Mr. Fergal O'Brien:

On the tax issue, what we are about in the economy is broadening the tax base. It makes economic sense to do this and that we are shifting our reliance away from work because the taxes on work in the economy are very high, in particular the taxes on highly skilled work. We hear this all of the time from employers when they look at the cost of a highly skilled job in Ireland versus that in other jurisdictions. We have a high marginal tax rate and a high effective tax rate for highly skilled employees, which is a big challenge. In growing the economy, we need to broaden the tax base and get more people back to work. That would give us the tax revenue we need for improved public services.

On the inequality issue, Dr. Collins has said Ireland has a redistributive tax and social welfare system. We actually have the single most redistributive tax and social welfare system in the world, bar none. We raise a lot of tax revenue which we redistribute in terms of a strong social protection system. We do this more effectively than any other country.

When one looks at pre-tax and pre-social welfare levels, the question is why we have this inequality which is an outlier at a pre-tax and a pre-social welfare level. The single main reason we can see is that there are so many homes in which no one is working. That is the real issue in terms of inequality in society. We have the highest rate in Europe for jobless households and had the second highest rate before the crisis hit, even when there was a full employment rate. We have not really grasped that policy challenge.

Investment in education, skills and appropriate reform of the tax and social welfare system which would help to get people back into work is the priority because the number of homes in which no one is working is the real cause of inequality in society.

Ms McElwee will respond to the question on pay.