Mr. Seamus Coffey:

I will take the first question. The Deputy is correct that if one can make an international comparison, although there are massive difficulties in terms of getting a common denominator to compare across countries, Government revenue in Ireland is substantially below the OECD average. The question becomes why Government is revenue below the OECD average. In the main it comes down to social insurance contributions. If one looks at income tax, sales taxes like VAT, corporation tax, which is now above the OECD average, and other taxes, we are close to the average for most of them. There might be differences in how we collect the money. With income tax, we are close to the OECD average for the amount of money collected but we collect it in a much different manner from other countries.

The big issue with social insurance is how we run our pension system. We are a much lower Government revenue raising country than other OECD countries but equally we are a much lower Government spending country, particularly on pensions. We tend to have a flat-rate pension system where one makes contributions and benefits are flat-rated based on the number and length of contributions, whereas in most other countries they have contribution-based systems where a person who puts in more money gets more money back. Our system is much more redistributive. Those on higher earnings make much greater contributions and those on lower incomes make a smaller contribution but everybody gets the same pension. One of the key drivers of the difference, which is quite substantial, is down to social insurance and how we run our pension system. There is ongoing debate in Ireland about how we should change it. If it were to change, it may end up with people actually giving more money to the Government, but equally then they just get it back. It would be a form of a long-term saving scheme. We do not have substantially less revenue for providing Government services in health and education.