David Cullinane (Waterford, Sinn Fein) | Oireachtas source

I have a supplementary point to Mr. Coffey. Mr. Coffey stated in response to the question on the fiscal rules and whatever additional space might be there in 2018 that there is overall expenditure of €60 billion and there can be a reallocation within that expenditure that can deal with some of the pressures that we have. That is not a fair answer because much of the low-lying fruit in terms of whatever changes can be made have been dealt with quite harshly over the past six or seven years. I do not see much room within overall current expenditure where we can do much reallocating. It is not about reallocating. It is about additionality. The additionality that was identified in the stability programme update in terms of the fiscal space for the next number of years is being revised downwards. Even leaving that aside, we then have the carryover from this budget and the differences in terms of the standing-still money. That does not leave us with many options. If that is the case and if Government policy is to cut taxes further, one can see the difficulties facing us at a time when we have patients on trolleys.

We have major problems in housing and in hospitals and I do not see how we can square those two. As such, can the witnesses come back on that? I do not have a difficulty with balancing budgets in terms of day-to-day spending, but there is an obsession with it. The Tea Party in the USA, which is seen as an outlier politically, talks about balanced budgets. There is a difference between balancing budgets for day-to-day spending and borrowing for capital spending. That is one of the pressures we face. Everybody in the room has to borrow at times to provide the capital to build a home and for big infrastructural projects. That is what we do and the same should apply to the State. Professor McHale referred earlier to learning from the mistakes of the past and remembering the harsh lessons of the economic crash. However, we have gone from an extreme of reckless spending to an extreme of very limited spending and restricting ourselves in terms of investing in capital infrastructure funding for hospitals, schools, housing, flood prevention and all the other issues with which we have to deal.

My first question, very specifically, is on that difference between reallocation and additionality and my second is on whether the witnesses see a distinction between balancing budgets and not borrowing for day-to-day spending and borrowing for capital spending, which is where the debate is located. Also, what are their views on additional tax-raising measures?