As with many of the things we are dealing with in this final week - we had discussions about the complexity of the previous Bill and the multiple issues introduced, some of them at the last minute - it is worth noting that this Bill deals with a significant matter relating to the financial vehicles through which the Irish and global super-rich get even richer. This very significant Bill being dealt with on the second last day of the Dáil in the dead of night effectively focuses on the enormous investment funds and one of the particular vehicles through which these enormous funds are invested in order to make money for very rich people indeed.
The scale of investment funds that are domiciled and administered in this country is staggering. At €4.9 trillion, it is an astonishing amount of money. Based on what I have read, the Bill was written by the investment fund industry. It is to facilitate the investment funds. While the Minister of State might say that the issues about beneficial ownership, in other words, finding out who the key investors in these investment funds are, is a progressive move creating greater transparency about who owns these funds, there is a threshold of 25% of the fund for the beneficial ownership register. As I understand it, we will not have full transparency about who many of the investors in these funds are because most investors in these funds will be below this threshold as they tend to have multiple investors with smaller percentages than that.
When the Bill went through the Seanad, Senator Higgins pointed out her concerns that the Bill might fail to align with objectives of the base erosion and profit shifting, BEPS, process. That base erosion and profit shifting leads to an enormous leakage of what should be taxable profits for different states because they operate through these multinational investment vehicles, often quite opaque vehicles in which nobody really knows who the investors are and there is very little oversight of these matters. Through various mechanisms, these funds pay very little tax. Our Government proactively facilitates this through various tax measures. Through legislation like this, it tries to encourage this type of investment here which is often effectively a way for the rich to launder their money, avoid tax and make more money.
It is worth flagging that because most people do not know about these things. When we say that there should be more money for Debenhams workers, for the health services or to pay student nurses, the Taoiseach often accuses us of economic fantasy, but it is precisely when we look at these areas, which often few people even know about, that we find these opaque financial vehicles the administration of which is located just down the road here in the Irish Financial Services Centre, where trillions of euro are washing through with very little tax paid. It is important to remark on that fact.
In that regard, it is worth noting that the Bill was introduced by Michael D'Arcy when he was a Fine Gael Minister of State. Shortly afterwards he went off to work with the body that lobbies on behalf of these investment funds, which was rightly remarked on as completely inappropriate. Despite the seriousness and the scale of money movement that will be facilitated by the Bill, pre-legislative scrutiny was waived at the request of Michael D'Arcy. After being the Minister of State who sponsored the legislation, he then went off to become a lobbyist for the very industry that will benefit from and which is promoting the sorts of measures that are contained in the Bill.
For years, successive governments have being promising to legislate to implement the recommendations of the Duffy Cahill report and to legislate to change the priority creditors to prevent a recurrence of what happened with Clerys, Vita Cortex and so on, but here we are with Debenhams, and strangely none of that has been done.
It has been mentioned and there are promises in the programme for Government, but it has not been done. This aspect has been done and got into legislation on the last night before Christmas. This is a priority. I refer to the legal mechanisms to facilitate more speculation for profit by super wealthy global investors.
I certainly have significant concerns regarding this endeavour. Frankly, I do not even fully understand these opaque instruments which are being used. Invariably, however, when we look at things such as section 110, and other similar aspects, such as Irish collective asset management vehicles, ICAVs, these are things touted by big accountancy firms as a means through which the rich can invest their money and pay little in tax because of loopholes provided in this country. It is important to remark upon that concern and to try to ring the alarm bells in that respect, although I am sure that at this deathly hour no journalists, or anybody else, will be watching. Nonetheless, for the record, it is important to signal that this is the dark financial side of how the system really works.
