Mr. Sebastian Barnes:

That was a very interesting and wide-ranging set of questions. Health is a big issue to focus on in the public finances. As the Deputy notes, there has been a lot of temporary spending on health because of Covid-19 and it was very important that that was done. As he said, there is a risk that some of that could become permanent spending. We are not completely away from the kinds of pressures we saw in recent years. A striking figure is that the permanent health spending next year, taking out the Covid part, will be 30% higher in cash terms than it was five years ago. That is a very significant cash increase in health spending. As we know, and as we have discussed in our previous reports, most of that spending came about in an unplanned manner. It was not originally budgeted for and came about through supplementary budgets and then was locked into the base. There is also the implementation of Sláintecare on the horizon. That is estimated to cost €3 billion. Some of that, apparently, is in this year's budget. It was not very clear to us how much of that has been done. There has been no up-to-date costing of the implementation of that reform since, I think, 2017.

A lot of things have changed since then. That is one of the reasons we think that, as part of the package in the spring, it would be good to have a good costing of that.

Health, of course, is one pressure among many others. As Deputy Nash noted, and as we have noted, the programme for Government essentially makes commitments not to increase taxes on approximately a third of the tax base. It also commits not to cut or adjust spending on approximately half of the expenditure base. It is therefore a very restrictive document. This is why it is important for the Government to clarify how it will prioritise these issues and address them going forward. As for the public finances and how these pressures can be reconciled, the choices are unfortunately very clear. One is higher taxation; another is adjustments on the spending side. Whether that comes through reprioritising certain programmes or increasing the efficiency of certain activities, those are basically the choices. The Irish Fiscal Advisory Council recognises that none of these choices are easy, but these are essentially the choices the country, the Government and everyone faces. In that context we do not have specific views about wealth taxes or any other way of achieving such an adjustment. That is really a choice for the Government and the political system.

As I noted earlier, the tax commission has an important role to play in coming up with ideas and proposals of ways of increasing the effectiveness of the tax system, making sure it is fair and contributes to growth. As I also noted, the spending review process could be strengthened. At the moment it is very much an analytical and technical exercise. It is good work but very technical work. In other countries, such as the Netherlands, they use it as a way to prioritise government spending and to consider the efficiency of what is done.

A third pillar in this regard - the council has engaged on it in the past week - is the pensions commission. As I said, pensions is partly a long-term issue about the public finances but it is also a short-term issue. Every year between now and 2025, ageing will on average add another €850 million to the spending base. This is a lot of money, so those things need to be considered. In that context, we were concerned about the change in the legislation on raising the pension age in the beginning of next year.

I will make one very specific point about taxation. We do not have general views about different tax instruments. One thing worth noting is the fact that property values for the purpose of the property tax have not been updated as planned. This is one area where a plan was in place which has not been implemented. It will be important to get back to that if that is what the Government intends. There is a risk otherwise - we have seen this in many countries - that if the properties are not revalued for the property tax, it never gets done and the tax base suffers as a result.