Dr. Tom McDonnell:

I agree with Deputy Doherty that it is unlikely we will have deflation next year and that is why we had that comment about once-off measures not making sense. We should just deal with the issue of what we project inflation to be in terms of all the welfare rates. Ultimately, what we have said in previous years is that we think Government revenue needs to increase over the medium to longer term, and we do not see any reason that needs to be the case this year. We think there are many households that have the capacity to bear a higher tax burden, so our €6.7 billion figure should be considered broadly as a net figure.

We do not think there is anything to be fetishised about the figure of €6.7 billion. The budgetary figures are very strong at the moment and we do not have the fiscal rules this year. We can absolutely look at modifying that number through an additional package, if necessary and if a recession were to kick in which would immediately reduce the tax yield and lead to an increase on the welfare side. In addition, there has been discussion about a rainy day fund, and some people are advocating that should take up some of the space itself, but our view on that is that we have a rainy day now because of inflation, and that it will be ongoing, and that we have a rainy day in regard to climate change-----