Mr. Matt McGann:

That would, in theory, be the case. It remains to be seen how it would pan out in practice, to be honest. Coming up to a budget, if there was automatic indexation, it could eat up all of the available fiscal space. Previous contributors have spoken about indexing to prices or wages being fiscally neutral. In theory, ceteris paribus, all other things being equal, that is the case. However, for instance, it is perfectly imaginable that there could be a rate of inflation in another expenditure component that is above prices. For example, health inflation can run quite high. You might need greater flexibility or resources to allow for expenditure in other components that means that when the Government gets to budget day it will still be faced with a trade-off where if there is automatic indexation it will not be able to deliver on existing levels of services of health. In theory, yes, it does give more certainty that you know what is going to happen on budget day but it is hard to see that you would not need to maintain some degree of flexibility for what you know will be the case.