Mr. Fergal O'Brien:

I thank the Deputy for his questions. In our conversation, inequality in society and the statistics we use to measure it are mainly looked at in terms of household income data, including social welfare. I would go back to some of the comments made earlier about the source of inequality. I believe it is due to having such a high rate of jobless households and that this is the single source of inequality in society. The issue is not just the social welfare system, but more about how we can help people in these households find jobs. These are people whose parents may never have had a job. This is one of the biggest challenges we face and is crucial to the debate on inequality.

In terms of tax, my point is that there tends to be significant revisionism in terms of the economic history of the 1990s and 2000s and of the cuts in taxes making the system unsustainable. The problem was we had a very narrow tax base. Our argument would be that we should broaden that tax base. We must learn from that crisis. When the economy collapsed, there was nothing coming into the public coffers. This was because we had an excessive reliance on income tax and transaction related property taxes. Broadening that tax base to services and property makes sense and will protect us in future downturns. We argue that having competitive income tax rates, in what is now becoming an increasingly mobile, global labour market, is how we will maximise tax revenue from the perspective of income.

A narrative has developed that the State is subsidising employers to keep people in work. That view is unhelpful to this discussion and we disagree with it. Many of these jobs would not exist if they were a higher cost. The employer may be paying 70% or 80%, but the State would be paying 100% of that cost if it was not competitive to keep that job in this economy. If wage costs are significantly higher, we will lose many of these jobs. We hope we will move to higher quality jobs over time. For that reason we will invest in skills and education to try to create an environment where more people have higher quality and higher paid jobs in the economy. However, many of the higher cost jobs we have here will move out of this country. We have seen this in the past. Before the economic crisis ever hit us, hundreds of thousands of jobs moved out of this economy because of wage cost competitiveness.