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Interview

All sectors will get 'fair hearing' on taxation if SF gets into power, McDonald insists

If in government, Sinn Féin would reduce the inheritance tax threshold to €300,000.

MARY LOU MCDONALD has expanded on some of her party’s aims if Sinn Féin gets into government in an interview with The Journal – including its plans for tax and housing. 

While a poll at the end of last month showed Sinn Féin’s popular support had fallen to its lowest level in over a year at 31%, the party has remained the most popular political party in opinion polls over the past 18 months. 

Much of SF’s appeal lies in its promises to do better than previous governments, particularly on issues like housing. However, the Sinn Féin president told The Journal she is not naive enough to think that change would come overnight should SF manage to form a government. 

When asked how it would deal with the same roadblocks Fianna Fáil, Fine Gael and the Green Party are facing in government, such as planning issues, red tape, bureaucracy or the slow pace of the civil service, she said:

We are well aware that firstly, to get the chance of government, it means a lot of hard work. Then to be in government and deliver in government means even more hard work. So there’s no naivety on that score at all.

She said the last few weeks and months have been critically important for the party as the team has “very quietly, but very systematically, been talking to people, listening to people, doing the work across all of the different sectors”.

“Because of course, if the people give us the chance to be in government, we have to be ready. Can everything be solved overnight? Of course not. I mean, nobody thinks that.

“But just remember, the ones that are presiding over the current failures have had a decade and more and they tell us still, ‘oh, things can’t be sorted overnight’. But the change of direction and in policy terms, in critical areas, can change and change substantially in my view and can have the effect of speeding up delivery in areas critically like housing.”

Taxation

Some of Sinn Féin’s changes would be around tax. A recent report by the Commission on Taxation and Welfare examined Ireland’s fiscal position and future possibilities for tax and social welfare.

It offered recommendations on how the government should proceed, including lowering the threshold for inheritance tax, which Taoiseach Leo Varadkar took issue with.

In an interview with The Journal, the Sinn Féin leader said she was “very, very conscious” that people will now look to her party and try and get a sense of what it would mean for them if Sinn Féin were in government.

The commission were proposing “a very dramatic and steep increase in that tax. So we’re not proposing that, that’s not our position,” said McDonald. 

Currently, the threshold for inheritance passed down from parent to child is €335,000. Under a Sinn Féín government, inheritance tax or capital gains tax would reduce to €300,000 and increase the rate for all categories to 36%.

Sinn Féin said decreasing the threshold would bring in approximately €43 million, which it said is badly needed to invest in the construction of affordable housing, and to deliver better healthcare and childcare services.

“We totally understand that families want to look after their loved ones, their kids, their grandkids… Where you have active farmland and where it’s a working asset, of course that has to be protected from inheritance tax.

“But we also have to recognise that we live in a society where some people for generations are caught in a particular experience of having less, or even living in poverty, and then other people just by where you’re born and who you’re born to, you have a better chance. And I think the the taxation system has to correct for that,” said McDonald.

“The area of taxation, like others, you have to always test for equity,” she added. 

McDonald said there has to be equity in the taxation system, and that means taxing things like wealth.

“I’m not talking about actual wealth. I’m not talking about people who are in good jobs and have a good income. I’m talking about people who are wealthy, the 1%, who have wealth. Wealth should be taxed.

We don’t believe that the family home should be regarded as wealth for working people. For most of us, it’s your single and only asset, because you put every shilling into it, you sweat and slave to pay back a mortgage on it and so on. But if you’re somebody who is wealthy and has accumulated huge assets, we believe there should be a wealth tax.

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What will a Sinn Féín Govt mean for me?

McDonald acknowledged that as the party’s popularity grows, people are rightly asking what a Sinn Féín government will look like and what it will do. 

“If you were to ask me what will a Sinn Féin government do or [what will] a Sinn Féin in government [do], whether we lead the government or not: we [would] build houses, we [would] bring down rents, we will give people breathing room so that they can live without the fear and worry that they’re just not going to make it month on month, that they’ll have a chance to put together a deposit, maybe purchase their own home.

“We will be real about what’s affordable. We’re not going to call unaffordable housing affordable. And we recognise that the State has to lead the charge,” she said.

And what about the government’s current housing policies – the Help-to-Buy Scheme which helps first-time-buyers with a deposit; or the shared equity scheme which involves government bridging the gap for buyers while taking a stake in their home?

Housing spokesperson for Sinn Féín Eoin Ó Broin previously told The Journal that he would scrap such schemes almost immediately if he became housing minister. 

Winding down Help-to-Buy Scheme 

McDonald claims those particular schemes “are a little bit deceptive, because on the one hand, they’re painted up as allowing you to access the housing market. But there’s a big, big price tag on that as it drives up house prices. We know that,” she said. 

“I think those that are already in the scheme, you’re not going to come and take that away from them, they get wound down, we’d like to wind them down very quickly. But that has to go hand-in-hand with accelerated [housing] delivery,” said McDonald. 

She stated that there would be no “cliff edge” that would end housing supports immediately, “but you do have to be decisive”.

“And look, I get it, when you’re desperate, and you’re just looking for a way out or a way in, I absolutely get that. But from a public policy point of view, anything that contributes to even higher house prices, and more debt on the shoulders of young people, that’s not a good outcome. That’s not a good policy,” she said. 

The Dublin Central TD said she is “enormously frustrated” that nearly three years on from the last election, having had a ringside view of government, it continues to fail on housing.

“I am very well aware of the real life consequences of all of that. I am also conscious that I’ve been saying this for quite some time now that we are looking now at another generation of forced emigration. And that to me, that is intolerable, absolutely intolerable.”

‘Change won’t happen overnight’

Just like ordinary voters might be asking what a Sinn Féín government will mean for them, so too are businesses. 

McDonald has been on a number of foreign trips over the last year, such as a whistle-stop tour of Australia and the west coast of the US, where a number of key business players for Ireland are located.

So is she reassuring big business that Sinn Féín will bring no harm?

“We accept that business needs to have a sense of the direction of travel. So we are not in the business of pulling rabbits out of the hat. They will always have a clear sense of the direction from Sinn Féin,” said McDonald. 

“We’re anxious to have those conversations,” she said, adding:

I think it’s really important that we do. I mean, ultimately, the electorate will decide who is or is not in government. But I think it’s important that there is clarity for everyone so that we’re not going off on tangents or people aren’t getting false impressions, one way or the other.

She said she has had very interesting conversations with Irish businesses,  multinationals, and the big corporations, and her party is open to talking or listening to everybody.

“Everybody will get a fair hearing on the issue of taxation,” she said, adding that the issue of corporation tax has been “put to bed now”, ironically by a Fine Gael minister. 

McDonald said that a lot of her conversations with businesses, including the FDI sectors, pharma, and the financial services, is actually about housing.

“It’s not about tax. There are a huge infrastructural deficits across the Irish economy, we need to fix those. First on the list is housing, believe it or not,” said McDonald, adding that Dublin in particular is a centre for international talent.

“If you want the brightest and the best, they have to have somewhere to live,” she said.

McDonald said she would like to see a general election in 2023, but acknowledged that the three parties in power would be reluctant to let go of the reins. Fianna Fáil and Fine Gael are indistinguishable now, she claimed, adding that people want change.

If she manages to keep her party high in the polls all the way to the next election, McDonald’s first choice would be to lead a government. She said she will talk to everybody, “even those with whom we have very little, if anything really, politically in common”.

When asked if she believes Fianna Fail leader Micheál Martin is a roadblock to a possible future Sinn Féin-Fianna Fáil government, McDonald said who leads Fianna Fáil is a matter for the party.

“My hunch is that come the next election, we have a chance and an opportunity to convince enough people to actually give us the chance, that’s what we’re asking for.

“And to do so ideally, in circumstances where you don’t have either Fine Gael or Fianna Fáil,” McDonald concluded.  

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