Dr. Tom McDonnell:

The short answer is "Yes". We had a rainy day fund for a while. We have corporation tax windfalls but we do not know whether they will be transitory. The issue is they may not be transitory but they could be and we are also very reliant upon half a dozen companies. Just a single company's corporation tax yield fell in August and that has had a very large and significant effect. We have an opportunity to sequester away what we think are transitory receipts into a number of different funds perhaps. One would be a savings fund, and this could be the majority of it, invested abroad and, over the 2030s and 2040s, starts to generate a dividend that goes a little bit of the way towards paying for ageing costs.

In addition, our infrastructure is very poor relative to other countries in western Europe and, therefore, we need to protect our capital spending over the medium and long term because it is always the first thing that is cut during a recession. If we have that in an independent fund that is used year on year, that is positive; similarly, on the housing side, to ensure that we have a steady run through of housing supply year-on-year.

Let us remember that we are talking about tens of billions of euro, potentially, in these transitory receipts so we can do multiple things. I agree with the Deputy that there should be some form of rainy day fund that is triggered when we enter a recession, which could be caused by an international war, another pandemic or simply a major recession in a trade partner. We could have a fund that would kick in automatically if, say, the unemployment rate reached a certain point or modified domestic demand fell by a certain amount. That could be then used and made available to Government to use in the next budget or immediately, if necessary, to provide supports to households. In those instances infrastructure spending is not necessarily needed because infrastructure sometimes takes years to come on line. In that case immediate help is needed for households to stimulate demand in the economy in a countercyclical way. That could come through tax cuts but it could come through income supports for lower-income households, universal payments across the board or through another mechanism so, yes, I agree with the Deputy.