Dr. Tom McDonnell:

There are different calculations. Some people consider tax credits to be tax expenditure. I personally do not because I see it as a core part of the income tax system. I regard tax expenditures as things that certain segments of society may have a capacity to exploit or as providing reliefs in respect of certain types of activity.

I have not looked at the exact data. A couple of years ago a former colleague of mine on the Commission on Taxation did a lot of good work in that area. Many of the tax expenditures have already been closed off. There are potential gains in that area, but I would take a more surgical approach rather than seeking to get rid of all of them automatically. Again, a core point is that there should always be a sunset clause. When we produce public finance estimates every year for all the different areas of spending such as health and education, the tax expenditures, for example, should automatically be part of that because they are effectively subsidies in the same way that the basic pension or pension tax relief is a transfer to someone.