Dáil Éireann debate -
Thursday, 9 Nov 2023

Tráthnóna inniu, tá tuairim tugtha ag comhairleoir Chúirt Bhreithiúnais an Aontais Eorpaigh gur cheart breithiúnas na Cúirte Ginearálta maidir le cinneadh chás cánach Apple a chur ar leataobh. Tá a fhios againn uilig go ndearna an cás seo agus an córas cánach a bhí sa tír seo tamall fada ó shin damáiste do chlú Stát na hÉireann.

The foreign direct investment, FDI, sector is a vitally important part of our economy and employs over 300,000 people. For many multinationals, Ireland is an attractive place to operate and grow thanks to our highly educated workforce. It is important for them and us that our tax regime is stable and respected. There have been elements of our tax code that have not lived up to those standards in the past, whether that was the double Irish or the facilitation of stateless companies. These arrangements inflicted considerable reputational damage on the State and were rightly, following pressure from Sinn Féin and others, closed down. It is not in the interests of the State or our economy to have an unwelcome spotlight shone on our tax system, especially when such attention provides motivation for some to encroach on what should never be at stake, namely, our tax sovereignty.

In 2016, the European Commission found that two tax rulings issued by Revenue to Apple in 1991 and 2007 had substantially and artificially lowered the tax paid by Apple since 1991. It declared that more than €14 billion in unpaid taxes and interest was owed by Apple to Ireland. The arrangement the Commission investigated was disclosed by Apple's head of tax operations, Phillip Bullock, in sworn testimony at the 2013 hearings of the US Senate subcommittee on investigations. He said the income earned by Apple subsidiaries in Ireland was subject to, in his own words, and "In accordance with an agreement that we have with Ireland". He confirmed that the agreement was that there was a maximum of 2% fixed on the tax.

This allowed a situation to develop whereby Apple's Irish subsidiary recorded European profits of €16 billion in 2021 with only €50 million of tax paid here. The Government decided, wrongly in our view, to join Apple in appealing the case to the General Court. That case was won. In July 2020, when the Government proclaimed victory, I said this was not a cause for victory but, rather, marked only half-time in the case. Today, the Advocate General of the European Court of Justice has given his opinion, namely, that the European Court of Justice should set aside the judgment of the General Court. He has proposed that the case instead be referred back to the General Court for a new decision to be made. It should be noted that his opinion is non-binding, with the European Court of Justice judgment due in the next several months. However, there is no doubt that today's opinion is a blow for Apple and the Government which took the case. Worse still, it is a further embarrassment for the State. It again shines a spotlight on our tax affairs and further strengthens the resolve of some within the Commission to encroach on something that was never at question in this case, that is, our tax sovereignty and the right to set our corporate tax rate fairly and consistently.

On the day after the finance committee unanimously voted to apply a minimum effective tax rate on large multinationals, an unwelcome spotlight has again been shone on Ireland's tax regime and past practices. Does the Minister agree that today's opinion inflicts further reputational damage on the State and past tax arrangements that were but are no longer in operation here? What is the response of the Government to today's opinion?

I thank Deputy Doherty. As he knows, a stable tax system has been absolutely essential to the growth of our economy and the progress of Ireland over the past number of decades. We have seen the benefits of that for our population and in the transformation of our economy. This is something the Government takes very seriously. We want to make sure that we maintain that.

The Deputy has raised a court judgment in regard to the Apple tax case. It is an opinion that was delivered this morning by the Advocate General. It is not the judgment of the court. We expect that in the near future, probably in a few months' time. As the matter is still the subject of legal proceedings, it is not appropriate to comment on any element of the case. As a finance spokesperson, I know the Deputy will fully understand that given that the case is currently subject to judicial proceedings.

Looking to the backdrop to this, in 2016 the European Commission issued a decision finding that Ireland provided state aid to Apple. Ireland challenged this finding to the General Court of the European Union at that point. In 2020, the General Court issued its judgment which annulled the Commission's state aid decision of 2016. The Commission appealed the judgment to the Court of Justice of the European Union. On 23 May 2023, the Court of Justice heard that appeal. The Commission, Ireland, Luxembourg, Apple and the European Free Trade Area Surveillance Authority, ESA, made interventions before that court. Following an oral hearing, the Advocate General's opinion was published today. That opinion analyses the legal aspects of the case in detail and, separately from the deliberations of the court, provides an opinion regarding the issue being heard. This opinion does not form part of the judgment of the European Court of Justice but it is considered by the court in arriving at its final judgment. Following the opinion of the Advocate General, the Court of Justice judgment will be pronounced in open court. The timing of the judgment is entirely at the discretion of the court. The contents of the opinion of the Advocate General are noted. However, as I have said, as the matter is subject to legal proceedings, it is not appropriate to comment any further.

To return to my initial point, a stable tax and business environment, one which is attractive to companies internationally, is reputable and in which countries and companies can have confidence, has been central to the progress and development of this country. That is the case in our own county and constituency of Donegal, where Letterkenny, with a population of 20,000 people, has 4,000 IDA Ireland-based jobs. That is very much key to the lifeblood of the country.

The Government takes very seriously the tax regime we have in place. We have engaged at an international level in terms of coming to international agreements on how corporation tax arrangements should be conducted internationally. We have been very much to the fore on that and that will continue. Regarding this case, because it is still the subject of ongoing judicial proceedings, the Deputy and the Government in particular have to be very cognisant of that in making particular comment on it.

I thank the Minister. At the heart of this case are old tax rulings, some going back over three decades. The arrangements in place at that time no longer exist. We have a stable tax environment. Indeed, it will become more fair as a result of the work we did in the finance committee by implementing pillar 2 of the OECD base erosion and profit shifting, of BEPS, process, which was agreed yesterday.

That will ensure large multinationals pay an appropriate and higher level of tax on their profits. That is welcome as part of a global agreement.

We also acknowledge that many of the tax arrangements that shone a negative spotlight on this State are no longer in existence. The double Irish, for example, has been closed down, but it took many years for the Government to move on that. The loopholes regarding stateless companies, which are at the core of this, again facilitated through our tax code and how it interacts with other jurisdictions, have been closed down. The fact that the tax arrangements in question were allowed to operate by successive governments for too long is an issue. Governments resisted closing them down for many years until succumbing to pressure from Sinn Féin and others. Regardless of what way the courts judge, the fact is that in 2011 an Irish subsidiary of Apple recorded €16 billion in profit and paid a 0.03% tax rate.

I will not get involved in a particular opinion. I know Deputy Doherty and his party opposed us in defending the case as a State. Going forward, in terms of maintaining a stable business and personal tax regime in this country, our objective is to continue to work with international partners and to have consistency across international borders in relation to how laws operate and to ensure that we are working with those. By doing so and by engaging in that way, we give continued confidence to businesses in many parts of the world to continue to invest and to stay here.

On corporation taxes in general, Deputy Doherty's party had differing views on the matter at different times in the past. In many pre-budget submissions in the past, Sinn Féin advocated for changes and increases in the overall corporation tax rate. If we had followed his party's policy on corporation tax over the years, we would not have the many companies or the very strong international-facing economy with the strong international investment that we have today. I know Deputy Doherty has very significantly moderated his own views and his party's policy in relation to that in the recent past, and that is welcome.

Under a Fianna Fáil housing Minister - one from the Minister's own party - homelessness has reached record levels in the lifetime of this Government. We warned last year that the failure to extend the ban on evictions would lead to a massive increase in the number of people without a home. Sadly, that has come to pass. The September homelessness figures were published a fortnight ago, as the Dáil went into recess. Those figures showed that 12,827 people are now without a home in Ireland. Let us contrast that with the figures when the Government came to power in July 2020, when there were 8,728 people registered as homeless. In the space of just over three years, the Government has, shockingly, managed to increase homelessness by more than 4,000 women, men and children. That is a surge of almost 50%. Has the Government become desensitised to the gravity of these enormous figures? Behind every figure, there is an individual person – a woman, man or child – who has been left without a home. This is the desperate reality.

Will the Minister admit that the Government's housing policy has failed? Ministers say endlessly that we cannot build houses overnight – of course, we cannot – but across the board, the Government's actions in the past three years have undermined its stated aims of keeping people in affordable and secure homes. The Government will not act to restrict no-fault evictions to keep people in their homes. It will not act to impose a use-it-or-lose-it obligation on developers who speculate on land. That has been delayed. Just this morning, it has become clear that the Government will also not face up to its responsibility to fund local authorities to bring vacant homes back into use and provide social homes.

In oral questions to the Minister for Housing, Local Government and Heritage this morning, I raised a concerning situation, which has been brought to my attention by my Labour Party colleague, a Dublin city councillor for the south-west inner city, Darragh Moriarty. He has given me the minutes of a meeting of Dublin City Council, which show that Government funding for repairing and refurbishing empty council homes is being reduced further. Indeed, Olivia Kelly reports today in The Irish Times that council officials have confirmed that "department funding has changed ... that [the budget is] constantly coming down" for refurbishment of what are known as voids or empty local authority homes. An official has estimated that as many 220 fewer homes will be turned around as a result of a central government cut in next year's local authority budget for Dublin. The Minister should make no mistake: that is 220 fewer families in the Dublin City Council area who will be housed in a refurbished home as a result of central government cuts. If there are 220 fewer homes every year for the next three years, it will mean 660 additional families will be left to languish on the housing list. Yet, we get replies from the Minister for Housing, Local Government and Heritage and his colleagues that skirt around commenting on the figures. This morning, the Minister of State, Deputy Noonan, said that funding would be available to councils. Is the Government saying that Dublin City Council is wrong? We would welcome clarification. Is this a national issue? Has the Government actually cut funding to councils to bring empty homes back into use? Can the Minister guarantee that councils in Dublin and across the country will have enough money to deliver homes for people who desperately need them in 2024?

Delivering more homes and preventing homelessness is the number one issue for this Government. It was the number one reason my party decided to go into government and sought the housing portfolio. When we look at the investment that this Government has put in place, and the three parties working together, it shows the commitment we have to ramping up as fast as we possibly can the delivery of new homes, enabling people to have a house that they can call home and, in particular, enabling them to own that home.

Every year, under the Housing for All strategy, we are seeing significant progress in regard to house builds in this country. It is not so long ago that the total number of house builds in the country was between 7,000 and 9,000 units per year. Last year, it exceeded 30,000 new homes. That included very significant investment in social homes directly built by the Government or with the support of the Government through social housing bodies. Some 10,000 homes were delivered last year, with 7,400 of them being social homes. We are going to continue to deliver that because, ultimately, it is the solution to the housing challenges we have.

In regard to the properties that are there, especially when social properties become vacant or voided, we must ensure the support is in place to make sure they come back into circulation immediately. Deputy Bacik has raised specifically an issue in regard to Dublin City Council. This year, the Government, through the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, has allocated more than €4.8 million to the city council so that 445 homes can be remediated. In addition, €870,000 has been allocated for planned maintenance. Also, officials from the Department of Housing, Local Government and Heritage have been in contact with Dublin City Council in an effort to identify additional units and funding requirements. Every effort will be made to support these additional requests.

It is crucial that we make sure properties are brought into circulation. That is something the Government is focusing on in terms of our social housing stock. We are also focusing on the many vacant and derelict homes that are in private stock across the country. That is why, under Housing for All, we have introduced the vacant property grant of €50,000 where a property is vacant for more than a year, to enable it to come back into circulation. It is also the reason we have introduced the derelict property grant whereby a grant of €70,000 from the Government is available, through local authorities, to bring derelict properties back into circulation. That scheme has been extended to ensure it applies to all parts of the country, whether it is a village, a town or a rural house that has been derelict or vacant, to bring them all back into circulation. The Government is working on this every day. Ultimately, in terms of addressing homelessness and bringing down rents, the key objective is to drive, as fast as we possibly can, the delivery of new houses. That is the number one objective for this Government every day, week and month.

I note recent reports that the Minister has not ruled himself out of the running as a candidate for the European Commission. It is more appropriate for the Government to focus on matters closer to home. With respect, the Minister did not answer my specific question about whether Dublin City Council's funding for restoring voids has been cut.

I appreciate that this is a bigger issue than social homes because we know there are more than 100,000 properties sitting empty, vacant and derelict across the country. It is a national scandal and a scourge. Next week, our Labour Party colleagues in the Seanad will be bringing a motion to address vacancy and dereliction and will address some of the other issues the Minister raised. Sufficient funding for local authorities to tackle voids and bring empty and derelict homes back into use and to operate the vacant and derelict sites register is a critical issue. It will be raised in the Seanad next week as well. It appears to us as if the Government is guilty of a dereliction of duty here.

It is taking a hands-off approach and washing its hands at central government level. It is blaming local authorities and placing the responsibility on them, yet not funding them adequately to deliver the refurbishments necessary to bring vacant and derelict properties back into use and put more people into the homes they so desperately need.

I do not agree with Deputy Bacik's accusation but do agree with her on the absolute importance of ensuring the properties do not go void. Once an outgoing tenant or family vacates a social property, it should be immediately brought back into circulation and the Department of Housing, Local Government and Heritage, working with the local authority, should ensure it provides the funding to achieve this. That is something we are doing every single year. At national level this year, €31 million in funding has been allocated specifically for this. The Deputy is raising a specific issue related to the Dublin City Council area. I have outlined to her that officials of the Department of Housing, Local Government and Heritage are in contact with officials from Dublin City Council in an effort to identify additional units that have funding requirements, and they will be making every effort to support additional requests.

This is an important issue and it is being addressed on an ongoing basis alongside our work to bring new properties, social and private, into circulation for families, making sure every one of them is fully utilised.

I want to raise with the Minister the very concerning and serious developments during the week whereby access to the Chinese market for Irish beef has been suspended temporarily. The Minister will be fully aware that this is the last thing needed at this moment by those in Irish agriculture, particularly suckler farmers, and particularly after the year just gone. We have had historically high input costs for feed, fuel and fertiliser and we have reduced margins and CAP payments. We have had the disastrous nitrates directive and awful weather, and now we have this. It is tragedy heaped on tragedy, and the blows just keep on coming.

That said, we must be grateful for small mercies in that the BSE case was isolated, nowhere near the feed or food chain, which is good. It was most likely an atypical case. Most likely, it was spontaneous in origin rather than transmitted. Most reassuring of all, it was detected by Irish authorities and communicated very transparently by them across the world. We have many generations of Irish farmers to be thankful for because the reputation of Irish beef from grassland and quality points of view has come to the rescue. I recognise that China triggers an automatic suspension once a case is detected, but I very much welcome the fact that the other 70 countries to which we export beef have not responded at all. That is a testament to the quality of Irish beef and our farmers down through the years.

There is a lot of worry in the agriculture community, even though our exports to China so far this year have been worth only €16 million. Could the Minister use his time to give us some background to the BSE case? Is there any indication as to how long it will be before the temporary suspension is lifted and access restored? Are we talking about days, weeks, months or longer? What engagement has there been between the Minister's officials and their counterparts in China or the Chinese Embassy, for instance?

The Tánaiste is in China at the moment. Could the Minister indicate whether he has spoken to his counterparts there about this issue? If not, will he consider it before returning to this country?

I thank the Deputy for raising this important issue. On the basis of his request, I reassure everyone that our beef is absolutely safe and that there is no safety issue related to this atypical case of BSE. It is very different from classic cases of BSE, which were an issue ten or 20 years ago and were related to feed. BSE is something that happens sporadically and randomly in bovines, and it always will. One in every few million contracts it every so often. We had a similar atypical case in 2020 and another in 2017, and we will have similar ones in the future because we have 7 million or 8 million cattle in this country. It is critical that we have the best testing system anywhere in the world. That is why we capture any case that arises. I am referring not only to BSE but also to other matters of food safety. The system will remain in place. Its security is recognised by the World Organisation for Animal Health, WOAH, as is the fact that we have the best possible BSE risk rating. Our risk is negligible according to the WOAH and that is recognised by all our markets.

We exported 70 markets across the world, one of those being China. China is the only one of the 70 that has a specific clause in its importation protocol that requires exporters to voluntarily suspend exports as soon as there is an atypical case and to submit an epidemiological report to its authorities. This is a process we have gone through in the past couple of years. We secured access to the Chinese market for the first time in 2018. In 2019, we were building up this market and our companies were working hard to acquire customers. However, the atypical case in 2020 led to a suspension of the market. Over 2021 and 2022, we worked with the Chinese authorities to get the market reopened. It was reopened in January, so it is disappointing that we now have a case again. I am hopeful, given that we have gone through this process very recently with the Chinese authorities and that they have verified and signed off on the strong controls we have in place, that we will be able to gain access again more promptly. It is ultimately a matter for the Chinese authorities to decide upon.

The Tánaiste is in China this week and will be raising the matter as part of his visit. I was on a trade visit to China earlier this year. Access to markets is of considerable importance. I was in South Korea last week seeking to make progress on gaining access to its market. My colleague, the Minister of State, Deputy Heydon, is in Malaysia and the Philippines this week seeking to build on the markets we have there. International markets are important to family farm income in this country. We must make sure that as many as possible are open. We hope to see the Chinese market reopened as soon as possible.

I thank the Minister. I echo his sentiments on the credibility and robustness of our surveillance system. That is to be applauded, and that is what we are leaning on reputationally.

I have one other concern, namely, the consequences if the meat factories seek to take full advantage of this development and lower the prices of carcases even more. Are there any safeguards to prevent this? Can the Minister assure the House it will not be allowed to happen on his watch? Is there anything we can do to ensure the factories do not take full advantage of the development by lowering the carcase prices?

The Chinese market is an important one for us to develop and build on. Our meat companies are doing really strong work in it to build up customers. China, with its 1.4 billion people and its growth in GDP and economic well-being, has a lot of potential for the future. Currently, however, the Chinese market represents a small proportion of beef exports overall. To date this year, the value of our beef exports to China is €16 million. The total value of our beef exports this year will be €2.5 billion, so the value of the beef we export to China represents just under 0.5% of what we export overall. There is very good demand for our beef in many other markets, so I do not have any worries about an impact on our current beef price. There are 69 other markets, which make up 99.5% of our total volume. That is important. The step I have taken as Minister, which is unprecedented in the State, has seen the introduction this year of a new food regulator office specifically to bring more transparency to the food supply chain. Therefore, we now have a statutory office shining a light on the relationship between the farmer, primary producer, processor and retailer to ensure fair play for farm families. We all have to work together to maximise the value of our beef and re-enter and build the Chinese market so it can deliver for family farms in the future.

I am deeply concerned about the fraudulent activities by vulture funds that include the Irish courts and, indeed, the Land Registry. Over the past few weeks, I shared crucial details with all Deputies, including the Minister for Agriculture, Food and the Marine, outlining misconduct in the banking system. This misconduct has significantly affected our economy, the lives of many homeowners, family farms and small businesses. The documents provided by Mr. Edmund Honohan, Master of the High Court for many decades, have my full support. They concern the rights of homeowners, farmers and business owners who are suffering due to an unfair system that is stacked against them completely.

Deceiving the courts and homeowners is a very serious matter. I hope the Minister agrees. Inviting vulture funds to come to the country was bad enough but allowing this carry-on is absolutely reprehensible and disgraceful. Fine Gael and now Fianna Fáil and the Green Party allowed the banks to sell off loans without any requirement to update Land Registry records. The has caused widespread confusion, malpractice and blatant deception which is causing thousands of families to lose their farms and properties in this country.

The courts are not complying with a new EU repossession directive meant to protect the interests of those struggling with mortgage arrears. The reason for this is that the Government has failed to transpose this EU directive. Why has it not been transposed? Is the banking and vulture fund lobby that strong? The courts' non-compliance and Government's inaction are despicable and deeply unfair. It gives distressed borrowers no protection whatsoever while it gives a free hand and a massive advantage to the vulture funds.

Currently in Ireland there is no organisation protecting borrowers, unlike what is available to landlords and tenants under the Residential Tenancies Board, RTB. Distressed homeowners are facing expensive court proceedings which many cannot afford. It is totally unfair given the might of the banks and vulture funds which can roll out the best of law firms. The EU directive suggests a mediation process that would be fairer to people dealing with mortgage arrears. It is imperative that the Government enacts this directive into law, preventing vulture funds from continuing their unfair and disgraceful practices. The Government must act swiftly to halt the vulture funds from selling more people's homes.

Judges need to be upskilled and updated on the law that has been in place in Europe since 2019. Why are we not paying heed to that? We need an upskilling and re-education of members of our Judiciary every so often. Laws change and it is very hard to keep up with them. Currently the laws are not being enforced in our courts and this cannot be allowed to go on. The lawyers representing the vulture funds are providing false evidence in repossession cases, causing significant harm to people and their homes while the Government remains silent. This cannot be allowed to continue either.

I thank Deputy Mattie McGrath for raising this. As everyone in the House knows, we have come through a decade or 15 years which have been quite dramatic for people's personal finances. Many people across this country faced difficulties in their personal lives or their businesses. They accumulated mortgages and debts in good faith but as a result of the economy and the financial crash in 2007 and 2008, they found themselves in very precarious situations. Many people have the scars on their back which reflect that period.

The Government has engaged with the financial authorities on the matter. The Central Bank has a strong role in this regard. There have been significant changes in the law in recent years to provide oversight and protections for those who have debts, those who have mortgages and those who have business debts in terms of engaging in depth and trying to give the capacity, opportunity and find pathways for people to come through to maintain their businesses and in particular to maintain their homes. It is really important that that is the case and that the laws that are in place are overseen by our judicial system. It is important for people to have fair play.

As a result of the good management of the economy and getting into a good position in relation to employment and good fiscal management at Government level, thankfully the economy has recovered. Resolving those issues helped get people into a better situation. However, it is important we keep a close eye on this. It is important that people get fair play in their engagement with financial situations. Regarding the oversight bodies and the laws and regulations we have in place, and which have been significantly adjusted from what they were ten plus years ago, it is important they serve the public well while making sure we have a fair system in terms of financial engagements and contracts as well.

I am very disappointed at the Minister's reply. Since I issued a statement two weeks ago, my office has been inundated by calls from families from all over the Twenty-Six Counties. The Minister and his colleagues all know about these. Why are they not dealing with them? It is shocking that we can transpose any kind of directive from Europe which relates to the environment or is anti-farmer. However, this is an EU directive that has not been transposed and must be transposed. It is shameful for the Minister to stand up and give me those answers today because the Government is not dealing with it.

Ten years on, we look at the number of lives that have been lost, the number of suicides, the number of marriage breakups, the number of people with mental health issues and the number of repossessions and outright blackguarding of families. We in this country fought to get our freedom only to allow the vulture funds and big banking houses to carry on like this. The Government's softly-softly approach will not deal with it. Why does the Minister not give a date here for the immediate transposition of this EU directive into Irish law? Who is the Government protecting? I will not ask whom it is loyal to - we know where that got me before. Who is it protecting? It is not loyal to the people, daoine na hÉireann who elected the Government. I plead with the Minister for Justice and the Minister for Finance to act to stop this sabotaging and plundering - it is worse than in Cromwell's time - of family homes and businesses to make money for the stock exchange in New York. I fully support Ed Honohan in his travels to New York to expose this carry-on at the stock exchange there. This must be stopped. It is outright criminal.

I will get the Deputy an up-to-date note ** Deputy McGrath - a note ** on the specific of the transposition of that directive. As I mentioned previously, the objective of the Government is to work to provide strong support to those who find themselves in financial arrangements relating to a mortgage for a property or a business. There are now strong provisions in place, including the consumer protection code and the code of conduct on mortgage arrears. At Government level the Minister for Finance, Deputy Michael McGrath, continues to monitor the matter, which is important. The landscape and the protections have changed significantly. It is something that we continue to look at in government. It is about protecting the people in every way we can which means giving people protection regarding contracts they enter. It also means having a business environment around which there's confidence and security. That is something that we as a Government want to make sure we maintain.