Colm Brophy (Dublin South West, Fine Gael) | Oireachtas source

A measured, observable reality can be an absurdity to other people. I have a couple of questions for Professor Barrett and I appreciate that he outlined that it was his own personal view and perspective. There are two things. I take on board certain aspects of Professor Barrett's comments on the USC in regard to some of its benefits. However, for lower and middle income workers the USC is an excessive tax that is really impacting on their earnings. It is taking money out of people's pockets. I do not agree with Professor Barrett's conclusion on it at all. While I do not agree with the abolition of the USC, I always have a problem when sentences start with, "We should not abolish the USC" but then suggest that lower, small proportionate phasing or re-tweaking of it is not good either. No one would disagree with the idea that we want a broad, stable tax base, but that does not prohibit us from gradually looking at the extent to which taxes like the USC impact on low and middle income workers in terms of actual disposable income. One of the clear and obvious problems we have is that while, as the Professor said in reference to Friday evenings in Dublin restaurants, we have people who can spend money, we have a large number of people living in the real world who cannot. They are working very hard and putting every hour they can into it, but when they look at their pay packets at the end of the week, the impact of the USC suggests that we should look at doing something for them. If that means tweaking the USC and looking at what we do elsewhere, that is something we should do. I do not accept the economics, which effectively suggests one does nothing and does not touch it.

The other thing is the "Do no harm", comment which was alluded to earlier. If the Government was doing nothing on the supply side, I could see how the ESRI could come to its argument. It did a paper last year a lot of the assumptions of which could be looked at again. One of the huge things that has changed is the programme that is now being proposed by the Government which largely addresses the supply side problems in housing. One does not take any one action in isolation. I agree that if no attempt was being made to adjust the supply side, we could have a tax incentive here or there. At the end of the day, however, one has to create a situation for people who are working and earning and want the opportunity to afford their own home. As well as looking at the supply side, we need to look at how we can help them. There is nothing inherently wrong with that provided it is done as part of a comprehensive package which addresses both sides of the situation. I query that.

I am interested to know why the ESRI seems to ignore the supply side of the Government's newly announced programme. It is probably something we will not agree on because I do not accept the principle that we should be a high tax economy for low and middle income earners just to preserve the stability of the tax base. That is not political rhetoric, it is just a different approach in terms of how I look at things versus, perhaps, the Professor's perspective.