Dr. Micheál Collins:

To pick up on a number of the Senator's points and other points mentioned, there is a real issue around the scale of tax revenue we collect. It is clear that what we are collecting currently is not sustainable, and we are still borrowing. As growth continues there will be some recovery in that. We can expect that but if we look at the projections the Government has set out in its budgetary documents some months ago into the years to come, they are questionable in terms of the costs the economy is likely to face and the feasibility of what are declining overall levels of taxation revenues proportional to national income. That does not make sense regardless of the way one looks at it.

Mr. O'Brien mentioned that we have the most redistributive tax and social welfare systems in the world. I am not sure if we do. I suspect we are very close to it if we do not, but the reason for that is because the starting position is so bad. It is because we have such an inequity in terms of starting distributions of earnings and because the State has to step in through the tax system and, most principally, through a social protection system to even it out. That is why I said earlier that the State does a very good job at doing that, but we forget the fact that it is the starting position that is so problematic. One of the solutions to adequate levels of income, therefore, is that we end up looking at adequate levels of pay to be the base for that.

I will make some brief points on the living wage, picking up on some of the other comments. I wish to clarify that it is one figure that is being set out, not 20 or anything like that, and it is for the country as a whole. There is a very clear technical document laying out the calculation of it for the Republic of Ireland. It does work in other countries. It is fairly well established in London, for example, and outside London in the United Kingdom, as there are successful living wage schemes in other parts of the world, including in the United States, Canada, New Zealand and so on. Employers make that work, and they make a link to the fact that this is about saying that if an individual is working full time, they should be earning sufficient to be able to afford a decent standard of living. That is what the living wage is intended to do. That is not to say it is the answer to all our problems or that all our problems will disappear, but the significant contribution it makes is that it provides an annually updated benchmark, which will tell us the level of income employees need to be earning for them to be able to afford a decent standard of living. When they are below that, they are clearly cutting back and when they are above that, they have some discretion in terms of their spending.