Michael Noonan (Limerick City, Fine Gael)

I cited Professor McHale because of his eminence as an economist and the position he occupies as chair of the Fiscal Advisory Council. We should give weight to what he says. I cited his comments so that Deputies will know he made them and can give them due weight. Of course there are other voices on the "Yes" side as well as the "No" side and some people exaggerate the position. Our target is a nominal deficit below 3% by 2015. Part of the nominal deficit will be structural. It is not possible at present to say what the structural deficit will be because all estimates are based on the assumption of no policy changes that will reduce or increase the structural deficit over the next four years. That is pure theory but does not work in practice. We will have a number of years to deal with the structural deficit and get it down to 0.5% of GDP. There are four ways of doing it: we can tax, we can cut, we can get the economy to grow or we can address the structural flaw. One of the big contributors to the structural deficit is the 150,000 people who became redundant from the building industry. If we can retrain many of them and get them back to work as well as re-employing some in the building industry through initiatives such as the one announced by NAMA this morning, we are dealing with the social welfare bill, moving away from long-term unemployment and reducing the structural deficit. It is alarmist so to say it will be slash and burn fiscal economics for three or four years after 2015, with no choice but to cut services and tax. That is not true. Professor McHale said the heavy lifting will be done by growth on very modest growth assumptions, without addressing the structural flaws in the economy.

See this speech in context