Dr. Stephen Kinsella:

That would be helpful. Assuming that one cannot do that for whatever reason, one has to be able to commit credibly to do something in the future that will guide behaviour today. Everyone expects the carbon tax to increase every year, for example. The one year that does not, credibility goes out the window.

Much of this stuff has been studied in the monetary policy literature to a much greater extent than fiscal policy. In fact, one of the world's great experts on central bank communication is Professor Michael McMahon of Oxford. He is also deputy chair of IFAC. If he is in, I recommend that the Chairperson listen to him before she listens to me. However, I have read Professor McMahon's papers. The basic synopsis is that one needs to be able to show how one's theory of the world is changing as new data comes in. For example, if it turns out that corporation tax revenues fall for whatever reason and the chief executive of a major technology company has a heart attack or something, one needs to be able to show that one's guidance has changed and here is how it has changed. That kind of policy communication is important, particularly for households.

I have been a professional economist for more than 20 years and I talk to lots of people all over the country about the economy and what it means to them. I made a statement earlier on that people do not experience the economy as GDP, percentage changes in consumer price index, CPI, baskets or whatever. It is only a qualitative feeling that things are getting slightly worse. The way to communicate these kinds of changes and what one will do to alleviate them is also to speak qualitatively. That is where previous Ministers for Finance - I mentioned former Deputy, Michael Noonan, because he was pretty good at this - got it right. They say that this is how it will feel when they introduce the next Christmas bonus and they will do that if we see a change in this.