Michael D Higgins (Galway West, Labour)

I too would like to offer my sympathy to the Minister on the death of his uncle.

I do not regard forecasting as a science, as the Minister has referred to it, nor do I regard his scenarios as any aspect of science. I would like to ask one or two macroeconomic questions. If one takes as a departure point the most benign of the ESRI's models for exiting the recession, which suggests that in 2014 Ireland will have a growth rate of 4%, an unemployment rate of 10% - which depends on sets of assumptions relating to how the deficit is managed - the Minister is dealing with the current deficit and the achievement of targets over four years and, at any given time, the contribution to the deficit by the ghost of Anglo Irish Bank. None of us on this side of the House and in this party ever referred to it as a viable bank present, future or past and I am not sure that many others are hanging on to that illusion now, which is certainly neither scientific nor practical. There is the contribution, therefore, of the €1.15 billion, which people can understand and which will rattle on as the interest on the promissory notes that have been transferred to a different form of liability. The Minister is interesting when he suggests no cash changes in this regard. On the other hand, for European Commission purposes and for reputational purposes, it counts because it affects the figure the Minister throws up.

That leaves us in a position, which I want to put forward out of practical concern. If one takes what is happening in regard to the deficit and the figures published, the greatest disappointment relates to income tax and that is connected to the increasing unemployment figure and the cost of unemployment is related to social welfare expenditure. While the interest rate on the promissory rates will remain a constant, if unemployment increases, the deficit will increase and, therefore, the Minister is speaking of inflicting grief largely sourced from, and facilitating, the legacy of his banking solution, at a cost of rising unemployment.

I hope we have agreed that forecasting is not a science. The Minister has to be able to say what is the connection between the projected deficit, the projected or assumed range of economic growth rates and the unemployment rate. Perhaps he will want to tell us when Ireland envisages returning to the international bond market. Surely a strategy for converting Irish savings, which are at an enormously high proportion at the present, no matter what way they are measured, would be a domestic source of funding for practical spending with the added advantage that it would be retained within the economy and with a high multiplier.

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