Dr. Donal Donovan:

I will respond to the first part of Deputy Tóibín's remarks. Yes, there is an important issue here that we highlighted in the June fiscal assessment report and we came back again and highlighted it in our recent report. It is not for us to say what may have to give on either expenditure or revenue specifically. Those are political and social decisions the Legislature and the Government must decide. However, what we did stress both times and which we continue to stress is that it is important that the Government initiates a debate on some of these difficult choices by being more explicit about the fact that, as the Deputy correctly stated, one cannot have everything. There are pay pressures, ageing pressures and potential taxation reduction pressures and one cannot have all of these.

Within the context of a credible medium-term budget budgetary framework, it is appropriate for a government to set out some broad options, not necessarily decisions, that indicate trade-offs on these different aspects. This is why we were somewhat disappointed that the recent budget essentially just contained a set of technical numbers, chosen perhaps somewhat arbitrarily, and did not address the meat of the issue, which are these policy choices. We would not expect any government to provide extreme detail about its precise policy plans for the year or two ahead; that is not common. However, I refer to the broad thrust of policies such as, for example, whether the wage bill is likely to go up or down as a percentage of GDP, whether benefits are likely to rise or fall and similarly with tax rates, direct taxation and other arrangements. In other words, what is the thrust of the envisaged policy directions of the Government? We urge strongly that this be present.