Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

My view on that is there is not a one-to-one relationship there. If we have a deficit of X, it does not necessarily mean additional borrowing of X by the NTMA. There is considerable flexibility in its view of what is required to be held on reserve. It has built up a considerable level of cash and liquid financial assets. Based on the numbers we have here, I stand over the plan to continue to invest 0.8% in the coming years. The Deputy is correct there are different potential outcomes in terms of pillar 1 and pillar 2. There is the interaction effect. We have baked in the net cost of €2 billion into 2026. If there is a delay to pillar 1, the outcome will be better. If pillar 1 happens in 2026, the Department will firm up its estimate of what the impact will be. It could be worse. It could be more than that. That is a possible scenario.

It comes back to the fundamental question of whether there is sufficient flexibility. If there is a scenario of economic deterioration, an unfavourable outcome in terms of pillar 1 taking effect in 2026 and we are in a considerably worse position than set out in table 1 of the SPU, then the Minister of the day may make a different decision. That is provided for and facilitated within the legislation. These are Department of Finance projections working with our colleagues in Department of Public Expenditure, NDP Delivery and Reform. They are not my personal projections and they are not political projections; they are the central scenario in the view of both Departments, particularly my Department. I am satisfied, based on the time horizon, the known knowns and the known unknowns, that we should proceed. I am also satisfied that, were events to change and things to go against us, the future Minister, whether me, Deputy Doherty or somebody else, will have the ability to pause or reduce the contribution. We will come to section 26, which goes through those criteria. That ultimately is where that flexibility sits and I think it is adequate.