Mr. Sebastian Barnes:

Regarding a good way to think about this aspect, we went through a period where, and the Senator may remember our reports better than we do, depreciation was not far away from the level of investment. I do not recall whether it was higher or lower. That was problematic because it meant the capital stock was not growing in line with the economy. The national development plan runs out in ten years, but at the end of those ten years, as the Senator said, investment will still be high. We will still have these rates of 6% of national income, which is high by historical standards. What we do not have a sense of is what will happen after that. It might be natural that investment would fall a little after that period, but it will not fall back to the low levels we had at some points in the past.

One of the reasons investment will not fall to such a low level is because we will need to keep investing to maintain what we have built in the past ten years. We will have a bigger capital stock. In order to maintain that, we will have to invest more money. This is exactly the kind of factor that medium-term budgetary plans need to build in. This is a less pressing issue now because we are ramping up the capital stock heavily. The new investment is big relative to the depreciation of existing investment. This future context is a real thing. A common problem in the public finances of many countries is that people like to build new things, but it is less exciting to tell people that existing capital infrastructure will be repaired. This means we end up with capital stock that gets depreciated and, essentially, gets lost. Over the longer term, I would expect investment to be permanently higher than it has been on average in Ireland in the past.