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Economic Policy

Dáil Éireann Debate, Wednesday - 9 March 2022

Wednesday, 9 March 2022

Ceisteanna (12, 13, 14, 15)

Richard Boyd Barrett

Ceist:

12. Deputy Richard Boyd Barrett asked the Taoiseach if he is planning to update the national reform programme for 2022. [11771/22]

Amharc ar fhreagra

Paul Murphy

Ceist:

13. Deputy Paul Murphy asked the Taoiseach if he is planning to update the national reform programme for 2022. [11774/22]

Amharc ar fhreagra

Mary Lou McDonald

Ceist:

14. Deputy Mary Lou McDonald asked the Taoiseach his plans to update the national reform programme. [12410/22]

Amharc ar fhreagra

Cian O'Callaghan

Ceist:

15. Deputy Cian O'Callaghan asked the Taoiseach if he is planning to update the national reform programme for 2022. [12960/22]

Amharc ar fhreagra

Freagraí ó Béal (43 píosaí cainte)

I propose to take Questions Nos. 12 to 15, inclusive, together.

The national reform programme is an important element of the European semester, the annual cycle of economic and fiscal policy co-ordination among EU member states. As part of the semester, Ireland, along with all other member states, prepares and submits a national reform programme to the European Commission each April. This provides an overview of economic reforms and policy actions under way in Ireland, including in response to country-specific recommendations given as part of the preceding year's semester.

Preparation of the national reform programme is co-ordinated by the economic division of my Department with input from relevant Departments and agencies.

Work on this year's programme, which includes engagement with stakeholders, is now under way.  Last year, in line with guidance from the European Commission, Ireland's national reform programme was integrated into the 2021 national recovery and resilience plan, NRRP.  This was required to access funding under the European Union's recovery and resilience facility from which Ireland was allocated €950 million in grants.  The NRRP was approved in September 2021 and implementation is now under way.

The Taoiseach will be meeting with European leaders in Versailles to discuss the impact, including the economic impacts, of the war in Ukraine.  Many people in Europe quietly want to use the war in Ukraine to boost up military spending and make our relationship with NATO a closer one and yet the Taoiseach uses excuses about Europe to say he can do nothing about rising fuel and energy costs because Europe would not allow it.  Europe is happy to co-ordinate on militarisation but not so happy to co-ordinate on protecting working people in Europe and in this country against the rising cost of fuel and energy which is going to immiserate them.  Should the Taoiseach not be going to Europe, as part of this European semester process, to say that we need radical emergency action and we want the licence to introduce controls on the price of energy and gas, and not just petrol and diesel?  What about gas, heating oil and all of the things that were immiserating people before the war in Ukraine and will do so to a greater extent as that war unfolds?

The national reform programme talks about students.  What action is going to be taken to ensure that English-language students from outside of the country are protected and are not allowed to be scammed again as has happened?  There have been scandalous cases whereby Latin American students have lost their life savings, thousands of euro, to travel companies like Travel Now.  It got the students to pay upfront on the promise that when Covid-19 restrictions lifted, the company would have paid for a place for them. When the students subsequently contacted the English-language schools, they were told they had no record of this.  Many students have been scammed out of thousands of euro.  The reason for this is that the Department has failed to ensure its own rules are enforced.  The rules are enforced for the students - they must have an attendance rate of 85% - but not in the case of the rules that state very clearly that the money should be placed in an escrow account so this sort of scam cannot happen.  This is not what has been taking place. As a result, companies are able to walk off with hundreds of thousands of euro from unsuspecting students who have lost their life savings.  Will the Government act to enforce the current rules so that this cannot happen any more?

Accessing the almost €1 billion in funding under the NRRP requires the State to undertake multiple reforms.  Priority No. 3 of these reforms includes commitments on anti-money laundering and aggressive tax planning.  I have repeatedly raised the issue of billions of euro of Russian money going through the International Financial Services Centre, IFSC, over the past two years. A fortnight ago I raised with the Taoiseach the issue of opaque shell companies.  These companies are used for aggressive tax planning by firms accused of money laundering which have funnelled billions of euro from the IFSC to Russia.  When I mentioned this to the Taoiseach, he mentioned securitisation but these accounts are not securitisation vehicles.  If changes to our financial regulations and tax codes are not necessary, why has the EU demanded that Ireland implement reforms on money laundering and aggressive tax planning?  The NRRP clearly states that the State must "enhance the supervision and enforcement of the anti-money-laundering framework as regards professionals providing trust and company services." If we want to show solidarity to the people of Ukraine, we must take real action on this.  Will the Taoiseach commit to ending the use of anonymous company ownerships through trustee structures and ending the ability of these companies to operate from the IFSC for the purpose of aggressive tax planning through section 110 of the tax code? At a minimum, will the Taoiseach ensure the Minister for Finance undertakes a cost benefit analysis of section 110 to ascertain whether it is consistent with current reforms to the international tax regime?

I am very struck by Deputy Boyd Barrett's comments.  He said that the EU wants to use the war in Ukraine as an excuse to militarise and increase defence spending.

That is exactly what it is doing.

No disrespect, but what planet is the Deputy on?  War has happened.

It has been pushing to do this and now it is using the war as an excuse to do it again.

Russia has invaded Ukraine in a savage way. It is bombing civilians. It has torn up the multilateral rules-based order with no regard for UN universal values of territorial integrity, sovereignty and democracy.  Russia is afraid of democracy and wants to kill democracy in Ukraine. Deputy Boyd Barrett is saying that Europe is using this as an excuse to militarise.  Europe did not want this war.  The European Union did everything it possibly could to prevent this war as did President Macron and Chancellor Scholz.  When one is dealing with authoritarian regimes that do not apply democracy or democratic principles to how they conduct their countries and states, it creates vulnerabilities.

We sell arms to some of these countries.

There is a vulnerability now in the security architecture of Europe.  Germany believed in trade and in good relationships with Russia over a long period of time, certainly since the early 1990s, and had been very consistent in that.  Unfortunately, I do not believe that has been responded to by the Russian Federation over time. The latest manifestation of that is the wholesale war on Ukraine.  We already had a taste of it in 2014 with the invasion of Crimea. People like the Deputy and others in this House were very silent about it in 2014.  I refer not so much to the Deputy but to the main party opposite, which was quite silent at the time. When I raised it in this House during European debates at the time, Sinn Féin did not want to know about it.  The point I am trying to make is that the very unfair tendency in the debate is always to blame the EU.  The Deputy’s whole contribution sought to blame the EU and not Russia.  Russia has caused this war.  It makes complete sense that Europe would now reflect and look ahead.

We have been protesting about Putin long before the Taoiseach.  Our comrades are anti-war protestors in Putin’s prisons at the moment.

Democracy is important, but it is now in recession and is receding vis-à-vis authoritarianism.  Europe wants to defend its Single Market, its economy and the quality of life of its people.  There are no warmongers that I have ever noticed in Europe or in the European Union that I have seen-----

Is the Taoiseach joking me?

----- in the past number of years.

Are the ones selling arms to Saudi Arabia not warmongers?

I was there as Minister for Foreign Affairs.

Come on. Give me a break.

Europe’s predominant role is an interventionist one which is trying-----

Of course it is shocking because it does not fit the Deputy’s world view.

It sells arms to dictatorships like Saudi Arabia.

The immediate focus of the Deputy’s approach is always to attack the European Union and not the aggressors, the despots or the authoritarians.

We are the ones who resist them.

That is his response all of the time.  He attacks the war by Russia but suggests it is all the European Union’s fault. That seems to be the Deputy’s fallback position.

We did not say that.

That is the essence of the Deputy’s presentation.  Europe goes to great lengths to intervene to prevent conflict and, where there is conflict, to provide humanitarian assistance. The EU is probably the biggest provider of such assistance in the world to less developed states and to areas of conflict.  Enormous sums of money are allocated. Similarly, the recovery and resilience facility coming out of Covid-19 is providing enormous sums of money. For the first time ever, Europe has collectively borrowed and has given enormous sums to countries to enable them to come through the Covid-19 pandemic.

  I share Deputy Paul Murphy's abhorrence of students being abused in the manner he outlined. Those who have perpetrated these scams are fundamentally responsible for them, without question.  The enforcement of it is something that should be followed through.  Any swindling or untoward behaviour should be reported to An Garda Síochána.

Yes. An Garda Síochána must follow through and hold those people to account if people’s money has been taken from them in respect of products.

If the Department enforced its rules, it could not happen again.

I will talk to the Department on this because it is very bad for the individuals concerned. Their money is being stolen and they are not getting what they thought they would be getting.  It is very bad for the country’s reputation also.

  On the financial services issue raised by Deputy Mairéad Farrell, I gave figures last week in the Dáil in respect of the overall story of those Russians. I do not have the figures here with me now.  I have only about one minute left and I do not want this to be portrayed as the Government not giving the full story.  I gave a much more comprehensive picture last week of the Central Bank’s examination of Russian-sponsored funds.

Approximately three companies are coming under the sanctions regime in respect of that. This country fully implements and works with any European or global tax frameworks or anti-money laundering initiatives as well.

The issue is the opaque structure.

More generally, the financial services sector in this country grew from the late 1980s and the 1990s. Approximately 50,000 people are working in that sector now.

I worked in the financial services sector. This is specifically about section 110. They do not employ people under section 110.

That is never said in this debate. The implication in all the assessment is that somehow the Government wants to excuse bad behaviour because of the 50,000 staff. That is not the case. We have no truck with anybody who wants to abuse, in any shape or form, either the IFSC or any tax framework. We have no truck with that whatsoever.

They can do it under section 110; that is the issue.

Regarding section 110, anyone who takes funding out of those funds is taxed in that respect. My point is that when the crisis breaks out in Ukraine, the assertion and the immediate focus of attention is that suddenly the financial services are covering for or hiding people who engage in bad behaviour.

It is section 110.

That is not the case. We have no interest and we do not want it to be a haven for anybody who is enabling the Putin regime.

In fairness, this is not something I am raising now since the Ukrainian situation arose.

I know, but we did-----

It is section 110, specifically. I am not saying that it is all the fault of the entire financial services sector. I worked in financial services, so I am not saying that. It specifically relates to section 110 of the tax code. Can we at least have a cost-benefit analysis?

Yes, of course. I have no issue with that.

Is féidir teacht ar Cheisteanna Scríofa ar www.oireachas.ie .
Written Answers are published on the Oireachtas website.
Cuireadh an Dáil ar fionraí ar 2.12 p.m. agus cuireadh tús leis arís ar 3.12 p.m.
Sitting suspended at 2.12 p.m. and resumed at 3.12 p.m.
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