Dr. Tom McDonnell:

It could still be relevant. However, the argument would have to be made on a specific project like that rather than in respect of the overall envelope. My research has shown that as one area where there would be definite gains. We also have special purpose vehicles and the European Investment Funds. These can be used to get certain items off-balance-sheet. I know that is being examined at the moment in the context of additional funding for housing.

We can front-load capital spending because of the four-year horizon currently in use. Essentially, the increase in capital spending could be approximately 25% in the first year and a similar amount could apply in subsequent years. That would be a way of bringing forward capital spending but it does not get around the point that the fiscal space is extremely low for budget 2018. Potentially, the figure is as low as €500 million or €600 million. Reference has been made to new measures. In the context of a growing population and price pressures and so on, arguably these factors are not fully knitted in to the figures.

Short of changing the rules, to increase capital spending we are going to have to cut current spending - already the levels will not provide improvements in 2018 - or increase taxes. That is really it. In future years, we could increase capital spending perhaps by putting less money into the rainy day fund or perhaps by using the rainy day fund as a supplementary form of capital spending. It would be a counter-cyclical measure used to spend more during recessions and less during booms. As it stands, we are rather limited.