to provide for a separate family court structure. Any proposals on these matters will be brought to the Government when ready, and the Government will announce any decisions on them in due course, including the timing of any referendum.
I suppose there will be a referendum on the Government on 23 May, on the Fine Gael Party and on the Labour Party's participation in the Government. People will make a judgment on the past three years.
The Taoiseach referred to a number of important promised referendums, including one on same-sex marriage and a second on the family law court. Some weeks ago, the House extended the remit of the Constitutional Convention until 31 March. I note the convention has examined a number of other important issues, including the possibility of reducing the presidential term to five years, and has reviewed the electoral system for the Dáil and constitutional provisions such as those relating to the offence of blasphemy. Is it the Taoiseach's intention that the recommendations of the Constitutional Convention will be dealt with not later than 2015?
The Taoiseach will recall the ill-fated referendum on the abolition of Seanad Éireann, on which he and I strongly agreed, and a second referendum on an important legal matter. Ms Justice Elizabeth Dunne was the chairperson of the relevant Referendum Commission. At that time, a view was expressed that the commission had not been given sufficient time and it was proposed to place it on a permanent footing. A Referendum Commission with a permanent function would be able to make adequate preparations in respect of all important revisions to the Constitution and other important developments, including the referendum on same-sex marriage, before giving citizens an opportunity to make their decision.
The local and European elections will take place in May. Whatever result the people give, their choice will not change the Constitution. It will be a reflection of attitudes towards the Government and political parties and what they stand for at local and European level.
The remit of the Constitutional Convention was extended to the end of March at the request of the chairman because the convention wished to discuss a number of other matters. The Government stated that when the convention submitted its reports, we would consider them and respond within six months. We also stated that if, having considered the individual reports, we were to decide to hold a referendum on one or other of the issues involved, we would indicate a timeline for doing so. We have some experience of holding multiple referendums on one day. We need to be cognisant that if the questions being asked are complicated, it causes confusion for some people.
A question was raised about the structure of the ballot paper for referendums. This issue needs to be addressed in legislation to make it clearer. The Government will respond to the issues raised in each of the reports within the six month period.
It is not feasible to hold a series of referendums to deal with all of the issues on which the Constitutional Convention reflected. However, the Government is committed to holding referendums on same-sex marriage, reducing the voting age to 16 years and reducing the minimum age of candidates in presidential elections to 21 years. The unified patent court is a major issue in respect of the Single Market and one on which we require a referendum. During the Presidency, we were forthright about dealing with many issues related to the Single Market. A unified patent court is one such issue. The theory behind having a unified patent is that an entrepreneur or a business in Dublin which defines a new entity would not have to seek a patent in every country of Europe. For example, a motor car could include 2,000 mechanical parts and obtaining a patent for a new part could be highly complex. This issue has been ongoing for 20 years.
I do not disagree with the Deputy on the length of time the Referendum Commission has to reflect on its duties and responsibilities. I note, however, that in its most recent report, the commission stated that, for the first time, it had sufficient time to reflect on and consider the issue in question. Irrespective of whether the Referendum Commission is set up on a semi-permanent basis, once we decide what will be the likely number of referendums and what issues they will address, we will establish a Referendum Commission in good time and appoint a competent person to oversee it so as to ensure everyone has an opportunity to reflect on the issue.
As I stated, in the case of the referendum on same-sex marriage I hope the discussion will be calm, considered and compassionate and people will listen to each other as the debate will have very divergent views.
The Government will, in good time, inform the House of its decisions and when the referendums are likely to be held. While I have not yet fixed a month or date yet, the spring of 2015 would be an appropriate time. The Minister for Justice and Equality is considering the referendum on the structure of family courts. This is an issue that needs attention because it has drifted for far too long and the current position is not adequate in 2014. It would be in the interests of children in these complex cases to have a family courts system. This matter also requires a referendum.
The constitutional referendum on same-sex marriage the Government has announced for 2015 has acquired new and perhaps more urgent dimensions following the recent controversy and outrageous decision of RTE to pay €85,000 to individuals who are opposed to same-sex marriage because of some mild enough remarks made on RTE about the individuals in question by the gay activist, Rory O'Neill. Instead of organising a good and profound debate one or two weeks after the event and inviting the individuals in question and others who are in favour of the rights of people to equality and gay marriage were invited, RTE, without any contest, paid out taxpayers' or licence payers' money.
I put it to the Taoiseach that a referendum is not needed on this issue. I am sure he is aware that in Article 41 of Bunreacht na hÉireann marriage is not defined as being exclusively or in any way limited to heterosexual couples or persons. It is not defined in the way that traditionalists argue that marriage must be, nor in the way it is defined by the Catholic Church and Iona Institute. Many people believe the Government could introduce legislation to deal with this issue without a referendum. Considering that this is such an important human rights and civil rights issue and given that an important section of the population and their friends, families and neighbours feel put upon and oppressed by the existing laws, why does the Taoiseach, in the name of equality and human rights, not move to introduce such legislation?
The Labour Party has indicated it is fully behind same-sex marriage. What is the position of the Fine Gael Party? Given that the Taoiseach will introduce the referendum, I presume he and his party will campaign for it. Why does the Government not move now given that a referendum is not needed and thereby heal the unnecessary wound caused by the exclusion of many people from the rights to which other citizens are entitled simply by reason of their sexual orientation or whatever reasons traditional institutions have for insisting on this denial?
It is important to have certainty on such a sensitive issue on which there are so many views.
The best way to achieve this is by way of vote of the people in respect of the Constitution. Deputy Higgins will recall that in the drafting of the civil partnership arrangements, the legal advice was that marriage might not be constitutional if that happened. If an attempt was made to introduce legislation in this regard, we would be leaving ourselves open to challenge as a consequence. That aside, it is important that the people of the country are able to reflect on this in a calm, considered and compassionate way so that they can make their views known at the ballot box in the context of the referendum.
Deputy Higgins will be aware that the Minister for Justice and Equality recently published the heads of the children and family relationships Bill, which is to create a legal edifice to underpin diverse parenting situations and to provide for legal clarity on parental rights and duties in what are now diverse family forms. Following enactment of that legislation, the question in relation to same-sex marriage will become clearer. I have already indicated that I propose to support that referendum and will campaign in favour of it. It is important there is certainty on this issue, which can and hopefully will be provided by the people in a referendum which we hope to hold in the spring of 2015. As I said, I hope the debate around that particular referendum will be calm, considered and compassionate.
I wish to raise a number of issues around referenda. I think I am correct in saying that there have been six referenda since this Government came to power and that there will be at least another three prior to the next election. It could be argued that there is a need for a permanent Referendum Commission to manage the electoral process and, in particular, the referendum process. Another issue that arises is the funding of referenda and the need for both sides to be properly funded so that citizens have equal access to information around whatever issue is up for discussion. I commend those notions to the Taoiseach.
I support the Taoiseach's call for calm debate on the issue of same-sex marriage. The recent controversy on RTE's "Saturday Night Show" and the allegation by Rory O'Neill of homophobia and how RTE dealt with it and so on has highlighted the urgent need for legislation to give protection to lesbian, gay, bisexual and transgender citizens who at this time do not have any legal rights. The Taoiseach said earlier that this matter will not be dealt with until 2015, which means these people will have to wait until then for this matter to be addressed. I think everybody is agreed that all citizens, regardless of their background, sexual orientation or gender, should have the right to equality of rights and opportunities before the law. I understand that the Government's view is that the issue of marriage equality cannot be dealt with until the Oireachtas has passed legislation in relation to children and parenting, which appears to me an unnecessary delay. The Minister for Justice and Equality has stated that the main reason for the delay in the next three referenda - perhaps this was a slip of the tongue - is concern in regard to turnout. Obviously, we have to do what the Government says in this matter. However, this is not acceptable now that there is a clear focus on the fact that a section of our citizens do not have the same rights as others.
The Constitutional Convention has dealt with a number of issues, in respect of which it has made recommendations. Some of the issues with which it has dealt include electoral reform, which debate I attended, whether citizens living outside this State, including citizens in the North, should be allowed to vote in presidential elections here, which debate I also attended, and the offence of blasphemy. It is important citizens can voice their views on such issues as soon as possible. Is there any possibility they will have an opportunity to do so before this term of Government runs out?
The fundamental issue when it comes to referenda is that the Taoiseach essentially tells us what the Government has decided in terms of what issues it will put before the people. The Oireachtas was presented with a fait accompli in respect of the last couple of referenda. The root of the problem, in terms of how referenda are held here, is that regardless of what anybody else wants or what the constitutional convention recommends, the only proposals will come from Government to the Oireachtas and these matters are decided by Government in advance.
The Taoiseach referred to consultations and conventions. When it comes to referenda and the wording and timing of same, there has been less consultation in that regard during the lifetime of this Government than at any time in the past 20 years. There is a need for genuine consultation with all parties in this House in regard to the timing of referenda. This would, in my view, help enormously in developing a good level of consensus. I do not like saying this but the experience to date has been the holding of ticking the box-type meetings in the aftermath of decisions having been made by Government. This applies to a whole range of issues from Dáil reform to electoral reform and referenda. I do not believe that is an effective way of doing business. During the campaign on the Lisbon referendum, I held detailed discussions with Opposition party spokespeople on an ongoing basis, often taking on board suggestions in regard to wording and so on. I suggest that if the Taoiseach continues the current approach, the Government will lose more referenda.
In terms of the marriage equality referendum, which the Taoiseach suggested will be held in 2015, it would be in everybody's best interests if there was genuine consultation across all parties in terms of timing, wording and so on. There is a sense that the scheduling will have more to do with party political interests, including the likely needs of the Labour Party to overshadow a budget and so on. We want a respectful debate. There is no question but that it is within the capacity of this society to have such a debate. Fianna Fáil will be constructive in that regard in terms of creating the right space and environment for genuine articulation of perspectives and viewpoints. Referendum debates are important regardless of the issue involved. However, the debate on this issue will be particularly important. Fianna Fáil will be forthcoming and constructive in relation to that debate. I believe there should be genuine consultation on the issue well in advance of the referendum.
Deputy Adams is correct that there have been six referenda. These referenda concerned investigative powers for Oireachtas committees, judges' remuneration, the Treaty on Stability, Co-ordination and Governance in the Economic and Monetary Union, the children's referendum, abolition of the Seanad and the Court of Civil Appeal, some of which were held some time ago. Deputy Broughan has made the important point that if we are going to hold a series of referenda, a commission, be it a permanent or semi-permanent commission, should be set up in adequate time to deal with them. Given that it is proposed to hold referenda soon, it might be as well to put in place a commission in adequate time to organise the work involved.
Following the court cases, the Government does not campaign as the Government on referendums, although parties do.
I note the outcome of the decision by RTE. I am not going to interfere in the balance that RTE must maintain in respect of legitimate discussion and conversation about issues of the day. My understanding is that it was cognisant of the cost of litigation and it made its decision in that regard.
It is not a case of not wishing to hold a referendum. There is the matter of electoral fatigue among people. We will have local and European elections in May and if we followed that with three or four referendums in the autumn and then another three or four in the spring, people would have had enough. The Government must make decisions about these matters. We have decided that there will be no referendum in respect of the Constitution in 2014 and that this would be the year for driving on about the creation of jobs, opening up opportunities for dealing with the banks and the construction sector, create opportunities to make an impact from the local enterprise offices and the local authorities and to derive a definition and the effective translation from FÁS to SOLAS to provide courses and opportunities for young people in a different way.
The referendums that have been discussed in the House relate to matters that the Constitutional Convention recommended. People are well aware from their parties' attendance that there have been double the number of ordinary people at the hearings and, together with the political process, they have made their views known. It is not a case of drifting or having consultations. The Government must make decisions and these cannot be subject to what Deputy Martin described as box-ticking exercises.
I thank Deputy Martin for his comment about being constructive in this matter under discussion. It will be a sensitive discussion and we will be sensitive - I give Deputy Martin that guarantee, if I did not fulfil it previously. We will have consultations on whatever information we have for the parties.
We had in-depth discussions about the Lisbon treaties and we had to have two attempts at that. It was necessary that there be a structure in the context of the broad agenda, ranging from abortion to neutrality and all the points in between, such that people were able to have the best evidence on which to make a decision. On the second occasion, regarding the Lisbon treaties, they were better informed than on the first in order to make their decision. We do not do this on the basis of party political interests. If we are going to have a referendum or a series of referendums we must have them some time. People said to me on the last occasion that we should space these things out.
That was the Taoiseach's Senators.
What we have said is that the convention should send in the reports and there would be a response to them within six months. If we are going to have a referendum, then we would say so and give an indicative timeline. The indicative timeline for the next batch of referendums is spring 2015. We have identified three from the convention reports, those relating to same-sex marriage, a voting age of 16 years and a reduction from 35 to 21 years to be eligible to become President. Two other issues outside the convention report relate to the unified patent court, to which I have referred, and the family court system. There is a batch of others that will have to be dealt with one way or another in the following convention report.
Let us suppose the Government has two years to go before the next election in 2016. We have a number to decide on and the question is whether, following the spring of 2015, is it right that there should be more in the autumn of that year. Should we run them in conjunction with an election to be held in the spring of 2016? These are matters for discussion. For 2015 we have proposed a number and, in the not-too-distant future, we will reflect on what others, if any, we should hold in conjunction with them. We will then set up the commission and give it plenty of time to do its work and get on with it.
The Taoiseach said he did not plan for any referendums for 2014. I suggest that there is a referendum the Government should hold this autumn and the Government would have widespread support for it. Water is a precious resource, crucial to human life in a most vital way, as it is to most forms of life. However, it is also a resource that is cherished by the majority of ordinary Irish people. There is grave concern among large tranches of people in respect of the current Government policy towards our water resources and the setting up of Irish Water, Uisce Éireann, as a corporate commercial entity which makes a commercial commodity of water that can be bought and sold on the marketplace. This is seen by many people, rightly, I believe, as moving in the direction of the privatisation of this vital resource.
The Government has brought in the austerity tax on it, which is disgraceful, but I will leave that aside for the moment because I believe the people will give Fine Gael and the Labour Party a grand wallop, as the Taoiseach might put it, over water taxes in the local and European elections.
The people have paid for the production, supply and treatment of water through their taxes for generations. That is the only reason it arrives in our homes. They want to keep water in public ownership. The Taoiseach has denied our allegations that the privatisation of the water supply is being envisaged down the line and that what is happening now is part of the preparations towards it. The Taoiseach should therefore hold a referendum on the question of whether our water, uisce na hÉireann, will be kept in public hands and in public ownership under the direct democratic sway of our people. I guarantee the Taoiseach that there would be vast support for that.
I agree with that proposal and I will be interested to see what the Taoiseach has to say about it.
I offer another proposal for a referendum which is rather simple, that is, to change the wording in the Constitution relating to natural resources from the current wording which refers to "the State" owning the resources to "the people" owning the resources. In fact, that was the wording in the democratic programme of the first Dáil. In the later Constitution it was changed to "the State". There is a major difference between "the people" and "the State". If we changed the wording to "the people" it would enshrine and provide the protection for resources like our forests, water, wind, sea and land to remain in perpetuity in public ownership and that ownership could not be compromised. That is one concrete suggestion for the Taoiseach for a referendum and I believe he would get considerable popular support for it.
Another issue arises out of the Rory O'Neill case. Like many others, I am disgusted that public money was handed over to an organisation-----
We are not going down that road.
This was discussed already and it is related to referendums.
There are other Deputies to speak.
It was discussed already, it is related to referendums and you did not pull anyone else up on it.
I know, but I let you in on a supplementary question. You do not have a question in this group but you do have a question in the next group. We are over 30 minutes on this group. I want to be fair to everyone.
As with others, I shared the disgust that public money was handed over to an organisation that wants to deny equality to same-sex couples and people with a different sexual orientation. That decision was made on the basis of fears of litigation. The Taoiseach has said in respect of the necessity of holding a referendum and not legislating straightaway on these matters that there are concerns about litigation. The fear of litigation is always the chestnut thrown up. In the case of the referendum, can we see the advice from the Attorney General stating that we would be seriously open or vulnerable to litigation in this area?
Can such advice be published in order that we know what is the legal position and whether a referendum is required or if it is something for which we could legislate?
The Taoiseach could pass on a request to RTE for the legal advice it received, which said it had to pay out €85,000 rather than standing up to the people who are trying to deny equality to LGBT people.
Deputy Higgins raised the question of a referendum on the water issue in the autumn. There will be not be a referendum. I assure the Deputy that Uisce Éireann or Irish Water will not be privatised. It is a public entity in respect of the people of our country. The reason for setting up Uisce Éireann is not only the fact that we are the last country in the OECD to apply a charge for the use of water provided by the public purse but the situation we find ourselves in where the global use of water will increase by 40% over the next 20 years and the situation in Ireland where 18,000 families have to boil water, almost 1 million homes are under threat because of the inadequacy of treatment works and 40% of water that is produced leaks away. In addition, most areas in the country are operating at near capacity and the Deputy witnessed the difficulties in Dublin last winter. His comment that this is a move towards privatisation is without foundation or basis and it is not true. We will keep repeating that as necessary. Any future government that would attempt to privatise water would have to come back to the Dáil to deal with that.
Deputy Boyd Barrett referred to natural resources. There is a programme for the development and use of natural resources. They are difficult to deal with because of concerns - some legitimate and some not - around the country. The Deputy mentioned wind, sea, land, water-----
Forests
I expect the Corrib field will flow to the terminal by the middle of next year.
Our oil into their pockets.
It is not just a case of the cost of litigation. Referenda bring certainty. I hope the same sex marriage debate it is compassionate, considered and calm and the people of the country can give their judgment. One could attempt to legislate for it in the House but it would obviously be challenged. The case for the people's decision by referendum is the way to go and that referendum will be held in the spring of 2015.
Can we see the legal advice?
Economic Management Council Meetings
Questions (3, 4, 5, 6)
Gerry Adams
Question:3. Deputy Gerry Adams asked the Taoiseach if the Economic Management Council has met since the budget. [47671/13]
View answerMicheál Martin
Question:4. Deputy Micheál Martin asked the Taoiseach if the Economic Management Council has met since October. [2183/14]
View answerMicheál Martin
Question:5. Deputy Micheál Martin asked the Taoiseach when is the next meeting of the Economic Management Council. [2218/14]
View answerRichard Boyd Barrett
Question:6. Deputy Richard Boyd Barrett asked the Taoiseach the date of the most recent meeting of the Economic Management Council. [4932/14]
View answerOral answers (31 contributions)
I propose to take Questions Nos. 3 to 6, inclusive, together.
The Economic Management Council, EMC, has met ten times since the budget in October, most recently on 5 February. In general, the EMC meets on a weekly basis. The next meeting is due to take place on 12 February 2014
I would like to raise the issue of foreign direct investment and, particularly, the PricewaterhouseCoopers-World Bank report on paying taxes in 2014 and the paper by Professor James Stewart of Trinity College, which has revealed that as a result of deliberate tax avoidance by US multinationals, facilitated by the tax code of this State, American corporations are in reality only paying an effective corporation tax rate of 2.2%. That represents a significant financial loss. This question is not about the headline corporation tax rate of 12.5% but it is about the abuse of the international tax system and tax avoidance.
Sinn Féin fully acknowledges the benefits of FDI and we know that more than 100,000 citizens are employed by American owned corporations but the notion of them paying, as Professor Stewart has pointed out, only 2.2% is not sustainable and fair. Multinationals should pay the same tax rate as indigenous enterprises. There will always be a probability that these companies will come here to avail of tax avoidance and I am sure the Taoiseach will agree that is not acceptable. It has also become a greater issue internationally because, clearly, a sustainable and fair recovery cannot be built on such a system.
I am also mindful of how this affects the developing world. At last year's Clinton Global Initiative meeting, former US President Bill Clinton raised the question of action companies could take to support development in African, which is to pay their taxes. One business person from the Continent pleaded with the big companies to pay their taxes in Africa. What plans has the Taoiseach to close tax avoidance loopholes and to restore our international reputation in this matter? Has the EMC plans to deal with this? Will that include steps to monitor the number and value of Irish registered non-residential companies operating out of the State? Can the Taoiseach ensure the State is not being used to funnel profits tax free out of the developing world? That would be entirely contrary to our sense as a people of ourselves and of the one-world vision most progressive Irish people hold.
I thank the Deputy as this is an important question for the country and for the future. When I attended the G8 summit in Lough Erne, County Fermanagh on behalf of the EU Presidency on the invitation of Prime Minister Cameron, I was struck by the debate that took place during the formal session of the summit about Africa and by comments from African leaders who were present. They made the point that countries and companies signed deals on mineral rights and so on in areas of Africa which have phenomenal natural resources and all the necessary advice was given at the outset about how they could and should operate but at the conclusion of a deal, the same level of legal or tax advice was not available. This has meant that huge swathes of tribal Africa and peoples of Africa are deprived of real benefit from many of the deals that are struck. It was on the basis of a recommendation by President Obama that the G8 agreed that in respect of many of the deals with African countries, we should be able to see to it that such expertise and analysis of deals and tax legislation, in particular, should apply in order that the benefit of deal for the extraction of minerals, for instance, would extend to the communities in which they are extracted. I recall clearly one of the African leaders pointing out that on a journey of 20 miles a lorry carrying minerals might be stopped 60 or 100 times to pay additional tolls.
I attended an OECD meeting with the Minister for Education and Skills and a number of others last week in respect of the BEPS situation which is being handled by Madame Navarro on behalf of the organisation. That arose because of the decision of the European Council last June when every country agreed that because this is an international question, it should be answered in an international forum and dealt with internationally. It is not a requirement on an individual country to respond to what is happening here.
Let us consider the position of a mobile entity which might have components manufactured or produced in the Far East, assembled in Ireland and then sold in Europe as a finished product. In that instance the intellectual property might be vested in another country. It is the connections between the different jurisdictions and the difference between the rates of tax that often apply here which sometimes give scope for comment. As is recognised by the OECD, the EU and the G20, international tax planning is an international matter. That is why Ireland fully participates in the BEPS process. There are 15 sectoral committees relating to that process and Ireland participates on all of them.
When one reads the reports on effective tax rates, one discovers that there is no single agreed methodology to calculate the tax rates of this nature that operate in any country. A number of different methodologies are put forward. The particular study to which the Deputy referred is based on US Bureau of Economic Analysis, BEA, data, which incorrectly count the profits of Irish-registered non-resident companies as being Irish. What this means is that the study included the profits of American companies that are not tax resident in Ireland. This country cannot tax profits that are properly attributable to other jurisdictions. Sometimes these things become mixed up and that results in a distorted version. As already pointed out and just as our income tax system does not levy income tax on Irish nationals who live abroad, out corporate tax system does not levy corporation tax on some Irish corporations which carry out their activities abroad.
A range of independent studies show the effective rate in Ireland as being very close to the main headline rate of 12.5%. The European Commission's 2013 edition of "Taxation Trends in the European Union" indicates an effective corporation tax rate for Ireland of 14.4%. The PricewaterhouseCoopers report shows an effective rate of 12.3% for Ireland. In response to the growing interest in this subject, the Revenue Commissioners now publish an additional explanatory note with their annual statistical report in order that everyone can see what is involved. For example, the 2012 report - which refers to the data for 2011 - indicates that aggregate net taxable profits, after taking account of various deductions, allowances, charges and reliefs, amounted to €40 billion, while the total amount of corporation tax payable on those profits was €4.2 billion. This means the total corporation tax payable - as a percentage of taxable profits - for 2011 was approximately 10.5%. While this is lower than the 12.5% rate, it can be attributed to the availability of some reliefs such as, for example, the double taxation relief and the research and development credit. While we do not generally refer to the Revenue's statistics as an effective rate, per se, they represent further evidence that companies actually pay very close to the 12.5% headline rate.
I note reports linking - in public perception - Ireland and tax haven countries. It has been agreed by everybody that Ireland does not comply with any of the four criteria that are applied in the case of tax haven status.
No country does.
This matter was referred to in very clear terms by Mr. Angel Gurría, secretary general of the OECD, on Friday last in his very forthright comments regarding the progress being made by our country.
Is the Taoiseach still satisfied with regard to the constitutional status of the Economic Management Council vis-à-vis its role within the Cabinet? He stated the council has met on ten occasions. The Ministers for Social Protection and Agriculture, Food and the Marine, Deputies Burton and Coveney, and others have on occasion articulated their concerns at being excluded from economic decisions and indicated that the Economic Management Committee tends to make all of the decisions. We know, for example, that the council - which comprises four Ministers, including the Taoiseach - was central to the establishment of Irish Water. It also approved the payment of bonuses to the staff of Irish Water and agreed to the seamless transfer of senior staff from local authorities - to whom lump sums of up to €330,000 were paid, along with pensions - and, essentially, into other public sector jobs. The latter are earning very high salaries in the positions then now hold. The Taoiseach never commented on that matter when questions in respect of it were put to him. We all know about leaks in the system and other matters with which it will be necessary to deal. However, Irish Water is going to have to depend on local authorities to deliver, manage and maintain water supplies for the next 12 years. As a result, the essential purpose of Irish Water is to levy charges.
In the context of the Economic Management Council, many Ministers reacted with disbelief when they heard the various stories relating to Irish Water. In the first instance they stated that they were of the view that bonuses should not be paid. The Minister for Social Protection, Deputy Burton, was very clearly annoyed about the matter and stated that she was going to take it up with the Cabinet. Perhaps she did not know what was happening because everything was done through the Economic Management Council. I do not know whether she raised the matter with the members of that committee. The Minister of State at the Departments of Finance and Public Expenditure and Reform, Deputy Brian Hayes, said that it was a PR disaster. The Minister of State is very interested in PR these days because he is running for Europe. The Minister for Agriculture, Food and the Marine, Deputy Coveney, and other Ministers were also very annoyed about this matter. Perhaps that is because the Economic Management Council made all the running in respect of Irish Water. I do not know whether that is the case but there is a propensity among Ministers to disown decisions made by the Government on a regular basis.
I put it to the Taoiseach that there are serious questions with regard to the constitutional status of the Economic Management Council. As the Taoiseach revealed to the House, it meets frequently. This indicates, perhaps, the degree to which it dominates the formulation of policy and the fact that the remaining Ministers in the Cabinet simply rubber-stamp whatever the officials, the Tánaiste, the Taoiseach and the other Ministers on the council decide. Clearly, many Ministers are being left outside the loop and they seem to believe they can say what they like about Government decisions because they are not involved in making them in the first instance. Will the Taoiseach comment on that matter?
Will the Deputy repeat his final question?
In terms of the Economic Management Council making decisions, Ministers subsequently state that they know nothing about those decisions or that they do not agree with them. What happened in respect of Irish Water is the classic illustration of this.
I wish to confirm for the Deputy that all of the issues agreed by the Economic Management Council for recommendation to the Cabinet are the subject of formal decision by the latter. He will recall that there was a Cabinet security committee in place in the 1960s and the 1970s.
I was only born in 1960 so I do not really know what went on in the 1960s.
The Deputy often informs me that he is a historian, that he reads widely and that he knows all about these things. Deputy Adams knows about them as well. There was a security committee which comprised a number of members of the Cabinets which held office in the 1960s and 1970s.
Deputy Adams certainly knows about the security committee.
The Economic Management Council was established with the status of a Cabinet committee. It has only four members, namely, myself, the Tánaiste and the Ministers for Finance and Public Expenditure and Reform. I will not bother the House with the details of the agendas for each of our meetings but, as already stated, we discuss matters that go to Cabinet for decision. If issues need to be teased out before a matter goes before the Cabinet for discussion and decision, then that is what happens. This does not undermine the role of the Cabinet at all. The council has been in place for three years and I am of the view that it streamlines the process very well and removes the necessity to engage in long discussions at Cabinet. The council can define issues at its meetings and if there are further matters which required discussion by the Cabinet, then this happens.
Has the Minister for Social Protection, Deputy Burton, reconciled herself with all of this?
The Deputy referred to the loan relating to Irish Water being decided upon by the Economic Management Council. The latter does not make decisions on behalf of the Cabinet, rather it makes recommendations to the Cabinet for formal decision. The National Pensions Reserve Fund, NPRF, is independent in the context of its loan-making functions. It was a matter for the NPRF to decide whether it would provide Irish Water with an initial bridging facility. Given that Irish Water was not fully established at the time, the NPRF sought a Government guarantee in respect of the loan it was making to the company. That guarantee was provided by the Minister for Finance, following consideration, agreement and decision on the part of the Government. It was not the case of the Economic Management Council making the decision. The possibility of a guarantee of this nature is provided for in section 13 of the Water Services Act. In that regard and following consultations with the Minister for the Environment, Community and Local Government, Deputy Hogan, the Minister for Finance may guarantee, on such terms as he thinks fit, the due repayment by Irish Water of the principal borrowed and any interest which accrues on that borrowing. On 11 June 2013, the Government agreed that the Minister for Finance would provide such a guarantee in respect of the proposed bridging facility to be provided to Irish Water by the NPRF.
On 19 June 2013 the NPRF commission decided to provide Irish Water with a bridging facility on commercial terms which would cover expenditure on the domestic water metering programme and the establishment costs of Irish Water. The provision of the loan and the guarantee allowed BGE-Irish Water to award the meter installation and equipment contracts and to commence and accelerate the metering programme work which began in July 2013.
Deputy Martin will be aware of the perception - he may have said it himself - that this is a sort of a playing out to allow this thing to happen beyond the local and European elections. The Government will introduce its business and financial model well in advance of the local and European elections-----
When?
I cannot give the Deputy an exact date but I can assure him it will be well in advance. I am not talking about 48 hours, rather it will be a couple of weeks beforehand.
That is only three months away, 16 weeks.
I understand that. A great deal of work has been done.
March or April?
We want to be in a position to set out very clearly for people to understand that the costs involved are the costs required to provide the Irish consumer with a decent water supply and a platform for the future. It will deal with the comments such as that we are afraid to put out the business and financial model in advance of the local and European elections. Far from it. The people will be well aware of what is involved. The Government is conscious of what is involved. People have faced a lot of hardship and many challenges and this is the last imposition on them. We are 90% of the way with regard to taxation, cuts and charges and this is the last one. We will have that model out before the local and European elections.
I call Deputy Boyd Barrett on Question No. 6.
The cover-up about what is really happening with Ireland's corporate tax rate has to end. We need an open, honest, transparent and comprehensive debate about what is really happening with the corporate tax rate.
An eminent Trinity professor of finance has flatly and completely disagreed with the repeated assertions by the Government, the Minister for Finance and the Taoiseach that the 12.5% corporate tax rate is effective at that rate or anything even close to it. He has said it is a small fraction of that. People were rightly outraged by the CRC scandal and about the consultants in Irish Water but these are in the ha'penny place compared with what is at stake in this discussion. We are talking about billions of euro, potentially, of lost revenue to the State if the professor is even close to being correct. At the very least, whether one agrees or disagrees, it is not good enough to keep trotting out the standard line.
I am a member of the Joint Committee on Finance and the Public Service. Last year I tabled a motion in the committee asking that some of the biggest companies in the country - multinational corporations - who were at the centre of this worldwide controversy and were located and registered for business in this country should be brought before the committee to answer questions about how they are paying so little tax, or at least how they are being accused of paying so little tax as a result of them being resident or incorporated in this country. However, Fine Gael, the Labour Party and Fianna Fáil Deputies all banded together to prevent that discussion at the finance committee. That is a disgrace, given the billions of euro at stake. We discover that the 11.9% rate which the Taoiseach has quoted endlessly turns out to be, according to Professor Jim Stewart, a fictional firm with 60 employees which neither imports nor exports products. It is not a real firm and it is certainly not the firms that are at the centre of this controversy. It is a ceramics firm that does not import or export. In case any of the questions I have asked repeatedly about this should be confused or dismissed, I reiterate that we were never asking questions about ordinary small and medium enterprises. We know they pay the 12.5% rate and the commercial rates and all the rest of it. The issue is that a few hundred enormous corporations account for about 70% to 80% of all the pre-tax profits that are made in this country but are paying a fraction of those pre-tax profits in actual tax or, in the case of these companies registered here but not tax liable here, are paying nothing at all, which is another semantic, legal scam for them to avoid tax, and everyone knows it.
Will the Taoiseach discuss at the Economic Management Council the holding of a serious, honest and open debate where the main players, the different competing views, and some of the corporations at the centre of this controversy are quizzed, questioned and interrogated to discover whether this State is losing out on billions of euro in tax revenue when ordinary residents are being screwed to the wall with cuts, charges, pay cuts, unemployment and all the rest of it? Does the Taoiseach not have a responsibility, given the parlous state of our economy and the financial situation of many of our citizens, to look into this seriously and not just trot out the pat answers provided by the Department of Finance?
In the past year we have been told about a 2.2% rate. I showed a 6.3% rate by means of a parliamentary question. The Nevin Institute quotes a rate of 8%. The Taoiseach has just mentioned 10%. We have heard 11.9%, 12.3% and now the Taoiseach has referred to 14%, which is a new figure. The corporate tax being paid in this country is somewhere between 2.2% and 14%. Billions of euro are at stake in that difference. Even based on that, there has to be a serious investigation.
If the Deputy wishes to hear a reply I remind him there is only one minute remaining.
It depends on whom one believes. I refer to the comment made by Deputy Boyd Barrett. I confirm this matter has been discussed at the Economic Management Council and also by the Government which has authorised the Minister for Finance and me to participate in the international discussions at the European Council and the ECOFIN Ministers meeting and led by the OECD and 15 different sectoral committees in which Ireland participates fully and openly.
Deputy Boyd Barrett wants to believe the rate of 2.2% at the lower end of the scale is the effective tax rate. As I pointed out, there is no single methodology to evaluate the effective tax rates for companies operating in any country. The study to which the Deputy refers-----
What about the ceramics firm with 60 employees?
-----incorrectly counts the profits of Irish-registered non-resident companies as Irish. What that means is that the study included the profits of American companies that are not tax-resident in Ireland-----
They are registered here as brass plate companies.
The point is that we cannot tax profits that are properly attributable to other jurisdictions. The Deputy does not seem to believe the European Commission's report on taxation trends in the EU in 2013 which indicates an effective rate of 14.4% in Ireland, nor does he believe the PricewaterhouseCoopers report which shows an effective rate of 12.3% in Ireland. We are fully engaged. The Minister for Finance in the budget changed the legislation in respect of stateless companies because of the perceptional damage to our country. The 12.5% rate is very clear and is in legislation. The Revenue Commissioners publish the methodology, and the Revenue statistical report for 2012, which I am sure the Deputy will believe, refers to 2011 and, taking account of charges and deductions, amounted to €40 billion-----
What about the pre-tax profits of €70 billion?
-----while the total amount of corporation tax payable on those profits was €4.2 billion. It depends on whom one wants to believe. I like the professors, the theorists and the academics but this is politics and it is about decisions. We are involved fully, openly and comprehensively in having an international response to the situation where multinational companies can use the facilities or the conditions applying in different jurisdictions. We want an international response to an international phenomenon and we will get it.
Written Answers follow Adjournment.