The Dáil statement in full
I would like to thank the party Whips and the Government for giving me the opportunity to speak today.
In relation to my company's under-declaration of VAT in 2009, M&J Wallace Limited sold apartments in 2008 and 2009 and the proceeds from the closings of the sales were pledged to the bank. Normally, the business cash flow would have allowed us to deal with the VAT liability but not on this occasion.
In early 2008, the company had got the go-ahead to build a large project on the North Circular Road, which gave confidence in its potential to go forward. Towards the end of the year, the bank pulled the plug on the project.
This meant serious and unforeseen cash flow problems for the company. M&J Wallace Limited had committed a lot more money to the project than it ultimately received from the bank.
It had to let some men go and pay redundancy. It was coming under pressure for payment from suppliers and subcontractors, and having to deal with four banks becoming increasingly aggressive.
The company was not able to pay the VAT at the time but was convinced that it was possible to work our way through the crisis. M&J Wallace Limited believed that the company would be able to pay the full amount within six to 12 months. It was feared that if the problem was revealed at the time, either the Revenue or the banks would have moved against the company and put it out of business.
The manner in which the VAT was dealt with was, in hindsight, an error of judgment made under pressure at a time when the approach of the banks was changing dramatically and the value of property was dropping sharply. There was never an intention that the money that was owed would not be paid to Revenue and the motive behind the underpayment was to delay payment in order to trade out of difficulty.
Few at the time predicted that the country's economic woes would continue as long as they have. We were never big developers, which meant that we did not go into NAMA as the company's debts were not large enough with the Irish banks, most money being owed to foreign banks, which are not subject to State guarantee and which have been more aggressive in their pursuit of debts as a result.
The company had traded successfully for 20 years and it meant a lot to me. People have said that if M&J Wallace Limited had not understated its VAT, the Revenue would have worked with the company. Maybe that is true – hindsight is a great thing – though at the time, it appeared that flexibility was in short supply.
The following year, 2010, the situation had continued to deteriorate and the company made a full declaration to the Revenue and opened its books. The Revenue then proceeded to carry out a full audit of the company's books and, after some weeks, an agreement was reached between both parties whereby a sum of money would be paid each month by the company to the Revenue to deal with the outstanding amount, and all other ongoing tax liabilities would be honoured.
When I stood for election in February 2011, I personally had a tax clearance certificate, and so too did M&J Wallace Limited as it was meeting the terms of its arrangement with the Revenue. The company was sourcing work, paying the Revenue, paying off as many subcontractors and suppliers as possible, and this continued to be the case up until November 2011, when, following a €19.4 million judgment against the company by ACC Rabobank, M&J Wallace Limited was no longer able to get work due to the judgment.
I should add that all payments regarding PAYE, PRSI, pensions and redundancy were made but, unfortunately, the VAT and a number of subcontractors were left being owed money.
I have strived to demonstrate the distinction between my personal tax affairs and those of the limited company M&J Wallace Limited. In legal and company terms, they are two separate entities, something which everyone in business will recognise, and without which no one would ever risk enterprise.
I understand that many people do not see it in this way. My personal tax affairs are in order and for 20 years M&J Wallace Limited paid all taxes due, until the company found itself in its recent troubles and failed to meet the VAT obligation in question.
In view of the fact that I now work for the people and am paid by the people, I feel obliged to look beyond the bounds of company law. I understand that many people suffering under vicious austerity were upset by my statement last week that M&J Wallace Limited would not be able to repay the tax debt. This was not a cavalier comment, but rather an honest statement of fact.
I understand that PAYE workers and social welfare recipients are not afforded this flexibility, although life for most people in small and medium sized businesses is far from rosy either at the moment.
In solidarity with the citizens of this country, I will strive personally to make repayments in relation to the tax debt of M&J Wallace Limited To this end, starting immediately, I am taking steps to organise for half of my Dáil salary to go towards paying M&J Wallace Limited's VAT liability to the Revenue.
I have been told that I have not presented my case well and that I should have hired a PR company to help me make my presentation. That may be so, but rightly or wrongly, that has not been my way of doing things. I did not come in here today to defend the indefensible. The company understated its VAT liability and was wrong to do so.
I want to apologise and say sorry to all the people who expected more from me. I want to apologise to the Members of the Dáil for bringing any dishonour on a profession which hardly needed it. I want, especially, to apologise to the people of Wexford. I went home last weekend and found it hard to believe the support I was given.
The manner in which people can find it in themselves to offer support to somebody who has done something wrong and is down would boost anyone's faith in human nature. I want to apologise to people all over Ireland, particularly those who have supported and continue to support me. No matter what happens, I will not forget them.
I have done many things in my life that I should not have done and now I have disappointed many people who believed in me. Some Members of this Dáil have suggested that I should resign the seat for a mistake made by the company M&J Wallace Limited before I was elected.
Have I considered resigning and running in a by-election? Yes I have. Have I considered resigning and walking away from politics for good? I certainly have. However, I have never been very good at quitting.
I went into politics with a desire to work for social justice, to challenge the lack of fairness that exists in our society and to strive to make this country a better place in which to live for all of us. I am grateful for the support I have received from the small and medium sized business community, who know how difficult things can be and what the pressures of business can be like.
As well as support from owners of small businesses, I have been greatly heartened by the many messages of support from all over Ireland in general, and from Wexford in particular. As a Deputy for Wexford, I feel privileged to have met so many wonderful people living quiet, extraordinary lives and to have worked with them on so many issues, such as cuts to special needs assistants, resource teachers and guidance counsellors, problems with the domiciliary care allowance and the carer's allowance, changes to the one-parent family payment and a host of other issues. In short, it is an honour and a privilege for me to represent the people of Wexford.
They say that those of us who speak out should be above reproach, but I would be at pains to stress that I will never be that. I am just another human being who is very far from being perfect and will remain so. I am answerable to the people of Wexford who elected me and they will discard me when they see fit. It is their seat, not mine. In the meantime, I will strive to serve them and all the people of Ireland as well as I can. Thank you.