Professor Michael McMahon:

Deputy Doherty is right. Some of the comments he referred to were mine and he is correct that I would not have put them in the public domain. The underlying background to it and the element that is most frustrating for most economists is that the process of forecasting is one where nobody ever gets it right all of the time but forecasts should really be judged by the information they are based on at the time they are done. Again, the context was not given in the articles but it was well known to us. The comment "not forecasting Christmas" goes back to the old issue of not putting Christmas bonuses in even though they are perfectly predictable, so we get these repeated errors on the spending side. When they can be forecast, they definitely should be included.

We said at the end of 2019 that the economy looked like it was starting to run a little bit hot. At the time, that was the right judgment to have. Absolutely, we were wrong in that we did not forecast Covid but I do not think anybody did. Again, the comment without context looks a little more snarky but the underlying issue is that when doing forecasts, what we want to see is a credible forecast process that takes into account all of the information. It turns out that there were occasions when we were predicting worse outcomes where, of course, historically the Government got better outcomes but those were on the back of over performance in corporate taxation or other things that could not be forecast or were risky.

We will make mistakes and get forecasts wrong, as will the Department of Finance and every other forecaster, but the key point to recognise is that our core role in the Irish policy process is to assess those forecasts, determine where errors are made and assess the credibility of forecasts so that policies can be set on a sustainable footing. Taking account of what we think of as excessively large corporate tax gains, even though they have been persisting, seems like a riskier strategy and one which we do not think is advisable. That is setting the record straight.