Gerald Nash (Louth, Labour)
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The simplest and most straightforward thing to do - we should all have a collective understanding of this - if we are to address questions around income adequacy and are determined to address issues around deprivation, is through increases in the core rates of social welfare, which match or beat inflation. The Government decided not to do that and took a different approach.

I am attracted to the idea of using the minimum essential standard of living, MESL in the benchmarking process and having a permanent benchmarking commission. Having this as an instrument of the political system every year, whereby social welfare is increased and a big reveal on budget day is simply no way to do business. I agree we need an evidential basis to move forward. With regard to tax expenditures, when I read the ESRI 2021 report, I was salivating. The report was a page turner. It pointed out exactly what it is we needed to do with expensive tax reliefs that roll over, uninterrogated, every year, by the tax strategy group or anybody. It simply does not happen in the way that other policy measures are rigorously interrogated through the government process. They have established a permanency that is troubling. They have often outlived their usefulness, if they were ever useful, or never had any efficacy in the first place.

We tend in this State to copy examples of what might have occurred in the UK, for example. If it did not work there, it takes us ten years to realise. After spending several hundred millions or billions of euro, we suddenly understand it does not work and then it is wound down.

I wish to make a point about tax expenditures. I think the witnesses may agree with me. It goes back to the lessons learned or how far the Government is prepared to go to understand these lessons and the signals the Commission on Taxation and Welfare was sending about tax expenditures. Again yesterday, there was an announcement of the extension of the 9% VAT rate reduction for the hospitality sector, a sector that is absolutely dependent on and obsessed with low-paid and insecure work, with no conditions attached whatsoever. That is a massive transfer of funds from the taxpayer to an industry in which it has already been established there is a deadweight issue by the Department of Finance. We repeat this time and time again. If we are looking for is evidence of why we should have a better and robust process to try to establish on an evidential basis what works and what does not, that is exactly it. It is staring us straight in the face. I assume the witnesses have a view on the extension of the 9% VAT rate. There is no such thing as an independent economist. People bring their own views to the table. Others in the field, such as academic economists, said there was no policy basis or responsible economic argument for this whatsoever. It was purely a political decision. It beggars belief, frankly.