Richard O'Donoghue (Limerick County, Independent Ireland Party)

It is my question this time. To follow on from the last comment on reducing VAT to 9%, it is a good thing because it can also counteract inflation. At the moment, if you are on a 13.5% VAT rate, you are looking at wage increases and food production cost increases. When you look at your tax base, it is only year on year you are talking about the tax base being reduced. If you go back three years and look at the tax base you have now versus three years ago, because of the price you are paying for your product the taxes that are received on the products today far outweigh the taxes you were getting three years ago. As for saying that our tax base will be down, it will be down for this year, but if we go back to last year, it will actually be up based on last year's taxes. Factually, we are talking a year-by-year basis. I am a contractor, so I have been in business all of my life. I have been in business for 30 years. I can see from the tax base, from PRSI, from sick pay and everything else across the board that has to be paid that every time there is an increase in the cost of materials and labour, the consumer pays, which drives inflation. No matter what wage increase there is, from the minimum wage upwards, because it is a domino effect, businesses are getting nothing extra for their increase because inflation takes it away. If you have charged more, you have to pay more. It is a circular economy when you look at it. From the tax base we were in last year, even if it goes to 9%, there is no difference. This year we are actually up on the tax base from last year.

I will go further on this. The witnesses said earlier that for capital spending, one of the things you have to do is raise your tax base. That is grand, but it is one thing raising a tax base. It is another thing getting value for money for your tax base. If you look at private delivery versus public delivery and at the cost base between them, private delivery can deliver the same infrastructure for less than the public delivery can do it and there is no overspend because it is based on design and delivery. You have your base price and design price and you might deliver, say, a project of €1 million, whereas you could have a public price based at €1 million and the next thing they change it because they have a figure designed themselves. That project could turn into €2 million, or it could turn into a children's hospital all over again. If we had the tax base we have now, and we had design and delivery for infrastructure, we would then have projects coming in on budget, on time. That means we would have more houses, more delivery and no overspends, which would make an accountant’s job easy. Why do we not look at the basis of a private delivery versus public delivery, with the costs based on the private delivery and what they deliver versus a public delivery? It is public-private delivery, but we would look at the overspends. How much could we save in taxes every year and put back into infrastructure?