Michael Noonan (Limerick City, Fine Gael)

I draw Deputy Doherty's attention to a statement made on "Prime Time" last night by the eminent economist, John McHale, who is chair of the fiscal advisory council. He took the view that no additional consolidation would be required to meet the structural deficit even under very conservative assumptions about growth. One takes note of what somebody with the stature of Professor McHale says.

Deputy Doherty followed a good line of argument but it contained fallacies. The 3.5% figure which the Department produced last April included the Commission's figure because it was based on the latter's calculation. All these forecasts are done at a point in time. Put simply, the point in time in this instance was that if no policy changes occurred between last April and 2015, the Department estimated that the structural deficit would be 3.5%. However, the Government is evolving policy on a monthly basis. The jobs plan drawn up by the Minister for Jobs, Enterprise and Innovation provides for 232 different initiatives and is being driven by the Taoiseach in a Cabinet sub-committee. A timeline has been devised for Departments and they have to report back to the Taoiseach and provide an explanation if they are not delivering.

During the boom years when the building industry was going great, we appeared to have a surplus but while we had one in nominal terms in fact we had a structural deficit. If the Government of the day had taken the heat out of the building industry rather than continuing to rely on the transaction taxes the industry produced it would have addressed the structural deficit and we would not have faced the problem in 2010. Similarly today if we retrain building workers so they do not remain permanently unemployed we can take them off the live register and do not have to pay social welfare. We will thereby address the structural deficit. Of course it has to be corrected but not by means of tax increases or cuts. It is structural and if we change the structure we will address the flaws.

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