Mr. Tom McDonnell:

Those in difficulty would presumably qualify for a deferral. One of the advantages of this system is that the tax burden is lower during a time of high unemployment and low incomes throughout the economy and rises at stronger periods. Property is wealth, and this would be a wealth tax. I regard a wealth tax as very much a progressive measure. For too long we have had a dysfunctional tax system. The amount of revenue brought in by the State is far beneath the levels sufficient to generate western European standards of public services, which I assume Deputy Higgins supports. Therefore the question is how this is paid for and who pays for it. Wealth as opposed to income only must be a component of this. It is the least damaging to employment and efficiency. The question then is how this is done. One begins by taxing immovable property in a universal system which acknowledges that those on low incomes and suffering from mortgage arrears difficulties are exempted for a period. If they remain in difficulty for the coming 20 years, they will continue to qualify for a deferral until such time as the house is transferred. If the amount is €700 a year for 20 years the total would be €14,000 which would be paid when the house is sold. It would be much less damaging to the individual at that time than it would be to have to pay €700 per year now. We feel this is by far the best system to help reduce the €10 billion structural deficit we have in an equitable and efficient way consistent with not damaging employment.

For what it is worth, the majority of the remainder of our proposals are taxes on inter-generational wealth transfer and inheritance. We also speak about reducing pension tax expenditures because the current system is a disgrace. I do not know any economist on the right or left internationally who would support our system. I agree with Dr. Healy that the basic pension should be increased because this is how one helps people. I strongly advocate that no cuts whatsoever should be made to primary or secondary benefits for vulnerable groups and taxes should not be increased for low income groups. Through carefully working out all of these measures one can design a system, even for this year at €3.5 billion, which protects the most vulnerable in society and places the burden precisely where it should be, which is on the wealthiest and highest income groups. We do not buy into the austerity narrative. We have argued for years about how it is counter-productive. We have called for the €4.5 billion from the National Pensions Reserve Fund to be targeted.