Motion on Tax Evasion - 5th October 2005

Motion on Tax Evasion – 5th October 2005

Mr. Norris: I welcome the Minister to the
House. I found his speech very interesting but
before I turn to it I would like to say that I may
support the Government’s amendment. Although
the Labour Party has made very serious points, it
has gone in the direction of a particular ethos
rather than any particular party. I do not know of
any Government under which there has been the
kind of aggressive attack upon private tax
defaulters that the Labour party seems to think is
deficient and a deficiency of this Government. I
do not wish to be part of this on this occasion.
The Government is fairly strong in going in the
right direction and in the direction that the
Labour party seems to wish for.
The Minister said there is no policy to protect
the well-off from the rigours of the law. There
may not be a policy but that is certainly the effect.
Nobody could be in any doubt about this. Wealthy
people are protected both in the courts and
in terms of their tax provisions and the banks.
The bigger the crook, the bigger the write-off he
or she will get. A small person gets squashed and
trampled. We all know this is true; there is no
argument about it. There could be no argument
from either side of the House. I disagree with the
Labour Party in that I do not think this is a spec
ific policy of this Government. I believe the
responsibility lies elsewhere, perhaps in the past.
The history of the Revenue Commissioners may
play a part in it. I do not want to see people
hounded into prison, particularly people on relatively
low incomes. The Revenue Commissioners
is a beast that is feared in many quarters but also
treated with disrespect by others.
I do not believe there is a policy to protect
these people but it is a fact and part of our ethos.
I remember when tax evasion was not regarded
as a sin in the Catholic Church. A person who
had evaded income tax did not have to confess it.
I have some nationalist friends who are delighted
to boast to me about the amounts they defrauded
from the Revenue Commissioners. There was no
feeling of civic responsibility in this country and
we must understand this. We are now at a path
where something needs to be done about it. A
friend who is a senior and well-advised political
commentator said to me very recently that he felt
that there should be what he described as “stench
marking” in addition to benchmarking because of
the awful aroma of corruption that floats around
so much of our life in this country. We are sliding
down internationally on the corruption index,
which is most regrettable. All of us should stand
together to try to do something about this.
The tribunals, of which we have had approximately
12, are a good indicator. So far, these tribunals
have cost \200 million and that is before
third party costs are paid. The total cost will probably
be \1 billion. This is the extent of what is
going on in this country. The Exchequer seems to
be awash with money and everyone is trying to
get their fingers into it in one way or another. I
have before me an economic report which looks
at the report of the Comptroller and Auditor
General. The Comptroller and Auditor General
talks about the West Link bridge where \2 million
disappeared and nobody seemed to bother
about it. There is information in the report about
the computer system in the Department of
Health and Children and how the Prison Service
abandoned a \500,000 computer service because
it did not like the way it operated. I heard some
time ago on the radio about a situation where a
road service was faulty and had to be redone. A
steamroller had to be brought in and the entire
cost of re-tarmacking that section of road was
\50,000. However, the authorities were billed \3
million and they paid up. This is the kind of ethos
that we have and should address.
The report I have is very interesting because it
is not partisan and does not come from any particular
political party. It is a kind of business
report. It says, “there is a stark contrast in the
way the State pursues social welfare fraud, compared
with tax fraud”. I am not saying it is
Government policy but it is a fact and is noticed
by the business community independently. The
amounts are also quite disproportionate. I have
before me a table of prosecutions from the
Department of Social and Family Affairs. Table
53 deals with criminal cases forwarded to the
Chief State Solicitor and lists them under the
headings of unemployment assistance, unemployment
benefit, disability benefit, one parent family
payment, other schemes, offences committed by
employers and so on. In 2004, there were 476 and
there were 355 in 2003. The amounts involved
were \1,116,492. In other words, the amount was
just over \1 million and there was a marginal rise
from the previous year. If one looks at the other
aspect of this, the special investigations, the
money which was deliberately and systematically
defrauded by big interests and big private investors
is \2 billion and nobody has gone, or will go,
to prison. By contrast, the small people, those at
the margins of society, have been prosecuted and
36 of them have been sent to prison.
Irish Times, referred to a series of frauds in the
construction industry which is close to some of
the political parties here. He wrote “The brazenness
can be breathtaking.” Indeed it can. Four
building sub-contractors were involved in claiming
tax relief funds for jobs that were never
undertaken. They never paid the tax, the jobs did
not exist but they received the tax relief funds. In
his article Fintan O’Toole states:
[They] faked tax refund claim forms pleaded
guilty to deception and theft during 2003. They
submitted forms to the Revenue claiming
refunds on the 35% which main contractors
must automatically deduct from payments to
subcontractors. But the jobs they were claiming
for did not exist and when the offenders
received the refund cheques, they simply
passed them on to the builders who organised
the fraud, keeping a small cut for themselves.
The situation of what is termed “pick-me-up”
schemes is interesting. This involves party supporters
outside the political arena who pick up

expenses legitimately owed by the political parties.
It is illegal but there have been 71 cases of
this practice. That comes very close to home in
this House.
Fintan O’Toole, in an excellent article in The
I understand this is called “trousering the
proceeds”.
If one looks around there is no doubt that the
Labour Party is right in what it says in this sense:
the small people are crushed, the big crooks get
away with it. That is part of our ethos. I am not
inclined to blame Fianna Fa´ il or the coalition
Government for this. However, Senator
Mansergh with his eloquent interruptions has
persuaded me that it would be wrong for me
tonight to vote with the Government. In tribute
to his wisdom, I shall be happy to vote for the
Labour Party motion.