Dr. Tom McDonnell:

I thank Deputy Durkan for his important insights and very good questions. In terms of tax cuts, to be clear, what we said in our statement was that there should be no net tax cuts, which would open up the possibility of all sorts of compositional changes one might not wish to pursue. There are things on the income tax side one could do for low- and middle-income households, from increasing the threshold for the universal social charge, USC, to increasing tax credits or potentially even increasing the standard rate cut-off point. That could be offset in other ways, not necessarily through the income tax system but through capital taxes. There are other ways one could do it as well. If we are looking at an envelope of €6.7 billion, not counting once-off measures - we are happy to talk about those too - it has to be about looking at what is, I hope, a singular crisis and focusing on the households that are in danger of falling into greater poverty or deprivation and for this year certainly, not focusing on households that are not experiencing or likely to experience those problems. We will need additional supports for business too. That is the broader point we are making.

On the inflationary impact, almost anything you do in terms of public spending or tax cuts is going to have some inflationary impact. Tax cuts for higher earners will have a smaller inflationary impact because they save most of the money but, of course, that is the point. They are not suffering at the moment and can afford to save, except in the case of house prices, which would go up.

The Deputy is correct that there has been a house price inflation issue for a long time. We have had a housing crisis for two decades now. It is probably the single-biggest competitiveness issue in the economy at the moment. We all anecdotally know about people who cannot come back to Ireland. The income tax system is often cited as a reason. There may be some truth in that, but the one reason we always hear is housing and the absolute lack of housing, particularly in the greater Dublin area.

In terms of wealth taxes, there are different types. There is obviously net wealth tax and tax on inheritance. There are property taxes, which are a version of a wealth tax, and there are site value taxes. Even capital gains tax can be interpreted as a form of wealth tax. There are a lot of different ways that could be done. Broadly, we are saying that some of those types of measures may be appropriate and are likely to be appropriate in the coming years. The point is that if there are to be tax cuts, they should emphasise and focus on benefiting lower-income households in particular who are likely to be at the coalface in terms of experiencing food or energy poverty, especially over the next six months. That is our sense of that issue.

In terms of house price inflation, the Deputy mentioned investment funds. Our position is broadly that there needs to be a much more significant role for the State here. A State housing company could manage supply over a long-term period, thereby managing inflation. It could cool down the market or heat it up as appropriate over time. That is a medium- to long-term reform. It is not going to deal with the problem in 2022 or 2023. Unfortunately, that issue will be with us for many years to come, and supply will not catch up with demand probably for at least another half a decade.