Mr. Seamus Coffey:

The Deputy has made a number of valid points. I would broadly break them down into two categories, namely, what have we learned and issues related to health. I will deal with the first category and hand over to my colleagues to deal with the issues related to health. What have we learned? A phrase we use occasionally when describing the current situation is that there are echoes of the past. There are some similarities to what has gone before. We can get too fixated with some of the problems we had in 2006, 2007 and 2008 because there are differences. It is possible we are only doing this in retrospect but if we consider the economy in 2006-07, we can clearly see where the significant problems were. I would point to the over-reliance in the economy as a whole on construction activity and how that over-reliance on construction activity carried forward to a concentration in the public finances in construction related and property-related taxes, so the two were linked. When we look at 2019, there is a difference. I do not think we see the same extent of risks within the broader economy. There is not a reliance on activity in a particular sector or a risk that activity could stop at the rate at which it stopped in 2008. We do, however, see risks in the public finances with a reliance on a volatile source of tax revenue which is not really related to activity in the economy. The profitability of the multinationals, which is a key driver of the tax receipts we are seeing, is based on their international operations and on decisions made not necessarily about what happens in Ireland but about what happens internationally.

Some comparison can be made and the Deputy was right to ask what have we learned. A key objective the fiscal council will have is that we do not forget and that we consider the impact to which some of the mistakes of the past have led. While there is some similarity we would see differences. When it comes to the economy as a whole, the Deputy will note from the report one area where we would see added value is in the analysis of what we would call the current account of the balance of payments, taking account of the overall level of spending in the economy and how that compares to our income. During 2004, 2005 and 2006 that deteriorated. We were running a current account deficit. We were spending more than we were earning and that hole was being filled by borrowing, primarily by the private sector at the time. If we consider the current account in 2018, we are running a significant surplus. As an economy we are generating an income that is greater than our spending. We will not give it a clean bill of health. The corporation tax receipts we earn are counted in that income and perhaps some allowance should be given to that but as an economy we seem to be in a much better position compared to where we were in 2006 and 2007. Our chief concerns would be about the public finances and we highlight the risks that are there.

The Deputy mentioned the level of debt we are now carrying that we did not have. In 2006 and 2007 net debt was close to zero. There was some debt but, as the Deputy mentioned, there was a significant amount of assets. We are now in a position where we have €200 billion of debt, we have some modest assets that can be offset against it, but it still is a significantly worse debt position than what we had in 2006. We see a surge in corporation tax revenue and that surge not being reflected in an improvement in the overall budgetary position. The money is being spent as quickly as it is coming in. We hope people have not forgotten what happened but we would not link too much to what happened in 2006-07. There are differences. Putting the public finances on a sustainable basis is important. We saw the difficulties, problems and trauma involved in pulling back public services. We are not opposed to public spending. We want it to happen every year. The hope is that what we have learned is the importance of putting the public finances on a sound footing. We have seen problems in recent years with spending growing faster than can be considered sustainable and that could lead to problems but, hopefully, efforts will be made to address that spending. It is set to slow down for 2019. It is still close to the limit of what would be considered sustainable. I hope we have learned from what happened. Our role in the fiscal council is to ensure that the rest of you do not forget.