Apple tax issue may end the coalition romance

To say Fine Gael and the Independent Alliance have suffered some teething problems in their months-long political romance would be an understatement.

John Halligan

Partially because of the clear differences between some cabinet colleagues whose long-held political positions mean they are destined to agree to disagree, and partially because of certain ministers’ need to keep playing to their support base, the Coalition has stumbled from row to crisis every few weeks.

However, the Apple controversy needs to be taken far more seriously than what has come before.

At today’s emergency cabinet meeting, Fine Gael Finance Minister Michael Noonan will seek formal support for Ireland to reject the European Commission’s decision that Apple owes this country €13bn in unpaid taxes over the past decade.

While the position to effectively turn down free money appears bizarre on the surface, Fine Gael believes it is based on a certain logic.

The funds would pay for the health service for an entire year, USC for three years, and are equivalent to giving every person in the country €2,732 tax free. While the cash is needed, to accept the money would mean Ireland is acknowledging we are a tax haven.

Taking the €13bn cheque would also risk the future of multinationals coming to Ireland, along with the thousands of jobs they would bring with them.

In keeping with tradition, the Independent Alliance does not share its partner’s view. Junior minister John Halligan warned he was “not defending anything” given the Apple money on offer.

In public and private statements, the alliance has made it clear that it wants to examine all options at cabinet and is more than reluctant to support Fine Gael’s position.

John Halligan

Again, this is partially based on logic — €13bn can be put to a lot of use — and due to the fact alliance members know they are more at risk than their Fine Gael counterparts if the Government turns down the money given the reputations of individual members for speaking out on behalf of people who stand to benefit from the money.

The issue — and separate alliance frustration over Fine Gael’s decision to publicly state the Government position without any consultation — will be aired during the cabinet meeting today. It is genuinely unclear whether the alliance will be able to fall back into line.

We aren’t close to seeing the Government collapse yet, but like Adam and Eve, one bite of the Apple controversy could put paid to the coalition’s doomed romance.