Mr. Sebastian Barnes:

Overall the choice is about how to prioritise spending and tax adjustments. This is very much a question for the Government. Deputy Farrell referred to the increase of €5.4 billion up to €8 billion, which is a very large increase in the context of recent budgets. It is also quite a large increase if one looks at it relative to the sum potential tax changes. Clearly, things such as the sugar tax raise a very small amount relative to that. It may well be desirable on public health grounds, but it is not something that radically changes the picture in Government revenue.

The imposition of the carbon tax, again, can be very helpful in reducing emissions, which is a goal that we all support. On the other hand, those revenues have already been allocated to specific things. Again, it does not provide a general solution for supporting further spending. If one looks at the increase in PRSI rates, the estimate from Revenue is that this would bring in another €750 million per year. It is important to view this as context for looking at the impact of these increases in spending. Of course, the economy will grow over the coming years also, which will provide additional revenue. At the same time, the costs of standing still, which is the cost of the Government continuing to provide the same services taking into account the costs of paying higher wages, higher welfare rates or maintaining welfare rates in real terms at their existing levels, and the costs of ageing, which will add another €850 million per year on average to public spending, will eat up a lot of the space that growth will create. It will probably eat up more than the amount that additional growth will generate over some of these, once we get beyond the recovery. It is a challenging environment and there are difficult choices to be made in terms of increasing spending and perhaps reviewing spending in existing areas. One thing we call on the Government to look at is to strengthen the spending review process. That does some good work, but it could be made into a genuine process for looking at whether Government spending is prioritised and delivered in the most effective ways. There are some very hard choices coming around taxation and spending.