David Cullinane (Waterford, Sinn Fein)
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I welcome our witnesses.

Ms Patricia King referred to the dreaded fiscal space. These are the parameters with which we are all working, however. Even those of us who submit alternative budgets have to work with the figures presented to us, even if we have differences of opinion as to how the rules should be applied. The difficulty we face next year is that there will be a €500 million carryover cost because of measures introduced in last year's budget for which a full-year cost was not applied. Accordingly, the fiscal space has shrunk from what it was a year ago. That means the discretionary spend has significantly reduced and there will not be huge scope for investment or cutting taxes, if that is what the Government proposes to do.

The only way we can increase the fiscal space is to either achieve savings in public spending or increase revenue and taxes. Ms Patricia King spoke about a fair and progressive taxation system. What concrete proposals has ICTU made for expanding the fiscal space by way of discretionary tax measures? Has it proposals on spending and savings?

An argument can be made that the capital spend should be decoupled from the fiscal rules. Many organisations which have attended the committee have supported this. Ireland has one of the lowest capital spends in the European Union. That happened because the economy collapsed and the easy thing to do was to stop and slash capital spending. Ms Patricia King mentioned transport, broadband, education, research and development. There are significant capacity problems in many of these areas which will require significant investment. How can we do that if we are operating solely on the basis of a shrinking fiscal space and we have to adjust for carryover costs?

I have argued with other delegations before this committee that if we have a shrinking fiscal space with less money available, as well as demands in education, housing, capital needs and so on, how can we continue to reduce the tax base by phasing out or abolishing the universal social charge, as the Government is doing? Is that the best policy decision?

Obviously, public sector pay will create pressures. We have no agreement on it and there are no provisions made for 2019, 2020 or 2021. To unwind FEMPI, the financial emergency measures in the public interest legislation, would cost in the region of €1.4 billion. There are different commitments to do this and it depends on how it is done, when it is done, who is prioritised and so on. What is the position of congress, notwithstanding the Lansdowne Road agreement and it seeing out its timespan? In the context of a new agreement, what is congress's demand for outstanding public sector pay for 2019, 2020 and 2021?