Draft remarks –

We made a commitment to the people in the election that we would bring responsible and transparent budgeting to the core of government business. We did that, right after the election, in establishing the Fiscal Advisory Council (FAC). This Bill further strengthens that body. I wish to congratulate the government on their foresight.

This is an independent body established to guide government thinking on preparing the budget. We are not bound by its reports or recommendations. But we should be guided by them.

Otherwise it serves only as window dressing – as an image of reform rather than true reform itself.

Last year the FAC called for a greater budgetary correction than was being anticipated. To cut more and to be careful of our assumptions for growth. I agreed with its prognosis at the time.

We didn’t go with it but we have done OK, even though growth was not as high as had initially been forecast for 2012.

But we are growing and that is key. We should repeat that point, take confidence from it. Positive things are happening.

The latest report from the FAC, that of September 2012, is essential reading as we approach the budget for 2013.

I would like to draw on three elements in it:

The first is this – that the correction in the budget for 2013 should be greater than 3.5 billion. Cut bigger, cut faster. The national deficit is a national security issue as Deputy Paschal Donohoe has said before. The longer it stands, the more exposed we are to external events.

We cannot rest upon assumptions for growth that may not come true. We cannot continue with a prolonged adjustment, because ultimately we risk undermining the great strides that have already been made.

The second point is: that all options for making the adjustment should at least be on the table, from tax increases, to social protection, to public sector pay and pensions.

Responsible budgeting requires that we consider all the options. At least consider them. So that we can see what’s possible and see what’s not. So that we can see the opportunity cost of keeping certain policies in place. Nothing should be off the table.

Is opening the options available to us really so dangerous an idea?

Yes the Programme for Government commits us to a certain fundamental arrangement. But that document must be a fluid thing if it is to remain relevant. Things change; we must have the flexibility to react to those changes.

The third and final point I wish to draw from the FAC report of September is this: that there is a real risk of group-think sinking in to the economic assumptions that provide the context for the next budget.

That warning should be setting off alarm bells in the corridors of power.

‘Group-think’ is perhaps the most cited reason given in explanations as to how and why the economic crash happened. “No one saw it coming”. Well some people did.

If the FAC is warning us about our assumptions for growth; if the Central Bank is also telling us to cut quicker, we must listen.

I conclude with this: the programme for government commits us to a new, transparent budgetary process. This government has been more transparent with the public finances than any previously. But we can do better and we can go further.

And I will stand here and continue to push my government in this direction as a new TD. Because I believe that that is my responsibility. Because ultimately, as a government TD, I share the responsibility that the government has for the management of the country.

I don’t have the answers, but we should always be encouraging the questions, the debate, the discussions.

I would urge the government to consider the establishment of a cross-party budgetary committee to discuss and frame the budget. This year, and every year.

If we do not strengthen this parliament, empower parliamentarians with facts and figures, involve them in the process properly, it will only weaken the political establishment in this country, as it was weakened under previous administrations.

People may not agree with some of the things we have to do in the coming budgets, but at least, with an open, informed debate involving all members of the Dail, they will understand what exactly it is that we are considering and why.

We are still borrowing more than 1 thousand 200 Million euro a month just to fund the running of the country. Solving that problem without killing the economy falls to all of us.

I thank the Minister for Finance for his engagement in the process thus far and I look forward to further engagement in the coming weeks and months.

For video click here

Today I moved my third piece of legislation in Dail Eireann since being elected. This is a Bill prohibiting investment of state funds in companies that make nuclear weapons. The Bill requires divestment of some 10 million euro that the NPRF currently has invested in nuclear weapon companies (check out more details here: Ireland, Irish Finance and the Nuclear Weapons Industry). This is to coincide with UN International Peace Day (Friday 21 September).

The Bill is entitled the Nuclear Weapons (Prohibitions of Investments) Bill 2012 and prohibits investment of public moneys in companies that manufacture, test or maintain nuclear weapons, their components or delivery systems. It also requires divestment from entities or funds that invest in such companies (check out the Bill itself: Nuclear Weapons (Prohibition of Investments) Bill 2012, and the Bill’s memo: Nuclear Weapons (Prohibition of Investments) Bill 2012-memo).

While the National Pension Reserve Fund is depleted, it is still active, to the tune of more than five billion euro. This is money invested on behalf of all of us and at present about 10 million euro of that money is invested in companies that are involved in manufacturing nuclear weapons, components for nuclear weapons or their delivery vehicles.

It is not responsible investment, and it is in complete contradiction to our proven foreign policy record in this area. It is time to put our money where our mouth is insofar as our commitment to international disarmament and non-proliferation is concerned. This is money that the state is investing on our behalf and I don’t agree with it.

The pension reserve fund should have an ethical investment policy and framework and this Bill is an important step in that direction. It follows a similar prohibition in this country for investments in companies that produce cluster bombs and anti-personnel mines. I’m hoping Minister Noonan will consider adopting the provisions in this Bill alongside any new financial measures brought in with the budget for next year.

International Peace Day is a day singled out by the United Nations for individuals to commit practical acts of peace. In publishing this Bill I thought this would be a good way for the Oireachtas to play its part. The threat posed by the existence of nuclear weapons is not something that has gone away. In fact it is potentially growing. We have a historical duty to continue to work towards international disarmament and non-proliferation and it is important that this Dail meets that challenge.

Seeing such a policy adopted has been a goal of mine since the Irish Campaign for Nuclear Disarmament brought the issue of unethical investment to my attention and I would like to thank David Hutchinson Edgar of the Irish CND for helping with the Bill and for all the important work he is doing in this area on our behalf.

Yesterday I raised The Smarter Transport Bill with Minister Leo Varadkar. I began drafting the Bill in 2011 and introduced it to the Dail on 25th October 2011. The Bill allows for local authorities to enact bye-laws establishing charging bays for electric cars on public roads and also to regulate and control parking for car club vehicles on public roads.

You can watch the Minister’s response here. For the full text of the Bill and an Explanatory Memo, click here.

I also took the opportunity to highlight the importance and potential of golf tours in Ireland following the recent success of the Irish Open, and you can watch my statement here.

Last Friday (22nd June), the Minister for Jobs, Enterprise and Innovation published the Microenterprise Loan Fund Scheme. The Bill, which will be debated in the Dail this week, will see over €90 million in additional lending being made available to 5,500 micro-enterprises which is expected to create 7,700 jobs over 10 years.

The Scheme will initially facilitate €40 million to businesses employing not more than 10 people over the next five years, with provision for the scheme to be extended to provide an additional €50 million of lending over a further five years. Start-ups, sole traders and existing microenterprises will be eligible to apply for a loan under the Scheme.

The scheme is designed to provide loans, up to the value of €25,000,  for commercially viable proposals that do not meet the conventional risk criteria applied by banks, such as the absence of collateral.

For more information on the Microenterprise Loan Fund Scheme, click here.

Eoghan Murphy Fine Gael TD for Dublin South East moved the Tax Transparency Bill 2012 on Thursday the 29th of March in the Dáil.

After moving the Bill Murphy said “It is time that we let the people know directly, and in detail, how we spend their money. This is their right as taxpayers and it is our responsibility as government. Transparency in government must be at the centre of everything we do”.

The Bill compels the Minister for Finance to issue annual statements to each tax payer detailing how much tax they paid in the previous year and how the government intends to spend that money in the coming year. The statement will resemble an itemised receipt detailing the recipient’s contribution in euros and cents to different areas of government spending. For example, it will detail how much the person will spend in the coming year on areas like social protection, health, paying off the national debt even.

Two additional elements to the Bill will be a VAT and excise calculator on the Department’s website, which would assist people in estimating their previous VAT and excise payments in the year and would perform a similar function to the annual statement on income tax. The other element is a proposal that would see all single expenses or payments over five thousand euro incurred by a Department published in real time on that Department’s website. “This would help people to follow the money from their own statements to the relevant Department’s spend” according to Murphy.

http://www.oireachtas.ie/viewdoc.asp?DocID=20774&&CatID=59

Tax Transparency Bill 2012 – Explanatory Memorandum

Introduction

The Bill makes provision for the issuance to each person paying income tax (and other such taxes on earnings) of an annual statement detailing tax paid in the most recent tax year, the estimated tax payments to be made in the coming tax year and a breakdown of the areas of government spending on which the recipient of the statement’s taxes are to be spent.

The breakdown will be provided in percentage terms as well as in simple monetary terms and will be presented as an itemised receipt for the taxpayer detailing how the government is to spend the taxes the recipient paid on earnings in the previous year.

The intention is to provide greater transparency as to spending by government departments and agencies in a given year as well as to draw a stronger correlation between taxes paid by individuals and state services delivered. There should also be a positive effect in terms of the preparation of annual budgets, public debate around the financial planning of the government, and a move to more responsible budgeting.

In addition to the annual statement, the Bill also provides for the publication on-line of a calculator for estimating the total amount of value added tax and excise paid on goods and services by an individual. The on-line calculator will perform a similar function to that of the annual statement in detailing how such indirect taxes are to be spent by government departments and agencies. This should provide further information to the taxpayer as to how the government is spending monies collected.

A final element to the Bill is a commitment from the government to make the necessary provisions to introduce a new minimum threshold for the publication of money spent by a department or agency. This would see government purchase orders of more than five thousand euro being published on-line within one month of the order being paid. This provision is included so that the individual can follow more accurately the spending behaviour of a given department, leading to further transparency of government finances.

Contents of the Bill

The Bill is made up of four parts and ten sections covering the three related purposes of the Bill as outlined above.  Part 1 (Sections 1-3)

This Part contains general provisions such as the short title and commencement provisions (section 1), definitions (section 2), and the purpose of the Act (section 3).  Part 2 (Sections 4-5)

This Part contains two sections that address the central purpose of the Bill, which is to cause the Minister for Finance to publish annually and to issue to each person having paid tax on income and other earnings in the previous tax year an itemised statement of taxes paid and a detailed breakdown of the areas of government spending on which the paid taxes are to be spent.

Section 4 contains this central provision regarding the publication of the statement and details the content of that statement, namely: money earned by the recipient of the statement in the previous year and taxes paid on earnings; anticipated taxes on earnings in the coming year; a breakdown of areas of government spending on which the paid taxes are to be spent, including a description in simple monetary terms; and, figures detailing the recipient’s share of the national debt, annual contribution to national debt repayments, and share of annual national surpluses or deficits.

Responsibility for the issuing of the annual statement, how it is to issue and when, is covered in Section 5.

Part 3 (Sections 6-7)  This Part contains two sections that address the second purpose of the Bill, which is to cause the Minister to provide for an on-line tax calculator for estimating value added tax and excise paid by an individual person with a view to calculating a detailed breakdown of the areas of government spending on which the paid taxes are to be spent, similar to the type of information to be provided in the annual statement on taxes on earnings.

Section 6 establishes the obligation while section 7 outlines the functions of the on-line tax calculator.

Part 4 (Sections 8-10)  This Part contains three sections and addresses the third purpose of the Bill, which is to cause the Government to make the necessary provisions so that every purchase order by a government department or agency of more than five thousand euro must be published on-line, with exceptions.

Section 8 outlines the central obligation, with section 9 detailing how and when such information is to be published. Section 10 provides for exemptions.

March 2012

Following the announcement today that the UK Chancellor is to give each tax payer in the UK a detailed breakdown annually of how the government spends their taxes, Fine Gael TD Eoghan Murphy (Dublin South East) has called on the Irish government to do the same. Murphy has been preparing a Tax Transparency Bill and is to publish it shortly.

Commenting on Chancellor Osborne’s announcement, Murphy said: “Ireland should follow the UK’s lead here in bringing greater transparency to public finances and highlighting the relationship between what people pay in tax to central government and how that money is spent.”

“When I heard of Ben Gummer MP’s proposal back in January I thought it was an interesting idea. My office was in touch with his and we’ve been doing our own research and work on a ‘Tax Transparency’ Bill since then. The Bill is at an advanced stage and we should be publishing it before the Easter recess. It won’t look too different to what the UK Chancellor has announced today. It’s a good idea and we should adopt it.”

“Open government is good government. We have a responsibility to let the people know directly how we are spending their money. They can then make their own judgements after that. But overall it should greatly inform the debate that the public has before and after each new budget. It’s especially relevant at the moment given that we are engaged in such a dramatic correction of the national finances and money is scarce.”

The Bill will include the central element of an annual statement to taxpayers, summarising how the tax they paid was spent in the previous year and then breaking that amount down in to percentages and the actual monetary amounts that were allocated to different areas. It would give a breakdown of money spent on behalf of each individual on things like education, health, social welfare, debt repayments and government itself for example. Estimates for the coming year would also be provided.

“We’re still doing work on putting together some examples of the kind of information such a statement would provide, but very roughly, if we were to take just the 51.9 billion allocated by the government for current spending in 2012 (gross voted): a single person earning €60,000 would see that they had spent a total of €20,067 on taxes (income tax, PRSI, USC). The statement would then break this figure down and show that 17% or €3,411 of their earnings had been spent on Education, 26% or €5,217 had been spent on Health, and 40% or €8,026 had been spent on Social Protection.”

Two additional elements to the Bill will be a VAT calculator on the Department’s website which would assist people in estimating their previous VAT payments in the year and would perform a similar function to the annual statement on income tax. The other element is a proposal that would see all single expenses or payments over five thousand euro incurred by a Department published in real time on that Department’s website. “This would help people to follow the money from their own statements to the relevant Department’s spend” according to Murphy.

“I haven’t had a chance yet to sit down with Minister Noonan about this but I hope to soon. We still have some holes to fill, like when in the year the statement might issue for example. Of course this is all dependent on the Minister and the government accepting the Bill.”

Note: Re example, tax case is taken from Budget 2012, illustrative cases, example 9. Current spending percentages for 2012 (gross voted) is taken from Revised Estimates for Public Services 2012, pg.9. The example is illustrative only and more detailed examples will be provided with the publication of the Bill.

Yesterday the Government published the Finance Bill 2012. The Bill gives effect to the taxation measures announced in last December’s Budget. The Bill has left Income Tax untouched and, as promised in the Programmes for Government, there is an increase in the rate of Mortgage Interest Relief which has risen to 30% for first time-time buyers who purchased homes between 2004-2008 (which should benefit 270,000 purchasers). Another key commitment sees an increase in the Universal Social Charge exemption threshold from €4,004 to €10,036 which will benefit 330,000 workers.

It also includes a number of measures that I think are particularly good, including:

• Measures designed to support job creation and enhance the attractiveness of Ireland as a destination for multinational companies.
• Measures which aim to support SME’s and indigenous companies by recognising areas with the best employment potential.

These include:

• Foreign Earnings Deduction to support companies that promote Irish exports to countries such as Brazil, Russia, India, China and South Africa.
• Three year Tax Relief for Start-up Companies is being extended to Start-ups who commence a new trade in 2012, 2013 or 2014 – a great incentive for Irish entrepreneurs.
• Rewarding Research and Development by allowing companies reward key research employees by giving the company the option of transferring a portion of their R&D Tax Credit to personnel who are involved heavily in this area and making it easier for SME’s to claim the credit.

Also:

• Our exports grew by 4.4% in the first 9 months of 2011 and are leading the economic recovery and that the IDA reported record numbers of new investments won in 2011. The Bill is designed to build on this success.
• A ‘Special Assignee Relief Programme’, introduced in the Budget to attract key foreign -based individuals to the Irish-based operations of their employers, which this will see specialised individuals bringing their expertise to Irish companies.
• Extending the tax relief for corporate investment in renewable energy generation.
• Improved relief for excess tax on royalties for the Software Industry.

The measures above involve one key area of the economy.

A full copy of the Bill can be found on the Oireacthas website at: http://www.oireachtas.ie/documents/bills28/bills/2012/0512/b0512d.pdf

Thursday, 2nd February 2012

I congratulate the Minister on bringing this Bill before the House. We made a commitment to the people during the general election last year that this would be a reforming Government and that while restoring our country’s fiscal sovereignty would be our prime objective, we would also take the opportunity to reform all aspects of society to better meet the needs and realities of Ireland in the 21st century. Our aim would be to find a new vision for the country and to build a better country in pursuit of that vision. No sector of our economy or society can claim it is incapable of performing better, including this Parliament. We have only just begun our work, but already some important steps have been taken. This Bill is another important step in the process of the reform we hope to bring about for the country.

The Minister has asked for constructive proposals on how the Legal Services Regulation Bill may be strengthened and I hope to offer some in this debate. I have spoken with and corresponded with the Minister on this matter previously and I appreciate the fact he took the time to engage with me in detail on the various issues. We also had an excellent briefing last week on the Bill with the Minister and his officials where we had the opportunity to go through each section of the Bill in detail. Again, I thank the Minister for his time and for answering my questions in detail.

Today, I would like to speak about some particular aspects of the Bill because although we have discussed these issues previously, it is important that as a member of one of the Government parties I come into the House and contribute to the debate. Much of the work of Government Deputy happens in the background, in parliamentary party meetings and in one-on-one meetings with Ministers and their officials. However, it is important to the process that we also come into the House and express our opinions. I feel that too much of the work of an elected representative to this House is confined to that of a constituency representative and that needs to change. It is changing, but slowly. We are elected both to represent our constituents and to attend Parliament and bring our judgment to bear on matters of national importance. That does not mean coming in here and pushing a button once or twice a week, or standing up and speaking to a half-empty Chamber and calling it debate. This is a criticism I level at all of us, myself included. The country wants us to do better. It wants reform in this Chamber and wants us to be better and we cannot let reform of this House slip off the agenda, even for a moment.

As for reform of the legal profession, an issue this Bill attempts to address, it is critical to the functioning of a true and proper democracy that operation and regulation of the legal profession and system is truly independent of the executive and legislative branches of government. To blur that separation of powers even slightly is to strike at the delicate balance underpinning our society.

In a democracy, an independent legal system is essential to protecting and vindicating the legal rights of citizens. Anything that seeks to alter the constitution of that system, even with a view to improving it, must be examined very carefully. Independence is not an absolute term or meaning. It has different connotations. It is varied in its practice and it is relative. As a general principle, we can agree that it is preferable that no body or profession would regulate itself. That is true for the legal profession as it is true for the other professions. However, it is also important to recognise that in a democracy, given the special position of the legal profession, neither can the operation and regulation of that system be vested in the Government alone.

The Legal Services Regulation Bill 2011 establishes a legal services regulatory authority to regulate and control the legal profession, something we all would welcome in this House. However, questions have been raised about its constitution and there is a concern about potential political interference from future administrations. When we address new Bills in this House, we must remember that the ensuing legislation will remain after we are gone. We must always keep in mind those who will follow us into this Chamber and those who may occupy the front benches. Questions have been raised and we should not be afraid of them. We should answer these questions and where they are ridiculous, let us say that they are ridiculous and where they merit consideration, let us consider them. The Government will not have all the answers and we will not get it perfect every time.

I am personally interested in those proposals which have been put forward to parliamentarians that would seek to constitute the regulatory authority in a slightly different manner to that which is proposed in the Bill. I am particularly interested in those elements that seek to give more of a role to Members of the Oireachtas as a pillar separate to that of the Executive. These give us more of a role as legislators and give more weight to what we do in our work in the Government. That is important as part of the reform that we need to seek in this House. We can achieve that without impinging on the independence principle that we are all seeking to promote as we go about reforming the legal profession and as is contained in this Bill.

It is important that the appointment of a new regulatory authority is transparent and is seen to be transparent, uninfluenced by day-to-day political concerns. I wonder if there might be a role for the Commission for Public Service Appointments, or a similar body or committee, to nominate members for the Government to appoint to the regulatory authority. I agree with the Minister that it is also important the authority has a lay majority. However, it might be a good idea for those lay members to be nominated from particular sectors of our society, such as the non-governmental sector or other professional bodies, which will add to the variety of the authority and will increase its expertise. I would also like to see the regulatory authority reporting to the Oireachtas and its committees. If anything, this will strengthen the role of the Oireachtas and its independence from the Executive.

We could decide that Members of the Oireachtas will be responsible for dealing with those matters that may arise in the work of the regulatory authority, such as whether a member should be removed from the authority. That may fall to the Oireachtas or one of its committees to decide, and then only for stated reasons. I raise these two points because it is important in the context of the future Governments and future Members of Parliament who may sit here after us.

We have also discussed the potential costs of the regulatory authority. It is important that it is funded appropriately, so that it can carry out its work. It will have a lot of work to do under this Bill and it is appropriate that it has the right number of staff and all the resources necessary so that it can effectively regulate the legal profession.

The Minister is looking at the ways in which we might cost or provide for the funding of this authority but it is preferable that the authority would be established in such a way that it would not increase costs for the consumer. That is an important principle and I look forward to any proposals that the Minister has on that issue. He has also indicated that amendments may be made to the consent provisions in the Bill, and I look forward to considering them on Committee Stage.

I appreciate that there is a compelling reason for reviewing the current structures of the legal profession. However, given how significant the changes will be – it is a big change to how legal services operate in this country and to how people access those services – it has been suggested that there may be room for further development of the part of the Bill dealing with multi-disciplinary practices in separate legislation. This merits some consideration given the huge amount of work that will be involved in it, and I know the Minister is committed to it.

I am interested to hear more about how it is intended the new disciplinary tribunals are to interact with the new authority. Will they come under it? Will they share membership or other structures? Will they be appointed by the authority or will they be strictly independent of it? If they are independent, how will they be constituted and to whom will they report? We have not had an opportunity to speak about that yet, and I would appreciate clarification on that matter.

I hope that those proposals may be constructive to the work the Minister is trying to do. As a backbench Member of the senior party in the Government, it is important that contribute to this debate and be as constructive as I can. There is a long way to go. It is a large, ambitious Bill and I congratulate the Minister for that. I look forward to participating in further debates as we move to Committee Stage.