Mr. Ger Gibbons:

On behalf of the Irish of the Irish Congress of Trade Unions, ICTU, I thank the Select Committee on Budgetary Oversight for the invitation to discuss the report of the Commission on Taxation and Welfare, chapters 9 to 12. This follows on from the submission on these chapters which we made to the committee in December 2022. I am joined by my colleague Dr. Laura Bambrick.

In these opening remarks, I am not going to go through the full opening statement which we sent to the committee some weeks back. I would like to touch on a number of points at this stage. I echo what Dr. McDonnell has said, that the commission's report correctly recognises that Government revenue as a share of national income must be increased to provide the resources necessary to meet the many challenges to fiscal sustainability arising over the medium and long term; mainly due to our growing and ageing population as well as the green transition. We think this is perhaps the most important contribution the report has made and one that must guide policymaking in the years ahead. We accordingly welcome the recommendations to broaden the tax base and to minimise tax expenditures and differential tax treatments. This approach is entirely justified on the grounds of horizontal and vertical equity, economic efficiency and transparency.

However, to echo the points that Dr. McDonnell has just made, this approach is not carried over into chapter 9 on promoting enterprise. Instead, this chapter makes a series of recommendations that not only endorse, but in some cases actually seek to extend, a raft of very generous and costly tax expenditures and low rates for enterprises and high-earning individuals. We refer at this particular stage to the recommendations concerning entrepreneur relief, the special assignee relief programme, and the limited nature of the recommendations concerning the research and development tax credit. Some of these recommendations in chapter 9 run counter to the approach taken elsewhere in the report and only serve to undermine its overall coherence.

With regard to chapters 10 to 12, inclusive, we very much support the principle of broadening the PRSI base to safeguard the future sustainability of the Social Insurance Fund and to improve the adequacy of income supports, and we broadly agree with the range of recommendations put forward to achieve this. We welcome the key recommendation on benchmarking and indexation of working-age payments set out in chapter 12. As our pre-budget recommendations for budget 2023 stated, to ensure income adequacy, social protection rates should be benchmarked against median earnings. We argue this should be done against the median earnings of full-time workers as now envisaged by the directive on minimum wage which must be transposed by November of next year. We are disappointed the commission did not recommend increasing the employer PRSI contribution rate and, as outlined in our statement, we have concerns about recommendation to make low-wage workers and people over 65 liable for PRSI and the recommendation concerning inward support, that this should not, in effect, result in wage subsidies for low-paid and precarious jobs.

We are happy to develop and set out our views further on these points and to answer any questions on these matters. We look forward to the exchange with members.