Dr. Sheila Killian:

That can be done by signalling a significant change in terms of our attitude to tax and to flow. Related to the Senator's idea of having an ongoing spillover analysis is having an impact assessment of all our new tax treaties and our annual budgets that would not simply be an economic impact but an economic, social and human rights impact. If all our tax rules that came in were subject to such legislation, that would have a very strong effect on an ongoing basis and would be very good reputationally for Ireland. It would be nice to move beyond being constantly defensive every time a new report comes out from Copenhagen, California or wherever and to be able to say that we have genuinely made changes here in the way we are approaching this system and we are genuinely and actively trying to discourage aggressive practices and encourage real investment in the country that will create jobs and prosperity.

It requires very strong signalling as well as strong regulatory measures. The Copenhagen report focused on an innovative aspect, namely, the ratio of wages to profit. It was an interesting measure and it highlighted things that look odd. All of these reports set out to measure the invisible. They are trying to measure the amount of tax that is not being declared. If I put in place a piece of academic research to measure the invisible and I say it is €90 billion, it is not difficult to say it is not €90 billion and that it is more like €20 billion because what we are measuring is invisible.

We need to get to a point where we do not have to be defensive about those reports rather than having constantly to critique their methodology. That was an innovative idea. It will not provide a very accurate measure but it does highlight disparities. To do that we need to get away from filling in all the little holes and turning off these illicit flows into Ireland. That demands both regular spillover analysis and updating the methodology because the methodology used previously is now outdated. If it is to be done again, it should be done with a new methodology. It also demands having true impact assessments for all our fiscal measures that are introduced. This is something that will be required. It may not be required for five or ten years but we can future-proof our policies and get a certain amount of reputational first mover advantage by doing it now rather than waiting until we are told to do it and then saying we are being obedient to the base erosion and profit shifting, BEPS, process. As Mr. McCaughey said, we can establish a reputation here and that would change the signalling and reduce the kind of harmful investment that comes through Ireland. That would have a positive effect on the developing world.