Mr. John Palmer:

Let us suppose a body is within general Government, for example, the NTMA, the Housing Finance Agency, local authorities or Departments. If they borrow money, it is on-balance sheet; the borrowing is on-balance sheet and it is in our general Government debt. Obviously, then, it contributes to the debt to GDP ratio. The off-balance sheet story is about when we use that money.

If that money is used in a way that is classified as general Government expenditure, it contributes to the deficit calculation on a headline basis and to the calculation of the structural balance, and will count towards the expenditure benchmark. However, certain transactions are classified as being outside general Government, for example, certain investments. Some of the investments in the banks were classified as equity investments and did not count towards the deficit but in so far as we had either borrowed the money, or not repaid money that we could have otherwise repaid, it is still within our debt. That is the dichotomy. Any money borrowed by any general Government body is general Government debt. There is no borrowing outside that. It is a question of whether it counts for the deficit calculation and for the rest of the fiscal rules, the structural balance sheet and the expenditure benchmark. I hope that explains it.