Dr. Robert Sweeney:

The report of the commission makes a number of recommendations, such as the equalisation of the rate of excise between petrol and automotive diesel. There are several other subsidies. The report refers to the fact that Ireland is one of the biggest subsidisers of fossil fuels in the OECD. We would support phasing out that subsidy. It is almost widely agreed we need to phase out many of those subsidies. We also support the introduction of a carbon tax. I understand some of the concerns in respect of carbon taxes, such as that they are often not distributionally neutral. There are a couple of points to be made in that regard, however. First, not every lever has to be distributionally neutral. Excise on cigarettes, for example, is not distributionally neutral. It is designed to change people's behaviour. That is one point in support of carbon taxation. In addition, a suite of measures must be introduced such that the aggregate policies are not distributionally negative or regressive.

The commission's report makes many recommendations on how to reform the welfare state, social insurance, unemployment benefit, pay-related unemployment benefit and so on. That is what I have to say about that. Behavioural change is a legitimate justification for implementing some sort of fiscal measure, provided it comes with other measures potentially to offset some of those regressive aspects.