Dr. Robert Kelly:

When I think about debt sustainability, the question is how much debt the output is carrying. A couple of factors between now and 2025, such as projected surpluses, for example, indicate quite favourable growth dynamics relative to the cost of debt, which, to be honest, sees the debt fall quite considerably. When we think about the longer term, it is not necessarily a question of when the debt matures, and I will talk about that in a moment, but whether we have used this period to create more sustainability in the public finances and whether we have gotten to a place where we are running surpluses so it becomes less of an issue to roll over debt or we are rolling over less of a stock of debt.

To be fair, the NTMA has used the period of low rates to change the maturity of that debt profile and build quite substantial cash balances. There is flexibility for the State from a liquidity point of view in relation to individual bonds. We can carefully manage how we roll over elements of the debt and how we enter markets. This comes back to the point about how the excess or windfall corporation tax receipts are used. They need to be used in a way that does not enter current expenditure. That is where the danger lies, that we get to this later period but we have not used the surpluses in a way that makes them available to roll down our level of debt and make it more sustainable on a medium-term to long-term basis.