Dáil Éireann díospóireacht -
Thursday, 25 Apr 2024

Vol. 1053 No. 1

Saincheisteanna Tráthúla - Topical Issue Debate

Postal Services

Deputy Chris Andrews

I thank the Minister of State, Deputy Anne Rabbitte. An Post is planning on selling off its beautiful art deco building which has been the home of Rathmines post office for almost 90 years and is an iconic building in the heart of Rathmines. In one fell swoop, the actions of An Post will mean that this building will be lost to the Rathmines community and An Post will privatise the postal services in Rathmines. This is a vital service particularly for older people and the many small businesses in Rathmines. An Post is selling off the family jewels and privatising the essential postal services in one go. It needs to stop. The Government needs to intervene to end this recklessness. The Minister for the Environment, Climate and Communications is also a TD for the area so he is well aware of the challenges and difficulties it will pose to people in the community. Rathmines post office is a vital part of the social infrastructure. The community has already lost a number of important services. This is another big blow for the community in Rathmines. Many members of the public have expressed their anger about the decision to privatise the service. A large number of older residents on Rathmines Avenue use the service in this post office and it is not clear where they will have to go to now.

Forty-five of the existing staff will be redeployed to another location. It is not clear whether the services being delivered in Rathmines post office at present will be delivered at the new location.

How can giving such an essential service to a private operator be good for the community? It will mean that the postal service will be attached firmly to the success or otherwise of the private owner. If the private operator decides to close the office or feels it is not for them, the postal services will most likely go from Rathmines. This has happened in many communities across my constituency of Dublin Bay South, and those communities are now without a post office. This happened most recently in Kevin Street, where the private operator no longer wanted the post services in a shop. That had a major impact on so many older people in the Kevin Street, New Street and New Street Gardens areas. Now they have no post office at all. The nearest one is quite a trek for older people to have to make in their older years.

Another huge concern for residents in Rathmines is the selling off of the magnificent building which is the home of the current post office. It is a historical building and it will be sold off and lost to the State forever. This is a really short-sighted decision. This could be transformed into a hub for community groups. There are so many uses it could be put to by the local community. It could be the heartbeat of Rathmines, but this Government just wants to sell and privatise everything and let the community pick up the pieces. This Government is effectively asset-stripping the local community not just in Rathmines but right across the inner city.

Minister of State at the Department of Children, Equality, Disability, Integration and Youth (Deputy Anne Rabbitte)

I welcome the opportunity to outline the position on this matter on behalf of the Minister, Deputy Eamon Ryan, and the Minister of State, Deputy Chambers. They are both very aware of the impact that decisions relating to changes in An Post operations have on communities and individuals in both rural and urban areas.

An Post is a commercial State company with a mandate to act commercially and, as such, day-to-day operational matters, including decisions as regards the size, distribution and future of the network, are matters for the board and the management of the company and not ones in which either the Minister or the Minister of State has any statutory function. The Minister has responsibility for the postal sector, including the governance oversight of An Post, to ensure that the company is compliant with the code of practice for the governance of State bodies and the governance functions included in the statutory framework that underpins An Post.

In line with its ongoing transformation, An Post has announced that it is converting six post offices from An Post-operated to contractor-operated, one of which is the Rathmines office. That post office will join the mainstream of national post offices in that more than 90% of the country's 900 post offices are operated by contractors. It should be noted that fewer than 40 post offices throughout the State are now run directly by An Post.

In accordance with section 8.22 of the code of practice, all State bodies are required to seek the approval of the relevant Minister and the Minister for Public Expenditure, National Development Plan Delivery and Reform in advance of any material acquisition or disposal of land, buildings or other material assets proposed by a State body. An Post is aware of the requirement for compliance with the code of practice. An Post has indicated that the change in business model of the six offices will not in any way alter the range or extent of the services offered by An Post in those locations.

In recent years, An Post has been transforming its business by delivering new products and new formats in the way it operates. This includes, among other things, diversifying and growing the financial services products it provides for individuals and small and medium-sized enterprises to include loans, credit cards, more foreign exchange products, local banking in association with the major banks, and a full range of State savings products. An Post is providing agency banking services for AIB and Bank of Ireland across its network of post offices.

The Government's objectives for the An Post network include harnessing the opportunities presented by e-commerce and the digital economy and delivering a sustainable nationwide post office network offering a range of e-commerce, financial and government services. The Government agreed that €10 million per annum will be provided by the Department of the Environment, Climate and Communications over a three-year fixed term, 2023 to 2025, to support the postmasters, with funding to be dispersed across the post office network. The funding is being paid monthly for each 12-month period. Over €12.2 million has been claimed by An Post to the end of March 2024 for the postmaster network. The programme for Government recognises that a modernised post office network will provide a better range of financial services and e-commerce services for citizens and enterprise, as part of our commitment to a sustainable nationwide post office network. The overall €30 million funding being provided to support a sustainable nationwide post office network is in line with this commitment.

Deputy Chris Andrews

We often talk about a 15-minute city, but this model of An Post postal service delivery will not lend itself to a 15-minute city. People will have to travel significantly longer to reach the local post office. One example, as I mentioned earlier, was when Kevin Street post office closed. Residents have quite a distance to go now to reach the nearest post office, and at an older age it always proves challenging.

Rathmines has also lost its Bank of Ireland branch due to closure. Many services and community initiatives have been moved out of Rathmines. There is a desperate need for a community hub, and this post office, this building, could be the heartbeat of Rathmines. Unfortunately, the Government seems more intent on, as I said, asset-stripping and ensuring that Rathmines is left with nothing and communities are left with nothing to work with and no premises to work with or to work on. Rathmines is a diverse community. It also has many older people, and they will be severely impacted by this decision. We do not know where the new privatised postal services will be located. As I said, the new postal service will mean that if the new owner is not keen on it or decides to find some other new way of making money, that is the postal service gone from Rathmines, and it could be gone forever. That would be a huge blow. Over recent years, seven post offices in Dublin Bay South, that is, in Dublin 2, Dublin 4, Dublin 6 and Dublin 8, have closed. Rathmines needs this post office. It should be housed where it is, and this building should be safe and secure to deliver postal services for the Rathmines community.

Deputy Anne Rabbitte

I thank the Deputy for raising this important matter. As I said, I am taking it on behalf of the Minister, Deputy Ryan. I have listened with interest to the points raised by the Deputy.

As I indicated earlier, decisions relating to post offices are an operational matter for An Post and not a matter in which the Minister has a statutory function. The Deputy will appreciate that the Minister cannot intervene in matters which we as an Oireachtas have given An Post a statutory responsibility to fulfil. An Post has an independent board, which has a clear mandate. I trust the Deputy understands that it would be inappropriate for me to comment further on operational matters relating to proposals for specific post offices. An Post plays an important role in servicing the needs of businesses and domestic customers alike, and An Post advises that this is at the forefront of its mandate. The board and the management work to maintain the company's sustainability and its relevance to customers into the future.

The Minister, Deputy Ryan, and the Minister of State, Deputy Chambers, their officials and Cabinet colleagues are working to support the company to that end. The Minister and the Minister of State, with the Department officials, will reflect on the concerns the Deputy has outlined today.

International Agreements

Deputy Joan Collins

I note that the Minister for Finance is not in the Chamber.

An Ceann Comhairle

No, he is not.

Deputy Joan Collins

Can I defer it?

An Ceann Comhairle

If the Minister was not going to be here, you should have been informed.

Deputy Joan Collins

I was not. I checked with my office to make sure. I was at a meeting at 2.15 p.m. and I checked in my office before I walked in the door.

An Ceann Comhairle

That is most unsatisfactory. I apologise that you have had that experience. You should not have had it. The Minister of State, Deputy Richmond, has arrived in the nick of time. He is here on his white steed to save the day.

Deputy Joan Collins

Okay. I was just about to look for a deferment.

I am raising Ireland's position on establishing the United Nations framework convention on international tax co-operation. Last month, at a statement in Paris urging EU countries to support the new UN framework convention on international tax co-operation, we learned that global tax abuse will cost the EU €1 trillion over the next ten years. This follows a landslide majority in last November's UN General Assembly vote on a resolution for the framework convention. The framework would represent the most ambitious attempt so far to create an inclusive and equal global tax policy and directly target the hundreds of billions lost to tax evasion each year. Most EU countries voted against it. Most developed countries voted against it. Ireland voted against it.

Tax Justice Network research estimates that approximately $480 billion tax was lost in 2023 due to cross-border tax abuse by multinational companies and by individuals hiding assets and income streams offshore. It estimated that Ireland accounted for 4.1% of this total tax loss inflicted globally, even though we only account for 0.06% of the world's population. That is an impact 70 times greater than our population would suggest. Last October, in advance of the vote on the convention, I raised this issue in the Dáil. The Minister, Deputy Michael McGrath, avoided giving a position on the resolution and said the Government would continue to engage with the process and looked forward to seeing the ultimate outcome. The ultimate outcome was that Ireland voted against the resolution. Not only that, but Ireland pushed for the committee set up after the resolution to take decisions based on a consensus and not majority basis, which shows we have still not stopped trying to stymie a fairer and stronger global tax policy.

In October, the Minister said that it would be important to ensure developments at the UN are as complementary and co-ordinated as possible with ongoing work at the OECD, and do not undermine or duplicate the ongoing work. Almost all OECD members are part of the 48 countries that voted against the UN resolution. Those 48 countries represent 15% of the world's population and are estimated to enable 75% of global tax abuse. Developed countries, including Ireland, facilitate the majority of global tax evasion. That is what this framework convention would seek to address. Our Government voted against it. This tax convention would take the power over global tax policy away from those countries who cause the majority of it and spread it out to those most hurt by it. It makes no sense to me to give the countries committing the most global tax abuse almost sole control over the global policy that polices it.

The UN Secretary General, António Guterres, concluded in his extensive report on global tax policy that analysis of existing international tax arrangements indicates that they do not satisfy the main elements for fully inclusive and most effective international tax co-operation. He also found that the substantive rules through these OECD initiatives often do not adequately address the needs and priorities of developing countries. The Government must surely agree with this conclusion. In February the UN's economic, social and cultural rights committee published a report calling on Ireland to strengthen measures to stop tax abuse. Tax Justice Network research estimates that Ireland accounts for 3.5% of corporate tax abuse and annually inflicts almost €11 billion of corporate tax abuse on other countries. The UN committee also found that Ireland has played a central role in some of the most egregious and high-profile tax avoidance structures in the world, and it is often poorer countries that lose out. We need to seriously rethink our position on this. I would like to hear the Minister of State's comments.

Minister of State at the Department of Finance (Deputy Neale Richmond)

I sincerely thank Deputy Collins for submitting this important Topical Issue. As this House is no doubt aware, Ireland is a full supporter of multilateralism and is committed to effective international tax co-operation through various forums including the aforementioned OECD and the UN. Ireland is contributing constructively to the process at the UN to develop a framework convention on international tax co-operation that embodies the principles of fairness, transparency and inclusivity for all member states. The new framework convention was first proposed by the G77 group of countries at the UN, following which the UN Secretary General published a report titled Promotion of Inclusive and Effective International Tax Co-Operation at the United Nations in August 2023 setting out three options on a potential future role for the UN in international tax co-operation - a multilateral convention on tax co-operation, a framework convention on international tax co-operation and a framework for international tax co-operation. As Deputy Collins has already alluded to, a vote at the UN in November 2023 saw developing countries vote for option two, a more binding framework convention, while developed countries favoured option three, a less binding framework. Ireland, together with our EU partners and many other developed countries, took this position given the important work nearing its conclusion by the OECD inclusive framework on the two-pillar solution to address the challenges brought about by the digitalisation of the economy. From our perspective it is critical that the emerging UN process does not undermine the OECD agreement as it enters its final phase before delivery. Ireland signed up to the OECD two-pillar solution in October 2021 and we intend to follow through on that commitment. Global implementation of the agreement is crucial to the stability of the international tax framework.

Work has now commenced on the development of terms of reference for this new framework convention at the UN in New York and Ireland is fully engaged in that process. Led by the OECD and the inclusive framework of 145 countries, huge progress has been made in recent years on reforming global tax rules, yielding increased transparency, action on base erosion and profit shifting, BEPS, and the two-pillar solution which is critical to making international tax arrangements fairer and work better in a digitalised and globalised world economy. It is important to recall that substantial progress has been made in relation to tackling aggressive tax planning over the past decade. We have seen the development and implementation of many rules to prevent mismatches in the international tax architecture, ensuring tax is paid in the correct location. These rules are complemented by a substantial and growing body of tax transparency rules providing tax administrations worldwide with the ability to fully enforce these rules. We recognise the important role the UN has to play in supporting and enhancing international tax co-operation globally and we look forward to developing a new role for the UN in the near future.

We believe that in progressing this work, it will be important to ensure that developments at the UN are as complementary and co-ordinated as possible with the ongoing critical work at the OECD, which is in its final stages and should be allowed to come to fruition rather than being undermined. Ireland is already an active participant at the UN, including on tax matters. The UN tax committee is comprised of 25 members, nominated by governments and selected by the UN Secretary General. The Minister for Finance nominated an independent tax expert from Ireland, who was selected by the UN Secretary General and sits on this important subcommittee of the UN's economic and social council and contributes to developing the UN's expertise in this area. The committee develops practical guidance for governments, tax administrations and taxpayers to help to strengthen tax systems with a view to mobilising financing for sustainable development. As indicated at the outset with regard to the ongoing process at the UN, we are fully engaged in working closely with colleagues at the UN and hope the process can result in a robust UN framework convention on international tax co-operation that embodies principles of fairness, transparency, inclusivity and effectiveness for all member states.

Deputy Joan Collins

I will have to read that reply again as it got very convoluted. I will read it in detail because I want to come back to the Minister of State on it. It does not look to me as though Ireland's taken position is as positive as he has stated. All OECD members were part of the 48 countries that voted against the UN resolution. Those countries represent 15% of the world's population and are estimated to enable 75% of global tax abuse. Developed countries, including Ireland, facilitate the majority of that global tax evasion. That is what this framework convention would seek to address, and our Government voted against it. That does not seem like a country that wants to see genuine equality in relation to corporation tax, so that those poorest countries most affected get more from it, and countries like ours are more transparent about our corporation tax.

I want to make the point that in February the UN's economic, social and cultural rights committee published a report calling on us to strengthen measures to stop tax abuse.

Tax Justice Network research estimates that Ireland accounts for 3.4% of corporate tax abuse and inflicts almost €11 billion of corporate tax abuse on other countries annually. The UN committee also found that Ireland has played a central role in some of the egregious and high-profile tax avoidance structures in the world, and it is often poorer countries that lose out. The Government and the country have a moral obligation to ensure that those poorer countries do not lose out, but gain from the spoils of more developed countries in the context of corporation tax. This convention would tackle the hurt inflicted on the global south by tax abuse facilitated by the West and developed nations. We are front and centre in the context of facilitating that tax abuse, and everyone knows it. We should be much more responsible in our actions. I will look at the Minister of State's reply in detail.

Deputy Neale Richmond

I will restate a few points. I acknowledge that the reports were made by a UN committee. The Government also has a position. We cannot always take everything as read.

On the process and the vote the Deputy mentioned, I will provide exact clarity. It is important to recall that Ireland signed up to the OECD two-pillar solution in October 2021. We intend to follow through on our commitment in that regard. From our perspective, it is critical that the emerging UN process, which the Deputy outlined, and the OECD process are complementary and that the work at the UN does not undermine the work of the OECD as it enters its final phase before delivery. This is crucial to achieving something. Do not get me wrong - votes for the sake of votes are important. However, work is under way at the OECD. We want to make sure that it is completed in order that what the UN is looking for can be done in the right sequence and that we can deliver a co-ordinated impact to ensure that there is no duplicity or undermining of work. That is not an unfair position for the Government to hold.

It is worth noting what has been achieved in the past decade on the base erosion and profit shifting, BEPS, project, in the context of tackling aggressive tax planning and removing mismatches. We recognise that the UN framework convention will be important in helping all member states to achieve the strategic development goals and domestic resource mobilisation. We are committed to continued engagement in order to achieve that. We look forward to constructive co-operation between the UN and the OECD in order that they can leverage each other's strengths in a mutually beneficial way. They should not be seen as exclusive processes, but one came before the other. We should let the OECD finish its work and then allow that to be fed into the process.

The full transcript of my speech and additional information will be sent to the Deputy's office. I am more than happy to engage with her by direct correspondence in order to follow up.