Mr. John McCarthy:

We had identified it as a risk for some time. Up to 6% of total tax revenue comes from ten firms, meaning there is a concentration risk. One cannot tell the company we no longer want it in Ireland. That is not part of our industrial policy. Accordingly, to militate against that risk, we must ensure the public finances are in a better shape to be able to absorb any shock if one of these firms was to move or reduce its tax payments substantially. This is why it is important from a policy perspective that we achieve a structural balance next year and rebuild our fiscal buffers, including, as the Minister did, establishing the rainy day fund.

Under the fiscal rules and the so-called "expenditure benchmark", growth in public expenditure is anchored on the trend growth rate of the economy. It is averaged over ten years rather than on one particular year. That, in turn, reduces the probability that a Government might spend so-called "windfall gains".