Dr. Tom McDonnell:

The budget 2018 measures will be extremely helpful in respect of child care supports. Our view is that it is a start. State spending on child care is well below what it would be in the Nordic countries.

In the countries that have such high labour force participation rates, particularly for women, second earners and lone parents, the barriers for entering the labour force and staying in the labour force are much lower. I view that as year one and we gradually ramp that up over time. Clearly there is a capacity issue with the number of people working in the field.

There are also issues with the attractiveness of that as a career. One should consider moving it to being something akin to primary school teachers, who are salaried over a year and it can be a genuine profession, leading to a higher quality workforce in the long run. To give the best bang for buck, the best returns economically are in within education. Within education, the best bang for buck is the earlier the better. Therefore, pre-primary care and pre-primary education are extremely important for the development of human capital. It is a terrible phrase, but it is one used in the economics literature. The biggest barrier to human capital, of course, is poverty, but early childhood care and education are also extremely important. In our view, that should almost be top of the priority list for budget 2019 and beyond.

The marginal tax rate kicks in at quite a low rate when compared internationally. However, the effective tax rate for someone on average earnings is well below what it is elsewhere - the graphs are included in the supplementary materials. Comparing personal average tax rates and labour income for a single earner, for example, we are below the EU 15 all the way up to 250%, which is as far as the OECD does it. The gap is significant enough that one would imagine it goes to at least 300%. Therefore, someone on the average wage is paying less than-----