Professor Terrence McDonough:

That is a good question. I believe both are true. On the one hand we had a set of social partnership agreements which were trading wage moderation for cuts in income tax. I believe that resulted, along with our internationalisation strategy, in tax rates which were lower than they should have been. They were certainly lower than comparable continental countries. The Government was also making up for these low income tax rates by taxing the property bubble in various ways. Taxing a property bubble is a way of narrowing the tax base because a property bubble cannot continue forever.