Dr. Seán Healy:

I shall answer the Deputy's other question. In order to help the working poor we simply propose that tax credits be refunded. There are 130,000 people in jobs but they are so low paid that their household is in poverty. Therefore, we must do something to target those people and to keep them in their jobs. We have talked about how to incentivise people to take up jobs. These people have jobs but they are paid so little that they are below the poverty line or are struggling financially. A simple measure that would help would be to refund the two main tax credits to which they are entitled. In other words, change the system so that they can benefit from the full value of their tax credit. For the most part, they do not benefit from the full value of the tax credit, so they could receive a payment from the State to make up the balance. That means that the poorest people in employment, the working poor, would benefit from the full value of any changes in the tax credit system. I know that we are not likely to see that in the budget this year or next year. There was a time when they were increasing and I hope that it will happen again. It is perverse that a tax change of that nature can help everybody except the poorest in employment. We came up with a costing of €140 million that was based on numbers from three years ago. At the time the Revenue Commissioners claimed that it would cost over €3 billion. We held discussions in this committee room that eventually sweated down their figure of €700 million and, in subsequent discussions with our technical people, the figure was further reduced to €350 million. The Revenue Commissioners have not been able to move our cost of €140 million by one cent because it was rock solid. The proposal would probably cost less now because there are fewer people in employment than three years ago. The provision can be made for that sum.

It is most important that there is no reduction in child benefit and no second tier payment introduced as a quid pro quo for a cut in child benefit. I am sure that the members will question what I am saying and whether I support the wealthy. The Department of Finance and the troika asked me the same questions but I gave them the same answer that I shall give here. Let us take two households that each have a total income of €100,000, two people live in each, the households are identical and pay the same tax. If one household has two children then it receives over €3,000 from the State in child benefit. It is a contribution for the two children but it is far below the cost involved. Along comes a recession and Ireland is in trouble and needs to make savings in order to reduce its borrowing. What does the Government mean when it proposes a cut in child benefit? Which household will it take money from? Obviously, the household that contains four persons. To me that is not obvious. It is not the right thing to do and I would leave them alone. The State already does far too little for children by way of a contribution or supports.

Instead, if the Government needs to take money from the two households in order to make a contribution to Ireland reducing its borrowing then it should come from both houses through the income tax system or some other process rather than cut the child benefit. The child benefit is the only payment of substance and my group deems it to be not nearly adequate. It is the child's payment and should remain as it is. If one examines the range of services for children the one thing that they all have in common is that they are underfunded. There is insufficient funding across the system. The last thing that we should do is to reduce the little funding that exists through that one payment. There are much fairer ways to increase the tax take and reduce the borrowing than targeting children who are in no position to speak for themselves.