Alice-Mary Higgins (Independent) | Oireachtas source

I note that if we wish to encourage the retention of hospital consultants or indeed anyone in the public service, it is in the Minister's remit to pay them more. We do not have to include a protection from tax for all those on higher incomes. If the concern is consultants, the mechanisms exist in the State's contracts with them. Among many of the concerns with regard to retention, tax has not featured highly. The terms and conditions, including those related to the silencing of consultants who engage in public debate, have been prominent factors in the discussions. The tax rate is something of a red herring.

The capital flight we have heard about over the years is not a sufficient argument. Taking the idea that a 5% levy will lead to large numbers of high earners leaving and taking their jobs with them, if those are the priorities of managers to such a degree that a marginal difference in their income tax will determine whether they will carry out business in a state, even with favourable corporate tax measures in that state, that is questionable. Those are maybe side points.

The core point is that these are reasonable recommendations. Regarding recommendation No. 4, if there is a fall-off after €140,000, there is nothing to stop the Minister from bringing a counterproposal or indicating interest in a further report whereby he would look to continuing the tapering beyond €140,000 to avoid that disconnect. The crucial matter here is the idea of a high-income levy and the reluctance to look at that, with the idea that it is too complex. People earning €140,000 or more can handle the additional complexity. It is a very small additional complexity for persons on a substantial income, which would place them in the top 10% of earners in the State.

It is financially responsible to consider our GNI* and how we ensure its maintenance. The Irish Fiscal Advisory Council has been clear that we cannot continue to over-rely on the substantial windfall revenue that we have had from corporate taxes. It stated that we need to make sure we maintain a predictable and steady income tax. We should look at options such as a high-income levy. It is hard to look at this and not look at the fact that tax cuts are being talked about. We have heard the extreme measures in transformative public expenditure that are required. Tax cuts are expenditure. The idea that expenditure would go towards tax reliefs rather than public investment is a real concern. It affects public investment in the things that we share, including our collective public services and State measures.If we have a return of the fiscal rules, as the Minister has advocated for, and the ratios which the junior Minister spoke about when he was before the Seanad on the Finance Bill, then, if we consider the ratio of revenue to debt, by taking down revenue in any sense through tax reliefs or by failing to ensure a steady and continuous revenue by bolstering GNI*, not only is that money taken out of circulation for public investment but the ratio between income, expenditure and deficit also changes. It, therefore, becomes harder for us to spend on the other side, so we are losing twice on public investment in that context if we have tax cuts. We are taking away from one side of the scales and lowering the other side. It is surprising that tax cuts are being talked about now, even though the Irish Fiscal Advisory Council has been clear about the need for us to be clear. It would be more fiscally prudent if we at least did a report so we would know what our options might be around the introduction of an income levy on higher incomes if we need to bolster our GNI*.