Dr. Tom McDonnell:

In broad terms, the overall analysis of the Commission on Taxation and Welfare is that we are facing into a deterioration of the fiscal situation over the next ten, 20 or 30 years. Ageing is going to have a profound effect on public spending. In terms of healthcare, pensions and long-term care, there will be fewer people working as a proportion of the total population. That will reduce income tax receipts and PRSI. For that reason alone, we would want to be coming into the 2030s and 2040s running budgetary surpluses and very slowly, over time, gradually broadening the tax base a little bit every year, rather than realising when we get to 2030 and 2035 that we have a big problem and we are going to have to put all the burden on the next generation. Instead, it is fairer to do it now and to gradually look at ways of reducing tax expenditures, for example, which are often non-transparent, regressive and bad for the economy in the longer run. Looking at areas where taxation might be quite low, property tax would be one example but I could give many. That is part of the context around our views on VAT and the Commission on Taxation and Welfare's views in terms of VAT but overall yes, to manage the ageing population, we are going to have to have a stronger revenue base. We have a very young population now but that will not be the case forever. The only way we can reconcile that outside of higher taxes is by very high levels of inward migration to maintain employment growth year on year. Those are the two options. Something has to give.