Mr. John McCarthy:

We included a new innovation in the budget documentation. We produced a risk assessment matrix for the economy and the public finances. It might be worth examining. It is a nice piece of work, even if I say so myself.

We are very small and the world is globalised. From a treasury or finance ministry perspective, that puts an additional premium on policy caution. I do not want to delve into the policy space, but the Deputy will be aware that the Minister announced a rainy day fund and that debt would go to 45% of GDP by the middle of the next decade. All of these measures - I am only repeating what he said - are concerned with building up fiscal safety buffers so that, if the situation goes wrong and the risks materialise, we do not have to be pro-cyclical and can instead allow the automatic stabilisers to operate.

In every document that the Department of Finance publishes, we refer to the need to remain competitive.

So many of these factors, including the exchange rate, oil prices and world demand, are beyond our control. We cannot influence them, but we need to be able to be flexible and to be able to respond so that, if shocks materialise, we are in a healthy position and do not have massive peaks and falls in GDP.

I agree that there are many risks. They are not just from the President's side on corporation tax. Obviously there is a concern about issues such as protectionism. For an economy such as ours, where trade and FDI is our lifeblood, protectionism would not be good. On the upside, or perhaps on the downside, there is the overall fiscal package that appears to be likely from the new regime in the US. It would appear that there will be some form of fiscal stimulus, possibly on the infrastructural side. There may be some form of tax cuts, although their economic impact may not be great if they are at the upper end of the income distribution. There are some issues there. We may see some form of short-term fiscal stimulus in the US which could easily be transmitted globally. That should be borne in mind as well. I hope I have not gone off on too much of a tangent.