Michael Noonan (Limerick City, Fine Gael)
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One does not overheat an economy that is growing very strongly and one does not tax and cut in an economy that is in decline. Everybody knew the theory. It was not because they did not understand the theory, it was because they had no resources. What I am saying now is let us have a fund for the first time where there are resources for countercyclical intervention. The thinking has gone as far as saying we are looking at the Estimates and until we balance the budget in 2018, money is going in three directions; it is going to spend extra on public expenditure; it is going on the tax side – either tax increases or tax reductions; and it is going to reduce the deficit. When we balance the budget the tranche that was going to reduce the deficit will no longer be required for deficit reduction purposes so it gives us scope. If we allocated all the money that was available in the fiscal space, that would run into departmental budgets immediately and by the time the annual budget would arrive there would be no discretion because it is pegged in that we are going to spend X amount. What I am saying is that we put a fund aside, and it is either allocated for expenditure or it is not by the Government of the day depending on the circumstances. It is an instrument of macroeconomic policy to be deployed by the Government of the day. That is not to say it will never be spent. That is not the issue.