Dr. Conor O'Toole:

There are a couple of elements it is important to pick up on. As the Cathaoirleach mentioned, tax rates are applied as a proportion of the underlying activity, which is why, as the value of that grows over time, they rise over time. A key issue is how we get back to a situation where we have price stability, and low price growth over time, but also have rising living standards. We want people's incomes to grow faster than inflation over time because that leads to rising living standards. How does that typically happen in economies globally? It happens through capital deepening, so we get better technology or capital, which can help to raise productivity growth. We get economic growth through population growth plus productivity growth and employment growth. In the construction sector, but also more broadly in the domestic economy, if we can raise productivity levels in domestic firms, that should help to raise living standards. It is to be hoped, therefore, to have above-inflation wage increases that would allow people's living standards to rise.