David Cullinane (Waterford, Sinn Fein) | Oireachtas source

I welcome Professor McHale and his team, and I wish him well in whatever new role he takes up.

I will follow-up on the earlier conversation Professor McHale had with an Teachta Pearse Doherty about the potential for increased spending in 2018. Professor McHale outlined the overrun or carryover cost of the tax cuts and expenditure increases from budget 2017 and budget 2018 which would be in the region of €700 million, and then there are the demographic pressures and the standing-still pressures that will come into play as well. Essentially, there may not be much money in the pot at all to spend in 2018. I am somewhat conscious of the council's mandate here and what Professor McHale can and cannot say. One of the options mentioned in his opening speech, which he reiterated in response to an Teachta Doherty, is that "in the absence of offsetting savings or new revenue raising measures", then there is no money in the pot. Is he essentially saying that we must look at revenue-raising measures, spending savings, or both? Current Government policy, as Professor McHale will be aware, is to carry on and increase or accelerate tax cuts, including phasing out the universal social charge. How does that sit with what Professor McHale is telling us in terms of the limited wriggle room with fiscal space? Government policy is to cut taxes even more.

I will marry that with something Professor McHale stated in response to the critique of the fiscal rules. Professor McHale is somewhat isolated on this because it is the case that ever more commentators are saying that these are a constraint. It is not just politicians. IBEC has been quite critical of the lack of flexibility in capital investment. The Minister for Finance made a speech in Brussels recently about the need for greater flexibility in relation to the fiscal rules. Professor McHale talked about the current fiscal framework being advantageous. I suppose commentators would have a different view. Are they advantageous, for example, to those who are victims of the housing crisis? We do not have the ability to build houses because of these fiscal rules because we cannot borrow money to invest in capital infrastructure, which is, in part, why we have a housing crisis and why we have rising rents, which are symptoms of that as well. It is the same with health, etc. We have pressure points across public services. How will we resolve those through a system that Professor McHale states is advantageous? My point is that if there is pressure building in relation to the fiscal rules, not only politically but outside of the political system, what is the council's position on that? Second, Professor McHale might comment further if he can on a policy of tax cuts on the one hand and a position where we had limited fiscal space which is being downsized almost all of the time on the other.

My third question is, how can there be such a difference between the Fiscal Advisory Council and the Government on demographic pressures? The difference is in the region of €600 million. Surely, this should be more black and white than that. It is either the council is right or it is wrong. It cannot be so subjective. It is incredible that we have that level of divergence between the Department of Finance and the Fiscal Advisory Council in this area. It is something that has been a common difference between both for some time but it strikes me as odd that there can be such a divergence of views in monetary terms when it seems it should be something that is much more black and white, and much more grounded in facts because we are dealing with money and obvious pressures. Those are my three opening questions.