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Sweetheart deal or just good business?

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Minister of Finance, Michael Noonan: "I remain of the view that there was no breach of State Aid rules."

World of Politics with Harry McGee – harrymcgee@gmail.com

It sounds utterly bizarre, but the Government has this week ended up with a windfall of billions of euro that it just doesn’t want to take.

The money could be used as a once-off for capital spending to alleviate the housing and homelessness crisis, deficits in the health service, transport infrastructure, and to address a shortage of school buildings.

But no, the Government will tell the EU Commission ‘no thanks, it’s a kind offer, but we don’t want it. We’d rather do without the money, thank you very much’.

Of course, the windfall we are talking about is the EU Commission’s investigation as to whether Ireland’s tax arrangements with software and tech giant, Apple, were essentially a sweetheart deal.

Technically, the investigation examined whether a deal was struck with Apple that allowed it pay a ridiculously low percentage of tax. That, the Commission has found, constituted a State aid where the Government policy favoured an individual company or sector, with no similar deal being offered to rivals. In other words, it was inherently anti-competitive. And anything that distorts the market in Europe is completely verboten, as far as the EU Commission is concerned.

The whole arrangement came to light during Congressional hearings in the United States, where it was disclosed that Apple was paying a pitifully small amount of tax on the multiple billions of dollars of profit it was making in the EU each year – some claimed it was as low as 1%, but that was never verified.

It is a magnificent windfall. But the Government doesn’t want it. No sir. Not at all. Indeed, it will appeal the decision.

In a Dáil response to Pearse Doherty of Sinn Féin in June, Minister for Finance Michael Noonan said: “I remain of the view that there was no breach of State Aid rules in this case and that the legislative provisions were correctly applied.  In the event that the Commission forms the view that there was State Aid, Ireland is entitled to challenge this decision in the European Courts.  As the Government has already indicated, we will take that course of action, if necessary, to continue to vigorously defend the Irish position.”

In fairness, the deal was not struck by the present government but by a previous administration. To ordinary people – in other words, those who are not involved in the tricksterish world of finance – it would have come as a shock to learn about this situation.

For more, read this week’s Connacht Tribune.

 

Connacht Tribune

History in the making as we see our first Boris Budget!

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Budget buddies...Leo Varadkar and Boris Johnson after talks in Dublin.

World of Politics with Harry McGee – harrymcgee@gmail.com

Whatever way this week’s budget went, it had already guaranteed its place in Irish political history – as the first Budget shaped by Boris Johnson. Every so often a larger-than-life figure emerge in political life that is distinctive because he or she tends to dominate discourse.

For some they are magnetic. For others they are repellent. For many, they can be both, or variously, attractive and repellent.

If Boris wasn’t Boris, his political career would be long over by now. He is a habitual liar, has had a string of affairs, and is as trustworthy as a snake oil salesman, living his silver-spooned life in a privileged bubble.

But something about him gives him a huge appeal to what pollsters like calling the ‘base’. That’s diehard Tories and diehard Brexiteers.

And most of them are on the opposite side of the social spectrum – working class, unemployed, undereducated.

Boris Johnson is the leader of his party, principally because his MPs believe he represents their best chance of winning the next election. It’s certainly not on his track record, or on his performance levels.

Since becoming prime minister he has stumbled and reeled from one blunder to another.

His prorogation of parliament backfired spectacularly. He had his comeuppance on that when the English Supreme Court ruled it was not lawful. His plan (or non-plans) on Brexit invited ridicule because for all his claims that he was working tirelessly on a deal, Brussels was reporting there were no active or meaningful negotiations taking place.

And then when he finally came up with a proposal it was for Northern Ireland to be taken out of the EU customs union but to stay in the single market for four years.

The Northern institutions would then have a say in deciding if that single-market status would remain after four years. But, given that any party can veto change in the North, that would have allowed the DUP to veto any continuance of the North staying in the single market.

For more, read this week’s Connacht Tribune.

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Budget won’t hold much by way of good news or drama

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No great drama...Finance Minister Paschal Donohoe.

World of Politics with Harry McGee – harrymcgee@gmail.com

A few years ago I came across an archive copy of the Irish Independent from December 1984 – the day after the Budget. There was one word that was unfamiliar to me. That was ‘billfold’, a quaint word that means wallet. The Budget was going to be hard on the billfold, said the report. Well, blow me away with a feather.

What I found extraordinary about it was that just about everything else was the kind of stuff we read when we open up our newspapers, or iPads, after the Budget has been announced.

Increases in the old reliables like tobacco and alcohol. More duty on petrol and diesel. Income tax cuts and rises. Changes to welfare, small increases in the pension, little adjustments in transaction taxes like capital acquisition tax and capital gains tax. And then the capital stuff.

The reality is since we have become part of the single currency, and bound by EU budget rules, the Budget is one of the least dramatic days of the years.

Allied to that is the Confidence & Supply agreement between Fianna Fáil and Fine Gael, which means that it’s all agreed weeks in advance with few surprises in the bag.

Indeed, if there are no surprises it’s usually an okay thing. We had some very exciting Budgets between October 2010 and October 2014. There were loads of things to report but none of them translated happily into people’s ‘billfolds’.

The severity of those Budgets guaranteed the electoral collapse of the Labour Party electorally. It had gone into government promising no cuts and ended up implementing the very cuts in the areas it had promised to protect.

Unfortunately for it, it had set those promises out in a graphic Tesco-type billboards on the eve of the 2011 election.

A coalition government fell in 1982 after Minister for Finance John Bruton introduced VAT on children’s shoes.

In 1987, another Fine Gael and Labour coalition fell over an austerity budget. Fianna Fáil huffed and puffed about the severity of it. However, the moment he got into office, Charlie Haughey went ahead and imposed exactly the same budget on the Irish people.

For more, read this week’s Connacht Tribune.

 

 

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Oughterard protest deeper and different to previous campaigns

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The blocked entrance to the former Connemara Gateway Hotel at the weekend. Photo: Joe O'Shaughnessy.

World of Politics with Harry McGee – harrymcgee@gmail.com

It was a weekend back home and a tale of a rescue mission after the in-laws suffered two punctures that saw us end up last weekend on the N59 coming back into Galway. And so we passed through Oughterard, which has never looked anything other than pretty, even when it got a big frayed during the recession. It was after 9pm and the village was almost deserted.

“It’s all died down,” I said in reference to the furore over the proposed direct provision centre; how wrong I was.

As we approached the graveyard, it looked like there was a late, late funeral. Cars were parked on either side of the road. And as we turned the corner, we were greeted by what looked like a lit-up stadium.

There were flaming braziers, security tape and about 40 to 50 people in hi-viz vests pacing up and down outside the hotel.

I was astounded. This was after 9pm on a Sunday night, a full week and a half after the whole controversy had exploded. It was less a protest, more a vigil.

And the bottom line is that these protests in Oughterard are of a different order to those in Ballaghaderreen or in Ennistymon, where centres eventually went ahead.

The intensity of opposition in Oughterard, plus the obvious commitment, means that it’s going to be problematic.

There are rights on both sides – and wrongs on both sides too.

For example, I think the placards being carried by the protesters are hypocritical, with their opposition to ‘inhumane’ deportation centres.

That would suggest their primary concerns lie with the people who will be placed in the centre, when it is really about the impact the centre will have on Oughterard and their lives.

There is validity to that concern. But they need to be honest about it.

The Department of Justice hasn’t exactly covered itself in glory on the communications front. Its manner of engagement just defies logic.

It tenders for centres and then a shroud of secrecy descends. The first anybody learns of it is when it’s a done deal.

Only then, the Department begins its communications campaign with the local community – too late in the day.

Looking at the big picture, there are over 6.082 people living in 39 direct provision centres scattered across the State. This is different to other countries where they tend to be housed in giant national centres – which is far more unsuitable.

For more, read this week’s Connacht Tribune.

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