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Ferris points to alternative revenue sources

4 December, 2003


Speaking during the debate on the Budget, the Sinn Féin spokesperson on Natural Resources, attacked those who claimed there is no alternatives to current economic thinking. As an example of this, he pointed to the scandalous give away of Irish oil and gas reserves, with the massive loss in revenue which that entails.

Deputy Ferris said: "One thing that is regularly thrown at anyone who advocates radical alternatives to current economic policies is that we do not present any other coherent means of financing a different approach. I do not accept that there are no alternatives, nor that the revenue to finance them could not be found.

"The Sinn Féin pre-Budget submission details some of these, but I would like to cite one particular example and it is an area that has once again come under some scrutiny in recent weeks. That is, the control and taxation regime that governs our natural resources. Or rather, and to be more specific, the lack of control and taxation over our oil and gas reserves. It is my contention that if the State exercised its proper role on behalf of the people in that sector, that oil and gas revenue could play a major part in financing future progressive developments.

"We have heard Minister McCreevy explain why even minimal changes to the taxation regime such as broadening the 20% tax band to exclude more of the lower paid, was not possible at the present time. And yet his party has proven itself in the past to be more than capable of introducing tax benefits for others which have been far more radical and costly in terms of lost revenue. The terms governing the exploitation of our natural resources - and exploitation is indeed what it should be described as - are a good case in point.

"It has long been known that there is massive potential in the oil and gas that lies beneath Irish waters. When that first became a major issue in the mid 1970s Sinn Féin was one of those groups which argued that the reserves ought to be taken under state control in the interests of the Irish people as a whole. Instead of this, and instead of the state proactively seeking to develop what was there, and investing the necessary finance and skills, they were content to auction them off to multi-national corporations. While initially there may have

been some attempt to maintain the public interest, gradually over the years the terms and conditions have been further eroded to the extent that we now have almost no real stake in what lies off our shores.

"Some of the major changes introduced to the benefit of the corporations have been as follows; In 1987 the then Minister for Energy the famous Ray Burke, decided to do away with royalties; In 1992 Finance Minister, and current Taoiseach Bertie Ahern, reduced the tax on oil finds to 25%, the lowest in the world. Not only that but the companies can even write that off; Also in 1992, frontier licences were introduced which mean that oil companies can sit on areas of likely reserves for up to 20 years

"Ever since then, when these terms have been challenged, successive Ministers have claimed that they are necessary to encourage the development of the oil and gas sector. And yet the opposite had taken place and the number of exploratory drills declined after 1987. Right up until the present time when I have asked questions regarding these terms, and the likely benefits to accrue from recent finds such as that at the Dooish Well off Donegal, I am told the same thing.

"Well, where is the proof that all these great benefits, such as those referred to in this House by An Taoiseach two weeks ago, will come on stream? Does the state even know what is there or what the exploration companies themselves know lies in the sectors under their control. Because it has been admitted that the state actually has no means of independently verifying what the likes of Shell tell them.

"This is important because when the Corrib field was discovered in 1996, Irish rig workers knew that the find was massive. This was confirmed by a report by WoodMacKenzie which claimed that the field could contain up to seven trillion cubic feet of gas. At current prices this is worth €21 Billion. The Dooish reserve has been estimated to be worth 10 Billion. How far would even a minority share of this go to solving some of the fiscal problems cited by this Government as an excuse for imposing cuts on those least well able to bear them?

"Indeed we do not have to speculate because we have the example of Norway which by maintaining some control over its natural mineral resources has been able to channel the benefits into economic growth and prosperity for its own people and not allow it to be sat on by unscrupulous corporations like Shell.

"Last year alone the Norwegian Government earned €34 Billion from the state oil company Statoil. And that is not even to take into account the huge revenues it earns from the multi-nationals, which far from refusing to operate in Norwegian waters because of high tax rates - as is claimed here - are quite happy to pay the price for access to what is not called black gold for nothing.

"If this state had done what the Norwegians had done and put in place the proper structures and taxation and royalties scheme, we would be in a far stronger position and wouldn‚t have to be tinkering around the margins of direct and indirect tax rates and social welfare payments for those who can least afford it.

"I, along with every other Deputy here has thousands of constituents who have to count every Euro and cent in order to budget for their own and their families future. And yet, any improvement they ever see is in that range, one Euro here, 5 Euros there. And they are expected to be grateful for that, even in the knowledge that what is given in the pension or tax credits will be more than taken back in price rises, increases in payments for public services, and a whole range of new taxes including service charges.

"And yet the Fianna Fáil and Progressive Democrat Government that will expect people to be grateful, or to put up and shut up when things begin to bite, are only too happy to dispense massive gifts to their rich friends. The sort of friends like the President of Shell who can summon the Taoiseach and senior Ministers to meetings to threaten that they won't proceed with the Corrib Gas development unless the Government introduces new legislation to take them outside of the planning process.

"And remember that besides rejecting the pipeline planning application on environmental grounds, one of the authors of the report, Kevin Moore also pointed to the lack of economic benefits for the region. But I suppose if the proposed Critical Infrastructure Bill that Shell is seeking is passed, then they will no longer have to worry about the objections of those who are well aware of what they are at.

"To conclude, I make no apologies for going outside the limits of what is contained in the Budget. I do not accept that the current economic thinking which dominates this Government has, or even wants to, explore other means of not only balancing the State‚s books, but actually bringing in the kind of revenue that would ensure that all of our people could have a prosperous and secure future. And that that future will no longer be auctioned off to the kind of people whose only contribution to the Irish economy probably takes place at the Galway Races." ENDS

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