Mr. Neil McDonnell:

On public sector pay, we are well conscious that it is a sensitive issue. We all know people in the public sector. All my family are in the public sector and it is not a popular topic to raise at home. This is not an issue of absolutes. This is an issue of priorities. The issue for us is what happens when one has the sorts of problems that we have identified in health, in housing and in childcare and when one knows that that gap, as a matter of fact established by the CSO, exists. I have ended up in barneys about this previously. One need only look at the monthly earning statistics. It is a matter of fact. We are saying it is up to the members, as legislators, to prioritise but we think the priority needs to be on the capital side. If this will get sucked out in the so-called "restoration" debate and into areas of public pay expenditure which attract pensions with a long tail effect, we do not consider that is a wise long-term proposition.

On the Brexit and USA question, in fairness, we started off in our pre-budget submission trying not to "Jonah" when we say it. We do not want to give the impression that the sky will fall in and, therefore, we have phrased it carefully. We acknowledge the trade situation. What is coming out of the United States is every bit as threatening as what is happening in London. We have previously said we identify some of the Commissioners in Brussels as having an agenda that is inimical to our current economic policy. Frankly, we see threats around us. We have spent a bit of time in our pre-budget submission on the sorts of measures that would work for our indigenous enterprise. Dublin Chamber has covered many of them.

We ask the committee to consider the issue of intergenerational transfer, in particular, in the area of capital gains. We have this figured out for agriculture. Whereas a capital gain is not considered to arise when a farm moves from one generation to another, the Revenue considers that a capital gain arises when a business moves from one generation to another. What is actually happening in both cases is that a going concern is transferred from one person to another and a capital gain does not arise unless the asset is liquidated. Our tax system needs to recognise that. I am conscious that the next group before the committee will recommend an increase in capital gains tax. Such an increase would be revenue negative for the State. If the State wants to increase revenue from capital gains, it needs to reduce capital gains tax because the rate is far too high and is applied inconsistently compared with other countries.