Madam, - Garret FitzGerald's column last Saturday offered a very welcome - and, sadly, rarely expressed - insight into the state of the Exchequer's finances.
Despite a domestic and international economic slowdown, the resources available to the Government remain substantial - a feature that is even more apparent when comparisons are drawn with historical and international benchmarks.
The Government continues to run substantial current account surpluses (tax revenue exceeding day-to-day spending) expected to be around €4 billion this year. Based on the available projections, this figure will continue to grow throughout the remainder of the decade.
The Exchequer borrows money to fund the National Development Plan's commitment to address Ireland's infrastructural deficit - Government capital expenditure is running at approximately 5 per cent of national income, twice that of most of our fellow EU member-states. It is critical to the long-term competitiveness and economic growth of this country that these investments are made. Borrowing to fund such worthwhile investments cannot be considered an economic negative.
The recent decline in tax revenue should not be used to suggest that we have to return to the budgetary landscape of the 1980s. Indeed, a substantial proportion of that decline is related to an overdue correction in the housing market, a decline in capital gains taxes accompanying falling stock market prices and the recent restructuring of the VAT returns system. The latter will provide a notable boost to the Exchequer's finances in the next quarter.
As Dr FitzGerald notes, in the longer term (up to 2025) the resources available to run Irish society will continue to increase significantly. His challenge that this additional wealth "be deployed to the advantage of our whole society" is worthy. An informed discussion of how to achieve this objective is necessary and long overdue. - Yours, etc,
Dr MICHEÁL L COLLINS, epartment of Economics, Trinity College, Dublin 2.