Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

I thank Dr. McDonnell for his submission and taking time to appear before the committee. It is very much appreciated. I agree with his analysis in which he identified three areas of investment for growth, namely, education and skills, research and development and productive infrastructure.

The first question I have is where he thinks the money for that - the best place or the least bad place - will come from. Could we obtain it by increasing taxes, by not eroding the tax base any further, by reducing expenditure elsewhere, or by breaking the fiscal rules?

My second question relates to the expenditure benchmarks, which this committee will be poring over for years. It is my understanding that they are set at the starting point. The benchmarks provide that a country cannot raise its average spending more than X percent based on all of the factors we have spoken about today. However, they do not suggest that a reasonable amount of expenditure is X or Y or a percentage of X or Y. The indicators just say that wherever a country is at, it is coming from that point. Other countries spend more on education, be it per capita or as a percentage of GNP, than we do. This has been referenced in the witnesses' document. We invest considerably less in education than some other European countries. If we follow the benchmark and increase by a percentage per year, as other countries do, and because we are coming from a lower base of investment, unless we do something quite different, is it the case that we are perpetually locked into less investment than our competitors? If that is the case, does Dr. McDonnell think that is something we should change and, if so, how would he change it?