Dr. Seán Healy:

We welcome the opportunity to meet the committee, whose work is very important. As not everything can go into the opening statement, we would be happy to deal with any issues people want to pursue in the questions that follow.

On the surface Ireland is performing very well on a range of issues: our economy is growing and unemployment is low. On closer analysis, there are some very serious issues. We have a housing crisis; we have persistent poverty and social exclusion problems; we have a long waiting list for healthcare; we have major issues relating to climate change and so much else that would actually bring into question how well Ireland is performing overall.

It is important to recognise that budgets are about choices. In making these choices Government is shaping the society of the future. It is putting in place the various components of what it considers to be a good society, the infrastructure and services that shape the future.

Budget 2020 should be designed so that it is both economically sound and socially fair. These twin objectives are both realistic and achievable. However, they need to be underpinned by a clear policy commitment and by budget decisions aimed at achieving both.

I will address the overall fiscal position. The fiscal space is a critical issue. Government has the freedom in budget 2020, and in any future budget, to generate additional taxation revenue, from raising taxes in one area, and then spending or investing this money elsewhere. For us there is an issue about the transparency of the budget where the fiscal space is concerned.

We note with concern that the table setting out the available fiscal space for the next budget which was previously included in the stability programme update has been omitted from the Draft Stability Programme Update 2019 published in April. To facilitate informed comment and engagement with the budget process the details usually contained in this table should be made available in the public arena.

On public expenditure and Exchequer receipts policy, Social Justice Ireland believes that in the coming years policy should focus on increasing Ireland's total tax take. A move in this direction is unavoidable if we are to deal with the existing gaps in infrastructure and social provision, and if we are going to deal effectively with the other issues that emerge and the bills that have to be met in the period immediately ahead.

Using GDP, GNI and GNI* is problematic in setting targets. We propose setting a new total tax take target on a per capitabasis. The target is that Ireland’s overall level of taxation - not just income tax - should reach a level equivalent to €15,000 per capitain 2017 terms. This target should increase each year in line with growth in GNI*. We calculate that the difference between the level of taxation by continuing as things are and what we propose would be €3.5 billion in 2019.

Increasing the overall tax take to this level would require a number of changes to the tax base and the current structure of the Irish taxation system. Increasing the overall taxation revenue to meet this new target would represent a small overall increase in taxation levels and would be unlikely to have any significant negative impact on the economy. It would still keep Ireland as a relatively low tax-take country.

Demography will have a significant impact on Ireland’s budgetary position. Ireland’s growing and ageing population will require increased spending at certain stages in all levels of public expenditure, from early childhood education and care, through education, healthcare and pensions, and obviously care and social care for older people. These issues should be part of the framing of Ireland’s overall fiscal position.

In the broader context we believe that windfall gains in taxation should be used to provide investment for non-recurring infrastructure projects such as the provision of social housing, primary healthcare centres, rural broadband etc. Once the houses are built, they do not need to be built again next year; it is one-off expenditure.

Delivering a just taxation system requires three actions: an increase in the overall tax take, adoption of policies to broaden the tax base, and the tax system to be developed fairly. To achieve a budget that is economically sound and socially fair, other issues have to be dealt with besides taxation. Issues relating to social, economic and environmental development, in particular, have to be addressed simultaneously. We believe the budget should seek to develop five overall goals, including a vibrant economy, decent services and infrastructure, just taxation, good governance and sustainability. We spell out each of those goals in a series of proposals, which we can break down and so on. These proposals are set out on page 3 of our policy briefing, Budget Choices, which we circulated to the committee in advance of the meeting.

I draw the committee's attention to the fully costed set of proposals in the briefing. We have also identified how those proposals can be paid for and the impact they have on the overall budget. We set out all of our taxation proposals and what the income would be from those proposals on page 16. We spell out all of our expenditure proposals and what they would cost on page 17. We then balance the books on page 18. We are being totally transparent in that every proposal we make is costed and we show how it can be financed. We recommend this document as a set of proposals for a fully integrated approach, socially, economically and environmentally, where the decisions are taken simultaneously and, therefore, one is not dealt with without the other. We can be as specific as the committee would like on any of these proposals.