Tax and spend is not the only answer


Sir, – Michelle Murphy of Social Justice Ireland writes that Ireland’s current model of revenue generation does not provide the resources necessary to deliver the public services, social infrastructure and income supports that Ireland needs (“New government will have to confront the need to raise taxes”, Opinion & Analysis, February 21st). This, she claims, is a reality that Irish society and the political system need to address.

The fact that Ms Murphy thinks this is a reality does not make it so.

One of the five key outcomes for which Ms Murphy advocates is a just taxation system which gradually increases the tax take in a fair way that reduces income inequality. The implication is that our current tax system is not just and doesn’t do enough to reduce income inequality.

The reality on this point is stated in Stephen Collins’s neighbouring article (“Reluctance of Fine Gael and Fianna Fáil to govern understandable”, Opinion & Analysis, February 21st). He references a week-old OECD report which comments on Ireland’s “highly redistributive tax and transfer system” which has contained income inequality in disposable incomes.

I think we can all agree that we need better outcomes in health and housing. Some of these better outcomes will certainly require new expenditures. But I have yet to see anyone from the tax-and-spend industry acknowledge another reality. Decent public services do not necessarily require additional taxation or borrowing. Some at least of the necessary additional expenditures can be found from the proper management of the enormous resources already provided by the Irish taxpayer. Surely this is self-evident in health, where we have one of the highest per-capita expenditures in the developed world and consistently poor outcomes. Giving more resources to bad managers will not produce better outcomes but rather more expensive bad results.

As for housing, it is clear that a serious programme of building public housing for rent is part of the solution to our crisis and must be launched by our next government. But this will make sense only if the landlord is empowered to collect the agreed rents. You reported on January 24th that two-thirds of Dublin City Council tenants were in arrears at the end of 2018. This is not the most obvious incentive for the council to build more homes for rent. And I have little doubt that many of the defaulting tenants who could pay are taking a leaf from the regular media reports of private property owners who appear in our courts not having paid a penny off their mortgages for five years or more.

A residential property market which combines private and public ownership will continue to be dysfunctional if our courts persevere in the belief that only tenants and borrowers have rights and that landlords and lenders have none. – Yours, etc,



Dublin 6.