So if you have then, are you saying then that when you factor for pensions, that effectively we are at a point of more or less parity between private and public sector?

So before you factor for pensions, you're at that kind of point of parity.

And so, again, pensions are going to be more generous in the public sector.

But before you get into the pension side of the thing, it's a little bit difficult to make the calculations because how much is a public sector or pension worth? It can be tricky to kind of pin down for each individual.

But before that, if you just look at the earnings that people get, what we've seen is that once you adjust for the characteristics, they're about the same as they were.

Which, again, that means there's going to be variation.

There's going to be some jobs where there's a public sector pay premium, some jobs where there's the opposite.

Can you factor that stuff in or does it become too amorphous?

Lay them out.

Sure.

So, I think there is a case that people are not investing enough in the stock market and that the government might want to see more people doing that.

The way that the government has designed this account, I think, is poorly set out to do that.

And I think actually complicates the options that people have for investing and saving.

And the reason for that is, precisely as you can outline in your introduction there, that what is going to happen under the new scheme is, rather than paying tax on how much your investment increases by, essentially, once the account goes over €50,000, they're going to pay a 1% levy on everything above that.

And that's whether you make a profit or a loss on your investments in that year.

Barbara, to bring you in, a fiver a week, a fiver a month, it doesn't have to be for those with a lot of money.

That's the max.

No, but, but, but, yeah, exactly, but that's the max.

But again, we were told that this is something, so the people who are going to take up on this are the people who do have that amount to put in, right? They're, they're pe- They're, I have a couple of friends who have money sitting aside waiting to go into this thing, and they're going to max that out for each year that they can.

They were already investing.

They're gonna change the way that they invest because of this scheme.

I think that's one of the, the, the downsides of introducing this new generous tax treatment of it.

You, you could have gone for something different.

On Board SNIP II

Is it nine billion a year, I think, is it in, in the coming year?

Yeah, yeah.

And, and then on top of that you've got these measures on the tax side.

So we've seen the rent tax credit is being increased.

This was brought in a couple of years ago.

It's now being increased.

Um, a, a non-trivial, uh, increase, about 50 million that costs in full year time.

30,000 to 35,000.

You would, you would categorize this as reckless?

On the, just on the tax side alone, we're just waiting to get the numbers out from the expenditure side to see where that is, but, you know, the economy is doing very, very well.

And what we ins- you know, w- what we are instead be- being told is that we're gonna have a very expansionary budget.

That's gonna have the effect of pushing up prices further, but also, w- what it means, you know, as the, uh, Fiscal Council, the Central Bank, the SRI, anyone who looks at this stuff has warned, they are increasing spending and cutting taxes by far, far more than they should.

And, you know, you can make the argument for either one of those.

You can say we need to ramp up spending, but in which case, we shouldn't be having tax cuts, we should be having tax increases.

Or you can say, completely legitimately, "Well, actually, I think we should be having tax cuts," but in which case you're gonna have to pare back on the spending increases.

Barry O'Neill.

So by that measurement then, how far is the government from reaching its target of child poverty, reducing child poverty to 3% by 2030, or how could they possibly reach that target?

So even on their official target, if you leave that aside, they're very, very far away.

So 8% to 3%, it requires taking more than 50,000 kids out of poverty.

And we're going in the wrong direction, I suppose, is the first part.

Over the last, like even if you look at the kind of medium run trend, what we've seen is since COVID really, even that consistent poverty measure has been kind of trending upwards.

So there's been a little dip last year, but that's kind of the way it's, just down to how it's measured.

But what we're seeing is really sustained increases in child poverty since 2020.

sort of thing that could be addressed through tax measures.

Trinity College's Assistant Professor of Economics, Barra Rowan-Tree, co-authored the report and has been telling me how child poverty is measured and why it's growing.

So there's lots of different ways this can be measured.

The government have an official definition which it uses for its target, which is that the household is below 60% of average incomes, but that also it reports being what's called materially deprived.

That is, the household can't afford two or more items from a list of 11.

Things like being able to have a roast dinner once a week, replace worn out furniture, shoes, coats, that kind of thing.

that there's problems with that measure, the way the government measures it.

It essentially excludes a lot of children who report being in families experiencing material deprivation, but who are just above that income poverty line.

What impact could that have and how would it work in practice?

Is that the case? Or is so in your areas, economics, is social deprivation the primary contribution to this form of behaviour?

I think people have different views on it and how extensive it is, but people also make different decisions in that context, right? As you've said, there are many people living in disadvantaged communities who don't make these decisions, who don't end up, but at the same time, there are far more people, you know, proportionately, there are far more than do who live in affluent backgrounds.

I think, you know, this week being the Leaving Cert results coming out, the CA offers coming out, there is kind of a stark contrast.

And again, it's not in any way to justify or excuse the behaviour, but there are pockets of the country where people don't feel like they have a very strong stake in society, where there aren't great prospects.

And objectively, there aren't great prospects.

So again, if you look at the areas that the government classify as advantaged and disadvantaged, 90% of those in advantaged areas go on to higher education, including IT, university, all the rest of it.

It's less than 40% in disadvantaged areas.

know how long it's going to be suspended for, but say it was all to be back by December, I think, was it? What will that cost?

Is this workable?

Uh, no.

I mean, [laughs] the deputy says he's not flying kites, but he's talking through his hat, because this is a completely inoperable and in- unworkable scheme.

The way income tax works at the moment has no, uh, cognizance.

It doesn't care at all about number of hours you work.

It's based on the amount of income.

So implementing the scheme would require complete overhaul, radical overhaul of the tax system in a way that's never been done before.

so much of it goes in tax.

Now, we have wondered, because obviously our corporation tax take has hugely increased in the last 10 years, and we have hugely increased spending off the back of that, and we've wondered, is this money, is there, is this money in any way in jeopardy? Ironically, could the publicity, could the fact that these figures are now out in the open, could that be a threat to those, uh, revenues, do you think?

I, I, I think so, and again, it, it, it's a hard thing to, to know, because it really, you know, what this depends on is what the US government does.

Uh, and, and very much things are up to the, the, the, you know, US president and US Congress for how they structure their tax system.

That's what allows Microsoft and other big American multinationals to pay all the corporation tax payments here.

So it, it isn't really in our control.

And so, so if it does become a big issue, becomes a big political issue, which it could in the US, that these American companies are paying over 1,000 eu- you know, Microsoft alone, 1,000 euro per person per year in corporation tax in Ireland, then it could move up the agenda.

It, it could, they could want to do something about it.

But is there a perception issue?

Tell us why.

No.

So I think there is really no economic case for a VAT cut.

The sector is doing fine.

It's doing no worse than any others.

The economy is going through a difficult time at the moment, a cost of living crisis, as you said.

But if you look at the stats that you quoted from Deloitte and some of the other groups, Bank of Ireland report last month highlighting just how strong the domestic and international tourism sector is, how that's going to feed into hospitality sectors.

So recognising that, what should the government be doing if not cutting the VAT rate? What measures do you think the government should be introducing to help small businesses like that?

How is that fair? Are they right in that?

Uh, so I don't think so.

So firstly, very few people actually pay inheritance tax.

So the situation you describe of a house in south, leafy South Dublin, or maybe even an unleafy part of South Dublin, coming to, you know, 700, 800 g- uh, grand, there's very few of those houses who are actually left to a single child because there's not that many...

If you, if you look at the, the data on this, there's very few single kids, uh, for that generation.

It's going to become a more important thing in maybe 30, 40 years down the line, but at the moment, that's not really that substantive.

So there's actually very few people pay inheritance tax.

So while they may have had a capital accretion of value, they've nonetheless used tax- taxable income to pay down the debt.

What's your view on their success in that front?

I think it's very unlikely to be either of those things.

So as well as all the 500 million and all those additional costs you just mentioned, there's, of course, the 250 million a couple of weeks before that that they announced.

So that's 750 million to take us through to the end of July.

And I don't think anyone really thinks prices are going to come down by then.

So it's next to impossible, I would say, to imagine that these measures or some large subset of them won't be extended again.

come the end of july or come come summer when we start getting into the period when people are thinking about having to use um you know fuel again domestically as well there's going to be a lot of pressure to expand it out and bring in more people as people that people's energy bills and you know electricity bills have gone up and electricity prices have gone up at that stage um to for for households and you know and we see that the opposition are calling daily for more spending and more tax cuts on on top of this so i think i think it's you know it To call it targeted, I think, is questionable, right? In particular, the fuel duty element of it.

also, it's highly unlikely that Apple and Lilly and Microsoft are going to up sticks and leave anytime soon.

Are you surprised by these figures?

No, not really.

And I think there's a few things going on.

One is that we're living longer and living more healthily.

And so that means, well, one, people can actually work longer, maybe not necessarily in manual jobs and construction sites, but there's lots of jobs that people do that, because we're living much more healthily into our 80s, people are able to work in their late 60s, early 70s, just as well as they could in their earlier life.

So that's one part of it, that people can.

Another part of it is that... know people are kind of maybe approaching retirement and thinking i'm going to live longer i'm going to need more in retirement to finance my lifestyle or finance lifestyle i want to have during retirement and so people are maybe going well we're living a bit longer i probably need a little bit more money to to keep me taking over into retirement and so kind of people putting off actually retiring and working a bit longer and then and then there's also an affordability angle So it's not just that people are kind of thinking, well, I want to have this lifestyle.

But they also, women more likely to say they never want to fully retire.

It looked like we had too many houses and we were bankrupt.

Yeah, and I think the real thing is it's the politically easier one to do.

Given the mistakes that we've made over the 2000s, there was going to be some cut in government expenditure.

Politically, it was easier to cut the infrastructure, cut things like the metro, rather than necessarily cut back on the... government pay university lecturers or the number of university lecturers.

They did as well, but they did to a lesser extent because there was big cuts in their infrastructure.

And that's really something that's come back to bite.

And it's also, and this is kind of something highlighted in the central bank report, is really placing a cap on kind of the upsides that we might see by being very exposed to two sectors in the world economy that are doing really strongly.

It won't be popular with the voters, but it's probably what's needed in a booming economy.

People like having some autonomy when it comes to what they do with their own personal finances.

But people also like being able to consume and being able to have income to do so.

So from the point of view of what the taxes are trying to do, having a tax which is discouraging people from emitting carbon does exactly what it says it can.

People avoiding it is good.

We don't want people to work less.

We don't want people to consume less.

We don't want people to have less food on their table.

We're not taxing those, but those trying to get into the market, we're taxing them.

Is it time to change the rules on inheritance tax?

I don't think so.

And I think really what that survey shows is that people don't really understand the system that we have.

So the system that we have and we often refer to as inheritance tax applies to both gifts received over life and then inheritances, bequests received when someone dies.

And very few people pay it.

And the reason for that is there is most inheritances, most gifts over lifetime are from parents to kids.

And there's a threshold of 400,000 tax-free that you can get over your lifetime, including bequests.

Raunchy, what do you make of that?