Professor Michael McMahon:

At the aggregate level, as we discussed extensively in the report, Ireland has a history of procyclical policies, not just on investment, although investment is the most volatile component both of government and the aggregate economy. We have a tendency to spend a lot when things are going great and then to have to retrench that spending when things are not going well.

We have argued strongly in the report and historically, and other economists will sit here and do the same, that an ideal fiscal policy is countercyclical. It is precisely about having projects ready to invest in, which we would be doing in any case all the time but on which we could do more exactly at the moment the economy is weak. When the economy is strong, we might have to do less on them, but we would avoid that boom-bust both within investment and the aggregate, and in doing so, we would keep the aggregate economy in a better position. That is where a procyclical budget 2024 risks repeating these past mistakes.