David Cullinane (Waterford, Sinn Fein) | Oireachtas source

I welcome the Minister and the witnesses. The committee has met thus far with a large number of witnesses from various organisations. I would like the Minister to take us through this year's budget and, in particular, an issue raised by him in his opening remarks, namely, the universal social charge. First, I would like to give him a flavour of what some of the organisations we met had to say in regard to the phasing out or abolition of the universal social charge. Professor Alan Barrett of the Economic and Social Research Institute, ESRI, said that the USC has many desirable features as a source of revenue, such as progressivity, transparency and stability. Dr. Tom McDonnell of the Nevin Institute said that the USC has a simple and highly progressive structure and the dismantling or phasing out of it would be regressive and extremely costly. The European Commission has criticised the move to abolish the USC. The IMF has called the proposal regressive. The Irish Fiscal Advisory Council called it an unrealistic proposal. In a rare example of agreement, the Irish Congress of Trade Unions and IBEC are opposed to the abolition of the USC. Are all of those experts wrong? We also learned from a briefing document published via a freedom of information request that officials in the Department of Finance believe abolition of the universal social charge or a phasing out of it to be base eroding, regressive and of little value to many people. Are the officials in the Minister's Department who wrote that briefing document also wrong?

The Minister said that it is not possible now, given the limited fiscal space, to phase out the USC over three years. The Fine Gael manifesto committed to this being done over five years. From the Minister's perspective, what is the current position on the phasing out of the USC and the timeframe in this regard? I referred earlier to the view of all the experts on this issue. It is a rare example of agreement from so many different diverse organisations. They are all of the view that it is not wise or prudent to be phasing out this tax at this time. Given the pressures on public services, does the Minister accept now is the time to re-evaluate the phasing out or abolition of the USC?

My next question, which relates to corporation tax receipts, is directed to the Revenue witnesses. In 2014 and 2015, we experienced a massive increase in corporation tax receipts. During its appearance before the committee, the Irish Fiscal Advisory Council expressed caution in respect of future budgets, in particular any proposed phasing out of taxes, spending and so on based on potentially unrealistic or unsound corporation tax receipts. That is the opinion of the fiscal council, not mine. I am seeking the Minister's view as to the sustainability of these corporation tax receipts. Given we have had serious corporate restructuring that has on the one hand resulted in the boosting of corporation tax receipts and on the other hand a distorting effect on GDP, as happened in 2014 and 2015, are we likely to see more of this in the coming years and is that likely to have a further impact on our GDP figures and also on corporation tax receipts?