Ciarán Lynch (Cork South Central, Labour)
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We will proceed with No. 4 on the agenda today, a discussion with the Minister for Finance on the stability programme update for 2014. I remind members, witnesses and persons in the public gallery that mobile telephones must be switched off to avoid interference with the broadcasting of the meeting. I welcome the Minister, Deputy Michael Noonan, and his departmental officials - Mr. John McCarthy, chief economist; Mr. John Palmer, principal officer; Mr. Niall Feerick, assistant principal officer; Mr. Patrick Quill, statistician; and Mr. Shane Enright, assistant principal officer.

The Government's update on the stability programme for 2014 comes in the wake of Ireland's exit from the EU-IMF programme of external assistance in December 2013, with the State now eligible to participate in the EU semester process. The semester is a yearly cycle of EU economic and fiscal policy co-ordination which commences formally in January each year. The cycle begins in December with the preparation by the Government of its annual stability programme, which sets out the medium-term economic parameters for the economy. An update of the stability programme is published the following April and must be submitted to the EU institutions by 30 April.

The role of the committee today is to scrutinise the stability programme update before it is submitted to the European Commission and Council. The discussion will begin with opening remarks by the Minister, following which questions may be put to him by members.

Michael Noonan (Limerick City, Fine Gael)
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I thank the Chairman for inviting me to appear before the committee to discuss Ireland's Stability Programme - April 2014 Update. The document was approved by the Government earlier today, with this meeting being the first public engagement on the update. In a new departure, the Government is making the document available in draft form with a view to facilitating constructive and robust discussion. The finalised document will be submitted to the European Commission later this month in line with our obligations under the European semester. There is a great deal of information and detail in the document. In the interests of brevity, therefore, my opening remarks will focus on the main messages contained therein.

The forecasts set out in the update have not changed greatly from those published on budget day. This is a positive development and indicative of the general improvement in and stabilisation of the economic and fiscal outlook. Encouragingly, the greatest changes are in the stronger employment forecast. Job creation is the best indicator of economic activity and the top priority of this Government. We are seeing real progress in this regard, with an average of 5,000 jobs being created each month. The stated objective of the medium-term economic strategy published in December is full employment by 2020. Today's update suggests we have made a strong start on reaching that target.

The European semester is about improving economic governance in the EU. The rationale is that member states will better align their economic and fiscal policies with the rules agreed at EU level. In this co-ordinated way, the aims of the semester are to promote economic growth and ensure sound public finances in member states and the Union as a whole. As part of this annual cycle of policy co-ordination, each member state submits a stability or convergence programme to the European Commission in April. The stability programme update sets out the stance for fiscal policy in the coming years.

It complements and is prepared in conjunction with updates of national reform programmes, NRP. In the case of Ireland, the NRP details the progress made under our EU-IMF programme and it maps out our continued progress towards achieving our Europe 2020 targets. A draft of the NRP was discussed at the Joint Committee on European Affairs in early April. As part of the semester, the fiscal and economic policies set out by each member state are subject to peer review at a European level and country-specific recommendations are subsequently endorsed by the European Council in June for each member state to ensure that the policies are consistent with the goals of the Union as a whole. In my remarks this evening I will concentrate on the stability programme update. With respect to economic developments, preliminary figures indicate that real GDP declined by 0.3% last year. However, the disappointing outturn was due largely to sector-specific developments in the pharma-chemical sector, commonly referred to as the patent cliff, which acted to depress goods exports in the year. Because of this, the headline growth figure somewhat distorts what was otherwise an encouraging year for the Irish economy. GNP, which excludes the impact of this sector-specific issue, increased by 3.4 % last year.

Signs of economic recovery are increasingly evident. Investment returned to growth in 2013 and recent indications are of a strong pick-up in consumer spending so far in 2014. As I mentioned earlier, the most concrete piece of evidence comes from the labour market, where data have been unambiguously positive over the past year or so. For instance, employment rose by 3.3%, the equivalent of 61,000 jobs over the year to the fourth quarter, the strongest annual employment growth in the entire EU in this period. The vast majority of job gains were in full-time employment and broadly based across sectors. Unemployment, while remaining at a level which the Government regards as too high, continues to fall every month. I think it fair to say that signs of economic recovery are everywhere except in the initial GDP figures for 2013 which will be reassessed by the CSO in June.

Turning to the economic outlook, my Department expects GDP growth of 2.1% this year, broadly unchanged from budget time. GNP growth should be somewhat stronger at around 2.7%. The perennial question of which measure to use to assess economic progress, whether GDP or GNP, is very pertinent at this time. My view is that the labour market provides the best indicator of what is happening on the ground at present. As I said earlier, the developments over the past year have been extremely encouraging.

A pick-up in GDP growth in 2015 and beyond, is anticipated, accompanied by further recovery in the labour market. There is now a consensus that unemployment is on a downward path and my Department is projecting an unemployment rate of 8.0% by 2018. While this would represent considerable progress from the unemployment rate seen in early 2012, I would stress that the Government does not see these labour market forecasts as targets nor do we limit our ambition to their achievement. The economic forecasts upon which the stability programme update is based have been provided by the Irish Fiscal Advisory Council. I am happy to report that the projections were endorsed by the Council earlier this month. The letter of endorsement is contained in an annex to the stability programme update. In the interests of transparency, a publicly-available memorandum of understanding between the two institutions sets out how this endorsement process operates.

There is, of course, much uncertainty at the moment and there are both up side and down side risks to the outlook. Externally, although developments over the past year have been reasonably encouraging, the emerging recovery in our key trading partners remains at a fragile stage. In particular, risks associated with excessively low inflation in the euro area have of late been flagged by both the European Commission and the IMF.

Domestically, a deterioration in confidence among Irish consumers could result in a re-escalation of household deleveraging, which would serve to dampen consumer spending. On the upside, there is also the possibility that the labour market may be stronger than we have assumed. Last year, for instance, employment growth surpassed all expectations and a repeat performance would indeed be welcome.

On the fiscal front, a general government deficit of 7.2 % GDP was recorded last year according to the CSO. This was within the 7.5% of GDP ceiling imposed under the excessive deficit procedure, the third successive year of over-achievement. The projected deficit for this year announced in budget 2014 remains at 4.8% of GDP. This is inside the EDP ceiling. Therefore, we remain on track to bring the deficit below 3 % by next year, in line with our commitments.

In line with the requirements of the Stability and Growth Pact and the fiscal stability treaty, once Ireland corrects the excessive deficit in 2015, it will be necessary to ensure convergence towards our medium-term budgetary objective, also known as the MTO. In Ireland's case this will mean achieving a balanced budget in structural terms by 2018. More specifically, this involves a budgetary position where general government revenues and expenditures are equal in a given year, once correction for the position in the economic cycle has been made. The projections in the stability programme update are consistent with this.

The stability programme update also highlights that the debt-to-GDP ratio has now peaked at 124% at the end of last year. For this year and beyond the debt ratio is now on a firm downward path. Of interest to investors and analysts, the document also includes figures on the debt ratio in net terms, in other words, excluding the impact of cash reserves that we have built up in order to smooth our re-entry to capital markets following our successful exit from the EU-IMF programme. On this basis, the debt ratio was 98% of GDP at the end of last year, a figure which is not dissimilar to EU norms.

In conclusion, sustainable public finances are a necessary condition for the economic growth that is required to raise living standards and reduce unemployment. The stability programme update confirms that revenue and expenditure are being more closely aligned but there is still work to be done. The Government's policies are paying dividends, a fact which is clear from the turnaround in the labour market over the year.

I welcome questions and the constructive observations that I am confident I will hear from members.

Ciarán Lynch (Cork South Central, Labour)
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I propose to have a question and answer session followed by a final contribution wrap-up. The report issued by the Minister this afternoon is in draft form. The fiscal advisory council and this committee are engaged in the consultation process. Will the draft report be sent to other agencies and groups?

Michael Noonan (Limerick City, Fine Gael)
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No. It is the practice in Europe to involve Parliament more than was the case previously. One of the reasons it is in draft form is that any acute observations made here can be incorporated in the final draft which will then be sent to the Commission at the end of April.

Ciarán Lynch (Cork South Central, Labour)
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This report will go to the Commission in the last week of April. This is an opportunity for the member states to lay out their budgetary positions for examination by other member states and to ensure that the type of deficit budgeting in the past does not happen in future. That is the purpose of the report.

Michael Noonan (Limerick City, Fine Gael)
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We had to think it out for ourselves in the main. The Chairman and I were involved in much of the conversations. It is not possible, in my view, to have a currency union which does not have a fiscal union or something very close to it because there is always the risk that countries within the currency union which do not obey moderate fiscal rules will drag down everyone else. The move towards a fiscal union is that common rules would apply across the Community and everybody has to comply with certain criteria.

Then there is peer review. If we do not come up to standard on the peer review in June we will get specific recommendations under the semester process and we will be obliged to correct on that basis.

Ciarán Lynch (Cork South Central, Labour)
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That brings me to my next question which is whether the Minister expects this country to receive country-specific recommendations in particular in the area of budgetary and fiscal matters?

Michael Noonan (Limerick City, Fine Gael)
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Yes, I would be surprised if we did not because there is no shortage of advice in Europe.

Ciarán Lynch (Cork South Central, Labour)
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But the country-specific recommendations are more than a bit of advice. They come with a big stick.

Michael Noonan (Limerick City, Fine Gael)
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They may be of a general nature.

Ciarán Lynch (Cork South Central, Labour)
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Does the Minister see them as not being overly prescriptive but rather more general?

Michael Noonan (Limerick City, Fine Gael)
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Yes, I see them as being more general.

Ciarán Lynch (Cork South Central, Labour)
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Could the Minister explain to the committee what the consequences are for failure to meet a country-specific recommendation?

Michael Noonan (Limerick City, Fine Gael)
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What has happened previously at the semester hearings I attended was that countries were obliged to comply.

Ciarán Lynch (Cork South Central, Labour)
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Yes, but what are the rules of enforcement?

Michael Noonan (Limerick City, Fine Gael)
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There were bilateral meetings between the countries and the Commission. One country, for example, which I will not name, had the tap turned off on the transfer of funds which it was getting under one of the European programmes.

Ciarán Lynch (Cork South Central, Labour)
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It may well be the case that the tap could be turned off for a small member state but I have looked at some of the country-specific recommendations and there are very specific recommendations with regard to Germany, for instance, as to how it deals with imports and increases domestic consumption and how it addresses the trade imbalance that is currently in place. What kind of enforcement could be put in place in Germany? It is fine to wag one’s finger at a small European state but Germany is a different kettle of fish. We saw that previously with Maastricht; when criteria were put in place it was not small member states that broke the rules but major states such as France and Britain that were stepping outside the rules.

Michael Noonan (Limerick City, Fine Gael)
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Speaking from memory I do not recall Germany being admonished with country-specific recommendations which were enforced.

Ciarán Lynch (Cork South Central, Labour)
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What I am saying is that Germany has received country-specific recommendations.

Michael Noonan (Limerick City, Fine Gael)
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Under the semester I do not recall specific recommendations for Germany. We would like to see Germany reducing its current account surplus because a model where everybody eliminates deficits and nobody reduces surpluses does not seem to be tenable in the long term unless we run a balance of payments surplus with the rest of the world on a continuing basis. I do not think that is the way to go either. There must be some kind of internal balance but it is a work in progress. Much progress has been made.

Ciarán Lynch (Cork South Central, Labour)
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Given that it is a work in progress and that Ireland’s financial position is almost changing on a month-by-month basis – we saw at the end of March that Irish ten-year bonds were yielding 3.1% only last week but they are now down as far as 2.9%, which is the lowest they have been since 2004 – is it the case that later in the year there could be a review of what figures Ireland has provided in the document as it might have an effect later in the year?

Michael Noonan (Limerick City, Fine Gael)
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I do not think the figures are changing month-by-month in Europe, or in this country either, but it is possible now to identify certain trends both in the Irish economy and in the European economy. On ten-year bond interest rates, the trend has been downward but that is for reasons that were well planned in the Department of Finance and through the NTMA. Effectively, we are de-risking the Irish debt all the time. The principal reason for Irish ten-year bonds to be at 2.9% coming down from 3% ten days ago is a realisation in the markets that there is no further risk left in IBRC and that the risk in NAMA has been eliminated. What one sees is what one gets in terms of Ireland. The quantum of sovereign debt is what we have to deal with and no side issue is going to jump up and surprise people as they go forward. That is not to say that interest rates will not rise again and that it would not affect sovereign spreads but the issue is the relative rate. It was very narrow this morning on the five-year paper. With the five-year German bond, there were only 40 basis points. It was slightly more on the ten-year paper. We are moving in the right direction but we need to work on it every day. The ten-year was 140 basis points above the bond.

Ciarán Lynch (Cork South Central, Labour)
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Does Deputy McGrath wish to share his time?

Michael McGrath (Cork South Central, Fianna Fail)
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Yes, I would like to share the initial round with Senator Byrne. I will come back in later on.

Ciarán Lynch (Cork South Central, Labour)
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I will let Deputy McGrath know when about six minutes have elapsed.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister and his departmental officials for their attendance. We have had a limited opportunity to review the draft document and to come up with key questions.

How confident can we be that the Department’s projections in terms of GDP growth of 2.1% this year are going to be accurate? The Minister acknowledged that the outturn for 2013 was quite disappointing with a contraction of 0.3%. This time last year the Department forecast that the economy would grow in 2013 by 1.3% so it was out by approximately 1.6%. For 2014 there is a forecast of 2.1%. How confident can we be this time that the estimate will be accurate? The Minister attributed last year’s poor performance to GDP grounds such as the patent cliff and the sector-specific issues in the pharmaceutical industry but they would have been known at this time last year. I acknowledge GDP is a volatile measure of an economy, employment growth has been positive and further positive growth is forecast in that regard but how confident can we be that this time that the forecast from the Department on the overall measure of the economy will be broadly correct?

Second, there has been considerable speculation that in the next budget in six months time there might be scope for some tax reductions especially for middle income earners. Looking at the figures today in the stability programme update, SPU, even with €2 billion of an adjustment the Department is forecasting that we will come in right on the button of a deficit of 2.9% next year which is the limit of the deficit at which we are allowed to come in. Where stands all of the speculation that has been fuelled by senior Ministers and the Taoiseach that there might be scope in October’s budget to relieve the burden of income tax on families given that the official forecast today shows that even with a full €2 billion adjustment of tax increases and spending cuts we will still only just about come in on the button of 2.9% deficit next year?

Michael Noonan (Limerick City, Fine Gael)
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On Deputy McGrath's first question, I am as confident as any finance Minister in Europe can be about how events will play out by the end of the year. We also are not that enthusiastic about GDP figures because GNP is a more accurate measure of how the Irish economy is going now than GDP. As the Deputy knows, GDP includes all the foreign stuff whereas GNP is more or less the domestic economy with the foreign profits stripped out of it. What is happening with GNP is consistent with very high levels of increased employment.

I am confident, first because we are at the lower end of the consensus. Deputy McGrath will have seen what the ESRI, IBEC and the various stockbroker economists predicted. Even the Central Bank is slightly ahead of us now. We are at the lower end of the consensus but we are still within the consensus space. Our forecasts have been endorsed by the Fiscal Advisory Council which is also very prudent in its approach. There is always uncertainty. I cannot give a cast iron guarantee. I am sure Deputy McGrath is aware of what happened with the patent cliff. There are particularly high-selling drugs manufactured in Ireland, for example, Lipitor - anyone who has a heart problem would be familiar with that - and Viagra and its co-equivalents under other names is also very high selling and is highly profitable.

As they go off patent they continue to be produced, and the same number of people are employed in the pharmaceutical industry. There are more people employed in the pharmaceutical industry this year than there were last year or in 2012, but in terms of value what they produce is worth less. Pharmaceuticals, with 25,000 employees and massively expensive products, were contributing about 5% to GDP, and that has to be pulled back. We are not quite clear how it washes through, so to speak, because we do not control the decision-making in the companies. However, from what we can see they continue to produce but what they are producing now in general terms would be more on the generic side rather than the patented product where the high profits are available. Obviously, they will come in again with new patented products and it will drive again. That has given us a distortion, and that is the best explanation I can give the Deputy.

On the level of adjustment made, we are saying that we are in line with our budgetary predictions after three months of 2014 and that we are on target to get to the deficit of 4.8% but to go from 4.8% to less than 3% will require an adjustment of about €2 billion next year. That is what we have predicted for a couple of years, and we are not moving from that forecast even though independent forecasters are saying we could do this much easier. If there is a big surge in tax receipts as the year goes by or a big fall in expenditure because many additional people go back to work, we will welcome that and take it into account coming into the budget, but currently we are looking at an adjustment.

The Deputy asked how that leaves scope for tax reductions. I have always talked about tax reductions in the context of the tax reductions I have had in the past three budgets. The Deputy will recall that I reduced VAT from 13.5% to 9%, but I had to raise revenue elsewhere. I reduced stamp duty to transfer family farms to the next generation of young farmers. I gave enhanced provisions for research and development, which enhanced the IDA package and succeeded in bringing in many American companies, with emphasis on research and development. I gave a capital gains window for the property industry in Dublin, which brought a wall of money into Dublin for commercial property. I use taxes as quasi-supply side initiatives, to use a fancy term, to stimulate sectors of the economy. I brought in other measures and they did not work, and no doubt the Deputy will remind me of those, but that is no reason for not trying.

An aspect of the tax code that is most jobs-unfriendly is the fact that people on relatively small incomes must go on the high rate of tax. A single person earning €32,800 goes on the high rate of tax, and I am saying that my next move on tax is to address that. If I do not have some resources what I can do will be very small, but I am pledged to doing something. If there is a good deal of movement in that regard, that is where I will have the emphasis in the budget but that is not inconsistent with the correction we have to make. I am simply saying that we will continue to make the tax code across the different tax heads jobs and growth friendly because our objective is to grow the economy and create more jobs.

Michael McGrath (Cork South Central, Fianna Fail)
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If the numbers pan out as anticipated by the Department in this document, will there be some scope for income tax reductions in the budget next October?

Michael Noonan (Limerick City, Fine Gael)
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There will be some scope for income tax reductions if we make a correction in excess of €2 billion.

Michael McGrath (Cork South Central, Fianna Fail)
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It will be a case of giving with one hand but taking back with the other hand.

Michael Noonan (Limerick City, Fine Gael)
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That is not the best way of putting it. We take from areas that do not hurt job creation and we give to areas which help to create jobs, but let us travel in hope. We may have scope.

Michael McGrath (Cork South Central, Fianna Fail)
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Absolutely.

Thomas Byrne (Fianna Fail)
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I thank my colleague. I welcome that this document has been published in draft form because there is a glaring omission in it regarding the potential for a deal on the bank debt to move it away from the sovereign debt. Obviously, that would have a huge impact on the future public finances if it happened and I was surprised to see that it was not down as an upside risk. It is not down under European developments and as far as I can see, it is not included in the chapter on long-term sustainability of the public finances. Has it been left out of this document because it is assumed that a deal cannot take place? Is that the basis on which the Government is operating or is it an omission the Minister might correct as it is only in draft form?

Michael Noonan (Limerick City, Fine Gael)
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The position is that we include in the stability update what we know with certainty. We cannot put wishes, aspirations or policies in it until there is agreement, but that does not mean we will not continue to pursue the policy and several other policies to make our debt position more sustainable.

Thomas Byrne (Fianna Fail)
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However, upside risks and downside risks are described in the document. There is also a section on European developments and a section on long-term sustainability. If a deal were to be reached, and a deal was announced to have been reached in July 2012, it would have a major impact on public finances. As a constructive comment on this, which the Minister invited, I believe it should be included. It would show the Government's seriousness of intent with its European partners and with the Commission, that it is looking for this because it seems to me from this document that a major item that would have a huge impact on the figures before us is excluded, and I do not know the reason for that.

Michael Noonan (Limerick City, Fine Gael)
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What the Senator is suggesting is building in data that is aspirational, which is the very thing that got us into trouble in the first instance.

Thomas Byrne (Fianna Fail)
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We are not looking for hard numbers, and the Minister does not include hard numbers in his upside and downside risks section. An agreement was announced by the Taoiseach almost two years ago. That agreement, which would have a massive impact on the public finances, should be included in this document. It would also remind Europe that we are still looking for it because someone reading this might conclude that we are no longer looking for it.

Michael Noonan (Limerick City, Fine Gael)
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What we have got here are hard figures on which we can rely, and they are our best projections of what are the figures. We are not putting aspirational material in the document. We are not putting in policy positions that we continue to pursue. We will continue to pursue that particular policy, but it is not appropriate to the stability update.

Thomas Byrne (Fianna Fail)
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I find that hard to believe because there are so many items in the document. The Minister mentioned a number of upside risks that in no way could be described as hard figures, and they have not been announced as decisions reached at a European level. The Minister states regarding upside risks that economy-wide investment remains close to record low levels, therefore, if they go up there will be a huge impact. He mentions that employment growth has surpassed expectations and that if that increased, it would have a favourable impact on household income, etc. They are mentioned without giving any hard figures. It seems to me that the bank debt arrangement is much more significant.

Michael Noonan (Limerick City, Fine Gael)
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The paragraph to which the Senator is referring states:

It is important to stress that upside risks also exist on the domestic front. Firstly, economy-wide investment remains at close to record low levels. While the baseline scenario assumes a recovery in the investment-to-output ratio over the medium term, a more rapid 'normalisation' is possible. Secondly, employment growth has surpassed even the most optimistic expectations over the past year or so. Stronger-than-assumed employment growth would have a favourable impact on household income ...

Thomas Byrne (Fianna Fail)
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That is fine.

Michael Noonan (Limerick City, Fine Gael)
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-----I cannot help him any further on this particular question.

Ciarán Lynch (Cork South Central, Labour)
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Does the Senator need more time or does he want to move on to-----

Thomas Byrne (Fianna Fail)
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I will be making a submission, based on what I said earlier, that the Minister might consider incorporating it. It would be helpful to the country's case, and I believe it is an omission.

Peadar Tóibín (Meath West, Sinn Fein)
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The Minister mentioned fiscal union earlier. It seems that different economies in Europe have different productivity levels, many of which are divergent, and entering into a tight fiscal union in those circumstances is a recipe for disaster. The twin-track Europe we have currently where Germany and France set the rules and the smaller countries in particular are forced to follow them is not in Ireland's interests. They are different economies and different elements of the cycle but they are all being treated with the same tools.

Deputy McGrath mentioned the inconsistencies in the prediction figures with regard to debt to GDP ratios and GDP growth. Rather than being volatile around them, unfortunately, all of them erred on the wrong side in the past. There are contradictions also.

It talks growth but focuses on contraction. One of the startling transactions is that current spending will continue to contract further and then remain static for another four years. This is despite the fact the people have suffered a massively damaging spending blow. Spend per capitawill be reduced in real terms.
Since this Administration started, net employment has increased by 30,000 jobs but emigration has been ten times that number. People on the edge of existence will want to know what growth prediction the Government believes is necessary to see a reduction in the level of contraction. More specifics on this would be useful.

Ciarán Lynch (Cork South Central, Labour)
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I just want to let the Deputy know the rules at this committee. The ten minutes are questions and answers. If he wants, the Minister will answer that question first and then I will be able to let him in again.

Peadar Tóibín (Meath West, Sinn Fein)
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I will let the Minister answer that question first.

Michael Noonan (Limerick City, Fine Gael)
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It is difficult enough to answer the question. The connection between growth and budgetary correction level is probably between gross national product, GNP, and the amount of taxes that flow through the Exchequer. It is quite a complicated question to answer. If the economy grows very strongly in GNP terms with many people going back to work, paying income and expenditure taxes, no longer on social welfare payments, then this would be advantageous to us. As confidence builds and as people spend, one gets more yields from excise and VAT. For example, one sees quite a boost in excise from car sales in the first three months of 2014.

In general terms, we need to make an adjustment of €2 billion for the next budget. After that, the growth projections we have in this document will carry forward beyond next year. There should be no further adjustment then for 2016 to 2018, inclusive. By 2018, we will have a structural balance. The growth figures in this forecast get us into that position.

We will have to do the full €2 billion in cuts, based on the figures presented here. If matters improve during the course of the year, we will see how it plays out and it should improve the situation.

Peadar Tóibín (Meath West, Sinn Fein)
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It is probably the case of the Minister playing his cards close to his chest to help in Cabinet negotiations in the future.

This State is the most indebted of any state, globally. Has the Government considered different ways by which household debt could be alleviated through budgetary measures?

Up to 120,000 enterprises have closed over the past several years, which is a phenomenal figure. Main Street Ireland will say the likes of flat taxes - taxes that are not progressive and do not fully reflect earning capability - are hitting consumer expenditure. Is it not contradictory to forecast increases in consumer spending while attacking the ability of the consumer to spend through these taxes?

Michael Noonan (Limerick City, Fine Gael)
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We have been through an absolute economic tsunami. If the value of everything in the economy goes down by 20%, as it did with GDP, this then transfers over in the closure of many small businesses, particularly on the retail side. It is beginning to restore again, particularly in Dublin. One sees businesses reopening or starting up. I hope we are at the start of a more optimistic cycle. Not everything is repaired, however.

As well as being involved in the troika programme, we have taken the economy sector by sector with a series of initiatives where we have restored tourism, agrifood and farming, in which we have enhanced inward investment and the financial services. We are also repairing building, development and construction. It is just tipping in the right direction but it has been very difficult. We have had to do a big repair job on banking. Retail is really a function of consumer sentiment. The retail figures for the first three months of 2014 have been at their highest for several years. We hope this will continue.

It is also true that while volume is up in retail, the VAT receipts show there is much discounting in the sector. One will know from walking any high street that there are sales all the time with discounts of up to 50%.

On the strategy of how the tax code influences consumer spending, we moved to a property tax because it is set on fixed assets. We made a commitment that we would not increase income tax. It is income tax that generates consumer spending, helps retail and, in turn, creates jobs. We have been following the Deputy’s advice. The problem is we had to do this when we were consolidating to move back from the brink of impending bankruptcy. We have made much progress but I am the first to admit that it is still work in progress and much more has to be done over the next two years.

Peadar Tóibín (Meath West, Sinn Fein)
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One of the major points is that citizens consume services delivered by the State such as health care, education, etc. We have seen the budgets for these services contract massively over the past several years. This stability programme indicates static spending for the four years involved. Has the Minister identified what the population rate will be like in this time? Is it a case that there are static figures that may not take into account population growth, meaning a reduced spend per person in the end?

Michael Noonan (Limerick City, Fine Gael)
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Obviously, there is always a desire in any government that public services will be very good, especially education, health, keeping the streets safe and so on. We have gone through a period where we had to be very careful about the amounts we were dedicating to such expenditure because we had to consolidate on the expenditure side, as well as on the tax side. We are still operating under expenditure ceilings which will make it difficult. As well as the expenditure controls which the Minister for Public Expenditure and Reform, Deputy Howlin, exercises over different Departments, I am responsible for the expenditure ceilings within which Ireland must operate. These are quite a restrictive set of rules.

The Deputy asked me earlier how much the improvement on the deficit would be if growth were 1% better. The rule of thumb is that for every 1% improvement in growth, the deficit is reduced by 0.5%.

Peadar Tóibín (Meath West, Sinn Fein)
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The Government has focused on reducing the deficit through austerity. It has reduced the ceiling of public service consumption and has increased taxes through flat taxes. There is another idea, namely, reducing the deficit through growth. That requires stimulus through investment and the taking out of flat taxes such as water and property charges.
For example, with the ambulance service, the number of paramedics per capitahere is half the number in the North of Ireland or Scotland. Our ambulance service has seen a reduction of 30% of ambulances available and where only 30% of them arrive on time. Those life-and-death experiences in everyday life are directly related to the choices of spend per citizen as set out in this document.

It is not a case of there being only one parameter within which that can be discussed.

Ciarán Lynch (Cork South Central, Labour)
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The Deputy should put a question.

Peadar Tóibín (Meath West, Sinn Fein)
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Does the Minister agree that a focus on growth would be more useful for deficit reduction and more successful for the citizen?

Michael Noonan (Limerick City, Fine Gael)
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I do not agree with the Deputy's presentation because we have focused on growth. We had a twin-track approach to get the deficit down and control the debt - and the troika programme was up in lights for everybody - but, in parallel with that, the Government ran a programme to grow every sector of the economy. That is why I reduced VAT in the tourism industry from 13.5% and 9%; that is why we had The Gathering and that is why I abolished the travel tax this year. We have restored the industry now and, therefore, that is a growth strategy for tourism. The Minister for Agriculture, Food and the Marine has a programme in place under which volume in agrifood will increase by 40% between 2015 and 2020, principally because there has been a huge change in the Common Agricultural Policy with milk quotas no longer applying. We will be able to go for volume at market prices rather than being restricted by quota to sustain prices. There is a different model in this industry.

With regard to FDI, every time a foreign company invests here, that feeds the demand side of the economy. Intel said last week it has 5,500 people and it has put €7 billion into the plant over the past three or four years. This is low profile, demand side activity. However, in the context of investment by the Government, there is a supply side to the economy and we had to concentrate on that, first, because it is worth doing and we can get a great deal out of it to get the economy to grow that way and, second, because we did not have large amounts to invest in new deal projects. We did not have the resources to build great dams in the Mississippi basin or to follow a Roosevelt-type projection. That would not work for Ireland anyway. It worked for the US in the 1930s because it was a well enclosed economy. The multiplier in Ireland is probably less than 1%, which means that anything we put into construction leaks out of the economy so fast we do not get a multiplier effect. It is not that we are austerity freaks. We did what we had to do to correct the fiscal imbalances but we deliberately stimulated the economy sector by sector more through taxation and supply side initiatives than by demand side initiatives. If we had the resources, we would go down the demand route as well. We have arrangements in place through the European Investment Bank and PPPs. Bundles of schools and groups of health centres will be built.

It is wrong to accuse the Government of simply having one string to its bow when we have put so much work in, which has clearly been successful, to repair the damaged sectors of the economy and to get them growing again.

Stephen Donnelly (Wicklow, Independent)
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I recognise the efforts of the Minister and his officials in bringing the draft SPU to the committee with time for us to have an input into it. He says on page 1 that the three pillars of the medium-term economic strategy are competitiveness, credit and public finances. I would love debt resolution to be added to them. It is probably the key driver of economic growth missing from the strategy. I would love to see that factored in explicitly, if possible. The Minister also referenced on page 1 improvements to the budgetary process, which are great. I would like to give one final plug for the equality budgeting submission I sent to him. Even if he thinks it is not possible to implement it in full, it would be incredibly useful on budget day when he and the Minster for Public Expenditure and Reform announce the budget if all Members, as well as having the literature we were given last year, had some form of distributional analysis, be it by income decile, gender, rural versus urban and so on.

There is a fantastic graph on page 14 of the document, which breaks down the change in the deficit between 2013 and 2014 in the context of interest, revenue buoyancy, carryover, new policy measures and so on. I began my proposal for budget 2015 this week and it would be incredibly useful to get the Minister's opinion and that of his officials as far ahead of time as possible as to what the new policy requirements, including carryover, revenue buoyancy and other factors will be and I acknowledge these will be estimates. If we could get that a few weeks before budget day, it would be incredibly useful in the context of knowing what is required in terms of new measures as opposed to the overall package.

We have been discussing a figure of €2 billion. Will this be generated from new policy changes or will it include carryover, revenue buoyancy and so on?

Michael Noonan (Limerick City, Fine Gael)
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There is carryover in revenue and expenditure. I cannot give the Deputy specifics but there is carryover from the Haddington Road agreement. There is always a carryover on the revenue side but it is not large this year. I recall seeing figures before Christmas and it was low.

Stephen Donnelly (Wicklow, Independent)
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I thank the Minister. Has he a working estimate for the new policy quantum that is required to hit the target for 2015?

Michael Noonan (Limerick City, Fine Gael)
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It is €2 billion allowing for the carryover, which is small, but there is a bit more probably on the expenditure side than on the tax side. The rule of thumb division is 2:1 in favour of expenditure and, therefore, one is looking at approximately €700 million in tax.

Stephen Donnelly (Wicklow, Independent)
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Does the Minister think the new policy measures will amount to €2 billion gross?

Michael Noonan (Limerick City, Fine Gael)
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Yes, on the basis of today's paper but that could be qualified by saying the income tax figures for March were strong. If that continued during the year and strengthened further, that would give us a much greater tax carryover into next year and the €700 million adjustment in taxation would be pulled back.

Stephen Donnelly (Wicklow, Independent)
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That would be fantastic. The best estimate in this document is new policy packages amounting to approximately €2 billion.

Michael Noonan (Limerick City, Fine Gael)
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That is what is here.

Stephen Donnelly (Wicklow, Independent)
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Is that a gross or net figure? Is that before multiplier effects, deflationary effects, etc. are factored in?

Michael Noonan (Limerick City, Fine Gael)
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That is gross.

Stephen Donnelly (Wicklow, Independent)
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The inflation rate projection for this year on page 6 is 0.5% when looking at GDP versus GNP. We are following this lower than ECB target across the eurozone. There are pros and cons to a higher or lower inflation rate. Is there an optimal rate that the Minister would like? Is Ireland, through whatever means, doing anything at the ECB or elsewhere in Europe to push the current eurozone inflation rate up or down?

Michael Noonan (Limerick City, Fine Gael)
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There are swings and roundabouts. Low inflation continues to improve our competitiveness but it hits the tax take hard. Budgets are built on nominal growth - real growth plus inflation - and if there is hardly any inflation in the system, we are down to real growth to provide us with the extra impetus on the tax side. We would like to be up at the ECB level of just under 2%, which is its mandate. If we had a growth rate of 2.1%, as outlined in the paper, and 2% nominal growth, we would have a different set of figures and we would not be adjusting by €2 billion. As for how I feel about it myself, in European fora I have expressed the view for two years that Europe should find ways of doing some quantitative easing.

Stephen Donnelly (Wicklow, Independent)
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It would be easier for people dealing with debt as well.

The table on page 11 refers to a harmonised index inflation level of 0.5% this year, going up to 1.4% or 1.6% in 2018. Is that an acknowledgement or a suggestion that essentially the ECB will not hit the 2% or 1.9% target for many years?

Michael Noonan (Limerick City, Fine Gael)
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I think we are improving competitiveness for a while and we are taking into account the data we have to hand. As the Deputy knows, European inflation rates are very low. I do not envisage a once-off correction changing, but I think it will go back up. The European Central Bank policy is for a gradual increase in inflation while staying within its mandate of less than 2%.

Stephen Donnelly (Wicklow, Independent)
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The table only goes up to 2018, but it could be 2020 or further out before we start hitting the 1.9% or 2% ECB rate.

Michael Noonan (Limerick City, Fine Gael)
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There is considerable speculation about the European Central Bank intervening in the markets. There is speculation that it could do that in June, for example, but I have no information beyond what I read in the financial papers as to how realistic that might be. That would obviously change the inflation figure if extra liquidity is put in and extra purchasing power is put in. It will not go printing money, but it might buy bonds that other sovereigns print.

Stephen Donnelly (Wicklow, Independent)
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A bit of seigniorage might be no bad thing for once.

The promissory note is slightly off this but obviously very relevant in terms of borrowing costs and interest paid. There have been some reasonably credible media reports that the ECB is keen to accelerate the sale to market interest rates rather than the subsidised ECB rate of the promissory note bonds. Is the Minister coming under any pressure to accelerate that? Is the ECB asking him to start selling these bonds off by a particular date?

Michael Noonan (Limerick City, Fine Gael)
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I wish to revert to the Deputy's previous question because I have just got a note stating that the oil prices and energy costs that had decreased were depressing the inflation rate. As they reassert they come back into the figures, so it will go to 1.2%, 1.3% and so on. That is the explanation for the table.

On the promissory note, the way we organised the alternative to the promissory note was done on a lot of advice as to what would be legal and what would correspond to European law. We are very pleased that a few weeks ago the European Central Bank's board of governors decided that the arrangement we had made was in accordance with that and was not monetary financing. When we were negotiating it, the second issue was that the bonds which go from 25 to 40 years in duration have different maturity dates. Through the Central Bank we have agreed a schedule of sale and I think we have to sell some small amount next year. We might do that before the back end of this year. That would be always under review. The European Central Bank will always review the assets of any central bank within its remit, but we are under no pressure whatsoever. It might be in our interest as time goes by to change the profile and bring it forward.

The agreement is that we will sell in accordance with the profile, taking into account conditions of financial stability. I think I am quoting that accurately - that is the key phrase. The Central Bank always has the argument that it would be possible to affect the financial stability of a sovereign if there is a push to sell too fast.

Since the Irish paper was put into the Central Bank last year, the nominal value has gone up by about €4 billion. I am not going to take profit out of that or ask the governor to take profit out of that because we would be accused of dumping on the market to achieve fiscal correction. However, at some point in the future a profit will accrue and the point of sale will come back to the Exchequer.

To answer the Deputy's question bluntly, we are under no pressure, but we would expect the European Central Bank to review the holdings of paper which the Central Bank has under this heading and in the normal investment portfolio, and advise on its disposal from time to time. We are under no pressure, however.

Ciarán Lynch (Cork South Central, Labour)
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The Deputy may ask a couple of final questions.

Stephen Donnelly (Wicklow, Independent)
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My next point is an observation. The labour market figures contained in the SPU are obviously very welcome. It is fantastic to see the unemployment rate decrease and the numbers at work increase. One of the details hidden in the figures is the difference in the rates for men and women. We all know the unemployment rate for men rocketed owing to the construction bubble. However, one of the things the unemployment figures reveal is that the unemployment rate for women has not moved. While the last figures I saw were a few months old, the rate for women is getting marginally worse, whereas all the increase we have seen in recent quarters is among men. Many of the targeted budgetary issues to stimulate construction - for example, the tax relief on extensions to houses - are targeted towards men.

Ciarán Lynch (Cork South Central, Labour)
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Deputy Donnelly is running out of time.

Stephen Donnelly (Wicklow, Independent)
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When thinking about the corrections this year, accepting that the rate for men is much higher, the Minister should be cognisant that it has not moved in the right direction at all for women and should consider targeted interventions. One obvious one, which is a bit of a sidebar but would reactivate many women, would be making child care tax deductible or establishing some sort of package on child care.

Michael Noonan (Limerick City, Fine Gael)
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I have noticed the discrepancy the Deputy drew to our attention in the last set of figures. What he has said is correct. I cannot explain it to him. It may be because so many women are involved in the public services, such as teaching, nursing, the Civil Service and local authority offices. There are a disproportionate number of women in those areas of employment. There have been redundancies - shedding of numbers - right across the public service. I do not know whether that explains it, but it was a thought that struck me when I saw the figures.

In addition, two of the growth areas have been agriculture and construction, with largely male employment. As the economy begins to grow it will get more complex because as well as people coming off the live register, there will be people coming people from the schools and colleges who would have emigrated and people who had emigrated will come home. In addition, in the case of people from eastern Europe who have established ties here, some of their family members will start coming back again because it would be a fruitful labour market.

If we can correct some of the disincentives to work in the economy, participation rates will increase. If some help could be given in the area the Deputy suggests, participation rates for young married women might increase. That, coupled with the low entry point into the higher rate of income tax, is probably also a factor.

Stephen Donnelly (Wicklow, Independent)
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To put two children into child care, the person going back to work, usually the mother, has to earn about €45,000 just to get to zero. The Minister might look at that.

Michael Noonan (Limerick City, Fine Gael)
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Regardless of how desirable something is, we cannot do everything. For a while we will be prioritising growing the economy and getting the jobs; that is the agenda.

Ciarán Lynch (Cork South Central, Labour)
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I call Deputy O'Donnell, who is sharing with Deputy Dara Murphy.

Kieran O'Donnell (Limerick City, Fine Gael)
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I welcome the Minister and his colleagues. I wish to make an important technical point on the GDP-GNP reverse gap. Effectively, GNP is significantly higher than GDP, which is having an impact on reaching the excessive deficit procedure targets. The margin the last time was 3.7%. In 2013 GDP growth was minus 0.3% and GNP was 3.4%, which represents a differential of 3.7%. The Minister is projecting that in 2014 GDP will be 2.1% and GNP will be 2.7%, which is a 0.6% differential.

When is it anticipated they will converge and we will return to normal GDP versus GNP? The real economy is doing exceptionally well with regard to meeting targets based on GDP. In his interaction with our partners in Europe, has the Minister examined the introduction of GNP as part of the measure? It is far ahead of GDP, and GNP growth is clearly reflected in growth in employment. It is having an impact and I would like the Minister's thoughts on it.

Michael Noonan (Limerick City, Fine Gael)
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The deficit as a percentage of GDP involves two numbers, which are the size of the deficit and the size of GDP. It helps the ratio to decrease if one can grow the GDP but it also helps if one can reduce the deficit through more tax, expenditure or growth. If one were to substitute GNP one would gain on present growth levels but one would lose on the quantum because GDP is significantly higher in absolute terms than GNP. The denominator is much bigger if GDP is used. Switching to GNP-----

Kieran O'Donnell (Limerick City, Fine Gael)
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That was not really my question. The differential in 2013 was so large that using GDP does not reflect the true state of the economy but, as the Minister mentioned, it is the measure taken in Europe with regard to meeting our excessive deficit targets. When does the Minister anticipate that GDP will eclipse GNP again?

Michael Noonan (Limerick City, Fine Gael)
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My advisers tell me things should begin to level out next year. Table No. 3 in the documentation on macroeconomic prospects-----

Kieran O'Donnell (Limerick City, Fine Gael)
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What page?

Michael Noonan (Limerick City, Fine Gael)
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It is on page 6. The table shows a timeline.

Kieran O'Donnell (Limerick City, Fine Gael)
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The Minister anticipates-----

Michael Noonan (Limerick City, Fine Gael)
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The table shows GDP as 2.7% in 2015 whereas GNP is shown as 2.3%. In 2016 it is 3% as against 2.5%-----

Kieran O'Donnell (Limerick City, Fine Gael)
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For what reason are these the expected figures?

Michael Noonan (Limerick City, Fine Gael)
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Exports of services are very strong and there has been huge multinational investment in recent years, which will be translated into increased productivity and increased exports. This will be the key factor.

Kieran O'Donnell (Limerick City, Fine Gael)
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I am zoning in on meeting our targets. Earlier the Minister mentioned inflation and I wish to follow up on what Deputy Donnelly stated. Between now and 2018 inflation will be below the 2% target to which the Minister referred. Does he anticipate that the ECB will do something to deal with inflation? How near are we to deflation? I am focusing on nominal GDP growth with built-in inflation. I am glad GNP is coming back in line because we have not had acknowledgement from Europe on how the economy has been doing because of the patent cliffs.

Michael Noonan (Limerick City, Fine Gael)
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I do not believe there is a possibility of deflation. One of the factors in driving the European figures so low was the reduction in energy prices in recent times, and this will fall out of the figures shortly. The inflation figure will not return to 2% but it will ease fears of deflation. If one follows what Mr. Draghi states, he does not envisage deflation, but he is very conscious of the adverse effects of continuing low inflation on European economies. He seems to stand ready to do something about it. What this might be I am not quite sure. We have not been briefed. The point of contact will be through the Governor of the Central Bank. The Council of Ministers has the same level of knowledge as anybody who reads the business pages and speculation from analysts. We have no inside-track information.

Dara Murphy (Cork North Central, Fine Gael)
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I welcome the Minister and his officials. We are seeing strengthening GDP growth, but domestic demand, while also strengthening, seems to be running significantly lower. Is there a technical reason for this or is there something we should do to strengthen domestic demand in the coming three or four years?

Michael Noonan (Limerick City, Fine Gael)
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Table No. 3, to which I referred Deputy O'Donnell, shows the components of GDP in the second set of figures. Domestic demand is a combination of the first line, which is private consumption at 2%, and the third line, which is investment at 15.4%. This is domestic demand and one can see it is recovering in these figures.

Dara Murphy (Cork North Central, Fine Gael)
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I wish to return to the question first raised by Deputy Donnelly with regard to ECB policy generally. I welcome that the Minister has raised the issue of quantitative easing. According to one of the other tables included in the documentation, growth in Europe is running at half of what it is in the United States. Last week there was commentary from the ECB in which it accepted that we were not engaged in monetary financing, but there is a sense that in comparison to the Fed it is terrified of quantitative easing and any form of monetary financing. Is there adequate debate on whether the ECB is fit for purpose, bearing in mind that Europe consistently lags behind the United States when it comes to quantitative easing? Is it an area we should push harder? We got a slight glance from the ECB, but ideologically Europe is terrified of quantitative easing. Year on year the United States gets away with it and consequently has significantly lower unemployment and higher growth than we do in Europe.

Michael Noonan (Limerick City, Fine Gael)
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The European Central Bank is independent under law in the exercise of its functions. It takes a very adverse view of politicians commenting on what it does. Our representation at the European Central Bank is through the Governor of the Irish Central Bank and there is no political representation in any forum associated with the ECB. We will never be in such a position, unless it is a specific Irish issue such as the promissory notes, on which I engaged in conversation with the authorities at the European Central Bank.

I do not know about the comparisons with the United States. We are at a different point in the cycle. The US recovery preceded ours in Europe. We are perched on the verge of a fairly strong European recovery but of course there are risks. If one turns on the television this evening one will see what the Russians are doing in eastern Ukraine. Suppose gas supplies to Europe were cut off in the winter. One could see what that would do to growth in Europe. We are living in a big bad world with many unknowns and risks, but we must travel hopefully and allow for the risk. I hope the European Central Bank will do something for liquidity in Europe, because additional liquidity would stimulate demand and some demand stimulation is needed at present. Whether it will, I do not know. I would have thought there was movement by the Governor of the Bundesbank, Mr. Weidmann, in some things he said in the past three weeks, but how far he is prepared to move I am not sure. There is a different legal system and historic background.

Everybody will have read the stories about the Weimar Republic, where one had to fill a wheelbarrow with deutschemarks to buy milk and a loaf of bread in Berlin in the 1930s. A generation of people, the grandfathers of the present active German population, lost all their savings. They lost everything and were totally wiped out. It is a family memory and a political memory in Germany. The Germans are terrified of inflation. That is the reason the European Central Bank was built on the basis of close to but not more than 2% inflation. That is the mission statement on inflation in the European Central Bank.

It will not go for a walk on the wild side, but it might do something.

Dara Murphy (Cork North Central, Fine Gael)
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We all know about the historical memories in the DNA of the Germans about the Weimar Republic, but a new DNA is being developed in southern European countries and even in Ireland regarding lack of growth. Does the Minister think it right that an institution such as the ECB would have its terms of reference established in perpetuity?

Michael Noonan (Limerick City, Fine Gael)
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Every member state agreed to them under law. There is a mechanism for changing the law if one can get a majority of people who wish to change it, but there would not be much support for that.

Ciarán Lynch (Cork South Central, Labour)
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I call Deputy Kevin Humphreys.

Kevin Humphreys (Dublin South East, Labour)
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Perhaps you would let me know when I have five minutes left, Chairman, as I wish to raise another issue with the Minister. It is a little like the Minister talking about travelling in hope and taking a walk on the wild side. He is quite good with the story.

We ought not to undersell the achievement. We should clearly note the 5,001 jobs that are being created and the positive effects that has had on families who have had a husband or wife back in employment. That is very positive in the market. The Minister has also pointed to the strong retail sales figures. Deputy Donnelly referred to the imbalance between the number of males and females getting back into the workforce. Looking at the figures in the retail sector, there is a great deal of female employment within that sector. I agree with Deputy Donnelly's suggestion to look at child care. That is a big enabler for getting women, especially young women, back into the workforce. We know there is a review of policies relating to the construction industry coming down the line and we have seen the retail sales for the opening months of this year. Is the Minister being conservative in his estimations of employment and the cost within that element? That is my first question. The second is different, so perhaps the Minister would reply to that first.

Michael Noonan (Limerick City, Fine Gael)
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Construction was obviously a sector of the economy that was so damaged one would not know what to do with it when one approached it initially. However, it is being repaired. The first issue for the construction industry is that unless the cost of building a house is less than the price for which the builder can sell it, no house will be built. That is the first thing to remember. House prices in Dublin and commercial property prices had dropped well below their replacement value. They are only coming back up now in the last six months. I realise that there are parts of south Dublin where this does not apply, but in general around Dublin for the builder to build and sell his first house 12 months hence, he would probably be fairly satisfied to take his cost out and perhaps get 6% or 7% on it. It has only barely turned.

On the commercial side, one would have to get approximately €35 per foot for commercial or office blocks in Dublin to break even, so rents would have to go beyond that. They are €38 to €40 per foot now. That is the reason one is seeing sites opening up and cranes again on the horizon.

It is not rocket science. It is very simple. Until the price goes above the cost of producing the extra unit, nothing happens in a market. It must move into that position. I believe we are getting there fast. I introduced the real estate investment trust, REIT, legislation and the third one was announced today. It is a Canadian group and it wants 10,000 residential units in Dublin. It is in the market to buy apartment blocks and refurbish them. It is also in the market to build. The National Asset Management Agency, NAMA, has its portfolio of builders ready to go and it advertised for joint ventures recently. It got an enormous amount of offers from abroad, with foreign money that is prepared to finance builders in Dublin to build houses.

It is at the repair stage, but it is only barely turning. In rural areas there were almost 8,000 houses built last year but almost all of them were one-off houses. If one is getting married, getting a site from one's father and intending to live there for a generation, whether the value of the house goes up or down is not as important as if one were buying in an estate. The estates of houses are not yet there. The one-off houses are. We need get back to having reputable builders building estates of three-bedroom family homes, starting in Dublin, then moving to Cork and Galway and then on to the big towns around the country. There is a supply shortage and many young families have been living in restricted apartments. They want to break out and they need the supply. We must drive that hard and I expect the Government to bring forward a significant policy on that in the coming weeks.

Ciarán Lynch (Cork South Central, Labour)
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The Deputy has five more minutes.

Kevin Humphreys (Dublin South East, Labour)
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I will proceed quickly because I wish to make a statement at the end. With regard to the €8.5 billion we hold in funding, which is to cover us for the next 12-----

Michael Noonan (Limerick City, Fine Gael)
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I thought it was €6.5 billion, but I am subject to checking.

Kevin Humphreys (Dublin South East, Labour)
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It is €18.5 billion. Am I reading it wrong in the Minister's document?

Michael Noonan (Limerick City, Fine Gael)
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Is the Deputy is referring to the NTMA cash?

Kevin Humphreys (Dublin South East, Labour)
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Yes. Is there a possibility of squeezing that? Obviously there is a cost in the NTMA holding that €18.5 billion. We made a slight improvement because we conducted some buy-backs of our bonds and saved a couple of hundred million euro in that regard. Is there an opportunity to squeeze that a little further? If one looks after one's pennies, the pounds look after themselves. Every €10 million or €15 million makes a difference to us. If we conduct any further buy-backs, are there any trigger mechanisms that will impact on other bonds that we would have to redeem at the same time? I will leave it at that as I have one last question to ask.

Michael Noonan (Limerick City, Fine Gael)
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First, on the NTMA cash balances, in consultation with the NTMA we deliberately got the NTMA to build the cash balances so we had a precautionary buffer as we were going into the markets. That worked out, but they are not needed now so they will be tapered down over the next couple of years. The prudent position according to the NTMA, in its advice to me, is that we hold approximately 16 months cover for the deficit, which is a little below a year and a half. The Deputy can do the sums on that to see what type of money is involved. The Deputy will also have seen the figure the Central Statistics Office, CSO, has released for the first time. It shows that while the gross debt is 124% of GDP, the net debt is now 98%. That is not allowing for the value of bank shares or the like. That is purely the cash on hand element of it.

The NTMA is always looking at how it would sell, buy, swap and change. There is a big repayment cliff in 2016 and its policy, which the NTMA has discussed with me, is to reduce that cliff so that by 2016 we will have dealt with it progressively over the remainder of this year and next year. We are examining the possibility of repaying IMF debt because it is costing us more than European debt or debt we could raise on the market. To answer the Deputy's question about whether any triggers would be activated, if we were to repay IMF debt, we would have to repay the debt to the European funds as well and the bilateral moneys we got from the UK, Denmark and Sweden. On the other hand, however, it would not cost them anything to say, "If it is worth your while to repay, maybe we will let you go ahead." We will see what can be done.

Kevin Humphreys (Dublin South East, Labour)
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I ask the Minister to follow up on the matter.

Michael Noonan (Limerick City, Fine Gael)
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It is only a thought yet, and there are other considerations. There are negotiations on the extra quota in the IMF. It would change the calculation of the benefit if the Americans got their IMF additional quota legislation through Congress between now and Christmas.

Kevin Humphreys (Dublin South East, Labour)
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Perhaps the Minister will come back and let us know what possible savings can be made if we pay the IMF debt and the others let us go ahead. I am not asking him to answer me now.

I flagged the following matter with the Chairman at a previous finance meeting and today's meeting is the only opportunity that I shall have to raise it with the Minister. I want to put on record the dissatisfaction of committee members about the salary of €843,000 paid to Bank of Ireland's CEO, Richie Boucher. Bank of Ireland's stated policy at this committee last week was that it would provide no mortgage debt forgiveness where a consumer has given up his or her home through voluntary surrender or assisted voluntary surrender leaving a shortfall on his or her mortgage. The bank is also opposed to personal insolvency deals brought to them. Bank of Ireland's policy of no debt forgiveness is wilfully forcing people into bankruptcy. I believe that such a move is not in the interest of Bank of Ireland, its shareholders or the taxpayer. I ask the Minister to take that clear sentiment expressed at the committee last week, when the CEO of Bank of Ireland was here, into consideration with regard to the bank's forthcoming AGM.

Michael Noonan (Limerick City, Fine Gael)
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With my shareholder hat on, we own slightly less than 14% of Bank of Ireland, so how we exercise our votes is not going to matter in terms of the remuneration package for directors, which is the resolution.

From a shareholder's perspective, we did a very successful and beneficial deal for the State with Bank of Ireland on the transaction we had before Christmas. Bank of Ireland's activity has enhanced the value of the State's shareholding very much. Last year, the State abstained on a similar resolution because the recommendations of the Mercer report to cut the cost base of Bank of Ireland had not been implemented. Since then, principally through a reduction which was taken across the pension rights of all staff, particularly senior staff, the situation has improved dramatically.

Let us look at the cost-cutting base. If one takes the remuneration package, the reduction in Bank of Ireland is 48%. If one takes the whole cost base of the bank, the reduction is 28%. These are very strong figures coming from the Mercer report so I do not think I would be justified in abstaining again.

From a shareholder's point of view, I do not want to get involved in quixotic gestures. I know my comment will not help the Deputy in any way. However, I refer him to what Mr. Justice Martin Nolan said when he directed the jury in the notable court case that is still proceeding. He said that since the Lehman Brothers crash in 2008 - I am not quoting - they had been in bad order, and that it would be incredibly unfair and wrong to treat the individual bankers on the basis of legal issues that came from the crash.

Kevin Humphreys (Dublin South East, Labour)
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I thank the Minister for his response. I shall not get into comments flying back and forth because it would not be fair to anyone. With all due respect, I ask him or one of his officials to look at the recording of the evidence that was given to this committee by the Bank of Ireland with an open mind. They will see that the Bank of Ireland currently is not acting along the lines of Government policy. I know it does not necessarily have to, but we have the personal insolvency legislation. The bank has not been helpful in any way in implementing Government policy or legislation.

Michael Noonan (Limerick City, Fine Gael)
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The bank may have taken notice of the criticisms levelled at it by the Deputy and other Deputies, because I read in one of the newspapers today that it had written off a significant amount of unsecured debt for a couple, but not mortgage debt.

Kevin Humphreys (Dublin South East, Labour)
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Clearly, it is mortgage debt that we are talking about here.

Ciarán Lynch (Cork South Central, Labour)
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I wish to make a comment. The macro issue is probably the greater issue with the Bank of Ireland. One of the questions that was put to Mr. Boucher last week was whether any engagement had taken place between the Government or the State and the Bank of Ireland on the sale of the State's percentage in the bank. Has any such discussion taken place? Is there a plan to cash in?

Michael Noonan (Limerick City, Fine Gael)
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No. That will be our decision. I will sell it when I think we will make the maximum money from it. We do not have to cash it in yet. The economy is growing. An economy with only two big banks would be very badly run altogether if they were not profitable in the next couple of years. There is potential for their share values to be enhanced, so we will hold on for the moment.

Joe Higgins (Dublin West, Socialist Party)
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The European semester, which was alluded to approvingly by the Minister, is supposedly about improving economic governance and so on. From my perspective, it is simply about subjecting the Irish economy and the Irish people's economic situation to the surveillance and policing of the overlords in the European Union - the troika - to make sure they continue to wear the yoke of austerity that has been insisted on by them in order to pay off their European bankers and bondholders and save their financial system. I do not want a gloss put on the matter without comment.

If there is real recovery, then why have the people not felt it? Ordinary working-class people have found themselves on a treadmill. They have not noted a significant improvement in their living standards in the past three or six months, which has been the tune of the spin from the Government and the media.

We have been told there has been a 50% increase in employment. Every single job that is created is essential and welcome, but I want to make sure we are talking about reality. Can the Minister comment on the analysis by some people that up to 50% of the increase in employment is a result of a recategorisation of workers - for example, by the use of various categories such as self-employed? The jobs have been recategorised as job creation.

Very many of the new jobs are in low-paid employment in low-paid sectors. What is the implication of that situation for the economy into the future? Has the Minister adjusted his income tax projections for the Exchequer for 2014 in view of the improved figures that were not expected by officialdom? Has there been an upward estimate in income tax and even value added tax? If there are more people at work, hopefully they will have the ability to spend more.

Michael Noonan (Limerick City, Fine Gael)
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The recovery in jobs is broad-based and across various sectors. While there has been some recategorisation by the CSO, it does not affect the headline figures. The CSO stands over the headline figures but there is some recategorisation within it. The CSO has published the figures so the Deputy can check for himself. The recovery is broad-based and across a lot of sectors.

With regard to whether the improvement will flow into income tax, VAT or excise, there are about 850,000 people at work who do not pay any income tax. They have no income tax liability.

That is more than one third of the people at work - an awful lot of people. Our income tax system is very progressive and many low-paid people are exempt from income tax. Some low-paid people who do not pay much, or any, income tax are part-time workers but the latest set of employment figures suggests that the increase in employment is through full-time workers.

I do not agree that the European semester is a device to penalise Ireland. While we were in the programme, other countries were subject to the European semester. France and Spain and other large countries get strong mentions in the European semester when they come before the ECOFIN meeting in June for peer review. It is not a device to pressure small economies or small countries.

I think the Deputy agrees with the analysis that it is not possible to have a common currency zone without an architecture to underpin it. We need a fiscal union to sustain a common currency and a banking union. The Deputy will be pleased to hear that the European Parliament has passed the final element of the banking union. The resolution legislation has gone through the European Parliament. It has moved the agenda in the direction we have long advocated. There will be no more bailouts by the European taxpayer; the legislation provides for the bail-in of banking assets and a fund put together through levies on the industry. It is a red letter day in Europe and I hope it works when the full elements of the banking union come in next year and the year after.

Joe Higgins (Dublin West, Socialist Party)
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Eight hundred and fifty thousand people amounts to a high percentage of the workforce, but it is a damning indictment of a low-wage economy. That is why workers are not in the tax net. The fact that the Minister does not think it significant enough to have a significant readjustment of income tax for 2014, in view of what is said to be 50,000 or 60,000 new jobs, suggests that he expects many of the new jobs to be in the low-income and precarious category.

Michael Noonan (Limerick City, Fine Gael)
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No. It is difficult to know what income bracket jobs will fall into. In some traditional sectors such as tourism, which we stimulated strongly, jobs are seasonal and the pay may be quite good but not for the full year. That is one aspect. In construction, wage rates held pretty well during the recession, and big sites are opening up in Dublin again. People are working in the sites through Saturdays and late into the evening. There will be significant incomes for building workers.

Joe Higgins (Dublin West, Socialist Party)
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The Minister mentioned progressive taxation but he has captured many of the 850,000 people who are low paid through two new taxes, on homes and on water. This runs counter to the claim of a progressive tax system overall.

The argument is that the tax base needed to be widened under a fictional notion that there is some mysterious income people have outside of their wages from which they can pay property and water taxes. This simply does not exist.

With regard to the treatment of the property tax and the water tax, as far as the Minister and the Exchequer are concerned, next year we hope people will be paying for water. What difference will it make to the Exchequer figures in respect of the supply of water? Will the Minister have to provide Exchequer funding for the supply of water? Presumably it will not meet the full cost.

Michael Noonan (Limerick City, Fine Gael)
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Yes.

Joe Higgins (Dublin West, Socialist Party)
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Is there an estimate for how much water tax will be taken and how much we, the taxpayers, will contribute?

Michael Noonan (Limerick City, Fine Gael)
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We are working on the figures. The Deputy probably heard the Taoiseach in the Dáil saying that there would be an announcement shortly.

Joe Higgins (Dublin West, Socialist Party)
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I heard the Taoiseach today and he repeated the same thing he had said many times over the past few months. We do not yet have the structure he proposes. When can the Minister tell us the structure and the amount he expects to be brought in next year by Irish Water? How much will the taxpayer pay above that, as we always have done, to provide water?

Michael Noonan (Limerick City, Fine Gael)
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When I have fully assessed it with my officials, the memorandum for Government will come from the Department of the Environment, Community and Local Government in due course.

Joe Higgins (Dublin West, Socialist Party)
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Will we know before 23 May?

Michael Noonan (Limerick City, Fine Gael)
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The Deputy has heard the Taoiseach's reply.

Ciarán Lynch (Cork South Central, Labour)
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The Minister must leave at 9 p.m. but, with some flexibility, I can allow everyone to contribute.

Joe Higgins (Dublin West, Socialist Party)
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I have one last question. I heard the Minister reply to one of the earlier questions about tax breaks that brought a wall of money into the country. I presume he was referring to property and real estate investment trusts. What is the logic of facilitating a new wave of speculation by the same type of vulture that caused the disaster for which people have been paying so dearly over the past six years? The Minister referred to the need for three-bedroom homes. The Minister must be aware of the desperate situation of people being made homeless on a weekly basis through landlords increasing rents. There are no local authority houses. In the 1970s, the country was building 5,000, 6,000 and 7,000 social homes a year and now it builds a few hundred. Can that situation be rectified?

Michael Noonan (Limerick City, Fine Gael)
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I was referring to the exemption from capital gains tax for seven years for people who buy commercial property in Ireland. That brought an awful lot of investment money into Dublin. There was a major overhang of property in Dublin, which was under-used and not put to productive purposes. There was not a cohort of people in Ireland with the resources to invest in it, even though the same rules applied to Irish people if they had the resources to invest. A lot of foreign money came in. It put resources that were under-used or not used back to use, which is very important in terms of office blocks. The IDA tells me it is running out of the kinds of office block it needs in Dublin for some of the advanced industries. Most of the investors paid the purchase price and brought in funds to upgrade the properties, enhance their value and refurbish apartments. We can see the signs of it around town. I have no interest in driving it above the overhang and I have said I will not renew that particular tax incentive beyond the end of 2014. It worked while it worked. It did the job. Of all the sectors, the building, development and housing sector was the most damaged and became the second scapegoat sector. Banking and building were the two scapegoat sectors in Ireland - many people would say justifiably so. Every modern economy has a dynamic building and development sector.

If we want houses to be built we need builders who can at least get a margin on the construction cost. The property market is coming back to that point again. In parts of Dublin there is now a good margin whereas in other parts of Dublin it is not quite at that point.

On the rental side, it is true that rents have been increasing in Dublin recently, and that is why we need greater supply, but they have increased by 6% or 7% having fallen 25% between 2008 and 2012. They have increased a little but if we consider where they fell from we are still not into a proper market. Housing in Dublin is 50% below the peak, therefore, there are not big cohorts of people rushing in to make big money on it at present, although it is beginning.

On both the private housing and the social housing side the model was broken, and we need to build it again from the bottom. That is starting now, and we will build it. NAMA has promised me that it has building land and resources to put over 4,000 social houses into Dublin, principally through the housing agencies, and it will do that. It has also offered many houses to local authorities but many local authorities will not accept them because they have their own internal rules about the percentage of social houses that can be in any estate. Usually, there is a 20% rule in local authorities. If the cohort of houses it offers is 50% of the estate, the local authority will only accept 20%. In the housing emergency we are in I believe the new councils should examine those issues and try to remove the restrictions, even if they are only removed temporarily.

I fully agree with the Deputy that there is a big problem with construction and development. It is beginning to move again but there is a massive social need and while we curse the builders, if they do not build the social need will not be met. We have to move on with it.

Joe Higgins (Dublin West, Socialist Party)
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The State will build them, as it did in the 1970s when we were much poorer.

Michael Noonan (Limerick City, Fine Gael)
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The State does not have the resources to build, and in any event it is the most inefficient way of doing it.

Sean Barrett (Independent)
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I welcome the Minister. When will we have page 47, the blank page, and what is the Minister thinking of putting into it? It is the summary of progress on Ireland's national reform programme.

Michael Noonan (Limerick City, Fine Gael)
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It is sponsored by the Taoiseach's Department. It was published today. We were ahead of it but we will incorporate it now that it has been published. We had the data but we did not want to pre-empt the decision in Government on the publication by the Taoiseach.

Sean Barrett (Independent)
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I raise it because the reform agenda is still hugely important. The Chairman might-----

Michael Noonan (Limerick City, Fine Gael)
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I see it on the website. Does the Senator see it? It will come in the next day or two anyway.

Sean Barrett (Independent)
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On the reform of banking, Mr. Boucher and co. were before the committee last week and they are still talking about 90% loan to value and 4.5% loan to income. Both of those are too high. Again, we have the ingredients for a property bubble, and we need controls on the way those institutions operate. What worries me when I see large property supplements in papers is that many of these institutions will do it all over again unless the Minister controls them.

Michael Noonan (Limerick City, Fine Gael)
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There is always a fear and one of my ambitions, if I last another little while, is to stop the boom and bust cycle in the Irish economy so that we would have measures in place that would provide realistic, sustained growth. Somewhere between 3% and 4% for the next ten years would be admirable and would solve all our problems but it would have to be sustained, and we have to get away from the boom and bust cycle. I am examining a number of ideas. All the levers would not be under my control but we are a long way from a property bubble at present. We certainly have to think about the future but getting houses built that will serve as family homes, particularly in the larger cities and principally in Dublin, is vital. We probably need between 20,000 and 25,000 houses nationally because nothing has been built for four years. As well as dealing with the annual demand, there is a backlog feeding in. There is a good deal of demand for mortgages now. It is taking seven and eight days to get an appointment for mortgages, and it is principally public servants - teachers and so on - and also people in the IT industry. They seem to be the main categories that are moving to buy houses. I presume the other categories will follow as they have a greater sense of job security and a greater sense of countenance.

Sean Barrett (Independent)
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I do not want to keep the Minister from his next appointment but-----

Ciarán Lynch (Cork South Central, Labour)
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I will give the Senator a few minutes as he has waited long enough.

Sean Barrett (Independent)
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On the tax revenue increasing from €37.8 billion to €48.1 billion, that is €10.4 billion in extra taxes. The net current expenditure goes down by 3.3%. That is as a result of what the Minister said about people on medium incomes paying the top rate of tax. The adjustment is still being driven overwhelmingly by €10 billion extra in tax between 2013 and 2018.

Michael Noonan (Limerick City, Fine Gael)
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That is what is calculated there. It is the economic recovery. It is not more people paying more tax.

Sean Barrett (Independent)
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The same number who are paying more tax.

Michael Noonan (Limerick City, Fine Gael)
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It is the cycle. There will be many extra people working. There will be a good deal of extra activity in the economy. There will be a lot of extra VAT, excise and corporation tax. These are the best estimates but they are estimates; they are forecasts.

Sean Barrett (Independent)
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I thank the Minister.

Ciarán Lynch (Cork South Central, Labour)
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I will take some brief supplementary questions from Deputy McGrath. If Deputy Mathews has a question I will take it. I will not take a statement.

Michael McGrath (Cork South Central, Fianna Fail)
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I will keep it to one question. It concerns the future of NAMA. The Minister appears to be disposed to an accelerated wind-down of NAMA, and there is a balance to be struck in assessing the factors that feed into that decision. Obviously, there is a review under way within the Minister's Department. The commercial property sector has recovered to some extent and conditions are somewhat benign but when will the review into the operation of NAMA be complete? Has the Minister any thoughts at this stage on the future of the organisation and whether he is favourably considering accelerating the wind-down of NAMA? Will it still be in place by 2020, which was originally envisaged?

Michael Noonan (Limerick City, Fine Gael)
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I have asked NAMA to do a review, and I have set it certain objectives. I am quite neutral. I am looking for data on which I can make decisions subsequently. For example, I have asked it what would be the consequences of taking the entire residual NAMA book and doing what IBRC did with its book, namely, sell it off in a six-month period at the end of 2015. I want to see how that would pan out. I have also asked it what would be the outcome if it had €17 or €18 billion of a residual book, which it divided into three thirds, timelined and sold off that way. There is a simple equation. Does it sell quick and have very little upside or does it hold out in the hope that property values increase so that there is a bigger return to the Irish taxpayer in 2025? It is not as simple a sum as that, however, because NAMA is supported by NAMA bonds and the NAMA bonds are on the balance sheets of the main banks, and there are many of them on the balance sheet of AIB, which are a big drag on the balance sheet of AIB. If it were to sell off quickly and redeem the bonds, it would have to factor in what that would do to the share value of AIB, and we might get our upside in selling the AIB shares.

I will communicate fully with the Senator. I am not trying to do anything in secret. I have not made up my mind about it. The legislation provides for a review of NAMA this year and that is what we are doing but I have asked it specific questions. It has also approximately 2,500 acres of development land, principally in Dublin, and I have asked it for suggestions on how we would work that and whether it would be possible to use it as a break on the market, but there is probably not enough of it available. The Senator will recall the various Bacon reports that advocated taking the heat out of the property bubble on several occasions from the late 1990s onwards, and none of them worked. Their principal mechanism was using stamp duty but to my mind they only made it worse. We should be looking at a different set of mechanisms this time. We might have a discussion on it some day.

Michael McGrath (Cork South Central, Fianna Fail)
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I have a supplementary question for the Minister. Will the review be published, including the analysis of the scenarios he has put to NAMA or is it commercially sensitive information? It is an important policy decision and I am sure the markets would be interested.

Michael Noonan (Limerick City, Fine Gael)
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I will publish whatever I can, taking account of commercial sensitivity. I will share as much information as I can.

Peter Mathews (Dublin South, Independent)
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I apologise for my late arrival and I thank the Minister for his forbearance and patience in staying. He referred to broadening the tax base. Will he agree that at this stage the public believe there are a great number of stealth taxes in the form of cost of living increases, increases in the cost of gas and other utilities, water charges to come, property tax, VHI and other medical insurances increases and their tax yield is falling? Households are finding the complexity depressing. What is the Minister's response?

Michael Noonan (Limerick City, Fine Gael)
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I would think that people have found it very hard since about 2008. The people who have been hit hardest are the people who lost their jobs. The second category who were hit hardest are the people who were forced to emigrate and their families left at home who miss the company of their adult children. The Government has decided that the proceeds of the recovery will be dedicated to growing the economy and creating jobs so that we would address first the problems of those who are hit hardest. However, that is not to take away from the validity of what the Deputy says, that a great number of people have sacrificed an awful lot.

Peter Mathews (Dublin South, Independent)
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The evidence is not there to show that builders were the cause of the problem of the huge credit-fuelled boom and bust because, in fact, it was the banks. I handed the Minister a paper the other day - I apologise for the manner in which I did it - which explains it as a matter of fact and balance sheets.

Michael Noonan (Limerick City, Fine Gael)
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Before Deputy Mathews arrived I said that the two scapegoat sectors in Ireland were the bankers and the builders.

Peter Mathews (Dublin South, Independent)
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No. By definition, the Minister said-----

Michael Noonan (Limerick City, Fine Gael)
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I did not blame either of them.

Peter Mathews (Dublin South, Independent)
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I want to check this but the Minister just said that there are not sufficient units being built, that they are not in the market and that is the reason rents are rising. If that is the case, builders could not have caused the bust; it was a credit-fuelled price bust, an asset price bust. That is where the banking inquiry should start.

Ciarán Lynch (Cork South Central, Labour)
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Deputy Mathews, please.

Michael Noonan (Limerick City, Fine Gael)
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It was both, with respect.

Peter Mathews (Dublin South, Independent)
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The Minister mentioned that at the moment there are some transactions that are showing price rises in the property market around Dublin in particular. There is a golden rule that a house has an economic value of the inverse of the yield. In other words, if an investor buys the rent at a 7% yield, the house is worth 15 times the rent. That is a stabilising force and the key stabilising force is fractional reserving. One cannot create more than €641 from €100 initial deposit if the banks fractionally reserve at 13.5%. This is a mathematical fact.

Ciarán Lynch (Cork South Central, Labour)
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Please, Deputy Mathews. I am indulging you but I need to conclude the meeting. I noted the Minister's comments with regard to the property sector. Deputy Mathews makes the point about rules on the valuation of property. The Minister's comment this evening that the billed costs of a property have not come down during the shrinkage years of the property market because even when property values dropped the billed costs have not reflected the depreciation in the values. There would seem to be another matrix besides the rent. One would assume that the average house is valued at four times the average income of approximately €38,000. This means that the average purchase price should be somewhere around €160,000 to €180,000 at a maximum. If we see the price of the average house moving beyond the ratio of four to five times the national industrial wage, we are in a property bubble. It does not matter how much it costs to build a house and it could be that we are paying people too much to build houses if that is the difficulty-----

Peter Mathews (Dublin South, Independent)
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There is no credit to fuel it - that is the beauty of it. AIB told us today.

Ciarán Lynch (Cork South Central, Labour)
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Sorry, Deputy Mathews. You are no longer a member of this committee. I allowed you as it is the season of Lent and I offer it up.

Peter Mathews (Dublin South, Independent)
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I am a forgiving sort of guy. Sometimes I "fivegive", not only forgive.

Ciarán Lynch (Cork South Central, Labour)
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Lent will be over next week and I will not have to include Deputy Mathews. I ask him to allow me to conclude without interruption. We may need to revisit that matrix.

I thank the Minister for contributing to a very extensive discussion. I welcome the support of the Minister's officials at the meeting. I understand that the report is to go to the Commission by the end of this month. There will be a new Commission after the European elections and we should see the country-specific recommendations in July, at which stage we might be keen to bring those recommendations before the committee in order to discuss them with the Minister.