Professor Michael McMahon:

The question should not be about the definition of long lasting but rather the definition of what is counted as core expenditure. We count as core expenditure anything that essentially is going to require revenue to be able to back it up. The reason I do not want to define long lasting is because, arguably, every construction project and each brick is a one-off expenditure. However, we know that, even when one project is completed, there are usually maintenance costs and other things that go with that. The idea of this not being the ordinary business of Government which needs to be funded through sustainable tax revenues is the definition we get to. There are occasions, and we have had this discussion in the past, in which it makes sense to do so, such as the Covid-19 pandemic. In the case of an event that only happens once every 100 hundred years, it makes sense to say it is a once-in-a-100-year shock and should therefore be paid over 100 years. However, if these things are going to repeat, such as the exact project repeating or if we are going to have to continue paying for some parts of it going forward, it makes sense to sustainably fund them with available revenue. I do not wish to sit here and put a figure on it by saying if everything is going to last for 18 months or less, it can be taken out of core expenditure. Part of the problem is that we have had things which were, at the outset, proposed as lasting for one year which continued to appear again and again. By the third or fourth year, it might be said it would only last for one more year but there had been four years of its spending by that time unaccounted for in a core-expenditure sense. That is where we have struggled more and more with the concept of core expenditure, even if we agree with it and there are occasions when it makes sense. When it gets too widely used, it makes the analysis of the medium-term position of the budget harder to look at. That is the argument in favour of including a lot more in core expenditure than the Government currently does, which we do.