A Mayo View: Sinn Féin are asleep at the wheel

I read a letter from Rose Conway-Walsh in The Connaught Telegraph on July 30 this year.

It was in response to an opinion piece I wrote a few weeks previously on the poor performance of Sinn Féin in opposition and the recent local elections.

Reading it, I found myself nodding in agreement and approval with much of what she wrote.

It was comforting and refreshing to read that she and SF have no desire to meddle with our corporation tax rate of 15%.

This dovetails with Pearse Doherty’s meeting with around 50 global institutional investors, facilitated by Davy Stockbrokers in London in April of this year.

He went there to discuss SF’s fiscal policies. Davy briefed its institutional investors ahead of the meeting that SF’s policies are more 'New Labour than Corbyn Labour'.

However, if SF are not prepared to interfere with the corporation tax rate, they must alter one of the other three tax pillars - excise duty, income tax or VAT - if they wish to increase public spending.

So do they want to increase public spending? Can they not see that the current government have lost the plot and refuses to do what’s ethically and morally right for the future of this country? Public expenditure has surged 47% in the last five years. It’s not sustainable.

She writes in her letter that 'SF would address the funding gap, deliver double the amount of health care places in college, and keep our promise to abolish students fees'.

We would all like to see all these things happen but can they be done? If corporation tax is to remain fixed as she promises what changes will be made to the tax system to enable the legislative changes that SF wants?

Bottom line. Where is the money going to come from? And who’s going to finance it?

These are the questions that a growing cohort of the populace is pondering. SF can talk the talk but can they walk the walk?

The briefing note from Davy Stockbrokers said about SF 'Its proposed approach to income tax for higher earners differs from the current government' - in other words, SF will change the income tax bands, but won’t provide details.

RCW is the Public Expenditure Spokesperson for SF. Pearse Doherty is the Finance Spokesperson. The current government is doing its level best to buy the next GE.

Public spending has soared to unsustainable levels over the past five years. Government spending has surged 47% in the five years of this government, from €71.3 billion in Budget 2020 to €105.4 billion in Budget 2025. The state’s budgetary watchdog IFAC (Irish Fiscal Advisory Council) has repeatedly warned that the government is spending too much.

Are SF listening? Has SF challenged Pascal Donohue? They haven’t. So it begs the question. Do they understand how the current government are disguising their spending spree? It’s a question of competence.

Do they know why the government has changed the definition of the 5% spending rule and the likely future ramifications? The job of the opposition is to keep the government to task. They are not doing that.

What does the SF hierarchy make of the likely imminent departure of AIB from the clutches of the state? The state saved the banks. The Irish taxpayer bailed them out to the tune of €66 billion.

AIB and BOI have made excessive profits over the last few years. When the Russians invaded Ukraine it caused a huge interest rate hike in the Eurozone in response to the resultant inflationary spike.

Most businesses struggle in that environment. The cost of borrowing increases. Counterintuitively, banks flourish in a high interest rate environment.

They make huge profits on net interest income. Net interest income is the difference between what it makes from existing loans and what it pays existing deposit holders.

As it’s more expensive to borrow there will be a dropoff in new business. Less commercial loans and mortgages, but the interest earned on existing loans negates any loss in new business.

The Irish taxpayer rescued the banking system when our banks were on life support during the GFC, by injecting roughly €66 billion to resuscitate them and bring them back to life.

Surely now AIB should reciprocate and not be so eager to escape the clutches of the state. Surely we should see some return from AIB?

Our current government has been selling tranches of shares in AIB, reducing its holdings significantly over the past five years.

Whilst the state is deleveraging its position in AIB over the past five years, selling tranches of shares, the profits in AIB are soaring on the back of the high interest rate environment.

Wouldn’t it be more prudent of the government to keep the large shareholding they have in AIB and remain the largest shareholder? Thus in periods of recession and high interest rates, the state would have a nice revenue stream from AIB.

I believe the taxpayer should keep a significant holding within AIB and recoup its losses in the years ahead. The state ploughed €20.8 billion into AIB when the bank went over the cliff. It has recovered roughly €15 billion as of January this year.

The state has a holding worth about €3.6 billion so if the remaining shares were to be sold the taxpayer would be left about €2.1 billion out of pocket. That’s not good enough. AIB had profits after tax of €2 billion in 2023. The half-year profits in 2024 are €1.1 billion alone.

The government stake in AIB currently stands at just under 31%. To be fair to Pearse Doherty, when he met the institutional investors in London he did express a clear desire of SF to hold onto the state’s share in AIB. In the Davy briefing note, it was a 'clear objective’.

However, SF is not vociferous and aggressive enough in opposition. But, why isn’t he making more noise? What are RCW and Pearse Doherty afraid of?

The Irish banking sector has performed admirably over the past few years. The state’s stake in AIB should be preserved for future generations so that AIB can repay their debt to the taxpayer and the taxpayer benefits from future windfall profits.

It is the clear intention of the current government to sell all the state’s shareholdings so they can spend it on short-term measures. That’s disgraceful. The profits the bank and the state receive as major shareholders could and should be siphoned into our two sovereign wealth funds.

Finally, it was obvious at first glance reading RCW’s letter that she decided to omit one important topic. Direct provision. It wasn’t mentioned. Not up for discussion.

She didn’t write about it because she can’t. SF has no policy on the matter and can’t make up their minds about what to do or not do. Mary Lou was recently interviewed on the radio by Philip Boucher-Hayes and the interview quickly degenerated into a farce.

Any thinking member of the electorate listening would’ve come away and wondered if she was really up to the top job.

She declared that she would triple staff numbers at the IPO from 400 to 1,200 and triple resources for the IPAT (International Protection Appeals Tribunal). OK, but she couldn’t provide detailed costings for these ambitious plans.

An American private equity group, Apollo, owns Tifco Ltd. Tifco Ltd. is the second largest hotel operator in the country. It received at least €80 million in deals to accommodate asylum seekers and refugees in 2022.

A foreign landlord is making excessive profits on immigration. Has SF said anything? Nope. SF can’t seem to grasp the nettle and make a stand on this issue the way they should.

SF claims to be the party of the underprivileged, minorities and vulnerable. Ipso facto. Bring the noise. Fight for what’s right. They’re not doing that.

What does SF need to do?

1. Hold the government accountable for unsustainable public spending.

2. Develop and communicate clear, costed policies, especially concerning direct provision.

3. Oppose the sell-off of AIB when it is not in the public’s long-term interest.

The bottom line is a change is needed at the top. SF are silent. Asleep at the wheel.

When are they going to wake up?

(Dr. Richard Martin is a regular columnist with The Connaught Telegraph).