Mr. Gerard Brady:

Our view on the rainy day fund is the State already has about €20 billion in liquid assets built up by the NTMA and so if there is a sharp turnaround in the economy and the State needs financing, there is money there. It is the NTMA's job to manage that. Our view is that the rainy day fund in that context is not necessarily needed. If one looks at the scale of it, it is a very small pile of money, as we have outlined. We are talking about €3 billion by 2020 or €500 million a year. If there was a sharp turnaround in the economy, we are talking about less than six weeks' social welfare payments. Its usefulness is limited. In terms of a counter-cyclical buffer, one is talking about less than 0.5% of GDP. It is not necessarily that having money put aside is a bad idea. It is that we already have approximately €20 billion in liquid assets put aside. We do not see the rainy day fund as a separate stand-alone institutional vehicle to have a counter-cyclical buffer as useful, particularly given its size.

With regard to ageing, the population is growing so while we and DKM are saying two different things we are probably agreed. The population is growing. Ireland has the youngest population in Europe, which affords us a lot of space in terms of reduced pension expenditure. We spend approximately €4 billion or €5 billion a year less on pensions than if we had an average age the same as the European population. Half the population is under 35 and less than 12% is of pensionable age. As the population grows over the coming years, we will see a lot of opportunities from a business and State point of view in terms of the growth of the productive side of the economy and the working population. As a proportion of the population, ageing will happen. Particularly from 2030 or 2035 onwards, we will see a growing cohort of people who are over 65; we will go from about 12% now to about 25%. In that context we have severe issues coming down the line in terms of pensions and the viability of the State pension that need to be worked out. In the immediate term, we have very positive demographics. The youngest population is very quickly growing, which goes back to the infrastructural pieces. Between 2008 and 2013, we saw the sharpest rise in birth rates we have seen since the Famine. We will see that feeding through in terms of housing, child care, national schools and all the way up through secondary schools over the next 20 years or so, which will put severe pressure on the system.

We are saying we need to get out ahead of that now. As Mr. O'Brien said, the housing issue is the canary in the coal mine when it comes to those capacity issues.