Dr. Tom McDonnell:

Indeed. Perhaps what we are looking at is opening a debate about combining USC, PRSI and income tax and maybe simplifying them down to just two streams, where there would be modified PRSI and modified income tax-USC with a minimum of reliefs, retaining a progressive structure within which PRSI would be expanded to include new benefits such as supplementary pension, as is the case in other countries, and an employer contribution that goes towards child-care subsidies, which is important from the perspective of gender, lone parents, etc. I favour moving in that direction and using the social security system to encourage labour force participation, particularly by second earners. Ultimately, that too would boost potential GDP, and everyone would benefit from it. In budget 2017, assuming there will not be radical changes in terms of the reforms I have talked about, I would be reluctant to introduce measures of that type, but it would be a great idea for the committee to have that debate as 2016 and 2017 progress, and come up with recommendations on fundamental tax reform for budget 2018.