Professor John McHale:

I was going to make the same point. I take the point that people cannot see austerity continuing indefinitely, which is why we were supportive of what looked like a reasonable plan for 2016, which was a package of €1.5 billion, but even then, for the next couple of years until we achieve a balanced budget, adjusting for cyclical factors, it will still be pretty tight. I hope we can reach this sooner than had been initially forecast and get there by 2017 or 2018. At that point things will loosen up and expenditure will be able to be increased at the underlying growth rate of the economy. Coming up to this, the stringency with which we have been living for quite some time - the idea it would go on indefinitely would be very depressing - will start to lift in a more phased way. I take the point that people need to see some light at the end of this. As has been said, it is a reaction to the within-year increase in spending because of the surge in revenue. This is the type of thing that got us into trouble before, and if we want to ensure we have sustainable growth, we should avoid making such mistakes again. We believe it is our role to point this out very strongly to the public and to politicians.

The points made on enterprise culture go beyond the mandate of the Irish Fiscal Advisory Council. I understand the point that at times it seems entrepreneurship and enterprise do not get valued in this society in the way they are valued in other places, although I would not exaggerate this too much. It is difficult to defend the fact the self-employed face the top marginal tax rate of 55%, which is three points higher than that for PAYE workers. There are reasons for this, in terms of the way the social security system is organised and the benefits one gets, but it is a very negative signal to the self-employed. On the positive side, Ireland scores quite well in the World Bank's doing business surveys which compare the ease of doing business in various countries. I would not exaggerate the anti-enterprise culture too much.

On the specific issue of bankruptcy, Ireland has a fairly tough bankruptcy regime even though it has been reformed significantly in recent years and these reforms continue. Even from the point of view of an entrepreneur, getting the bankruptcy regime right is a balancing act. On the one hand, one would like bankruptcy to be relatively easy in order that one can make a fresh start and failure is not punished, which may happen here more than elsewhere. On the other hand, if people giving loans do not feel secure about giving them because the value of the underlying collateral is less because of bankruptcy procedures being too easy, it can make credit more difficult to obtain. If the bankruptcy regime is designed badly so that it undermines a borrower's creditworthiness, it would not be good for entrepreneurs as it would affect their ability to start new ventures. Even from the point of view of the entrepreneur and enterprise, getting the bankruptcy system right is a balancing act.

The volatility of the Irish economy has come up in various ways throughout the discussion. Ireland has an incredibly volatile economy because of its openness and the importance of the multinational sector. In addition to avoiding pro-cyclicality in policy, the other big lesson that came from the crisis is that we must think in a risk management way. During the boom there was too much focus on central scenarios, with the soft landing scenario been the famous example. This may not have been a bad central forecast. As it turned out, it was desperately wrong, but given the uncertainties of the time, it may have been a reasonable central forecast. However, people should have been able to see that things could have gone desperately wrong given the volatility of the economy and planned accordingly. What we need to do now is recognise this volatility and that we are vulnerable because of our high debt, the multinational sector and other issues we have mentioned. Many things can go desperately wrong. Deputy Boyd Barrett sees a very high likelihood of the negative scenario unfolding. Even if one still thought the central scenario was the right one, the Deputy is right to say many things could go wrong, and we need to plan for this. One of the important things is to reduce our debt.