Mr. Michael Tutty:

The rainy day fund is a good idea if we want to put aside money for bad times. It is something we should do in good times, not spending it automatically because when the bad times come we will not have room for manoeuvre to up our expenditure. We would be back in to the bad times of having to reduce expenditure and increase taxes at the wrong time from an economic aspect. There are issues about how a rainy day fund can be used within the fiscal rules. If we just put money into a fund, it is not real expenditure from the general Government point of view, but when it is taken out and we spend it, the money becomes expenditure from a general Government point of view. How it will fit in with the fiscal rules has to be looked at but, in principle, the rainy day fund is a good idea to put aside money in good times and have more available in bad times. Otherwise, we just find our tax revenue reducing and the budget deficit starting to increase rapidly and there are no reserves to use. In principle, it is good but the modality of it certainly has to be looked at in how it fits in with fiscal rules.