Mr. John McCarthy:

The point I was trying to make about hypothecation is that this ring-fencing of revenue for a particular expenditure purpose would introduce rigidities into fiscal planning, which might affect resource allocation. The point I was trying to make is that flexibility is needed from time to time as different priorities emerge. The Government would need to be able to reallocate resources to different priority areas, as is done at present. Health is an example. We must increase spending in that area at the moment, but this capacity would be reduced or curtailed if particular revenues were curtailed into a particular area. A more general principle is the question why we do not introduce ring-fencing for many different areas in which there would then be absolutely no flexibility whatsoever for Government to reprioritise as different priorities emerge.