Colum Kenny: Paddy doesn’t know the half of it

We elect governments that fail to monitor swathes of public life from the banks to the church

Enda Kenny: Fond of saying that Paddy likes to know the story. Photograph: Brenda Fitzsimons

Bertie Ahern didn’t know about Apple. “The Revenue Commissioners act within hard walls”, says Bertie.

Successive Irish governments were unaware of Apple’s special tax arrangements, according to Mr Ahern, a former Minister for Finance who was taoiseach in 2007 when Apple got its second generous ruling from Revenue.

Why not believe him? Governments didn’t know what was going on in the banks either, or in the banking “regulator” or in Nama or in the gardaí or in children’s homes run for the State by the Catholic Church.

And no doubt they knew nothing until recently about voracious vulture funds that used charity law to avoid tax. Sometimes you have to wonder if they know what is going on in government.

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And then there’s the rest of us, who vote for politicians and who maybe do not want to know too much.

Irish ministers should get out more – in Chicago for example. The dogs on American streets have long known that we were giving it away. It’s what brings their firms here.

One morning two years ago I found myself downtown in the Windy City looking for breakfast. I asked a man in a suit if he knew a good place. He was heading to a great pancake house and he suggested I join him.

The tone changed as we walked. He worked for a big Chicago accountancy firm, and had just got back overnight from an audit in San Diego. Maybe he was tired. But when he confirmed that I was Irish he started in on me contemptuously about the “double Irish” tax avoidance scheme, laughing.

Green jersey

I pulled on the green jersey, the one they keep wanting you to wear to cover Ireland’s political and corporate embarrassments.

Humiliated as a citizen of Ireland abroad, I rolled out the usual lines about everybody being at it, and Ireland being a small, open economy on the edge of Europe that has to fight more powerful states for jobs. In the end I told him I was running late, and bailed out of breakfast with the guy.

In February of this year The Irish Times reported that Google had used the strategy known as the "double Irish/ Dutch sandwich" to move €10.7 billion through the Netherlands to Bermuda in 2014, allowing it to earn most of its foreign income tax free You can bet that's the tip of a corporate iceberg.

So what should we do? The Government is scrambling to close some of the more obscene loopholes, such as vulture funds using a Revenue concession for charities that was intended to help the poor and weak. These funds buy up property to rent and make it harder for young couples to own homes.

Incentives

For a century, Irish leaders have been going to America to attract investment to Ireland. Eventually, a combination of incentives and a low corporate tax rate began to pay off. Job numbers rose dramatically and, from 1961, the population began to grow again for the first time since before the Great Famine.

That was the deal, and it was worth it. Who relished a return to the depressed economic and social conditions of the 1950s or earlier? If other countries did not like it, then too bad.

Our membership of the EEC from 1973 helped us lure US companies. Closest to the United States by air, we spoke the same language and had a pretty decent standard of education. The weather wasn’t great, but the craic made up for it.

Yet what made the big difference was profit margins. Then, as capital became more global and mobile, and competition more cut-throat, multinationals could play one country off against another. A race to the tax bottom began.

We pushed things too far. Revenue appears to have had a free hand to do deals subject to no effective scrutiny. It is hard to believe that no minister for finance or taoiseach knew, at least in broad outline, what was going on.

We elect governments that have failed to monitor swathes of Irish life. It is no intrusion into the privacy of tax returns to demand that the Revenue Commissioners keep us clearly informed about the number and kind of deals they do.

Then the public may at least make an informed judgment on whether or not it really pays Ireland to keep chasing foreign direct investment, and can decide if we have any real choice in the matter.

Hopefully, given where Brexit may also lead us, it will not boil down to a hard choice between being in the EU or out of it.