Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I want to touch on corporation tax. Mr. Coffey referred to the sustainability of corporation tax out to 2020. The definition of sustainability probably goes beyond 24 months. Could Mr. Coffey elaborate on that? He answered a previous question by referring to a report from a number of years previously. If we can only predict that those revenues are likely to be maintained at the current level for the next two years, I do not think that equates to sustainability. I would like Mr. Coffey to elaborate on that.

Looking at the fiscal monitor that came out in November, the Government had projected €1.1 billion above profile, €700 million of it non-recurring, with the rest recurring. Now we see that it has gone up by another €470 million, and possibly one might see the same in December. We are now more than €1.5 billion above profile. We evidently have serious challenges in terms of predicting where corporation tax is at. I assume that is also due to the fact that there is a small number of very large players that can distort the figures in a very positive way. Does Mr. Coffey believe something can be done from the viewpoint of the IFAC to come up with better projections in terms of corporation tax?

The most alarming thing for me in terms of the budget is that we are funding the necessary increase in health expenditure from increased corporation tax receipts. While the IFAC report shows the increase in corporation tax and the reduction in the net interest rate and the in-year spending has increased, it became very obvious this year that we decided to use this year's bonanza to fund health and, to say the least, that is madness. Could Mr. Coffey comment on corporation tax? Sometimes one sees headlines such as that the Irish Fiscal Advisory Council says that corporation tax is sustainable but I would argue that if the council is only suggesting it will be at that level for the next two years, it probably is not sustainable. People could take the view that everything is okay and there is nothing to see here.