Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I will move on to my next question. Earlier, Professor Kinsella gave five choices in terms of Government allocation. The reality is that the Government is likely to do maybe three of them, with some of it going into a sovereign wealth fund and some into additional capital spending. Possibly the worst decision would be to reduce the national debt. Given the interest rates on our national debt are 2% at this point, and while we know it is a high level of debt as a proportion of the economy and even GNI*, it is way below European averages and is falling. In light of the return we get on investment compared with the cost of the national debt, is there a sensible argument for using some of this windfall to reduce national debt as opposed to investment? We have the money there. If we get into trouble, we could reduce the debt at any stage. If I was managing my books, and if I was able to invest at 4% and get a loan from the bank at 2%, I would be saying “Give me more money.”

Moreover, what return I had on the investment, I would not spend; I would just store it there. In Professor Kinsella’s view of the national debt issue, is that a prudent thing to do at this point? We talked to ISIF about gross and net debt. The reality is you are reducing the national debt when you have a sovereign wealth fund, if you can cash in the chips when needed and some of them can be liquid very quickly.