Working in the salt mines

By Fionnán Sheahan, Political Reporter

The long running debates at committees in the basement of Leinster House over the intricacies of the Finance Bill was the longest time the pair had spent arguing over the finer points of economic policy in about 30 years.

The crossing of swords between the Minister for Finance and the Labour Party finance spokesperson were a throwback to the late 60s when the pair were classmates in UCD and then the early 70s when they served their accountancy apprenticeships in PriceWaterhouseCoopers.

"The stint downstairs was the most time I have spent arguing with him since I was 21 and we used to have long ideological debates," she said.

Despite the passage of those years, the views of Mr McCreevy and Deputy Burton of the public finances remained virtually the same.

However, Deputy Burton has no problem admitting she respects her old college pal even though it's now her job to point out the flaws in his every move.

"He's great fun and we have always been friendly. He is very honest in his views and I admire him for being so forthcoming with his views," she says.

Nonetheless Deputy Burton has no intention of allowing the minister to get away with his self-praising claims that he is closing off all the tax loopholes.

Accountant's savvy allows her to see through that facade as she knows the minister is equally aware that for every one tax break closed another dozen open up: "He and I could sit down with a sheet of paper for an hour and both could produce very attractive loopholes."

Regarded as a hard grafter in her Dublin West constituency, it's no coincidence that Joan Burton was the only Labour TD from the Spring tide era to win back a seat in the election - the other two returned TDs being former Democratic Left members. Yet she still feels like the new kid on the block.

It may sound like a strange statement for an experienced politician but, during her previous parliamentary stint, she was a Minister of State for Social Welfare and Foreign Affairs, so being on the opposition backbenches is a whole new ball game.

"The Dáil has changed enormously and the rules have changed substantially. Clearly this government have allowed for a tightening up of Dáil procedure.

The committee system is fully in operation now and, while it is good to have the time to debate issues, the reality is it got very little coverage," she says.

Between budgetary adjustments and the deal with the compensation deal for abuse victims with the religious orders, it's been a hectic baptism of fire in the portfolio.

Tipping away at committee level in what she describes as the salt mines of Leinster House is worthwhile she believes and trawling through the fine print throws up such interesting titbits as the minister's tax breaks for a constituent developing a private hospital and a loophole used by religious orders:

"In relation to my own job there is a massive job to explain who pays tax and who doesn't. I have said I am in favour of lower taxes but everyone must continue to pay their share. Exemptions have benefited the well-off.

"One of the key demands of the Labour Party is for a rebalancing of the tax system.

"It is absurd that we have well-off people who are able to live abroad and not pay tax here and yet, under the non-resident laws, they can turn up for every race meeting and football match.

"The loss to the State by the architecture the government has created means poor people are paying too much tax."

Scratching away at the Department of Finance's myriad files, Deputy Burton got hold of a Revenue Commissioners report on 400 of the country's highest earners.

It revealed that more than half of this rich list paid just 15% tax and one in 10 actually paid no tax at all.

The report was only released after Deputy Burton sought the briefing notes to the minister for an answer to a parliamentary question under the Freedom of Information Act.

However, she is quick to point out that, under the Government's proposals to restrict the FOI Act, in future background papers to parliamentary replies will be exempted from release.

It's a practical example of the type of documents that will remain top secret: "Is this a culture of paranoia that has developed among Fianna Fáil and the PDs?

No one would suggest it has done any harm at all to release briefing papers. The minister in a parliamentary question is allowed a maximum of six minutes and opposition three minutes and we are talking about very detailed areas here.

"If the FOI Act is closed down and dismantled I think it will have a very negative effect not only for politicians and the media, but community groups and the general public as a whole.

"Under the new act, the secretary of the Government will be able to waft papers before the Government and then say the files were part of cabinet deliberations.

"I would be extremely concerned that, in terms of taxation and environmental issues, the light will be closed off," she says.

Initiating a fair taxation system is also central to the argument about the prospective return of third level fees.

After 20 years as a lecturer in DIT, she regards herself as being pretty familiar with a student's life.

She says the vast majority of students work extremely hard and are already under a lot of stress.

Indeed, her own working class background, growing up in the Cabra area of Dublin and going to college on a scholarship, supplemented by working many part-time jobs, only reinforces her view that third level fees are not the answer.

"To impose an enormous fee burden on them is not right and I would also ask: 'is it economically the right thing to do'?"

Casting an eye back to the Revenue Commissioners' report on tax avoidance, she says wealthy people who can easily afford to pay fees can mitigate their incomes in the years their children are applying for a grant for college. The answer she believes is an equitable tax system where everyone pays their fair share.

Dismissing the Australian fees system, currently being toyed with by the Government, where students pay back loans after graduation, Deputy Burton says there's a discount of 25% on the charges, if paid up front.

The wealthy will doubtless avail of this offer for their children, leaving the less well off with the full bill to clear after graduation.

"When the Labour Party abolished fees more than 80% of the cost was met through the scrapping of deeds of covenants and tax avoidance.

"The effect of the abolition of free fees has been to widen the capability of lower income people to go to college. College now comes within the financial reach of families," she says.

The failure of large numbers from disadvantaged backgrounds to get to college has more to do with the primary and secondary education system and kids coming from backgrounds where the culture does not support them going to third level.

The State providing free third level education is an immensely worthwhile investment even on a purely economic level.

"As an economy I want to see a high-productivity, high-skilled, high-wage economy as has been the norm in Scandinavia and the continent.

"Providing a college education to as many people as possible is absolutely the best way to do that," she says.