Josepha Madigan (Dublin Rathdown, Fine Gael) | Oireachtas source

I thank Mr. O'Brien. One of the advantages of being Chair is that I get to ask a couple of questions before other members. They do not really have a choice. I will be very brief. I am curious about the USC. IBEC notes that international best practice advocates a broad tax base with a low marginal tax rate. In Ireland we obviously have a narrow tax base and a higher marginal tax rate. IBEC has said that USC cuts would not be in line with international best practice. I will ask three quick questions but I would like Mr. O'Brien's views on that issue.

I want to ask about the rainy day fund. As Mr. O'Brien knows, the introduction of the fund is a countercyclical economic policy. We take money out of a growing economy and we put it into a retracting economy. It is a fundamental part of any budget - particularly when dealing with public finances - that there is money to insulate against any future shocks. I am not necessarily thinking about Brexit specifically but I note what Mr. O'Brien is saying about a mitigation fund. I would like Mr. O'Brien's views. As far as I recall, IBEC said in its pre-budget submission that the fund is fighting against a war. Bearing in mind that the rainy day fund was cut by the then Minister, Deputy Noonan, from €1 billion to €500 million, and that IBEC is talking about the need for capital investment, ultimately a balance must be struck between spending, tax cuts, insulating against shocks and so on. I would like Mr. O'Brien's view on that.

On demographics, Mr. O'Brien said that he expects the working population to expand by more than 20% over the next 20 years. DKM Economic Consultants came in to us and said that the working population will actually reduce by 2050 from 60% to 50%. It got that information from the stability programme update, I believe. That sounds quite different from what IBEC is saying so, again, I would like Mr. O'Brien's views on that issue.