Professor John McHale:

If it is believed that more spending is required, there is nothing under the rules that would stop the Government if it raised the necessary revenues. It cannot use deficit spending and push the cost of that spending into the future to achieve increased spending.

We are still in a tight period of fiscal policy because we are still adjusting towards the balanced budget position, which the Commission refers to as our medium-term objective, MTO. Once we achieve that - and that is projected to be achieved in 2018 - spending can be allowed to grow along with the underlying growth of the economy, which seems to be a sensible way to proceed as a long-run approach. As more resources become available because of economic growth, there can be more spending to allow Government spending to keep up with the growth of the economy. At that point, even without tax increases, more resources will be available to meet the needs the Deputy referred to. There are two parts. The Government can always have more spending if it is willing to fund it other than through deficit spending and once that objective is reached, more resources will be available even without tax increases to meet those important needs.