Mr. Gerard Brady:

Some flexibility has been brought into them over the last couple of years but there is not a huge amount of flexibility on the investment side. We now have a European Investment Bank office in Dublin, and there is some flexibility around the EIB in the fiscal rules, although not a huge amount. This means we may have some flexibility over the coming years. We are coming out of a certain period of the expenditure rule, which governs the overall fiscal framework, and into a new one and this means we will have a little bit more space for capital spending over the coming years.

Deputy Burton asked if there were other examples of countries that have fiscal rules that work. The UK is a good example. It had a golden fiscal rule for a target for investment as a percentage of GDP and it treated investment and current spending differently. It had that rule for around 15 years under the Labour Government. It worked very well. In a European sense, we would look for an extension of that depreciation period of capital and more flexibility around the size of projects before private financing can work under the fiscal rules. The debt rule is there so if these things happen it does not mean that states are suddenly going to build up a huge amount of debt. The debt rule would still be in place to take care of that and there is still a brake on it. It does not make sense to us that Ireland has a planned current surplus this year of €2 billion. Half our capital programme is being paid for from savings at a time when interest rates are at record lows in the history of interest rates - as Mr. O'Brien said in his opening statement. It does not make a huge amount of sense. Those would be our three priorities on that front.

On cost issues, the committee will appreciate that I do not have the details of the children's hospital project. There are definite capacity constraints in the construction sector with more and more demand coming in. There is a build-up in demand for capital infrastructure from Government, a build-up of investment in private companies and a build-up in housing demand. Attention has been drawn to the lack of skilled labour in the sector, which will eventually push up the costs. Labour is a large part of costs for any construction project and if there is a lack of skilled workers it will have an effect. With regard to products for infrastructure, a large part of our supply chain comes through the UK or is based in the UK and this has Brexit implications that must be fully worked out.