Patricia Ryan (Kildare South, Sinn Fein) | Oireachtas source

I thank the representatives from IFAC for attending. The report references Ireland's debt to growth ratio and the need for reporting to utilise GNI* rather than GDP. I will not rehash the various problems with the latter measure. However, I still have concerns since while using GNI* rather than GDP would be an improvement in terms of providing a more accurate picture when it comes to debt sustainability, there is a risk of hitting the target but missing the point. We should recognise that there has been secular decline in interest rates in recent decades. Many believe that we will be stuck in a world of near-zero interest rates for a significant period. We are dealing with nation states and not the crude household analogy that many ill-informed commentators like to use. Would a better measure of Government debt sustainability in the context of low interest rates not be net interest payments as a percentage of GNI*? An alternative proposed by former US Treasury Secretary, Mr. Larry Summers, would be to take the net present value of all future GDP, or, in our case GNI*, which increases in times of low interest rates, and then use that to compare it to the stock of total debt.