Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I thank the witnesses for their contributions. I do not want to get too involved in an historical debate but the "lessons" of 2008 have been referenced on a number of occasions, particularly the importance of having a sustainable tax base. I would like to point out that it was not just the collapse in the construction industry that was a factor, although the witnesses are absolutely correct to point to that, but also the fact that in that very year, the Government made a ruling which allowed corporations that did not see a drop in profits to write off an extra €15 billion to €20 billion as so-called charges. That was done in 2008 as a result of the tax ruling in 2007. In a year when everyone else was being creamed and we saw a drop in tax revenue under the corporate tax heading, we gave an extra €15 billion to €20 billion to you-know-who in write-offs. We have been talking about the importance of ensuring the stability of tax revenues but an important element of the discussion that is missing is that we must make people pay their taxes. The Government was very happy to chase people for property tax and water charges but was doing deals with other guys.

That has to be referenced, particularly if we are talking about the lessons of 2007 and 2008.

That brings me to my question to Professor Barrett. This will be my narrative for the budget. What about some wealth redistribution? I wonder if that is on the ESRI's radar in looking at the macroeconomic situation in this country and having stability and sustainability going forward. Is redistribution of wealth, in Professor Barrett's opinion, a priority? I argue that it should be. In the 1970s people used to talk a lot about this stuff but they do not talk about the redistribution of wealth anymore and that, in fact, is what a tax system is for. The real lesson of 2007-2008 and the global economic collapse and the real explanation underlying the incredible volatility in the world economy today generally is the inequality in the distribution of wealth. It should actually be a macroeconomic imperative. I would like Professor Barrett to comment on that.

When one looks through the figures, what one will find is that as a result of the recession the concentration of wealth in Ireland has massively increased in the hands of a small group. That is what tends to happen in recessions. At the end of the recession, a smaller group at the top has ended up with more. We see it in spades with property. What was already a highly concentrated control of the property market in relatively few hands pre-2008 has now become even more concentrated as a result of the recession. We see a small number of survivors and the vulture funds coming in and buying it all up and then effectively controlling the property rental market. That is a central question for me. Should we not be talking about, as a priority in this budget and budgets generally, the necessity of redistributing wealth?

That then brings us on to things that do not get talked about except by us which is wealth taxes and having a database of the distribution of wealth, a proper database that identifies where wealth is in the country, who has it, how concentrated it is and the trends in the concentration and distribution of wealth. We need that kind of stuff. When we are talking about tax, instead of having this artificial public-private nonsense, which Professor Barrett alluded to, we need to think far more about low, middle and high. That is what we should be thinking about in terms of tax. That should be the informing logic of looking at the USC. The people on the low and middle incomes do not need to be taxed any more. They are struggling and they cannot pay their rent or bills. They deserve relief. It would be obscene to give relief to people earning in excess of €70,000 or €100,000. Should we not start talking about that?

Those are my questions. Following the same trend of thought, I have a question specifically on the issue of housing. The witnesses seem to be saying this but I want them to be explicit on it. The mantra has been that if we increase supply, it will resolve some of the problems. Is it not the case that we had massive supply pre-2008 and it did not solve housing problems at all? We still had a massive housing crisis back then. It got worse afterwards. Housing lists increased consistently every year in the pre-2007 period. Rents and property prices were very high even though there was an oversupply. When I hear, as is the current Government policy, that what we need to do is incentivise private developers again to deliver social housing, I just ask whether they are absolutely bonkers. We did that and it did not reduce property prices, reduce rents or deliver housing to those on low incomes. Why would it do it now? That raises the question of the State filling that gap. The market is failing, but even if it is functioning, in the recent past it has demonstrated its incapacity to deliver to certain sectors of society. We have to talk about the State filling that gap. It is an old fashioned 1970s idea but it worked back in the 1960s and 1970s. The State provided the not-for-profit housing because the profit sector was not going to provide it. Is that not the lesson that we can draw both from the 2007-2008 period and also from the fact that we have pursued this policy for at least the tenure of this Government? It has been trying to incentivise the private sector to deliver affordable housing but it has not. The latest figures bear that out. It is worse now.