Professor John McHale:

There are echoes of past policy mistakes. The one point on which we all agree is that we need to have sustainable growth and the key to avoiding the boom-bust cycle is not to pursue a pro-cyclical fiscal policy. The essence of pro-cyclical fiscal policy is that the revenue surge that occurs in good times is used for large, permanent increases in government spending. As the Deputy pointed out, there has been a surge in corporation tax revenues that, while very welcome, is poorly understood. Although the Revenue Commissioners have said they do not believe the bulk of it is once-off, corporation taxes are very volatile, and some of the factors that may have been driving them, such as the strength of the dollar, could reverse.