Mr. Sebastian Barnes:

On the question relating to the PUP, we have supported in general terms having those income supports. Exactly how they are designed and how we exit from them are legitimate questions that will need to be addressed. From the perspective of IFAC, if there is a permanent or longer-lasting change that results to the welfare system from those programmes, that would need to be reflected in the public finances. Obviously, it is important in terms of the public finances that once the recovery comes, we move out of the current phase.

On corporation tax, it has surprised us that it has lasted this long. In fact, it has increased so much in recent years that even Mr. Coffey, who is a great expert on these things, may have been surprised. There are two issues. One is the year-to-year short-term volatility, which may be linked to a company making more or fewer profits. It can have a big impact. Even if one looks to this year, our view is that corporation taxes can easily shift by €2 billion or €1 billion from month to month. That is quite volatile but, in the wider scheme of things, it is not a significant issue. The real issue is about the longer term. It is very complex to understand what is happening. It is on the tax policy side and it is also to do with the companies. We know that much of this money probably comes from companies in pharma or digital. Those companies have all done quite well during the Covid crisis. However, something could happen that means they do less well, which would have an impact on Ireland. It may be that, for whatever reason, they decide to structure their tax affairs differently, which could have an impact. That is why IFAC is still very cautious on this issue. We are likely to be closer to the day when these kinds of revenues drop than we were previously.

We do not know when that will be but we do not believe that locking in permanent spending based on these large sums we cannot rely on is a good idea. We remain concerned about it. We have been surprised that it has lasted. Of course, this year helped us a good deal. It has been the one good news story on the public finances. This is essentially the one thing that beat the forecast made in a previous budget. Anyway, the concern is still there and it is very real.