John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

That is fair enough.

My final point is in regard to the USC. I do not wish to argue with Professor Barrett's view in terms of the overall taxation system. Having spent far too long of my life in the banking inquiry discussing the hollowing out of the tax base, I can see the argument that is being made. I studied economics for years and I never found it to be, as it is often referred to, "the dismal science". I always found it interesting. However, sometimes there can be a disconnect between theory and reality in the sense that there are many in this country now who probably suffered most in the economic collapse, who have jobs that are in the €30,000 to €50,000 region in terms of salary, who bought their houses at ridiculously inflated prices and who are struggling to keep a roof over their head.

These are the same people with young children who spend whatever they earn or whatever they are able to spend to send their children to crèches, if they are still in employment. In theory, the incomes of these people are quite strong, but the expenditure they face to keep a roof over their heads and their families in the educational system is so high. They are extraordinarily and disproportionately affected by our taxation system. The way it is structured means they end up paying for everything and getting nothing for free.

This may only become apparent to a politician who deals with these people on a daily basis when he or she sits across a table in an office or clinic from them and they are literally in tears because they do not know how they are going to keep body and soul together and put bread on the table to feed their families. In light of some of what I have read in your presentation there seems to be something of a divorce from the reality facing families in the context of the universal social charge. I do not care what it is called, but it replaced two levies that were in place for years. Perhaps Professor Barrett has done so in other places but no one in media commentary ever speaks about the fact that the health levy and the other levy brought in over €3 billion annually. The current €4 billion plus that the universal social charge brings in is not significantly higher. The middle and lower income group is made up of people who, for the want of a better term, put their shoulders to the wheel when the country was on its uppers. They believe, rightly or wrongly, that they should get some benefit directly in their pockets because their incomes have reduced so much. Whether it is through the universal social charge or income tax is a moot point.

The witnesses commented on how the notion has built up that the universal social charge was a temporary measure. I was in the Seanad at the time. In fairness, it was not the Green Party elements of that Government, but the other elements that specifically said in debates and on the airwaves that it was an emergency measure brought in at a time of crisis. It is not a notion that any politician or anyone else has created; that was the way it was sold. Surely, whether it is a question of repackaging, directing these funds towards pensions or changing the PRSI system, people have a right to expect that in the case of this temporary emergency measure, which was sold to them as such at the time, some relief would flow from an improvement in the economic situation.