Mr. Sebastian Barnes:

There are two responses to that. The short answer is "No". There are two reasons for this. First, as the national development plan reflects, investment needs be permanently higher in the future because we are going to move towards a more capital-intensive economy. Whatever we do, it is going take us a long time to catch up on housing, energy production and other things. It is not just a sort of temporary one-off that we invest in something and it will be done. We have to build it into the baseline because it may not be as high, but investment will be higher than it has been historically. There is obviously a difference between taking that money and spending it on investment compared with spending it on health. Health is actually a poor example, but on truly current spending which has no future benefit, because there is a longer term benefit in the case of health.

One of the things that is important is that the money needs to be taken out of the economy. This is money where basically a big chunk of it is coming from multinational companies in profits on worldwide or European trading activity. It is not being generated within Ireland in the way that the revenue of a pub might be. This is money coming into the economy. Essentially, with this very large amount of money coming in, if you spend it, that will contribute essentially to overheating the economy further. If you bring more money in, prices will go up and housing will become more expensive. It is quite important not to spend it. It is important to invest it, probably outside the economy. That is a way of keeping the economy on a balanced path. This is the experience of Norway, which has a similar but much bigger issue with the oil revenue. In the early 1990s what they did is they spent the oil money as it came in and their economy had a huge boom and then a big collapse at the point where the money came down. It is at that point that they decided to set up a sovereign wealth fund, which invests the money. One rule of that investment fund is that it must not invest any money in Norway. It is all invested internationally. If you go to Norway, you still see the impact of the oil money. It is very expensive to buy anything there. Some of the oil money is still coming into the economy in a way, but compared with what it would be like had they spent that money even on investment projects that yield a future return, it would have been very much more destabilising to their economy. While it seems attractive to use these moneys for investment - and definitely using it for investment is better than using it for current spending - it is ultimately a question of trying to keep the economy on a balanced path.