Dr. Nat O'Connor:

Our analysis would be that any further cuts to public expenditure would be a false economy. Cuts to public spending means cuts in public services, social welfare payments and public investment. While this money will of course transfer into people's pockets, they will also have to pay for extra school and health fees. As such, there is no real saving to the economy. Taking imports into account, there is likely to be an overall shrinking of the economy. This is why we focused on the tax side.

We know that in the budget there is €500 million coming from water charges and €300 million due to come in from the changes made under the Haddington Road agreement. We know also that the Irish GDP will be calculated differently. The target is for the deficit to be 3% of GDP. We have to be fiscally responsible and deal with the debt. However, there is no need to go beyond the 3% target. There is plenty of scope on the tax side. We would bring in more than €350 million by introducing a 48% rate of income tax only on that part of earnings over €100,000. That would not be out of line with other European countries and would only affect one in 20 taxpayers. Likewise, tax breaks continue to be extremely high in Ireland compared with other countries and there is plenty of scope there.