Mr. John McCarthy:

I emphasise that the annual growth survey is very much a Commission document and these are the Commission's recommendations. Deputy Doherty is correct. The document refers to growth-friendly fiscal consolidation. This applies on the revenue side as well as on the expenditure side. On the revenue side, essentially the Commission is referring to a budget-neutral shift away from taxation of labour towards more environmentally friendly areas, including indirect taxes and so forth. On the expenditure side, the Commission is referring to maintaining investment in physical capital as well as human capital. The research in this area suggests that we can do this in a budget-neutral way and that it would have a favourable impact on potential growth in the economy through, for example, participation rates on the labour supply side. Moreover, the thinking goes, if we are investing then we are boosting our capital stock. This is essentially where the Commission is coming from in respect of this recommendation.