Mr. Neil McDonnell:

The amnesia to which we refer in a very broad, Catholic sense of the word concerns the tax base. Back in the day - and this is why we were asking people to think back to 2008 - we had a known exposure on transaction taxes. Lo and behold, when these revenues disappeared, we were left in the position in which we now find ourselves. Our exposure is on income tax, particularly sectoral income taxes, and corporation tax, which I know is a whole other issue and there are dangers that could potentially undermine that. The question for the members, as legislators, is if these two tax heads came under severe strain, we will return to the pain and suffering faced by the public sector, in which an awful lot of pain was absorbed ten years ago, and the private sector, which absorbed 300,000 redundancies. That is what the word "amnesia" refers to.

Regarding tax reliefs, which is what I believe Deputy Boyd Barrett was referring to, oddly enough, we probably agree with him on that point. I think he is reading us wrong on this because our point is that these reliefs are being structured for multinationals. The Department of Finance admits there is no penetration of these reliefs. If the Deputy listens to what Dublin Chamber of Commerce and ISME are saying, he will understand that there is no penetration of the key employee engagement programme, KEEP, the employment and investment incentive scheme, EIIS, the knowledge development box or any of these schemes. They go straight over the heads of small businesses, which are not able to avail of them. Therefore, arguably, while the members, as legislators, are meant to design tax reliefs that have socially desirable outcomes, they are not having these outcomes for the sector that is employing half the working population. That is our dilemma. The schemes need to be structured. We are not saying we should get a pass on tax. There is a quid pro quoin that the State and society would also get something useful.

Lastly, regarding income tax, Deputy Boyd Barrett asked where the money would come from. This will be a difficult issue. We have made no secret of the fact that we effectively cut and paste the Irish Tax Institute's 20 key asks into our submission. We reconfigured them in the order that our members found most valuable. Income tax is levied in such a way that once a person's income exceeds the average industrial wage of €36,000, his or her tax bill starts going upward very quickly.

In many ways, that productivity is a good thing but above €70,000, one is at Nordic and German rates of taxation. The difficulty is when one goes back the other way, where we are at low or no taxation. We know we have huge, long-term issues such as the pension deficit. We will not necessarily openly agree with the trade union sector on this but we know that social spending and the social insurance take have to increase. It is likely that that will have to be paid by the individual. People will have to pay for themselves in the long term because they live so much longer after retirement age. The Deputy will probably hear responses that he will like from the employers' sector on this but we need to think about how we will have a sustainable tax system in the long term.