Apple tax ruling - Appeal hard to square with pay rows

IRELAND could be facing a winter of discontent as teachers and gardaí make pay demands backed by threats of industrial action and Dublin Bus workers use the public as pawns in a cynical game of blackmail. 

The dilemma facing a tottering government is how to justify rejecting Apple’s €13 billion when public service unions are queuing up for better pay.

Taken individually, the claims look fair in the context of a pay freeze. But if viewed as a whole, which is how the Government must see them, the stark reality is that this country simply cannot afford to fork out huge sums to appease the unions.

Undoubtedly, the anger many people feel over pay cuts and raids on private pensions will be exacerbated by the growing feeling that Apple and other multinational conglomerates are getting away with daylight robbery as a result of sweetheart deals or specially crafted tax loopholes, call them what you will, that were hotly debated on the floor of Dáil Éireann yesterday. Whatever about the legalistic arguments, there cannot be a scintilla of doubt that the moral arguments are heavily weighted against any system that allows a company to pay €50 in tax on every €1 million that it makes in profit.

Not surprisingly, when the Dáil debate began over the European Commission’s contentious ruling that Ireland had granted illegal state aid to Apple, Finance Minister Michael Noonan defended the government position that the full amount of tax was paid by Apple and that no state aid was given. His toned down claim approach was that Ireland had no right to the money.

Ironically, he went on to say that the Government was appealing the ruling so as to defend the integrity of Ireland’s tax system and also to challenge the encroachment of EU state aid rules into the realm of state sovereignty where taxation is concerned. While it may be invidious for the commission to challenge Ireland’s sovereignty in this regard, there is no doubt the feeling in the popular mind is that a sweetheart deal was done with Apple, making it stateless.

In a nutshell this means in effect that it paid a pittance in tax on the billions of dollars made by Apple on the products that were sold internationally, thus helping to create the world’s richest company.

With Fianna Fáil strongly backing the Government, the outcome of the debate on the Apple tax appeal was a foregone conclusion, with the Government expected to carry the day, despite trenchant opposition and pointed questions from Sinn Féin and other members of the opposition.

The importance of winning the argument in the Government’s eyes is that even though tax haven loopholes such as the ‘double Irish’ have been closed, it was vital to protect Ireland’s reputation which has undoubtedly been damaged by the Apple affair.

Meanwhile, the public is bracing itself for a rash of industrial disputes. With gardaí threatening a return of the ‘blue flu’, teachers balloting for industrial action which could close schools and with no buses on the streets of Dublin from last night until Saturday morning, the outlook is bleak.