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Dáil Éireann díospóireacht -
Tuesday, 15 Feb 2000

Vol. 514 No. 3

Private Members' Business. - Credit Union Movement: Motion.

With the permission of the House I propose to share time with Deputies Deenihan, Belton, Jim O'Keeffe and Clune.

Is that agreed? Agreed.

I move:

That Dáil Éireann:

–recognising the uniqueness of the credit union movement;

–acknowledging its work in fostering thrift and providing advice to persons on low incomes in both rural parishes and in urban disadvantaged areas;

–appreciative of the efforts of so many volunteers who give freely of their time to the service of credit unions;

–conscious of the danger to the ethos and fundamental principles of credit unions posed by the application of an inequitable tax regime;

deplores the refusal of the Minister for Finance to meet representatives of the Irish League of Credit Unions, and calls on the Government to amend the Finance Bill, 2000, so that returns on credit union savings are taxed in accordance with the recommendations made by the Chairman of the working group which examined this issue.

This is another fine mess the Minister for Finance has gotten us into. His refusal to meet the Irish League of Credit Unions for over two years is unprecedented in Irish political history. Because of some imagined slight by the credit union movement, the Minister has gone into a sulk and refused to meet representatives of almost two million depositors in the credit union movement. One can imagine the outrage if he refused to meet the IFA, the GAA, the ICTU or representatives of the banks.

I have raised this issue on several occasions in the Dáil and the Minister still refuses to make an appointment to meet the credit union movement. I raised this issue with the Taoiseach at a meeting of the Oireachtas Joint Committee on Finance and the Public Service. The Taoiseach greeted my request with incredulity and promised to rectify the matter. However, the Minister continues to refuse to arrange a meeting and snubbed the Taoiseach in the same way he snubbed the Irish League of Credit Unions. Two weeks ago the Minister refused a similar request by the Leader of the Labour Party, Deputy Quinn.

Margaret Thatcher once famously said that she was "not for turning". In his dreams, the Minister sometimes thinks he is an Irish Margaret Thatcher, but on this occasion he is confusing petulance with principle. The Government does not appear in a good light when such a large number of respected citizens, who give of their time voluntarily in the service of their communities, are treated with such contempt.

Thankfully we live in a democratic republic whose citizens are equal before the law. Each citizen has a democratic right of access to those they elect, including access to Ministers. Ministers must be accountable to this House, and in this debate I am asking Dáil Éireann to hold the Minister for Finance accountable and to formally deplore the fact that he has refused to meet representatives of the Irish League of Credit Unions.

After two years of being refused a meeting, one would imagine that credit unions were looking for something extraordinary, but that is not the case. They are looking for a fair and equitable taxation system for their members. This request is supported by Mr. Terence Larkin, chairman of the working group which examined and reported on this issue, officials of the Department of Enterprise, Trade and Employment and Mr. Martin Sisk, the Registrar of Friendly Societies.

The credit unions were also supported in principle by the Minister for Finance in the measure he introduced in the Finance Bill, 1998, which he subsequently aborted and to which, either through lack of nerve or lack of interest, or because of the longest fit of pique in the history of Ireland, he has not yet returned. The Minister should take this opportunity to clarify what he has against the Irish League of Credit Unions as nothing on the record can adequately explain his behaviour.

This motion not only calls on the Minister to return to this issue but asks Dáil Éireann to specifically instruct him to introduce an amendment to the now published Finance Bill which would tax credit unions in accordance with the recommendations made by the chairman of the working group on the taxation of returns on credit union savings. I hope all Members will support the motion.

The manner in which credit union members are taxed is unfair and inequitable. While the surplus income or profits of credit unions are exempt from corporation tax, dividends and interest on credit union shares or deposits are liable to tax at the members' or depositors' marginal income tax rate which can be 0%, 24% or 44%. On a number of occasions in the House the Minister tried to portray that, because they are not liable for DIRT or corporation tax, credit unions are treated more favourably than other financial institutions. However, this is to miss the point and I remind the Minister that credit unions are not for profit organisations. They are no more than the sum of their members, and when so many of their members are being discriminated against there is no point in pretending that the unions themselves are the beneficiaries of a favourable tax regime.

The blunt fact remains that depositors in banks and building societies make a full and final settlement with the Revenue Commissioners when the financial institution which holds their deposits has returned DIRT at 24% on the interest they receive. If the deposit is in a special savings account the full liability is discharged at 20%. However, shareholders in credit unions are liable to tax on their interest and dividends up to a rate of 44% and have to make individual returns to the Revenue Commissioners. How can the Minister claim that the tax regime is fair when one group of savers pays tax on its returns at 44% and the other pays tax at 20%? The only difference between the two groups is the type of financial institution in which they deposit their savings.

All these matters were examined carefully by the working group. The Department of Finance and the Revenue Commissioners opposed the recommendations made by the chairman, but then that is their job. The Registrar of Friendly Societies, the chairman of the working group, the representatives of the credit unions and the Department of Enterprise, Trade and Employment supported the recommendations.

It is worth recalling that the recommendations were that: the first £375 of a credit union member's dividend income be exempt from tax; any excess of dividends more that £375 up to £750 to be subject to 20% tax; where dividends are more than £750 the entire dividend to be taxed at 20%; all interest on deposits to be taxed at the 20% DIRT rate; and there should be no reporting of dividends or interest by credit unions to the Revenue Commissioners. This motion calls on the House to request the Minister for Finance to amend the Finance Bill to reflect the recommendations of the chairman of the working group.

In defending his inactivity, the Minister has made great play of the fact that competitors of the credit unions for the public's savings have asked the European Commission to investigate what they describe as the favourable taxation treatment of credit unions by the Irish Government. The Minister knows that the European Union investigated this issue before and in the Finance Bill, 1998, he had no difficulty in getting the agreement of the European Commission to maintain the traditional exemption from corporation tax which the credit union movement has enjoyed since its foundation.

I presume the Minister will use this defence again and will try to frighten credit union members with the prospect of an immediate and terrible war waged by the European Commission on the credit union movement if he introduces a fair and equitable tax regime for its members. The Commission has already decided on this issue and has taken no action since receiving the complaint to which I referred.

Anyone who thinks that the credit union movement is unique in being exempt from corporation tax should consider the tax treatment of credit unions in other jurisdictions, an issue also considered by the working group. Of five common law jurisdictions – the UK, the US, Canada, New Zealand and Australia – the working group reported that in three countries credit unions are exempt from corporation tax and in the other two only investment income and chargeable gains are charged to corporation tax.

I spoke to officials in Brussels this afternoon and, while they received the basis for a complaint, they have taken no action. They stated that if the complaint is not substantiated within the week, it will be dismissed as an irrelevancy. I know that the Minister will insist in this debate that it is dangerous to do anything with credit unions because the Brussels sword of Damocles is hanging over him. That was the defence he put forward to Deputy Quinn two weeks ago and the defence he has used in this House every time the issue is raised. The Minister should come clean with the House and accept that this is a bogus defence and that the fears he has been expressing about Brussels are unreal. A complaint has been lodged with Brussels but it is on an issue on which Brussels has already adjudicated. The Minister will mislead the House if he runs that line again tonight.

The position of the Tánaiste on this issue is interesting. Her Department supported the recommendations of the chairman of the working group and correspondence issuing from her Department with her name subscribed has informed individual credit union members that she supports them and that she expects them to be implemented shortly by the Government. The statement by the Department of Enterprise, Trade and Employment, which is published in the report of the working group, makes as strong a case in favour of the credit unions as any Opposition Deputy could possibly make in this House tonight. It states, inter alia: “the present tax regime is clearly unhelpful to the long-term development of the credit union movement, there are a number of substantial reasons why a different taxation regime should apply to credit unions and the credit union movement provides a source of finance for a significant number of persons whose financial needs have been neglected by banks and building societies in the past.” It also states: “the service of credit unions is a valuable one in social terms, that a reasonable exemption should be made available on the annual dividend income of individual credit union members and, while acknowledging the reservations of the Department of Finance, it is the case that exemptions and allowances are a feature of many forms of taxation and consequently that an exemption on dividend income should not create any insurmountable difficulties.” The Tánaiste has supported this position in recent correspondence. Where does the Government stand on it when the Tánaiste is taking a different view from the Minister for Finance?

The Department of Enterprise, Trade and Employment also recommends that interest on deposits in credit unions should be liable to DIRT at 20%, which is the preferential rate four points below the standard rate, that dividends on credit union shares up to a value of £375 per annum should be exempt from tax, that dividends above this should be subject to DIRT at 20% and that this would fully discharge the tax liabilities of members.

I do not know if the Minister speaks to the Tánaiste, but I would have thought that some time in the south of France while nibbling foie gras, sipping the Beaujolais or playfully duck diving in the pool, she might have said, “Charlie, will you do something about the credit unions please?” It is difficult to understand the position where the Department of Enterprise, Trade and Employment and the Tánaiste are on record supporting a change in taxation law along the lines recommended by the chairman of the working group and the Minister for Finance stands firmly on petulance rather than principle and refuses to do anything about it.

I acknowledge the debt of gratitude which many people owe to the credit union movement. I acknowledge in particular the work by the thousands of volunteers who give of their time free of charge in the interest of their neighbours and their community and who over the years have built up the credit union movement to its present strength. Many families know that First Communion, Confirmation and funeral expenses were paid by the credit unions. Many families know they were not acceptable visitors to banks and building societies and that the credit unions lifted them out of the clutches of moneylenders. That should not be forgotten when we vote on this motion.

The Taoiseach has jumped on his horse and ridden to rescue the Minister for Finance by tabling an amendment to the motion. It supports the exemption from corporation tax, with which we all agree, "endorses the tax treatment of the credit union savings provided for in the Finance Act, 1998", which has been rejected out of hand and which the Minister should know is not a runner, "notes that the tax treatment of credit unions has been raised with the European Commission by way of complaint under Treaty competition rules", which put the frighteners on everyone, and finally "notes that, as already indicated, the Government will meet without delay with the Credit Union movement and that a date is being set".

I understand this breakthrough has resulted in the Taoiseach arranging a meeting for Thursday week. However, the Minister for Finance has not yet agreed to attend that meeting. Perhaps he will be dragged along to it. It is interesting to note that the amendment states that the "Government will meet without delay with the Credit Union movement". It does not state that the Minister for Finance will meet the credit union movement. I would like the Minister to clarify that he will be at that meeting, that this is not a device to get out of parliamentary difficulty with the vote tomorrow night and that this will be a transparent and credible meeting where the issues will be discussed with a view to amending the Finance Bill along the lines of this motion.

The final part of the Government's amendment calls on the "Minister for Finance to take account of these factors in his ongoing consideration of the Report of the Working Group on the Taxation of Returns on Credit Union savings which was established by him in this regard". I ask the Minister to explain his retreat and to what grounds he is now retreating behind the smokescreen of this amendment.

I recommend the motion to the House.

I acknowledge the presence of many credit union members and I compliment them on their unselfish work with no financial reward. I acknowledge Ms Nora Herlihy from a neighbouring constituency, who founded the movement in the early 1950s. The credit union movement has grown from three credit unions in 1959 to 435 at present. It has 1.9 million members, savings of approximately £2.5 billion, deposits of approximately £340 million and loans of up to £2.1 billion. This shows how successful the movement has been. It has done more for rural Ireland than any Government or State institution. Rural Ireland would be in a worse position today but for the credit union movement.

In the working group set up by the Minister for Finance, it was expected that the Department of Finance would see no reason to change the tax law in favour of credit unions. I have no doubt Department officials were well coached in this approach. The Department felt the contribution of the credit union movement was already recognised by the substantial benefit conferred on it by the current exemption of surplus income from corporation tax.

In contrast, the Department of Enterprise, Trade and Employment in its statement to the working group felt that taxing the returns on the savings of many credit union members at the marginal rates of 22% and 44% would not help the long-term development of the credit union movement. It believed there were a number of reasons a different tax regime should apply to credit unions, particularly to credit union shares which provide the source of much credit union lending. It recognised that much of this lending is for small amounts and is of no commercial character. The Department pointed out that it provides a source of finance for a significant number of persons whose financial needs have been neglected by banks and buildings societies in the past.

The service offered by credit unions is a valuable one in social terms. It encourages credit union members to meet their financial needs through regular savings and loans. It offers a viable alternative to dependency on State support or on moneylenders.

That view was confirmed by the chairman of the working group, Mr. Terence Larkin. He concluded that there was a significant majority view in the group set up by the Minister that the credit unions merited concessionary tax treatment in relation to the return on savings. This tax treatment should be transparent, should be legislated for and should be supported positively by the Government.

He also mentioned that, in examining the submissions made to the working group, it became clear that there are significant groups in the financial services sector which are critical of the tax treatment of credit unions. These groups are in competition with credit unions and are influenced to an extent by the implications for themselves of the growth in the credit union movement. They made comparisons on purely commercial and financial grounds. Their case ignores the voluntary efforts of local people and credit unions to lift up their communities and areas by fostering thrift and providing financial services and advice to low income groups in rural parishes and disadvantaged urban areas. In many of these areas there are no facilities for financial advice or services and, in the past, the scourge of money lending was common.

I refer to the Minister's responses to questions asked by Deputy Noonan and me and to a matter raised on the Adjournment by Deputy Quinn. The Minister indicated that he believed the proposals contained in the Finance Act, 1998, substantially met the league's requests. The Minister knows this is only partially true. The league agreed that DIRT should be deducted from credit union dividends and interest but, to protect the small savers, who make up 90% of membership of credit unions, it needed an exemption limit below which there would be no tax liability. This would ensure that people outside the tax net would not end up paying tax. It asked for an exemption on the return from the first £15,000 of shares. Unfortunately, in the Bill the Minister introduced DIRT but did not give the exemption.

The Minister introduced a requirement for credit unions to report members' names and dividend amounts to the Revenue in the same way as interest was reportable until then. The credit union movement did not request this, it requested the imposition of the DIRT system above the exemption threshold. This would have removed a requirement to report members' names and dividends.

The Minister has accused the credit unions of hanging him out to dry. He has said that several times in response to questions in the Dáil. He feels that he was stabbed in the back by the credit union movement and is now giving credit unions what they asked for. To clear up any misunderstandings, I have a copy of the letter sent to the Taoiseach, the Tánaiste and programme managers prior to the Minister for Finance's action in 1998. It shows clearly that the credit unions sought to manage the information process in relation to the Dáil and credit unions. Far from working against the Government, the credit unions tried to work with it to minimise any fall-out. The credit unions never received a response to these letters and the Minister failed to take on board the request for an exemption level for credit union shareholders.

The Minister has also mentioned multiple accounts and tax evasion. The Department of Finance indicated in the report of the working group that the proposals could be open to abuse if members had multiple accounts. This view was reiterated by the Minister in the Dáil on 2 February. The credit union movement took the views of the Department of Finance on board after the publication of the working group's report. In the amendment proposed by Deputy Noonan and me on Committee Stage of the Finance Bill, 1999, the credit union movement proposed to tackle this issue through the establishment of a scheme similar to that in operation for special savings accounts. The Irish League of Credit Unions is willing to meet the Department of Finance and the Revenue Commissioners to discuss the practical steps needed to prevent use of multiple accounts for tax evasion. This would be supported by the massive investment now being made by the credit union movement into a computerised system that should be able to identify multiple accounts.

The credit unions' common bond would also act to limit the danger of abuse through multiple accounts. Very few people hold a common bond with more than one credit union. Credit unions adhere to the money laundering regulations rigidly and it would not be possible for people to falsely claim to be entitled to membership.

The Minister has stated that if the existing taxation regime respecting credit unions and their depositors has triggered a complaint to the Commission, any legislation at this stage has the potential to aggravate the position. The complaint to which the Minister refers was made by the Irish Mortgage and Savers Association. It follows a similar complaint from the Irish Bankers Federation, a complaint which the directorate found to be unwarranted. I understand the Irish Mortgage and Savers Association has not responded to DG4 as yet.

It is time for the Minister to bury his pride before the Taoiseach directs him to do so. The Minister must make his mind up tonight.

I hope the Taoiseach does direct the Minister because it is time someone did – the sooner he is pointed in the right direction the better. I have heard tonight that we must beware of Brussels, that is where the big, bad wolf is. From what the credits unions have told the finance committee, the big, bad wolf is in the Department of Finance and the sooner action is taken the better.

The credit unions have given a service, mostly on a voluntary basis, to the people. They were not involved in high finance or profiteering, activities many politicians in this House adhered to in the past. These are honest people but the Government is drip feeding them. They want a meeting to set out their stall, not for today but for the future, to guarantee that they will keep this social service going. These organisations must have modern technology to exist and to prevent their being gobbled up by large financial institutions. That is all they ask. That is why Fine Gael has tabled the motion and why the Government has slipped from one gear into another.

We saw the Tánaiste, who speaks with two voices, do her double act again. I hope the Irish League of Credit Unions will not fall for such propaganda. When the Tánaiste was in Opposition and I was staying across the street in Buswell's Hotel, often on dark nights I would walk across the street only to see the camera lights flashing. I asked Paddy Kelly, the porter, who it was. "That is Mary Harney telling the truth to the Irish people", he would said. It is about time she told us the truth because often, when people enter Government, they do not know the difference between truth and propaganda.

The Minister should forget about the Taoiseach and Tánaiste. He was appointed by this House to do the job of Minister for Finance. It is up to the Minister to get on with it. He should look after these decent people so they can continue the good work they have started. Some of the Minister's own colleagues want him to do so.

It is clear that the credit unions are not commercial organisations. The Minister is probably the only one in this House who is not prepared to accept that fact. We are concerned here with what in many parts of the country is regarded as the poor man's bank. It is a movement with a mere 1,500 to 1,600 employees but with 15,000 or 16,000 volunteers. Anybody who suggests that taxes applicable to commercial banks or financial institutions should apply to this movement is making a case that is unsustainable.

Fortunately, the scourge of moneylending is on the wane because of the credit union movement. It has been the biggest contributing factor to lifting this scourge from many people on this island. The Minister may not recognise this, but the Government recognises it, including the Minister's colleague, the Minister for Social, Community and Family Affairs.

The Minister must be aware of the Kildare Money Advice and Budgeting Service – its annual report contains a photograph of him. Is he also aware that in its arrangements to assist poor people in debt this service is now one of the main arms of the Government? It is not run by, but supported by the Government. In response to a recent parliamentary question on the issue of money lending, the Minister for Social, Community and Family Affairs stated:

Strong emphasis is placed on practical, budget based measures that will succeed in removing people permanently from dependence on moneylenders and open up alternative sources of low cost credit through the credit union movement.

In his reply he goes on to refer to the management committees and community groups, which often include credit union representatives. Will he now accept that the credit union movement is rendering a public service to the people, especially to those who are not well off?

The Minister's proposed amendment is farcical and the farce is compounded when the amendment, in the name of the Minister, "calls on the Minister for Finance" to take account of certain factors. That is ridiculous drafting. This aside, the amendment is designed to win the supporters of the Independent Members of the House. It uses the EU situation as a fig leaf to defend the Minister's refusal to meet this national organisation for the past two years. The position with regard to the EU is addressed in the working group report, which refers to the investigation by the EU Commission – the DG IV investigation – the decision of which was not available at the time of the publication of the report in February 1999.

However, when the Minister wrote a personal letter to the then Minister for Education and Science, Deputy Martin, on 13 April 1999, arising from representations from the Ballydrohane Credit Union, it was clear that the complaint to DG IV had been disposed of. In this letter the Minister states: "In addition, there is also an EU dimension which must be carefully examined". He goes on to state: "While the EU Commission decided not to regard the exemption as a State aid.". It is clear the complaint had been disposed off by April 1999 and the EU had decided that the exemption would not be regarded as a State aid.

The Minister's conduct towards a fine, decent organisation is not only regrettable and deplorable but outrageous. He does not have the gumption to admit he is wrong and to offer to meet representatives of the movement to resolve this problem. If he does not do so he should resign.

I am pleased to have put my name to this motion. It recognises the valuable and unique role played by credit unions in our society and calls on the Minister for Finance to recognise and acknowledge the recommendations of the chairman of the working group set up by him. The terms of reference of the group were to examine the taxation of returns on credit union savings bearing in mind the special and unique nature of the credit union movement, its contribution to society and the wider taxation issues involved.

Some 1.9 million Irish citizens are credit union members. The movement is a substantial lobby and it consists of many members who do not see themselves as belonging to a financial institution. Rather, they consider they have joined a local, community run institution which offers help and financial support as they struggle to rear their families and to meet commitments or fund occasions, such as first communions, confirmation, holidays, Christmas, a new car or unexpected financial outlays, which they would be unable to do on a day to day basis.

The objectives of the movement are to encourage among its members a build-up of savings and thrift, creating a source of credit for the mutual benefit of all members, the training of members in household budgetary matters and the use and control of members' savings for their mutual benefit. Given this latter aspect, business in generally transacted among members only. It is another unique aspect of the movement. Each credit union is generally confined to its local area, from which it accepts members.

Credit unions are owned by their members and are generally run by them on a voluntary basis. The movement employs approximately 1,500 but, most importantly, these are backed by approximately 16,000 volunteers, 8,000 of whom are directors on a voluntary basis. This is not the case with any other financial institution and is another unique aspect of the movement.

In his statement and recommendations the chairperson of the working group acknowledges that there is little doubt that the credit union movement is unique in Ireland, and perhaps even in Europe. He goes on to acknowledge the contribution it makes to the well being of the less well off sections of society, even in the remotest parts of the country and in disadvantaged urban areas. However, this uniqueness is not widely recognised and the report emphasises that the case for the credit unions should be made in a stronger fashion by those who occupy seats of power. The chairman also noted that during the course of his meetings with his group, it was apparent that many misunderstandings initially arose because of a lack of knowledge of the reasons credit unions exist and of the benefits they bring to many communities, especially those that are deemed to be unattractive and unworthy of attention by other financial institutions.

I appeal to the Minister to recognise the unique position of the credit unions and to meet their representatives. I hope he will clarify the amendment in his name and in doing so will indicate if he, the Government, its members or representatives – perhaps even the Taoiseach – will meet them. Or will it be the Independent Members of the House?

Deputy Healy-Rae.

I call on the Minister to amend the Finance Bill to ensure the return on credit union savings are taxed in accordance with the recommendations of the chairman of the working group which examined this issue.

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann:

–supports the Government's policy of exempting the income of credit unions from corporation tax;

–endorses the tax treatment of credit union savings provided for in the Finance Act, 1998;

–notes that the tax treatment of credit unions has been raised with the European Commission by way of complaint under Treaty competition rules, and acknowledges that the Government will review the situation after the EU have disposed of the matter;

–notes that, as already indicated, the Government will meet without delay with the credit union movement and that a date is being set,

and calls on the Minister for Finance to take account of these factors in his ongoing consideration of the Report of the Working Group on the Taxation of Returns on Credit Union Savings which was established by him in this regard.".

I wish to share time with Deputy Ardagh.

The House will be aware that in 1997 the most recent Credit Union Act was brought into force. This Act consolidated the legislation which was then in existence in relation to the arrangements for the registration and supervision of credit unions. It also contained a number of provisions in order to permit credit unions to expand their services in the future. The Act allows credit unions to provide, within a proper regulatory framework, financial services on a similar basis to those currently being provided by the financial institutions that are to be found on every main street.

Contrary to the belief being expressed in some quarters, I have great regard for the very active contribution which the credit union movement has made and continues to make to communities throughout the country. I have great admiration for the dedication, effort and integrity of the army of credit union workers, those who serve in a full-time capacity and those who do so on a voluntary basis.

The House will be aware that the credit union movement in this country has its origins in the late 1950s and has grown considerably over that time. From an initial three credit unions in 1959 there are currently over 400 credit unions with approximately 1.9 million accounts. The credit union concept was given recognition in statute law in agreed terms in the Credit Union Act, 1966, as a legal person in the nature of an industrial and provident society.

The question of the taxation arrangements for credit unions and their members did not arise for the first time when I took office as Minister for Finance. The records of my Department show that the league had raised the issue of taxation at a meeting which they requested and which took place with the Department on 17 July 1996. A further meeting was held on 6 December 1996 between the league and my predecessor.

Since becoming Minister for Finance in the summer of 1997, the Irish League of Credit Unions has made a number of representations to myself and my Department. In December 1997, on foot of a request from the league, I met with them to discuss the taxation treatment of credit unions. Arising from the league's representations at the meeting in December 1997 I included a number of proposals for the tax treatment of credit union shareholdings and deposits in the subsequent Finance Bill, 1998, published on 12 February 1998 as follows, the continuation of the corporation tax exemption as requested by the league, the application of DIRT to credit union deposits at the special savings account rate of 20% as requested by the league and a requirement for credit unions to report to the Revenue Commissioners the dividends that they pay to their members in the same way as interest was reportable up to that point.

I believed these proposals had gone a long way towards meeting the league's requests. However, it transpired that these measures were unacceptable to the league and its individual members. Consequently, I proceeded to have further discussions with the league in February 1998. I agreed to withdraw these proposals, except for the proposal concerning the corporation tax exemption, and I also agreed to provide an exemption to the credit unions in respect of the reporting requirement for deposit interest.

For the benefit of the House it might be as well to make clear the current tax treatment of credit unions. The income of credit unions, including income from investment activity, is exempt from corporation tax. The exemption was first introduced in 1972 to acknowledge the social purpose and community self-help nature of the credit union movement. Section 58 of the Finance Act, 1998, provided for this exemption to continue after the grant of new powers to the credit union movement in 1997. The section took account of the fact that since 1 October 1997 credit unions are registered under the Credit Union Act, 1997, rather than the Industrial and Provident Societies Acts, 1893 to 1978. Credit unions are not currently within the deposit interest retention tax scheme and as a result they are not obliged to deduct DIRT from interest or dividends accruing in respect of the savings of their members. However, it would be a mistake to interpret this as meaning that interest and dividends on credit union accounts are free of tax. Credit union members are obliged to report or return interest and dividends on their savings as part of their income for tax purposes and are liable, if their income exceeds the exemption or personal allowance limits, to income tax at their marginal tax rate in respect of that income. These marginal rates are currently 24% and 46%. There is in fact a special box on the standard income tax return where one is expected to declare credit union dividends. There is no requirement in existence for credit unions to report the dividend payments that they make to their members in respect of shareholdings. Since the Finance Act, 1998, there is no longer a requirement on credit unions to report interest payments of any amount to the Revenue Commissioners. Previously, they were subject to a requirement to make a report of interest payments of over £500 in any one year. However, as I have already said, the individual members of credit unions are under an obligation to submit a full report to the Revenue Commissioners on the returns on their savings as part of their income for tax purposes.

I agreed in February 1998 to establish a working group to examine the issue of the taxation of returns on credit union members savings. The terms of reference of the working group were to examine the taxation of returns on credit union savings bearing in mind the special and particular nature of the credit union movement, their contribution to Irish society and the wider taxation issues involved. The report of the group was presented to me in October 1998. Early last year I made the report available to the public. The group was made up of officials from the Department of Enterprise, Trade and Employment, the Revenue Commissioners and the Department of Finance, as well as representatives of the Irish League of Credit Unions, the Registrar of Friendly Societies and an independent chairperson. The group met on seven occasions between May and September 1998, but it failed to agree on a set of findings. However, the chairman made a recommendation that a certain amount of tax free savings for credit union members should be allowed. The chairman's proposals were as follows: the first £375 of credit union members dividend income to be exempt from tax; any excess of dividends over £375 up to £750 to be subject to 20% tax; where dividends are over £750 the entire dividend to be taxed at 20%; all interest on deposits to be taxed at the 20% DIRT rate and no reporting of dividends or interest by credit unions to the Revenue Commissioners.

My Department and the Revenue Commissioners did not agree with some of these recommendations. The Department considered that there was no case for any further changes to tax law in order to favour credit unions. The contribution of the credit union movement was already amply recognised by the substantial benefit that was conferred on it by the current exemption from corporation tax which they enjoy in respect of surplus income.

The Department considered that all interest and dividends which credit union members earn on their savings should be made subject to the DIRT arrangements in the same way as for other financial institutions which are in competition with the credit unions for deposits. This would help to ensure a measure of horizontal equity between individual taxpayers in similar circumstances.

As a member of the working group, the Irish League of Credit Unions proposed a package of measures which it considered should be taken as a whole to address the needs of the credit union movement in what it felt was a reasonable and equitable manner. Its proposed package was a separate tax code for credit union shares whereby the returns from the first £15,000 of shares would be tax exempt and DIRT would be withheld at a rate of 20% from returns on all remaining shares, with 20% DIRT on all credit union deposits.

In my view, it is difficult to understand why the league pursued their proposal for a £15,000 exemption threshold given that, according to the league's own figures, the average credit union saving in 1998 was £1,583. The information available to the working group shows that only 1,457 account holders or 0.1% had savings with credit unions in excess of £20,000. These figures would seem to indicate that under the league's proposal a significant proportion of share accounts would be completely exempt from taxation.

Any concessions given to credit union savers would inevitably lead to demands also by corresponding savers with other financial institutions on the grounds of equitable treatment. The cost in DIRT terms of exempting the first £15,000 of savings over all financial institutions could be substantial. This would distort the market for savings at a time when efforts are being made to harmonise the taxation arrangements for products availed of by savers and investors.

While the league lays much emphasis on the acknowledged social and community role of credit unions, market research provided by the league to the working group indicates that members join credit unions for many of the reasons they open an account with any other deposit-taker. These factors are security, availability of loans, adequate return and that the motivation of credit union philosophy was considerably down the order of ranking. This is not to underestimate the worth of this philosophy or the drive and commitment of credit unions to their locale and community. It simply reflects that persons seek the best return on their savings in many cases.

I am currently considering the report of the working group. As some commentators have said, given all we have seen and heard on DIRT and tax evasion in recent times—

From the banks.

—it does not seem prudent to contemplate a new form of accounts on which the interest is neither liable to tax nor reported to the Revenue Commissioners. In the past, when a certain level of interest income was exempt from tax, a serious problem of tax evasion arose through the use of multiple accounts in different banks and branches and-or in different names, including those of relations and children.

When was it lodged?

The introduction of DIRT with no exemption thresholds had effectively countered this problem in other financial institutions in 1986.

The House will be aware from media reports and from replies I have given to written parliamentary questions that the tax treatment of credit unions in Ireland is now being closely studied by the Competition Directorate of the European Commission arising from a formal complaint to the Commission. The importance of this EU aspect is that it introduces a new dynamic that cannot be ignored. I understand that referral of the matter to the Commission was made by an umbrella group which represents financial organisations in the State.

Surprise, surprise.

The Minister, without interruption.

The complaint makes the allegation that the credit union movement in Ireland has benefited from preferential tax treatment by virtue of its exemption from corporation tax and DIRT. The complaint goes on to claim that these measures favour the credit union movement and that they place other credit institutions at a competitive disadvantage. The complaint asserts that this treatment of credit unions in Irish taxation law is contrary to EU law. I understand that the EU Commission is in the course of investigating this complaint.

That was decided a year ago.

While my Department has not been asked, thus far, by the Commission to provide observations on the subject matter of the complaint, such a request from the Commission is expected.

I am also conscious of the external environment within which we have to frame our overall taxation requirements. As regards the powers of the competition directorate of the European Commission, Deputies will no doubt be aware that Ireland has had to change its taxation code in several respects in recent years as a direct result of rulings and decisions of the directorate and of the EU Commission. For example, we have had to bring in a single low rate of corporation tax across the board so as to conform to EU state aid rules. The system of reliefs for taxpayers who invest in film projects has had to be changed because of objections from the EU Commission.

Last December the EU Commission decided to limit the period of eligibility for double rent and rates relief for certain buildings in the Custom House docks area in Dublin. In the Finance Bill, 2000, which was published last Thursday, a number of new tax reliefs were announced, for example, for the new town renewal scheme and for crèches, but these cannot commence until the EU Commission has given its formal approval. In the Finance Act, 1998, I announced the introduction of certain business reliefs for the new urban and rural renewal schemes but these have now had to be changed because they were not in conformity with the relevant EU rules. Whatever our feelings on this, we have to comply with EU rules on this matter. There is nothing to be gained by ignoring this reality.

The amended motion makes it clear that the Government will review the tax situation of the credit unions after the EU complaint is disposed of. If the existing taxation regime respecting credit unions and their depositors has triggered a complaint to the Commission, obviously any legislative initiative at this stage has the potential to aggravate the situation.

The Taoiseach will be meeting the credit union movement shortly and a date for this is being set. I urge the House, in this light, to accept the terms of the amended motion. To pass the Opposition motion to change the law would not be of service to the credit unions.

Is the Minister giving way to me?

No I am not, Deputy Noonan.

I am glad the Fine Gael Party has put down this motion because the credit unions deserve recognition for the great work they do and have done. This gives us an opportunity to debate this motion and the amendment and to show due recognition to the many people involved in the trade union movement. We can truthfully say that we have great respect for credit unions and the work they do.

I wish to focus on Dublin South-Central, my constituency – I have the constituents' greatest interests at heart. Economically, Dublin South-Central is the most deprived area. If one overlays the data available by the CSO from the last census of the socio-economic groupings in a digitised mapping format and overlays that onto a map of Ireland, which I have done, one will see that Dublin South-Central is the blackest area. I would like more Members of both Houses to recognise that. I see that Deputy Upton, who also represents Dublin South-Central, is here. Together we work very hard for the constituency, which is in need of much development and is recognised as an economically deprived area. Not only is it economically deprived but the banks have taken an attitude towards it that they do not want to have anything to do with it. It is not too long ago since one of the branches of a bank in Kimmage was closed, last year a bank in Thomas Street was closed and only recently a bank in Ballyfermot was closed. The services are not being provided to the people who are economically deprived in Dublin South-Central and I am sure that mirrors what is happening throughout the country.

The treasury in the United States, the equivalent of the Revenue Commissioners, stated on 24 December 1997 that the most important difference between the credit unions and other depository institutions, namely, banks and building societies, is that they have a public purpose to "promote thrift among their members and create a source of credit for people of small means." I wish the Revenue took it to heart that credit unions exist not only for the purpose of generating interest upon which tax can be paid but their primary purpose is to promote thrift and create a source of credit for people with low means. I understand the Revenue's position. Its job is to collect tax on all earned income, but the credit unions have a special case.

I wish to refer particularly to the volunteers in the credit union movement, many of whom are in the public gallery. Some are my guests and I recognise their voluntary work. I quote an American source:

Another difference between credit unions and banks is volunteers. Quite frankly, its hard to find them at banks. At credit unions, however, they're plentiful. The boards of directors are volunteers, as is the supervisory committee that oversee the activities of the credit union with respect to risk management.

Not only do volunteers work for as long as they are needed, vast improvements have been made to the buildings which house credit unions. Walkinstown, Sundrive Road, Crumlin and Drimnagh credit unions have been newly built or vastly renovated in recent years. I surfed the Internet earlier and visited Drimnagh credit union's website, which sets out the various services it provides to the many people in Drimnagh who are not acceptable to or wanted by other banks. I am delighted it is at the leading edge of banking technology. The Internet is a great device.

It is great that the Deputy has the time.

The Department of Finance website contains an analysis of savings held by credit union members by savings categories in June 1997.

In the Cayman Islands.

There were 430 credit unions in Ireland at the time with a total membership of 1.85 million and assets totalling £2.2 billion. Of the total membership 1.83 million held savings of less than £10,000, and their average savings was £1,070. The Minister referred to those with savings of £20,000 and £40,000, but less than 2,000 had savings in excess of £20,000. The credit union movement works with the small saver.

The Deputy should have a chat with his colleague, the Minister for Finance.

My colleague is of the same mind as me on this. We want to encourage people to save in a co-operative manner. The credit union allows almost two million people to save small amounts on a weekly basis at times that suit them. That is not the case with banks.

I estimate that 90 per cent of my constituents are members of credit unions. Savings and loans are used for house improvements, family events, such as births, deaths and weddings, and travel. Jack Charlton was followed on the back of the credit union movement. People who have savings in excess of £10,000 should pay a graduated tax. If people have savings of more than £20,000 they can afford to pay the small amount of tax that is normally due. I visited the credit unions in my constituency and asked them whether they had savers with more than £40,000. None of them had and only 68 credit unions in Ireland have members whose savings are in excess of this figure.

The Minister stated at the end of his contribution that an official of the EU competition directorate is due to begin a formal investigation to determine whether the credit union movement has received favourable tax treatment from the State. This has resulted from a complaint lodged by "institutions or organisations".

Sinners.

They are not sinners. These people are looking after their own business interests—

They are the people who appeared before the Deputy at the DIRT inquiry.

—which do not coincide with the interests of credit union members. Banks and building societies have made a complaint about the way in which credit unions are treated.

That is right. Their representatives appeared before the Deputy at the DIRT inquiry.

Credit unions deserve special treatment. US banks made a similar complaint against the credit union movement in 1997 and President Clinton signed a Bill into law in 1998 which protects credit unions. The banks lost and the credit unions won.

A battle is being fought currently and if, as the Minister said, precipitative legislation is introduced and railroaded through the House, the European Commission will have no option but to say that due process was not followed in Ireland and it will throw out whatever hope the credit unions have of receiving the treatment to which they are entitled because of the service they give to the public.

The Revenue has raised the question of account splitting where a number of relatives hold separate accounts containing £10,000. The bona fides of volunteer credit union workers with whom I am familiar will ensure that they will work in every way to make sure that does not happen. They would not be associated with anything that might happen in that regard.

I spent the past year, along with colleagues from all parties, working on the Committee of Public Accounts sub-committee on certain revenue matters, and we discussed the question of DIRT on deposit accounts. However, we cannot decide to do something which would undermine all the good work of that sub-committee in trying to establish a system that is transparent and accountable and under which everybody will receive equitable treatment under our tax regime.

All of us are on the side of the credit union movement. The Bill that was introduced in the US was passed by 92 votes to six. Similar figures would apply in this House if the Bill were drafted in a reasonable, methodical manner that would not undermine the work of Government or that of credit unions in Europe generally. There is no point saying that all savings under £375 per annum will be tax free. It is important that we all consider this matter in a level headed way and ensure that over time, the credit unions and their members get the favourable tax treatment that movement deserves.

Ba mhait liom, le do thoil, mo chuid ama a roinnt leis na Teachtaí Sean Ryan agus Michael D. Higgins.

That is agreed.

I am pleased to see the Minister and his officials in such good health this evening. I heard Deputy Healy-Rae on the radio at lunch time today painting a truly appalling vista of a rampaging 'flu in the corridors of power and I got the notion that, certainly at any time since Deputy Healy-Rae became aware of this over the past two or three months, everybody in the Department of the Taoiseach and the Department of Finance was afflicted with this 'flu in such a way as they could not possibly meet members of the credit union movement lest they be contaminated.

Deputy Healy-Rae's powers are miraculous.

The Minister may find they are more than he thinks, but it is a relief to see him here this evening in such good health. Deputy Healy-Rae is nobody's fool and he should not try to take the rest of the Members of the House for fools either. It is about time Deputy Healy-Rae put his vote where his mouth is.

The debate this evening is about two things. It is about how we deal with credit union savings and dividends, but it is also about the extraordinary and arrogant behaviour of the Minister for Finance, not just over the past two months since Deputy Healy-Rae became aware of the issue but over the past two years, since the 1998 Finance Bill, in dealing with the issue and in refusing to meet the League of Credit Unions.

It is important that we approach the issue with a serious appreciation of the reality. In theory, dividend income on credit union shares is no different from any other kind of dividend income. The recipient is obliged to make an annual declaration to the Revenue and the dividend income is then subject to income tax at the marginal rate that applies to that individual, whether that is 22% or 24%, 44% or 46%. However, the majority of people do not declare dividend income on credit union shares for income tax purposes. In truth, many people probably do not know that they are meant to declare that income in the first place. I acknowledge that the League of Credit Unions has made efforts in recent years to make people aware of their obligations but the reality, and we do ourselves no favour by ignoring it, is that most people do not return their dividend income in that way.

For some years now, Governments of various parties have suggested that they want to put things on a reasonable basis that would improve the level of compliance while recognising the special position of credit unions in society. The 1998 Finance Bill, when published, gave the credit unions some of what they wanted but also contained proposals about which they were not happy. I will not go into the rest of what happened then. We know the Minister agreed to set up the working party, the working party made recommendations and some specific proposals are included in that. It is important to acknowledge, and I do, that officials from the Department of Finance and the Revenue dissented from that report.

The least we might have expected was that the Minister would give some response. Surely it was and still is reasonable to expect him to say whether he agrees with the proposals. He still has not said so here this evening. Surely it is not unreasonable to ask him to indicate whether he intends to do anything on foot of the report. It is hardly unfair to ask him if he agreed with his officials who made it impossible for the working group to produce a consensus report. Deputy McCreevy has not done any of this. Instead, we have been treated, time and time again, to the supercilious repetition of something which is clearly untrue. We are told that the Minister is considering the report and that he is prevented from taking action by the possibility that the European Commission might impose corporation tax on foot of a complaint that has been made on the surpluses of credit unions.

I do not believe the Minister is considering the report. He has long since decided that he intends to do nothing at all about the credit unions for the rest of his time in office. This Minister is not slow to wash his hands of the views expressed by officials on his behalf but in this instance the officials were doing just that. They were representing the views of the Minister and that view is very simple: credit unions are just the same as other financial institutions. Everything the Minister has done and said flows from that basic misunderstanding of what credit unions really are. The Minister clearly believes that he was hard done by in 1998. Perhaps he was hard done by, by his party colleagues who are noticeable, incidentally, by their absence here this evening, but in any event that was two years ago and it is now high time the Minster emerged from his sulk and looked again at what is a very serious issue.

Before I go into the merits of this case I will deal with the second element of the Minister's mantra. He said he cannot deal with the issue of interest on dividends for fear that it might provoke the Commission into imposing corporation tax. This is nonsense. The issue of the corporation tax exemption will fall or stand on its own merits. The reason for the exemption is that all previous Governments have accepted that credit unions are not profit-making institutions as such and that their surpluses should not be treated as profit for tax purposes. In the past, the European Commission has accepted this argument and there is not any reason to presume that it is about to change its mind. In any event, the corporation tax issue is distinct in itself. I do not see that a determination on the issue of corporation tax would be adversely affected by the tax treatment of savings in the hands of credit union members. The two issues are separate and distinct and should be treated as such.

I have relatively limited time available to me so I will not repeat what others have said about the special position of credit unions in any great detail, but there are a number of distinctive features which make them different and perhaps it is worth mentioning them briefly. Credit unions are democratically controlled. They are now one of the few types of mutual institutions remaining in this country. They do not have clients. They do not have customers. They have members who must share a common bond, whether it is their place of work, where they live or whatever. They are largely operated by volunteers rather than paid individuals but, most importantly, they are not for profit institutions and there are statutory limits on what they can and cannot do.

The most telling comment from the Minister this evening was when he talked about how treating the credit unions in a particular way would "distort the market for savings". It is interesting that he should say this at a time when many credit unions are beginning to re-examine the sort of interest they give people on their dividends. They do not want to attract too much savings; they want to lend to people to help them buy things they would not otherwise be able to purchase. Most importantly in terms of distinguishing credit unions from the banks, of which Deputy Ardagh spoke so eloquently earlier, is the demographic breakdown of the people who are members of credit unions. There is no doubt that they provide a service to people and in areas where the services of the banks are not as readily available as perhaps they should be. It is noteworthy that 40% of credit union members do not have a tax liability of any kind in the first instance. All of this is a persuasive case for dealing with credit unions in a way that is preferential but also fair in all the circumstances. It is worth pointing out that the loss of revenue to the Exchequer would be minimal. It is possible that the tax from credit union savings would increase since we all acknowledge that the level of non-compliance with the existing arrangements is almost certainly very high. The maximum tax foregone from any one taxpayer would be 44% of £375 or just £165. The maximum foregone in the case of somebody who pays tax at the standard rate of income tax would be half of that amount.

Normally this Minister is greatly taken by the concept of self-financing tax cuts and I can only conclude that in this instance he is refusing to co-operate as a result of what is just a silly fit of pique. I have stated from the start that the working group report is a reasonable compromise and that the Labour Party endorses it as such. We tabled an amendment to the Finance Bill last year and the year before last to that effect. I stress the word "compromise". The credit union movement has voluntarily agreed to treat deposits in the same way that deposits in financial institutions are treated. Their central case is that shares in credit unions are not the same as shares in any other company. That case is persuasive and it is therefore reasonable to treat the return on those shares in a way that acknowledges that difference.

Nobody, least of all the credit union movement, wants to see credit unions used as a means of evading tax. I am fully persuaded, from the contacts I have had with the credit union movement, that it is aware of that possibility. Everybody acknowledges that effective measures must be taken to ensure there are not multiple accounts. I am persuaded of the bona fides of the League of Credit Unions when it says it has put in place the necessary information technology and that it has the will to ensure it does not happen. It is also important to ensure that when the exemption is taken into account the tax of 20%, whether it is called DIRT or a withholding tax, is levied. There must be a mechanism whereby the credit unions deduct DIRT or operate a withholding tax on the dividends above the agreed exemption limit.

It is time this issue was finally dealt with and for the bluster and prevarication to stop. This issue, which affects nearly half the Irish population, must be tackled with the seriousness it deserves.

I have a vested interest in this debate. I am a member of the Donabate and Dis trict Credit Union and, as I stated in the Oireachtas Committee on Finance and the Public Service, I have depended on loans from my credit union to assist me in my election campaigns in north Dublin over the years. Hopefully, that facility will always be available to me.

The purpose of this debate is to enable Members to apply maximum pressure on the Government to acknowledge the role and contribution of the credit union movement. It is a movement with 536 credit unions throughout the country, a membership of 2.1 million people, 16,000 volunteers and 2,000 employees. The fact that the Minister for Finance, Deputy McCreevy, has refused, despite numerous requests over the past two years, to meet the Irish League of Credit Unions to discuss the implementation of the report of the working group on the taxation of returns on credit union savings is an utter scandal. Do any of the credit union members in the Public Gallery this evening or throughout the country seriously believe that the Minister would refuse to meet the Irish Bankers Federation, the GAA, ICTU, IBEC, the Irish Horseracing Authority or the Turf Club—

Or J. P. McManus.

—for whom he is currently proposing a £50 million carrot to facilitate a merger of the horse racing fraternity? Furthermore, according to media reports, the Minister intends to have these proposals included in the Finance Bill, 2001. This is in complete contrast to the manner in which the Minister has treated the credit unions and their exclusion from the Finance Bill published last week.

Last month a shocking report by the Director of Consumer Affairs, Ms Carmel Foley, highlighted the extortionate interest rates legal moneylenders are charging for credit. Unfortunate families caught in the net are expected to pay interest rates of up to 197% for relatively small loans. Unfortunately, the report did not mention the activities and sinister practices of illegal moneylenders and the appalling pressure they place on families living in poverty. However, the stark reality of life for thousands of families was laid bare in that report.

The credit union movement knows this reality. It prevents thousands of families from falling into the trap of moneylenders every year. It provides a magnificent example of people working to produce real results in their communities. Credit unions assist families in budgeting, availing of credit and with a wide range of other services, including MABS. They play a vital role in every community and parish throughout the country.

My colleague and party leader, Deputy Quinn, raised this matter on the Adjournment on 2 February last. He highlighted the obduracy of the Minister for Finance and urged him to grow up and to meet the credit unions. His sensible words fell on deaf ears a fortnight ago and the credit union movement remains locked out at the behest of the Minister.

Nobody is suggesting that the issue of credit union taxation is not complex. However, what is beyond belief is how this Government can intend to address the matter if it is not engaged in discussions with the credit union movement. It is a ridiculous way to develop policy and a stance which insults nearly two million credit union members.

Reference has been made to the attitude of the EU to certain recommendations. One of the original founders of the credit union movement in Ireland, John Hume MEP, has stated that any concerns within the EU can be overcome. It is unacceptable that a Minister for Finance will be dictated to by bureaucrats in Brussels without a fight, especially when he has justice on his side. Over the years other Ministers, particularly Ministers for Agriculture, have fought the system in Europe on behalf of Irish farmers. It is the obligation of the Minister for Finance to fight and campaign for the credit union movement and its members. If he is not prepared to do this job, he should move aside and allow the Members on this side of the House to take up the cudgels.

The first point I wish to make, which was correctly addressed by Deputy Noonan, is with regard to the suggestion that due to a complaint having been lodged with the European Commission, the Government cannot accept this motion. Deputy Noonan correctly described this as a fig leaf. If this were the case, how would it be possible to proceed with the Planning and Development Bill or the Wildlife Bill or several other Bills when up to 40 complaints have been lodged in Europe against Ireland? The suggestion has no basis in fact. If a complaint being lodged in Europe had such an effect, any legislature in any member state would be precluded from action. It is not true.

I can give the House another example. The Minister says the complaint has been made – we know it was made by the banks – to Commissioner Monti in DG4. It is arguable whether this is within the competence of DG4. It is probably arguable in European law that the matter should be considered in the social affairs directorate. It is also true that Commissioner Monti is negligent, for example, in the matter the Minister for Finance raised with regard to introducing a regime for film. He failed to introduce a solemnly promised directive in relation to concentration of ownership in the media. It is not true that any suggestion of that nature to DG4 affected, at least when I was Minister with responsibility for film, anything in relation to the film industry. I stress this point to demonstrate that the fig leaf has no basis.

I am a member of St. Anthony's Credit Union since 1968. When one heard about the credit union movement in the west of Ireland, it was always after the most appalling stories about moneylenders, how they had been removed and how the credit union movement's efforts were sought to help people in crisis. Let us call a spade a spade. If there are places where the banks would not open branches, there are clients of the same banks who would not be seen dead going into a credit union. They are depositors in banks which have behaved disgracefully. Now the Minister for Finance would like to visit on the credit union movement the sins of the banks. That is outrageous.

The credit union movement has always spoken about membership, community, fraternity and solidarity. I never heard those words spoken in a bank. The credit unions are not the same as the banks and there is a difference between membership and clients. There is a difference between the person who arrives with a speculative deposit and the person who arrives with his or her savings. If the Revenue Commissioners and the Department of Finance had their people on all the commissions which have been established, something they did to consistently block the film industry, we would not have had a successful outcome to any commission. It is time to vindicate the proposals of the chairman of the commission and for the people on this side of the House who make worthy speeches to think between now and 8.30 p.m. tomorrow and to vote against the banks and in favour of the credit union movement.

Debate adjourned.
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