Oireachtas Joint and Select Committees

Thursday, 18 June 2015

Committee of Inquiry into the Banking Crisis

Nexus Phase

Mr. Kevin Cardiff:

No, I can't, specifically, for the very good reason, as I explained to Deputy Murphy, that mostly it wasn't ... that advice wouldn't have come from me; it would have come from the Secretary General or it would have come from whichever senior officer at the time was in the fiscal co-ordination because the economic unit and the fiscal co-ordination unit were usually together under the one manager. Now at various times on the ... when I was dealing with tax, in particular, I would have given advices on particular aspects. For example, I ran the process, ran it as hard as I could, that led to the abolition over ... on a phased basis, of the tax incentives. And at the end of that period ... so that would be, I forget, you'll know, you'll remember better than me, probably end of 2005 or beginning of ... whenever that was ... whenever we were abolishing the tax incentives.

At that point, there was already some sense in the mix that, you know, maybe we're abolishing these things actually just as property is about to top out. So, the property incentives were to be phased out rather than immediately cut and there were two reasons for that. One was because in, in natural justice and having regard to legitimate legal expectations and so forth, people had made plans on the basis of existing law and were entitled to finish through ... to carry through their plans. But the other was, that at that point, if the market, if the property market was toppy, you could actually ... you could actually, sort of, precipitate something more quickly than you wanted to. I think it was Nigel Lawson said that the economy doesn't crash ... it doesn't crash on the fast downhill run, it crashes when you put on the brakes ... maybe it was Brittan. So, there was a danger, I suppose, at that point, in relation to that particular issue that if you slammed on the brakes very hard, you might have more impact than you realised. But the general fiscal advice was coming from someone else , so my pieces of it would be a bit different.

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