Professor Michael McMahon:

We have made the case previously and remain of the view that the real value of the future Ireland fund is to deal with the medium- and longer-term challenges associated with demographic pressures. The decision for any government of the day to increase the generosity of the pension should fall under the normal financing arrangements. As I said towards the end of my opening statement, even putting excess corporation taxes into the fund, as currently planned, reasonable estimates of the returns on the fund suggest that by 2050 we will only cover approximately a quarter of the extra costs we have to face. We are putting money away to cover some of it, but there is still a lot of adjustment to do.

It makes sense not to add to that by trying to use up some extra of the excess today to boost the level of pensions to a level that becomes even more unsustainable in 2050. Again, it is a perfectly open choice for any government to make, but it should make it within the overall budgeting package and, therefore, not treat it outside of core or non-core. Pension spending is part of core spending.