Gerald Nash (Louth, Labour) | Oireachtas source

I welcome the opportunity to have a debate, if we can describe it as such, in this Chamber on a highly significant report from the Commission on Taxation and Welfare. Quite frankly, if the Committee on Budgetary Oversight had not decided to examine the recommendations of the report, which was published in September 2022, I do not believe we would be having a debate in this Chamber at all. Government parties, Fine Gael and Fianna Fáil representatives especially - with all due respect to colleagues in the Green Party I am not certain of the position in respect of their overall analysis of the report - entirely dismissed the report when it was published. I thought that was an absolute insult to the members of the commission who gave of their time to do this important work, and to the civil servants who gave of their time very diligently to manage the process. Given its importance, this report deserves greater scrutiny from the Chamber and from Government Ministers.

I was taken aback by the response of the Taoiseach at the time, Deputy Varadkar, who utterly dismissed the report. He referred to it as something you might see in a Sinn Féin manifesto. I disagreed with the Taoiseach's very casual analysis of the report. It is not and many of the measures are not things we would see in a Sinn Féin manifesto because it argues for wealth taxes such as those on property or land. They are taxes that socialists such as myself and the Labour Party and, to his credit, Deputy Boyd Barrett agree with. Property is the principal form of wealth that Irish people have. We know that. All of the analysis suggests it. If you do not believe in progressive taxation on property and wealth, you do not get to call yourself a socialist, a social democrat, a democratic socialist or whatever label you wish to ascribe to yourself. That may be another day's work.

It is a really important report. The thing I like about it is that it is honest about the challenges we have as a society in funding public services. It is honest and frank and does not put a tooth in it in terms of the requirement we have to broaden, not narrow, our tax base to ensure we can fund the public services on which we all depend to the level that people in this rich Republic ought to expect.

There are difficult decisions to make. Those decisions have not been taken by this Government, and I do not expect they will be in the few short months it has left. The Labour Party broadly supports the bulk of the key recommendations and observations made in the Commission on Taxation and Welfare report. If I am to summarise it on the tax side, it makes the case for increases, as are required to bring us up to European norms, on taxes on social insurance contributions, especially from those who are not paying anything close to what certain sectors of society in analogous European countries pay, especially on the social insurance side. It is very descriptive as to how we meet the long-term budget challenges and how we maintain and develop our living standards. It refers to regular reviews, as Deputy Boyd Barrett said, of tax expenditures and expensive and often untargeted and ineffective tax reliefs. In fact, a lot of the tax reliefs that have been available for many years are infrequently reviewed. The effectiveness of some of them, in terms of the job they were originally designed to do, may have moved on. They may no longer be effective at all in achieving the original outcome they were designed to achieve.

Significantly, the report refers to taxes on capital and a shift away from taxes on labour. Of course, we need taxes on labour, but we do not tax capital, that is, wealth and assets, in the way a rich republic would be expected to. There is scope in the years to come to make adjustments to taxation and the income of workers and to rebalance our taxation system, notwithstanding the fact that we have a disproportionate focus and reliance on corporation tax take from a very small handful of very successful foreign direct investment firms, which we wish to retain and which have been important to the success of the Irish economy. However, we also have a disproportionate reliance on them for good jobs.

That is why, while we are reviewing tax expenditures, including those that, for example, are targeted at our enterprise base, we need to be careful in doing so and to be honest when we look at the way in which we use tax expenditures to support our indigenous SME sector. It should be our ambition in this House, if we are truly interested in jobs, to ensure that we no longer rely in a disproportionate way on very large foreign direct investment firms, which are agile, which can move and which respond to global developments all the time, but that we enhance and develop our indigenous enterprise base, make sure that successful Irish firms can scale up and go global from here and provide the good jobs and tax revenues we will require to resource our State and to ensure that our tax base is as broad as possible, because we have a vulnerability.

I take issue with some of the recommendations and the observations and conduct of the discussion at the budgetary oversight committee when we were examining the Commission on Taxation and Welfare report around, for example, carbon taxes, subsidies for fossil fuels, local property tax and site value tax. It will be noticed, to be fair to the committee and all its members, that where there may have been dissent - and I certainly dissented on a number of questions - the committee simply notes some of the perspectives that were given at the committee. That is fair. Sometimes you lose arguments; sometimes you win them. We have to be realistic about the requirement for carbon taxes if we are to move away from fossil fuels and to decarbonise our society and our economy. It is absolutely fundamental, it is existential and we need to be honest with ourselves about the gap that will be created in our revenue stream and the gap that will be in our Exchequer in respect of the taxes on fossil fuels when we move more swiftly, as we all hope, to decarbonisation. Difficult decisions will have to be taken about how we replace those taxes that are important to running our services.

There is always a focus on the taxation side. There are some very important recommendations and observations in the Commission on Taxation and Welfare report as to how our social protection system operates. If I am to summarise them, what we are talking about and what we need to do - and I think this supports the view of the commission - is talk, when we speak about social protection, about income adequacy. It should not be a case of pulling a rabbit out of a hat every budget and saying there is an extra fiver a week on the pension, an extra €2 a week on disability payments and so on. People who rely on the State for their income need the assurance that the State is on their side and that we look at our social protection system through income adequacy and benchmark that against appropriate metrics to make sure that our social protection system is adequate to support people and that employment is at the heart of our social protection system, encouraging people to move into work when that work is available and when appropriate. The report also refers to looking at what I might describe as poverty traps and those disincentives that may be there at the moment, inadvertently in some cases, that might dissuade people from taking up opportunities. We all believe and should believe not only in the dignity of work but also in the idea that we make work pay.

I appreciate I have gone a little over my time. One of the important themes running through the report and one of the recommendations is around an additional child benefit payment on top of the universal child benefit payment. If we are serious - and we should be in this rich Republic - about ending, eliminating, child poverty, that is what we need to. On top of the existing universal child benefit system, we need targeted additional payments for those families who are less well-off and who need our support because every child in this country deserves the best possible start.

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