 Good a very good morning to everyone gathered here some people coming in said it was the first time in the Institute for three years So for those who are back the first time a particular welcome Welcome to everybody joining in online the new hybrid world and I suppose welcome to people who are going to watch this on our YouTube channel and various other channels that is that the future has truly arrived. So this morning we have a two sort of Elements to the discussion later on we will have the launch of the oldest fascinating OECD country report We will have representatives of the OECD and of course we'll have a Minister and President of the Eurogroup joining us shortly And he will be giving a discussion on that. But before that we are going to hear from the Senior Official Department of Finance who dealt with the Commission on Taxation He's going to give a presentation on the Commission on Taxation Report and we're going to have a discussion with the panelists here and yourselves and online Questions and contributions as well. So without further ado, let me hand over to Dr. Colin McCarthy from the Department of Finance. Sorry. Dr. Colin McCarty. I'm getting my names mixed up. Excuse me. Yeah, right. Thanks. Well, obviously we've reached that time of year where really, yeah. Okay, so good morning everybody and thank you and thanks for the thanks for the invitation and thanks for the opportunity to talk about the Commission on Taxation and Welfare. Just to, we're going to Those of you who may have seen the report of the Commission on Taxation and Welfare will know that it is not a short document. It's a 500 and something pages 116 recommendations. So in the short time I have this morning, I'm going to Give a very, very high level overview of the document and what it says and what it says about the future of taxation and welfare in Ireland. And that is by way of encouraging you to dip in. We did go to some effort to construct the report in a somewhat modular manner so you can dip into it and look at the pieces that interest you and then after Christmas obviously read the whole thing. So maybe we're just going to, I got it. So I'm going to clip through this fairly, fairly rapidly to give you a sense of what's of what the exercise was and what's in the report and just to tee up the discussion. The terms of reference for the Commission, very extensive, but we continue to come back to this particular component of which for the Commission members was the essence of the exercise which was that the Commission was asked to consider how best the tax and welfare systems can support economic activity, promote increased employment and prosperity while ensuring that there are sufficient resources available to meet the cost of public services and supports in the medium and longer term. And I think that's pretty relevant. So there was a very wide ranging terms of reference, but this was the the kernel of the exercise. So move it on to the next slide. Why do a commission What kind of an exercise is a commission and commissions are very much a product of the 19th century world. They were, there were hundreds of commissions between 1830 and 1900. And they were very much the mainstream way of doing policymaking before the central state was invented and before we had a civil service and civil service departments on the scale of nature that we currently have. So whereas this afternoon or sorry in the second part of our conference this morning we're going to talk about the merits of an external perspective or a peer review from outside. This is an external perspective or or a peer review from people who are outside sitting outside of the formal civil service governmental system. People with wisdom knowledge and expertise who take time out to have a look at it at a set of issues and to take a strategic perspective and very much if you move the next to move on to the next slide. This is very much a strategic exercise so it's not a line by line review of the tax and welfare code. It's very much trying to take a stand back view, take a long, medium and long term view, and to ask very basic questions about what do you want from the tax and welfare system, starting with, where do you think the country is going, what do you want to achieve, and what role does the tax and welfare system have in the achievement of those big objectives, those big social and economic objectives that the government assigned the commission to consider. And again, strategy or the term strategy involves choice so the commission had choices to make about what it looked at the level of detail that it looked at them in and the level of detail and with which it presented its findings. So again, you'll see this as very much a long term overview type of exercise rather than a detailed analysis of individual components of the system. That's the role or the perspective that commission took. That's the role it saw for itself. Moving on to the next slide. I mean, when you do this kind of exercise, obviously you think about how do we think about the future, how do we think about the next. 10, 15, 20 years, depending on how you define medium and longer term and obviously when you do that you think about the big factors that every other country thinks about in terms of strategic foresight and we had some very useful input from our colleagues in the OECD and thinking about what the big trends are. But in some ways the most compelling data that the commission looked at is data about the Irish story over the last 30 years and it's an arbitrary period to pick but if you look at what has happened in Ireland both quantitatively and qualitatively over the last three decades, then it's quite a radical or quite a dramatic story that you see. So Ireland has experienced very rapid economic growth since the late 80s. If you look at employment growth and compare Irish employment growth to other OECD countries, the story is even more favorable. Essentially we're twice as rich and have twice as many people employed as we used to have. And we have done that while at the same time somewhat booking the trend towards greater income inequality. So Ireland is somewhat more equal than it was 30 years ago and we've gone from being the poorest of the rich and being one of the more highly unequal countries in the OECD to being a much richer place with a much higher level of employment and being much more mid table. As far as income distribution is concerned. You might stick on to the next chart. Oh dear, we lost. I don't know. We can just about see. Why is that one. I mean one of the outstanding features of the Irish economy is a very high level of market income inequality. So the distribution of market incomes in Ireland is very unequal compared to other OECD countries. We're about mid table when it comes to the distribution of disposable incomes. And the reason for that is largely because we have a very highly progressive tax system, which works. We want to use that expression very hard or achieves a very high level of redistribution of incomes, such that disposable incomes are much more equally distributed than the market incomes and that's a fairly important fact. There's a whole series of questions about how long that can be sustained into the future of what and, you know, what the sustainability of that of that particular structure is. And so what I think the commission was left with was in many ways. There are of course difficulties and issues and problems in the tax money for system. But this story is really one of quite a positive story. It's one of quite a lot of success. There are of course deep problems. There's a lot to be done. There's more work to do in terms of income distribution as far as the commission so certainly there are huge challenges in the carbon area. But on the other hand, the question arises, well, what has been at the source of what has been, you know, in what sense has the tax and welfare system contributed to this success. And not to put it too bluntly, not to put it too bluntly. How do you keep that going or how do you not mess that up. So if we go on to the next slide. And the issue which which I think sort of became most fundamental for the commission was was essentially this issue of fiscal sustainability. So, again, I'm time is short so I won't go into this in any great detail but I think it's important to recognize that this quite sort of growth story that has that we've seen over the last three decades took place during a reasonably favorable demographic window and that demographic window is closing. And so we know that due to the quite rapid aging of our population. Age-related expenditure is likely to increase quite dramatically in the course of this decade such that between 2019 and 2030. My own department estimates we'll see around 3% of national income in terms of an expenditure challenge directly related to income. There are other issues, particularly in terms of climate where, excuse me, if we, if we achieve what we as a country say we want to achieve in terms of reducing carbon emissions, we will necessarily see reduction in revenues from fossil fuels, which will have to be in some way replaced. And we also know everybody I'm sure in this room understands that there is a growing concentration risk in public finances associated with cooperation tax receipts. And that's also an issue of which has to be understood in terms of fiscal sustainability challenge. So just looking on to the next slide, it's worth, and so I can point, possibly not entirely clearly but you can see our demographic tree, as it currently is and you can see what it looked like in 2040. It's very significant and very rapid aging in the population, which is partly the result of good news that we're all living longer but partly the result of migration flows which took place shifts in migration flows which took place in the 50s and 60s and which have altered our population structure. So moving on then to the sort of moving into the recommendations will detain you here to commission adopted five principles adequacy efficiency sustainability equity and reciprocity. So jumping to any one of those this morning we'd be here very long time but but some of these would be familiar to you there are combination of principles which are well known and when established and go back to Adam Smith, and on the tax side but also draw on when on an established welfare and so in some ways the challenge was merging those two and getting people who came from a, shall we say from a very tax perspective, those from a very whose whose experience of going to welfare world, understand how those two sets of principles merged. And again that set out in the report. In terms of recommendations, it's only the core recommendations where that in the view of the commission, their most likely scenario was that Ireland would have to achieve a higher would have to collect a higher share of its national income in taxation social insurance contributions into the future, and that it's necessary to plan for that, and to achieve that at the lowest economic social environmental costs possible. And so collecting taxes is inherently imposes costs on economy and society, and if interview the commission, it is inevitable that a higher share of national income would have to be collected in taxation. How do you do that at the lowest possible cost. That requires a number of things won't surprise you. When we say that that requires a broadening of tax basis so as to minimize the increase in tax rates which is a simple but still compelling argument around tax tax policy, but also the necessity to achieve a different balance in the cross in the types of taxation between taxation on earned income and assumption and wealth. Looking on to the next chart then I just talked, you know, as I said, 116 recommendations. It's impossible in the course of the short time we I have here this morning to take you through those in any detail but just to point you towards a sample of some of the types of recommendations which are in the report. So, again, drawing on this idea of horizontal equity, and an old fashioned idea of economic efficiency that the report argues that income, income is income is income in all forms of income should as far as possible be taxed the same. And therefore it says that the primary factor for determining liability for income tax should be income and not any other factor. It also makes some recommendations on components of income tax system, which currently deviate from that particular idea. It argues for a broadening of the parasite system and a more comprehensive treatment of all forms of income. It argues for the purpose of pure aside, and it argues for a lower, lower nominations employee pure side below the existing threshold, partly for reasons of efficiency and sustainability, but also for the purposes of enhancing a sense of rust reciprocity within the overall tax system. It argues for a broadening of the VAT base, largely by limiting the use of lower rates and increasing existing the level of which lower rates are currently charged. On the next slide we then tip into series of recommendations on wealth. Commission set out spend a fair bit of time talking about the case for a shift in the balance of taxation away from taxation on earned income towards taxation on capital and wealth, including taxation of land. And commission considered the case from their wealth tax, but in the end decided that it would be better to reform the existing capital taxation structures that we have, rather than introducing new net wealth tax. And so it made a number of recommendations aimed at significantly broadening the base for capital acquisitions tax. We're imposing a modest charge at a low rate on essentially over a de minimis level on all capital acquisitions. So, you could think of that as a two rate structure within capital acquisitions tax, the idea that everybody should pay sort of as, as applied in the PRSI reform being applied in the capital acquisitions area, and the idea that capital gains tax should apply at death and I'm not going to try to describe that here this morning as you can hear very long time. It argues for a significantly increased yield from local property tax, which the commission saw as a well functioning tax and one which people understood, and which is easy for people to get it to get a grip on. But outside of that argue for a site value tax and all other forms of all of all land, which is not currently subject to the residential property tax. And then on carbon mission supported very strongly the government's roadmap on increases in carbon taxation, and argue that over time it would be necessary to move in order to replace the exercise duties that we currently obtained from petrol and diesel to move away from from that structure towards a road usage structure and argue that for now it would be important to consider what technology would be appropriate in order to assess and collect that tax. And then I think we've won more slide. Yeah, which is just on the welfare side. And then the commission essentially made a decision that what was important in the welfare area was to again reform existing structures within welfare rather than any large kind of elaborate fundamental reach, we think of the existing welfare system, and it did not endorse the idea of a basic income for example, but it did make a number of recommendations in terms of reforming existing welfare structure. And those included reform of working age payments to essentially a more flexibility in the extent to which people can work while in receipt of working age payment. So it's up to tax tax child benefit to introduce a second tier of child income support within the child benefit structure. And it made a recommendation for a more evidence based system for benchmarking social welfare payments and to set multi annual targets on debate on the back of an evidence based benchmarking structure for welfare payments. So it's a very quick rattle true. I don't know how we did on time there Dan Bush. As I said, it's a, it's a very, it's a chunky document it covers I think we've 18 chapters we go into quite a bit of detail on a number of things which probably are for a more mine, something of a minority tastes such as how to evaluate tax expenditures, and less it's interlating but are actually very fundamental to how a tax system is designed and built and managed, and a number of other things around, around structures and how budgets are done and so on support so simply to recommend it to you for a bedtime reading over Christmas. Thank you docker we're done for your presentation timekeeping before introducing our two panelists or discussions here. Let me just say that this is a Q&A session about 35 minutes, everyone here in the audience is invited to put any thoughts or questions. There will be a roving Mike, I think you can, if you could identify yourself as well, it will be helpful for those online. So, the option to put questions and comments via the Q&A function that we have here. So, joining us here on the panel are column Kelly the global leader of corporate sustainability at PwC International previously held a similar role in the taxation sphere, and Dr. Martina Lawless who's a research professor at the Economic and Social Research Institute here in here in Dublin. Martina maybe start with you. Column sets out that it seems it's pretty much inevitable and the tax burden will rise. Do you agree with that or is there any alternative. I think I agree with them and I think that's really the key foundation stone of the Commission on Taxation Weathers report, the very extensive report, it goes into an awful lot of detail as well as on different elements of the tax and welfare system. But, but tease off all really of subsequent recommendations in the report is the opening section which looks at the challenges for the economy, sort of over the longer term. And those obviously are the 18 population and the climate transition as the sort of the two key challenges. Also some of the elements of the risks in our current tax structure in terms of the concentration. The narrow base in general and in particular the concentration and corporate tax. So really all of the, you know, if we want to sustain at least the level of public services that we have now, those are going to cost more in the future. There's perhaps a wider debate that like do we want the state to do more the Commission's report doesn't get into ideology on that but it sort of takes for granted that we want to stay to at least provide what it's providing at the moment, but that will cost more over time and that needs to be paid for. And then that leads into all of the subsequent recommendations I think on the choices that we need to make as to how to pay for those, those costs going forward. And column, or even if I can just ask you all that inevitability question, you know, in areas last week was wonderful news about an Alzheimer's drug breakthrough which could potentially mean that we stay healthier longer and older life. You know, are you absolutely convinced the cost of aging is on a sort of linear trajectory there's no possibility that advances would somehow make it less expensive in pensions with order enrollment. It doesn't mean that private provision of pensions will will shift that burden. You know, is it as inevitable as as you seem to say at the report. Yes, so I mean, look, I mean martini makes a good point, it would have been open to the Commission to sort of take a mutual view of that and I might have been more in keeping with the sort of tradition that you would see in these kind of public finance type of exercises. And it was interesting that certainly interesting to me that they decided not to do that and they took a view that there was an inevitability that, as Martina said to provide the existing level of service. And you would need to see an increase in the tax burden. But I have with, with having spent five years in the Department of Health, looking at some of this stuff to be to be perfectly frank. I, you know, I tend to be more pessimistic than optimistic about the cost of aging. And, and again, it's not because we're all living longer and because there's a, you know, you can make decisions around compression mobility or which is about extending the cost of care, you know, we're all going to live longer but we're just going to, the care cost is going to come at the end of our lives no matter how long we live. But in Ireland, that pace of aging is very rapid. And it's, you know, it's not just I mean in in when you look at pensions you look at ratios. When you look at health care, you look at numbers, raw numbers of patients landing into EDs and the facilities and the number that have been arriving for them. So, got to say, I, I've been more pessimistic than optimistic. Anybody has any more optimistic views on that, it's certainly welcome, but I would, would love to hear them. Column Ireland is your very much global role in your current role now in BWC and previously specializing in the tax area. And our last one of the most globalized economies in the world it's become as successful in many ways as, as Column pointed out, because it is tapped in hits its wagons successfully to globalization. Do you feel the, the report was sufficiently cognizant of the need to remain competitive in a globalized world? Yeah, actually, I think it was partly for the reasons that both Martina and Column have re-emphasized, which is that the report puts on the table. So, what I would describe as the inevitable realities that have to be dealt with demographics and climate change being too, and I think there are probably others we can, we can elaborate on, which means that in order to sustain the system which is competitive, efficient, effective, impactful from a business perspective, those realities have to be dealt with. I think what the Commission did an outstanding job on is putting options on the table, which can be considered as potential responses to these kinds of issues. I think what's critically important though, is that having put them on the table, is, I hope ensures that we don't end up in a debate about the pros and cons of individual specific items based on a winners and losers type conversation, because that will detract from the inevitable reality that we may not like elements of this, but this thing has to be dealt with. We have to deal with the demographic challenge, we have to deal with climate change in terms of both decarbonisation, but also climate change as a deteriorating reality, the risks which are already beginning to unfold. And so I think that the context within which the Commission deals with those issues is well put. I would only add that the role of the Commission was specifically to look at tax and welfare within the current construct that we have. I would say that the reality is that there are profound changes underway in the global economic system as well. I think in this morning, if you make a list of issues which are probably on the top of the agenda for most businesses at the moment, inflation, high inflation, high interest rates and energy crisis war in Europe and the fallout from the pandemic. One of those issues would have been alive three years ago, not one. And at the same time, we have profound structural changes in the global economic system related to climate and the transition. Ongoing rolling technology will continue to be more pervasive and disruptive. The changes we face, they are profoundly significant in many other regions. And last but not least, the geopolitical environment within which business make decisions is completely different to where we would have been three to five years ago. Those factors will endure for decades and they will have material influence on the way in which businesses make decisions. That will impact the shape of Ireland's economy. It will create tremendous opportunities, but it will reset the context within which our tax and welfare systems operate as well. And just on the positive aspect there, you mentioned the opportunities very often we're sort of looking at the challenges and the risks. Where are those opportunities? Well, I think they will be in the evolution of both sectors and also in the role which countries like Ireland can and will play. So for example, if you take the geopolitical fracturing and an increasing emphasis in some of our big partners on near shoring or French shoring, anchored in the EU and closely connected with the US. We're probably as well positioned as ever to support that business dynamic between those two regions. I think in terms of sectors, there's no question that the concentration list that we see, for example, in tech, well, that's a function of great success. And it's inevitable that that will have a disruptive period, let's say. But it too will refresh itself, new businesses will come on stream, new technologies, new players, and the energy transition will also drive transformation through most sectors. So all of those, and they're just examples, all of those factors will create new players in newly emerging sectors doing new things to try and access new markets with new operating models. In Ireland, the trick is to refresh the way in which we have participated in those activities in that new economic environment for the next generation column described very well how it's successful we have been doing that for the last 25 to 30 to 30 years. Martina, I often confuse your institute on the social insurance, ESR, PRSI, as many people have done, but maybe come to you on that in a moment, but again, just to emphasize, we very much want to have an open discussion here. So if people in the room or people online want to make a point or contribute, they're very welcome to just indicate to me if you want to come in. What are the specific recommendations there on lowering PRSI, what are your thoughts on that and generally a lot of talk in recent times of making the social insurance system more like continental European systems where what you get out more closely aligned to what you get in thoughts on on on that. So on the first brought thought I thought it was really useful that this particular commission was a commission on taxation and welfare which I don't think we've ever had before. All the others just looked at the taxation system but obviously that the intersection and the overlap between the two are really important in terms of how they support economic activity and avoid the concept that any taxation sort of by definition is a minimum distortion to people's behaviors. So to how to get the, the most revenue with the minimum distortions is sort of the magic balance that is tried to strike there. On the PRSI one I think as a, not specifically on any individual tax but in general, for the broadening and simplification of the tax system is probably the most obvious way to bring in more revenue without having any kind of dramatic changes to the tax system. And I think a lot of the commission's reports, it did start from, you know, we are where we are on the tax and welfare system and introducing very sweeping changes always runs the risk that those sort of unintended consequences. So a lot of the recommendations are kind of gradual expansions and extensions of the current system. And so the PRSI recommendation to cover all income and get rid of some of the exemptions to that is an example of, you know, a way to broaden the tax base without doing anything particularly radical that might have kind of unexpected consequences on people's behavior. When you, when you spoke to us about a year and a half ago at the Institute, you use the word path dependency a lot. This is a term wonks use for really low direction or travel is more or less set and it's hard to do something about Tina picked up there on, you know, lack of radicalism. Are you, are you a sort of orthodoxy type or would you be more like a recent British Prime Minister. I mean, so first of all, I am a mere servant of the Commission down. And so I'm simply interpreting what these very fine people might have thought. I do think I will help with this. I do think you have to be realistic about what I would call administrative capacity and bandwidth. Okay, so one of the things the Commission says in the report is that you think about what the social welfare system does every week. While we're sitting here it's delivering millions of payments every week. It's a complex system. It needs big IT. It needs a legislative underpinnings. It has some non legislatory based schemes, it has to be run on a basis of poverty and all those so it's a big complicated system. And therefore it's important to ask yourself the question, what can be what can realistically be done. So I think what one of the things that's reflected in the Commission report is, let's see what we can do pragmatically with what we have. And there are, you know, I mean even to introduce the second tier child benefits payment, which is a recommendation that has been around in policy discussions in Ireland for a long time. That would be a big project for my colleagues in the Department of Social Protection to deliver. They, you know, they refer to it and it's if you look at their submissions, the Commission on tax and welfare, it suggests that that's something they're interested in doing. So I think you have to ask yourself what's deliverable in terms of and what the policy bandwidth is and what the administrative bandwidth is. And equally, you can see that I think that's for college you can see that in terms of say, the decision to say that well tax, not so sure. Let's look at what we have and develop what we have. And I think that's, I think that's important. So you can see that at that level, and then in terms of the very big issues of, you know, how does Ireland sit as a welfare state versus, you know, a German welfare state or a UK welfare state or so on. I don't think those things change overnight those things evolve. So you can see it up in my corner. Good. Let's start with a few questions, Francis. I just like to follow up on what column has just been talking about, because in a way, you're doing a very undersell, I think in relation to what was achieved, because I think by starting with the guiding principles as you did. So you can cloud yourself to think how incrementally you can move the system towards delivering better on the objectives of what we're trying to do across the tax and welfare area. And when I think about it in a lot of cases when reports like this are come out, people focus on what's the new big thing. Now we saw a lot of the new big thing in the UK in October and we saw what happened. And I think there's a huge benefit in what you've done in making it clear what you're seeking to achieve across the tax and welfare basis. I think that was really, really important. And I think what it gives is a metric and a reference point for further changes that might come up in very practical ways. So for me, sort of this concept of strategic incrementalism is really about knowing where you're heading, and not about the brand new thing that will try to take six of those boxes in one go, and they are may not move, or may or may not be practical when it comes to it. So I think what you actually put in place is pretty good. I'd like to go back to the, just very briefly then to the issue on health and your pessimism. So just the one thing I would say in relation to that, I think of our policies on aging and our practices with relation to aging becomes more positive. In other words, our self and taking care of is something to think of it just in terms of health and afraid you're suffering from having been in Bagot Street because you think of any numbers. Immediately you jump to, to me, health is about care in the community and a continuum, etc. So I just think that there's, you know, I think we need to be proactive about the other matters that will actually help us to put in place a framework, better management of aging, including the retrofitting of houses so that people actually don't suffer from hypothermia are less likely to get serious illnesses. So that's the, just one thing I would say to you think I think, you know, paralleling what you're saying is to me and look at positive sides of that policy interventions that will help us. Do you want to respond or can I go. No, no, I mean, I, I mean, I absolutely agree with that point. Good. Other column here right beside me, just in your specialization area now on sustainability in the reports in terms of the funding of the transition to net zero, but how do you evaluate what the report sets out. I mean, I think it's pretty straightforward. It endorses the existing plans increasing carbon taxes in order to drive the decarbonization process. And at face value that's entirely appropriate entirely logical. I think in the middle of an energy crisis with ever increasing inflation, the capacity to absorb a layer of carbon taxes being imposed is a real challenge. And it's not just a political challenge, it's a real social challenge, a real economic challenge. I think part of the decision that will need to be taken on and I agree with what Francis said actually you're back to this, this strategic incrementalism part of the way in which we will have to navigate this path step by step over the coming 510 1520 30 years will reflect those kinds of external factor if you like which influence the specific nature of what you can do and when. We will be bounded by a reality but we're not going to negotiate with mother nature. This thing continues to deteriorate. And I think one of the factors that's underestimated is that even getting to net zero, which keeps us within 1.5 degrees Paris aligned by 2050 that of itself brings very material deterioration in climate physical hazards. That's not widely appreciated, and we're miles off track for 1.5. So we can expect to continue to see worsening climate issues. As we saw last summer in Europe wildfires throughout East that will continue to deteriorate from now in the current business cycle in the current political cycle and beyond. So the pressure to continue to do two things in parallel one to decarbonize and two to prepare for these deteriorating events will continue to build. One of the one of the interesting global dimensions which is now coming into play in the carbon tax conversation is the differing economic approaches being taken quite profoundly differing approaches being adopted in different regions. In Europe very focused on carbon taxes I think we have the carbon border adjustment mechanism see bam approved yesterday I think I saw on the papers. And in the US really surrendering on carbon taxes and shifting to incentives through the rather unfortunately named IRA, which we all find very difficult to talk about positively. But it has profound significance for accelerating the decarbonization process in the in the US. And as we've immediately seen it has a knock on effect then from a competitive perspective between the US and the EU. So I think, again, to reemphasize this point that that I think everybody's made. This is an inevitable reality has has to be dealt with the Commission has done us a huge service. I agree with Francis I think column had no choice but to be very modest on behalf of himself and his colleagues I think they've done an outstanding piece of work, putting these issues on the table these inevitable realities and giving us a series of options in relation to which we can then respond. I have to be dealt with. And so I think the challenge in Ireland will be to find the balance between navigating those different paths over that period of time, but with a clock which will continue to take. Okay, I just thought it was interesting conversation had earlier on in terms of you see the deterioration of catastrophic events as already baked in. They're not a risk, the risk is they could get even worse. Thanks to the terms I learned from good buddies. I want to come back to the issue of the role that the taxation system has in the success of our economic model. And to the extent that you know you can argue that it's inevitable that these aging issues or climate change issues will bring an increased need for for tax resources. But you can also argue that by increasing taxation that will actually disrupt the economic model that brought those resources in the first place. So my question really to column really how much consideration and benchmarking. Well, first of all how much consideration was was given to the role that that incentivization on tax side has played in the success that you talked about. And in terms of, you know, benchmarking for the future and there's what impact changes may have on that model's future. I mean, I think the report is reasonably clear that the commission is very seized off the role that taxation, particularly has played over the last 30 years in in the transformation that that has taken place now to an extent. Does that mean that if we made any change at all in in our in let's say in our aggregate taxation policy that all of a sudden that that success would evaporate. I don't think it would. I think I think there's reasonably strong evidence to suggest that it's a little bit more robust than that but I think if you look at the report commission is very focused on importance, promoting advice, the importance of promoting employment and maintaining a low stable predictable corporate tax regime. Very supportive of the government's approach on on engagement with the best process and both because it wants a low stable predictable corporate corporate tax regime. And the commission argues that there's more that could be done to promote, you know, enterprise and startups, but also fundamentally important not to go back to some of the things that we've seen before, where the easy thing to do was in when the easy thing was needed was to sort of hike up taxes on employment and income taxes so I think that kind of discussion is in the report. And there's a sense that we've traveled a long road and we've learned a lot. And I think one of the over sort of sitting listening to the discussions over 30 months, a very strong sense of well, we've learned a few things that we've made mistakes in the past and that's not going to do that again. And so I think you'll see a third degree of understanding of the role that low taxation has played in certain areas, and the need to, you know, minimize the cost of any increases in the tax burden. I was just going to connect Martina first and then we come. I think one of the sort of background to that question as well just further on that. Do you think it's very exciting the economics profession is now less keen on carrots and sticks than it used to be. I don't know if economics are less interested in carrots and sticks. I think they're still very interested in using the tools available to incentivize sort of preferable activities. The carbon tax is a great example of that where it's, you know, as much a behavioral change incentive as it is a revenue raising tax. And a lot of ways one of the complications of the recommendations and the tax law for commission report is that for some in some cases you're trying to do multiple different things the overall objective of the taxation system is to get the revenue to fund public services. But for a lot of taxes you're also trying to, you know, incentivize certain types of behavior of the carbon tax is the most obvious one. We're trying to, you know, disincentivize particular behavior and in other cases you're trying to introduce, you know, revenue raising mechanisms while minimizing the distortions and this is where the taxes on enterprise are probably, you know, more relevant. You want to get some revenue in, you do need to get fund that, but you want to keep the revenue base as wide and broad as possible in order to keep the rates low and to not have the tax burden falling disproportionately in any one area in a way that might undermine sort of incentives for enterprise and for work. But it does kind of, you know, the commission and the kind of the Irish states kind of objectives in this are really helped by the fact that we're starting from a very solid base of, you know, strong economic growth, a very good FDI system, you know, high levels of employment. So, you know, the commission's report and Ireland's kind of trajectory in terms of fiscal sustainability, you know, do need to recognize that it's built on very good foundations. But as German and Colin said, to avoid some of the risks of the past and we did see, you know, when the construction sector collapsed in 2008, not only did that cost the state a lot of money, but revenues also collapsed because they were so very concentrated in one particular sector. And it's that avoidance of concentration to an idiosyncratic risk in one particular area that I think a lot of the recommendations that the broadest of the base are trying to avoid. You want to. Yeah, I want to, I want to contextualize the specific question as well back to a comment made earlier, which is that the world is changing so profoundly in so many the economic environment in so many different dimensions. That I think we should acknowledge the significance of the tax question the, the appeal of a competitive corporate tax environment in particular, but the decision criteria which increasingly are being used in order to make investment decisions are, I would say, growing significance attaching to the sustainability of that framework and I think BEPS and the OECD dynamic is a profound significance there. And added to that for the reasons I touched on earlier. This is really focused, not just on the sustainability of the tax system but the availability of the necessary skills, the political dynamic which will influence decisions in relation to investments of particular functions locations of supply chains and so on. I think you see a much higher focus now on issues like sustainability and resilience and stability, as well as an appropriately competitive tax system. That's quite different from where we would have been 20 to 25 years ago. I think that's really important in the context of positioning, not just our tax strategy but just the point I was making earlier, positioning our forward looking economic strategy for the future which will be different because of the changes that I've described, and they will have to go hand in hand. Thanks, thanks to Colum and thanks to the panel. It's an observation and maybe a question and it comes back really to the narrowness of the base which I think Colum, you were referring to. And like if you look at corporate tax receipts, we now have a situation in which one in eight of overall receipts, not just on the corporate tax one, but one in eight of overall receipts are coming from 10 firms. Okay, they're pretty much in the high technology sector. And an example that I sometimes give is if you look at blackberry 10 years ago or even Nokia 10 years ago, these were the cutting edge technologies. They're now pretty much redundant, you know, blackberry turned off its support networks at the beginning of this year. So because the sector is changing so rapidly, is there really a risk that you know some of the cutting edge technologies that are there now in which Ireland is very much exposed will not be there in let's say 10 years time and that of course would impact on tax revenue and reduce the tax base and so forth. And then on the other side that the income tax, we know that a huge proportion of income tax paid is paid by a very small number of people. So a question really to the panel is, is it a case that the income tax system is overly progressive at the moment. That there are no incentives for instance to take up employment etc at the lower end of the spectrum so just an observation and a question. Maybe we'll go. Do you want to start on that one. I always trust one's colleagues to ask the most different questions. And yeah, I, we, I throughout my blackberry charger over the weekend, and we also throughout other chargers as well for other, other notable companies so there's always change and there's always churn and there's always, there's always that risk. And I think I'm right in saying that Ireland is the only Western European country to have escaped the middle income track trap in the 20th century. And, and that's a, so, so I think the commission's view was that there's a sort of a permanence to the achievement of becoming an advanced economy. And you could have that you could have there are risks, obviously, and the concentration risks are as you described John very, very striking. But on the other hand, there's an enduring capacity in the Irish economy to attract the next wave of technology the next round, but that takes a lot of work and it takes, you know, colleagues in in the idea and to do that kind of work so I don't think we underestimate that. So I think I think there's an enduring transformation that has been achieved. And I don't think it's necessarily the case that we could just switch off something and we go back to where we were. But that's not to say that one can be complacent about policy into the future. I want to agree, John, that I think the risks on the corporate tax revenue side are much more in the sort of like the idiosyncratic risks to the fact that it's such a small number of companies. I think there's a lot of focus on the challenges of the changes in the global tax system and the back system. But actually what we've seen in Ireland is if anything that's increased our corporate tax revenues as firms realign themselves with the real productivity that is going on in Ireland because Ireland has sort of a lot of companies doing real substantive business here. So I don't see the corporate tax risk being so much in the global tax system changes as I see it is being in the concentration and the exposure that that brings to idiosyncratic risks of you know, people, you know, Twitter getting taken over by somebody who makes strange decisions as to how it's wrong. There's a lot of a concentrated on individual companies is quite a risk there. And there's also an overlap between the concentration. Those companies because they do have real substantive presence here are the companies paying the high wages. So there's a big intersection between the corporate tax concentration and the income tax concentration. And often there's a tendency to talk about the two as completely different things that is really important to see the overlap there. But overall, as Colin says, Ireland has now built off a very strong base and reputation and a lot of expertise, both in a human capital in high technology companies. But there will be sort of churn on that and that the kind of the risks that it brings are kind of are quite real. And that's one of the reasons again to support that maybe it's like broadening of the base into other areas like wealth taxes and so on as well. Okay, we're just hitting the end of the events. There's a question here from Anne Marie McGowan from the National Economic and Social Council. She asks, there's a lot of resistance to changing capital acquisition tax, particularly around inheritance. Do you have any suggestions on how to have discussions or other options to help change the narrative on this. So Colin will take that to conclude. I mean, I think that's not on typical of what I referred to earlier when we get into a winners versus losers debate on any particular proposed policy change the quality of the debate tends to deteriorate. The commission work has done is help us contextualize those conversations by asking the question, well, what purpose does the policy achieve what are we trying to solve for what is the outcome which we think this will deliver, which then we can have a debate about the merits of income or not, not just the tax mechanism to achieve that. And I think that will apply actually across the board in in lots of these kinds of areas. And in the inheritance tax space, for example, one of the issues which goes back to the principles which the commission used on the pinnets work is the question of whether we are comfortable with the degree of inclusion and intergenerational for intergenerational fairness that we have in the Irish economy and the Irish society at the moment. That's a conversation that we should have because then tax policy like inheritance tax can be used as a mechanism to address, at least in part some of those concerns. The debate that we should be having is the degree to which we want to address those issues and then use tax and other measures as a mechanism to do that. That's the context within which that conversation can take place. Okay, thank you. So we're going to bring this section of the this morning's events to conclusion. There's coffee and I think some snacks over there. I'm going to take a few minutes break and come back 1015 for the OECD presentation. So just a final thank you to all our panelists for their input.