Professor John McHale:

I am delighted to see that Deputy Ryan is so ambitious for us because these are certainly big tasks.

On the Deputy's first question on the measurement issue, there is no doubt that gross domestic product, GDP, even if there were no problems of the sort we have been dealing with this summer, is an extremely limited measure of what matters in a society or even in an economy and it needs to be supplemented by many other measures that would give better measures of well-being that take into account environmental and income distribution issues. I agree with Deputy on the broader measurement challenge and considerable work is being done to come up with better measures. The Deputy is probably familiar with Stiglitz's and Sen's committee work on alternatives to GDP. However, we also need something like GDP to the extent that it measures the economic output of a country. We tell our students that GDP is a measure of the goods and services produced in a country in a period of time. However, because of various changes to the measurement and the fact that elements such as contract manufacturing have come in - the Central Statistics Office, CSO, follows the rules precisely, so this is no criticism of it - GDP is not measuring the economic activity in the way we need to underpin economic and budgetary policy. In a sense there are two separate issues. We need to go much further in terms of those broader measurement issues but we also need to have measures of domestic economic activity, and if GDP is not going to do it, we need complementary measures.

With respect to Deputy Ryan's second question, this is a theme that has come up through the meeting with respect to the council's mandate. A mandate was given to us. We did not decide it. It was set down in legislation. We try to respect it. It has four elements to it, namely, assessing the macroeconomic forecasts, assessing the budgetary forecasts, assessing compliance with fiscal rules and assessing the fiscal stance as measured around the deficit, but it does not get into questions such as the issue the Deputy raised about the productivity of expenditure. There are other bodies that get into that space. The ESRI does work that certainly relates to that. A good deal of work is going on within government on assessments and evaluations of particular programmes. Perhaps there is scope to expand the mandate of the Irish Fiscal Advisory Council, IFAC, in the future but for the moment we respect the mandate we have been given. We go into some issues in terms of the overall planning and control of expenditure and there is a section in the pre-budget statement indicating that we will continue in ongoing dialogue with the Department of Public Expenditure and Reform on the way expenditure is planned and controlled, but I will not go into the details of that here. That goes into the areas that we consider to be within our mandate, but on the broader issues of examining the productivity of public expenditure, we see that as going beyond our mandate. I take it as encouraging the fact that the Deputy considers the council would have valuable things to say on that. I am sure councils in the future would be very open to potential expansions in terms of what the council is required to do.