I want to tell you a story. It is about how the real world works. In this world there are two sets of rules. There are the rules that the plain people of Ireland live by, the ones they have to, with demands for water and a household charge.
And then there are rules that Ireland's financial sector lives by. The rules that they make up for themselves.
How does this world work? The Department of the Taoiseach coordinates the long-winded, International Financial Services Industry (IFSC) Clearing House Group. In a Dail statement last March, Enda Kenny said the purpose of the group is to consider "the long-term development" of the IFSC and "the progress of relevant legislation, both domestic and European [and] consideration of regulatory issues".
In other words, it's a very sophisticated and little-known but extraordinarily influential lobby group.
Freedom of Information (FoI) documents from the Department of Finance were released last week to Labour MEP Nessa Childers.
These documents reveal that in the five months between October 2011 and February 2012, sub-groups of the "IFSC Clearing House Group" met on 10 occasions.
These high-level meetings occurred between senior government officials and representatives from the leading financial services firms such as JP Morgan, PricewaterhouseCoopers, Ernest & Young, Barclays Bank, Deloitte, HSBC, William Fry, State Street, Bank of Ireland, AIB, Porsche FMS and others.
Tim Hennessy of Axis Capital/DIMA chaired four of these meetings in the "Italian Room" at the Department of the Taoiseach. David Guest of Ulster Bank chaired two in room 301 in the same building, while Paul McGowan of KPMG chaired another four up the same corridor in room 308.
The purpose of the meetings was to discuss the European Commission's proposals to introduce a financial transaction tax (FTT).
A FTT is simply a tax that financial services would have to pay when they buy financial instruments. So, just like property taxes, when a transfer of ownership occurs, a levy must be paid. Not complex at all.
There are two very good reasons why an FTT is necessary. It would deter the highly speculative trading that financial institutions engaged in which caused the global economic crisis. Not only that, but it would make the financial sector contribute towards the cost of the economic crisis they helped to cause. The EU, through taxpayers' money, has so far spent €4.6 trillion in bailing out the financial sector.
So, instead of the taxpayer being lumped with all the bailout costs, the financial sector would also have to shoulder some of the burden. A sector by the way, that does not pay any VAT.
The EU estimates that the 0.01 per cent FTT tax would reduce Ireland's bailout by €500m annually. Put that in perspective. The household charge will raise €160m this year.
That works out as the entire cost of the household charge for the whole country for three years. Common sense?
Eamon Gilmore, the leader of the Labour Party whose socialist principles are based on 'freedom, equality, community and democracy', has said that the FTT would put Ireland at a competitive disadvantage because the UK would not implement it.
Fair enough, but Ireland's financial sector is not in competition with the City of London, it's with Luxembourg. How exactly a 0.01per cent tax would possibly affect real investment decisions has not been made clear. Even the Department of Finance civil servants noted in the FoI documents that "There wasn't much drill-down into exactly how it (the FTT) would impact."
Most of the IFSC's activity is in fund administration, not the high-frequency speculative trading which the FTT seeks to curb. The tax would only apply to funds administered in Ireland, such as hedge funds that are domiciled in the Cayman Islands and serviced here.
There is no public debate on the FTT. The proposals come before the European Parliament in a matter of weeks, yet most of our MEPs are strangely silent.
The tax is most opposed by those it would hit. The financial sector. And the Government is consulting only this industry on these crucial policy proposals. Under Childers' FoI documents, the only analysis of the FTT was a 30-page research paper from AIMA -- an international hedge fund lobby. It seems that there was little or no analysis or impact assessment done on the FTT.
So, here is exactly how the real world works.
According to the documents, officials from the Department of Finance sent out a "questionnaire" to various financial services organisations. A civil servant noted that "unsurprisingly, the industry is very negative about the proposals".
Despite this remarkable insight that turkeys do not vote for Christmas, another civil servant states that "input from the International Financial Services sector will be crucial to informing our views on the proposal". The upshot? The Irish State will lose €500m in revenues from the financial sector a year.
Lobbying is a legitimate activity. But to what extent are the private interests of financial institutions influencing how our country decides on its tax policies? Why should the financial sector be immune from levies to fund their bailout? Why do we only know about these meetings because of expensive FoI requests?
Lobbying on such crucial decisions should be much more transparent, and other sectors should be consulted -- not just the financial sector.
We have adopted the same position as the UK, which has granted us a loan for our bailout. The Conservative Prime Minister David Cameron is deeply opposed to the FTT. In reply to the German Chancellor's Davos speech in January, Cameron described Angela Merkel's FTT proposals as "madness".
Incidentally, the Guardian revealed a couple of weeks after Cameron's speech that the financial services in the City of London had provided more than 50 per cent of the political donations for his party. This, the newspaper said, promoted "claims that the party is in thrall to the banks".
In March, nine EU finance ministers called for a far-reaching tax on all sales of stocks and bonds, currencies and derivatives. The French presidential election will be a game-changer for the FTT. Watch this space if Francois Hollande wins today.
In the meantime, remember to pay your household and water charges. But don't expect the financial sector to pay it's 0.01 per cent levy.
That's not how the real world works.
Dr Elaine Byrne, of the Department of Political Science, Trinity College Dublin, is the author of Political Corruption in Ireland 1922-2010, A Crooked Harp? (Manchester University Press, April 2012)