Mr. Sebastian Barnes:

I will group the questions into those relating to investment and then those relating to health. In terms of investment, a couple of years ago the council expressed concern about investment which was at a very low level. Investment was exceptionally low by international standards and by way of historical comparison and was not even sufficient to maintain the existing capital, let alone expand it. In that context, increased capital investment is very welcome, particularly as there are very significant pressures in housing at the moment. It is good that there is space within the budget to allow for the higher investment that is necessary.

On the health side, there are pressures in many countries, as the Deputy suggests. Those pressures come from multiple sources, including ageing but also cost pressures. Health spending overruns can be related to specific drugs. They are also related to the fact that the sector is very labour intensive, with high demand for skilled labour in particular. There are many pressures on the health system.

The previous two points demonstrate the importance of medium term budget planning and good forecasting. We have not seen that with this budget but we did see it with previous budgets. Accommodating increased capital investment, all other forms of spending and pressures in health poses a big challenge. That is why the Government needs a clear plan around how it is going to do that with the revenue that is available. Those political choices need to be made. This budget, because it did not have credible medium term forecasts, does not help in that process. It does not very clearly illustrate the choices that people face. People take different views on how to allocate funding but one must have a clear baseline. What we have seen is that the overall amount of spending budgeted for is not even enough to keep things at a constant level in real terms. It does not leave space to improve services but only barely allows enough to keep things at their current level and in the outer years, not even that.

These questions are political choices as to how much to tax and what to spend money on. It is vital there is a clear framework in this regard, and that is missing from this budget.