FF’s rich pals will never have to pay for our Lithuanian health service

IF Warren Buffet had given his $37 billion to the Irish Government instead of Bill Gates’ charities, it would probably have ended up as tax breaks for the very rich.

So far, a mere six millionaires do not pay income tax and taking more of them out of the tax net is a policy objective that the Buffet billions could have achieved immediately.

It would also have saved them the bother of having to go through the motions of looking at the best tax breaks available and concentrate on what they do best, like running stud farms, property developments, hotels, multi-storey car parks or the like. Basically, any tax avoidance scheme that Fianna Fáil can invent for its loyal, wealthy supporters.

It seems perverse that any government which gives a substantial bonus to the head of the second worst health service in Europe should not demand one penny in income tax from the wealthiest in the country.

Prof Brendan Drumm, although he is head of the Health Service Executive (HSE), is not responsible for the fact that our health system was this week deemed 25th out of 26 countries surveyed — just pipped for last place by Lithuania.

It takes years to achieve that, and maybe next year — and another billion or two — the country will embarrass Lithuania out of last place.

The professor was not in charge all those years ago, but he is now. In fact, after only about nine months in the job he was given a bonus of €32,000, exactly one-tenth of his not-to-be-sneezed-at salary of €320,000.

I suppose one would need a salary of those proportions to take so much flak from Health Minister Mary Harney. She has discovered since she demanded the portfolio when the Taoiseach reshuffled his cabinet that she’s more like a placebo than a cure for the disastrous health service.

But the professor did not warrant a bonus. The Government that rewarded him in this way applies the same perverted logic whereby the wealthiest in the land are not expected to pay any, or practically any, income tax. To make sure they don’t, the Government is obliging enough to have tax avoidance schemes in place to prevent the taxman from putting his hand in their very deep pockets.

So much so that the top 400 earners in the country had a collective income of €700 million, and the taxman saw practically none of it even though in value terms it’s equivalent to a couple of hospitals.

The super-rich earned between €954,000 and €15,318,000 and between them they paid a scandalous pittance to the State. While that hole in the Exchequer was revealed in the auditing returns of the Revenue Commissioners for 2002, nothing has probably changed in the meantime.

What they were obliged to pay varied between 5% and 15%, while six of them were obliged to pay absolutely zilch. In comparison, sitting-duck PAYE workers on the high rate of income tax have no say in the 42% extracted from their wages.

The rich have been allowed by successive governments to get away with paying as little as possible — if anything at all — by using tax incentives, usually property-based schemes. Our eagle-eyed Finance Minister Brian Cowen has plugged some of those loopholes, but the shock of paying up will be so great he has decided the schemes should be phased out gradually. What he has done is to restrict the tax breaks and ensure that people who use such schemes will have an effective rate of income tax for each year “of not less than around 20%”.

Now “around 20%” can mean anything, and what it certainly means to those who pay the very minimum they can legitimately get away with is that they will continue to do so, using whatever schemes the Government kindly makes available to them.

And they should have no problem for at least the next 10 years, as it’s been reckoned that’s the shelf life of the tax breaks that are left to these spongers. No doubt they’ll be replaced by other tax avoidance schemes under some other legal guise.

Apart from those valuable tax breaks, it would appear that the fabulously rich have the added luxury of paying, or not paying, four years retrospectively.

These figures relate to 2002 and were only released this week by the Revenue Commissioners, but I doubt very much if the taxman is that far behind.

Coincidentally, 2002 figured in another report, a major one prepared by the Central Statistics Office (CSO), which showed that 21% of people in this country faced poverty.

Is it any wonder, when a cynical Government panders to the rich in a disgraceful and untenable manner so that in the midst of plenty more than one-fifth of the population are struggling to survive.

While this country could allow the rich to avoid paying tax to match their incomes, it was the lowest spender among the then 15 members of the EU when it came to social protection.

THAT was then, and nothing has changed during the intervening four years in one of the wealthiest countries in Europe. For so many people the Celtic Tiger may as well be roaming around a cage in Fota or Dublin Zoo for all the difference it has made to their lives.

Recently, the Combat Poverty Agency produced figures which showed, among other things, that one in every five Irish children have to live in poverty for five years or more.

And those children, along with the countless thousands caught in the poverty trap, as well as compliant taxpayers, are living in one of the most expensive countries in Europe. For all of them it must be a consolation that ministers are to hold four meetings next month with their lesser colleagues on the Fianna Fáil backbenches to discuss, as well as agriculture and rural development, the economy, social issues and something called “quality of life”.

With a general election practically around the corner, those same backbenchers were displaying frayed nerves because, like the rest of us, they were being kept in the dark by an arrogant Government. Put another way, they were merely well-paid voting fodder to do the Government’s bidding.

Some of them, about 16, thought they would do something about it, like setting up an influential committee. As Deputy Barry Andrews of Dun Laoghaire, one of the motivators, said on Morning Ireland, backbenchers were sometimes viewed as a half-tolerated inconvenience. Too many of the meetings, he said, consisted of Government explanations rather than real discussion and, in any case, there were never any votes on policy.

That was before the putative rebels ran into Bertie Ahern’s ambush.

Now they’re being given a series of audiences with ministers next month, and the results will be fed into the party’s annual strategy meeting next September.

Oh yes, they can also form a backbench committee, but it will be controlled by the party leadership, not by the backbenchers.

They are essentially back to square one, while trying to convince themselves and the rest of us that they got what they wanted.

Except there is one major difference: they found out the hard way that Bertie Ahern reaches parts that all previous Taoisigh didn’t.

He’s correct now in his vigorous denial that there is any discontent within the parliamentary party, at least publicly.

He could write a book about it, but Thomas Harris got there first with The Silence of the Lambs.