Mr. Seamus Coffey:

The Deputy has asked for two separate views. The report I previously wrote showed my personal view and that of the council. Today, I am primarily here to represent the views of the Irish Fiscal Advisory Council. We have clearly highlighted this aspect as a risk. We referenced that the situation echoes our past reliance on significant amounts of receipts from one tax source. As the Deputy said, it looks like corporation tax will be 18% of the Exchequer tax revenue this year and that supports a huge amount of spending in the economy.

If I take off my IFAC hat and discuss the report, as published, within the past year I discussed the sustainability of receipts with either this committee or the Joint Committee on Finance and Public Expenditure and Reform, and Taoiseach. My view, in terms of the report, would not really have changed. I would consider that corporation tax is a volatile tax. It is likely to go down at some stage. I would continue to be of the view that the receipts are sustainable to at least 2020. Admittedly, the level is different so that means the risk is higher. Given that the step change occurred in 2015, and there has repeatedly been a step change since then, the evidence would suggest that the point I made around 2016-2017 still holds that the receipts are sustainable until 2020.

From the perspective of IFAC, the level of risk keeps getting higher and the amounts keep getting bigger. It is good to get this money. It is much better to collect €10 billion in corporation tax than not to do so. From the perspective of IFAC, we would be aware of the risk that this possesses. The report did not explain where the money came from. We have seen a huge surge but, as things stand, we have a limited knowledge as to why this happened. The amount could go back down. From the perspective of IFAC, we would be concerned about introducing permanent increases in spending on the basis of these, potentially, temporary revenue sources. That is what we have seen over the past number of years. We have referenced the fact that the delay in moving the public accounts into surplus has not been due to a deterioration in the economy. The delay could have happened naturally. The surplus has been pushed back even though the economy has performed stronger and we have these huge additional corporation tax receipts. The reason for the delay is policy, not the economic environment. I would hold the view that the receipts are sustainable. The year 2020 is not too far away so I am not putting myself too much on the block at this stage.