Dr. Tom McDonnell:

I would say that either of those strategies, in theory, would generate a new revenue stream for the Government over the longer term. Obviously, if saving the money, it would put it into equities or do whatever with it, and that will generate revenue for the Government into the 2030s and 2040s. The second thing is that if we have a stronger infrastructure, that will mean the economy is more productive and will be generating more receipts in that way, so it is indirectly generating new revenues for the Government simply because we are more productive as a society, and we are producing the same output with the same number of workers, or whatever it might be.

The problems with infrastructure at the moment, of course, are manifold. The most important thing is that we simply do not have the construction workers. One of the reasons we do not have construction workers is that the labour market is so tight that there is no incentive for people to retrain or upskill as construction workers. Also, we do not make it easy enough for people to become construction workers. If we were to do infrastructure, it would possibly involve, for example, bringing in workers from outside of Ireland to do that infrastructure because we do not have the spare capacity in the economy at the moment. That is one of the reasons, at this moment in time, that there is an argument against infrastructure. If unemployment were higher and there were more slack in the labour market, which would enable the ramping-up of construction companies and construction workers, it would be much easier to say we would put it into infrastructure.

We are talking about an economic cycle. Infrastructure projects can take up to a decade. Initiating those projects now with a view to increasing the productive capacity of the economy and dealing with our enormous infrastructure deficits in energy, water and, of course, housing would be very important. What we need to be able to do is identify how we can increase the number of people working in construction. Financing is not a problem now. That is where the issue is. We can unlock infrastructure as a second option for using some of the windfall and save the rest if we can find a way to remove that particular capacity constraint in the economy. If we can remove the capacity constraint regarding construction workers, then we can remove the capacity constraints of not having enough housing and weak energy infrastructure. We have to deal with all of those problems. The question is whether we do it using windfall taxes or by increasing other forms of taxation and doing it that way. Those are what I would see as the options.