Oireachtas Joint and Select Committees

Wednesday, 16 February 2022

Committee on Budgetary Oversight

Indexation of Taxation and Social Protection System: Discussion (Resumed)

Mr. Matt McGann:

I do not work in the forecasting side either, but I will have a go. The forecast will almost certainly be wrong, because that is the nature of a forecast. We cannot predict the future. That is just one of the trade-offs that one has to live with if one decides to have the indexing based on projections. That can go either way. It could be that the indexation increase is larger than inflation turns out to be. That may cause a problem for the next year. Previous speakers have talked about how some kind of tightening can be introduced the next year to make up for it. There may be a political economy element to that.