Vol. 561 No. 4
105 Mr. Murphy asked the Tánaiste and Minister for Enterprise, Trade and Employment her proposals as to the way in which industry can neutralise the negative impact that carbon taxes and other stealth taxes will have on competitiveness. [4743/03]
The proposed introduction of carbon tax is in response to our international obligations under the Kyoto Protocol to reduce greenhouse gas emissions. Taxation is one of a number of measures included in the national climate change strategy, which sets out a framework of mechanisms to help Ireland to meet this international commitment. While the introduction of a general carbon tax from the end of 2004 was signalled by the Minister for Finance in his budget speech last December, I should mention that the tax framework has not yet been developed. The Minister made it clear that given the many implications of such a tax, both environmental and economic, there will be full consul tation with interested parties on the design of the tax. This commitment to consultation is reiterated in the draft social partnership agreement, Sustaining Progress, which states: "In keeping with Ireland's obligation under the Kyoto Protocol to reduce greenhouse gas emissions and the announcement in the budget regarding the development of a general carbon tax, there will be full consultation with the social partners, having regard to the potential implications for jobs, competitiveness and social inclusion."
I expect the Minister for Finance will initiate consultations to develop a framework for the tax shortly. My Department will be fully involved in the development process, where important issues for discussion are likely to include the level at which the tax will be set, the question of exemptions or reductions for companies engaged in other greenhouse gas reduction measures such as emissions trading, negotiated agreements and the question of recycling the tax. In developing the tax framework, a crucial consideration will be minimisation of any impact on competitiveness.
There are two parts to my question. One part relates to carbon taxes, which I consider extremely important, and the other relates to general stealth taxes currently affecting industry. During questions to the Taoiseach earlier, there was much talk of the Government's communications unit. However, that appears to have failed to get the message across to the Government with regard to the massive loss of jobs throughout the country and the perception by industrialists and business people that the reasons for the downturn are stealth taxes, increased inflation and the general increase in costs which are the responsibility of the Department of Enterprise, Trade and Employment. There have been massive increases in rates and waste disposal taxes—
The Deputy must put a question.
Does the Tánaiste accept that her Department is responsible for all the increased costs, including taxation, ESB charges, motor and other insurance premiums and bank charges, all of which have a drastic effect on the competitiveness of Irish industry? Carbon tax is a worrying issue at present and industry needs to know where it is going at this stage. I have read a document from the Department of Enterprise, Trade and Employment expressing grave concern about the potential impact of carbon tax on industry. Yet, the Tánaiste has indicated that there are no specific proposals coming forward.
The Deputy appears to be living in a different country from me. There is not a situation of total gloom and depression. The Irish economy is performing better—
Is the Tánaiste in cloud cuckooland?
The Tánaiste, without interruption.
Would the Deputies just listen for a moment? The rate of unemployment in Ireland—
Is rising.
---at below 5%, is one of the lowest in the EU, where the overall average is over 8%.
Is the Tánaiste not aware of the job losses?
There are job losses every year.
The Tánaiste, without interruption. We are subject to the time constraints of Priority Questions.
Some 40,000 work permits were granted last year to people from outside the country to work in Ireland.
Thanks to the Tánaiste, who wanted 200,000 a few years ago.
That is not indicative of an economy in decline. The reality is that there is a slow-down in the global economy, as we all know. Corrections are taking place in the stock markets, following the dot com bubble, and the implications of that are well known. There is uncertainty as to what will happen in Iraq and all those matters—
We are not blaming the Tánaiste for that.
I thank the Deputy. All those matters are placing pressure on the global economy and Ireland will succeed or falter on the basis of our performance in that global economy, with 60% of our jobs depending on our export performance.
In relation to carbon taxes or any other taxes, there are, clearly, different ways in which taxes of this kind can be introduced. It is important to bear in mind other strategies which companies put in place, such as trading emissions, for example. That is facilitated within the EU. It would have been premature to introduce such a tax. I am not sure whether the Deputy is for or against the tax, although I know his party is in favour of it.
Is the Tánaiste for or against it?
The Tánaiste should not—
No Member of this House is more in favour of lower taxation than I am. In reply to Deputy Hogan, it depends on how the tax is introduced. I am not in favour of any tax that puts Irish jobs at risk.
We must move on. A very brief relevant question from Deputy Murphy.
Some of the impact of carbon taxes could be avoided if the Government got its act together in relation to the production of green energy. This country has enormous potential for wind energy production. There is lack of co-ordination and a solid Government policy in this sphere. Does the Tánaiste accept that the Government needs to get its act together on this issue?
The allotted time has been exceeded. We must proceed to the next question.
