John Lahart (Dublin South West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Coffey for his public service. He mentioned the word "crisis". He is predicting a crisis in fiscal policy based, I presume, on the past. There is a degree of "Groundhog Day" about all of this when Mr. Coffey comes before the committee so rather than rehash and rehearse some of the points I have made on previous occasions, I wish to put a couple of points to him. The first relates to the Taoiseach's comments on the over-reliance on corporation tax, and that it could be offset to some degree by an anticipated increase in growth in stamp duty revenues as a result of increased building. What are Mr. Coffey's comments on that?

My other questions are general ones. The State is going to spend some €17 billion on the health service this year. In Mr. Coffey's view, is that enough to run a good quality health service if everything is equal? In other words, is it sufficient if it took account of the comments Mr. Coffey has made on how health spending has not been controlled in previous years?

The Minister for Finance referred to surplus and there has been another big boost in corporation tax receipts. He is not putting it in the rainy day fund but he is giving it to the National Pensions Reserve Fund. He is not saying exactly what it is for, but he seems to imply that it will not be using it, in other words investing it, and that it will just sit there until such time as we might need it.

Mr. Coffey indicated in the final lines of his statement: "The Government can ensure a prudent fiscal policy where net policy spending growth does not exceed....Three reforms would help to achieve this", and he outlined what they are. That involves a move away from the reliance on corporation tax and setting it aside when one thinks it is a bonus. What is the net impact? There is clearly an impact on day-to-day Government spending. What would the impact of that be, because there would obviously be less available funding? Where would the moneys to replace that come from or is Mr. Coffey saying that the Government will just have to live within the limits below the corporation tax receipts?

Second, we have a copy of the OECD Economic Outlook. To a layman, some of it does not seem to refer to us, and global growth might be different from Ireland, but it does call for an urgent need for a much bolder policy action to revive growth. Obviously, Ireland does not have growth issues but without corporation tax receipts and, perhaps building, there are underlying growth issues. The OECD points specifically to transitioning towards sustainable growth amidst digitalisation and climate challenges that would trigger a marked acceleration of investment, particularly from the private sector. If the IFAC representatives were to answer no other question, I would like them to answer this: were the Government to take all its advice and put these portions of unsustainable, unreliable receipts in either a rainy day or prudence fund, where would we make up the difference? What suggestions does IFAC have on that that are tenable and achievable from a tax perspective?