and provide a platform on which a recovery to future growth from 2010 can be built. i would go further to assert that a wider rebalancing of the structure of the economy ( going beyond just tax and spending ) to something much closer to that of the year 2000 would leave us best - placed for a resumption of employment - generating growth on a sustainable basis. when external observers ask me whether the irish economy has to be reinvented, this therefore is my answer : not reinvented, merely restored to where it was just a short while ago. let me stay first, though, with those budgetary aggregates. compared with this time last year there have, of course, been some unexpectedly severe adverse developments. we have seen a collapse in total revenues as a share of gdp. unlike the deliberate decline in this ratio in the latter part of the 1990s, this collapse was an unplanned consequence of, first, the collapse in housing activity and, then, the rest of the downturn. especially important, as has been widely discussed, was the role of those evanescent taxes whose receipts were highly contingent on a booming economy generating large profits, capital gains, and – notably – stamp duty from property transactions. we had become highly dependent on these as the steady expansion in revenue from these sources during recent years came to be taken for granted and rates elsewhere in the tax code were lowered. thus the income tax increases of 2008 - 9 represent – broadly speaking – no more than a return to rates that prevailed within the past decade or so and over a period when the economy was growing strongly. while high marginal tax rates are distorting to economic performance, this comparison with recent history is needed to put the tax increases in context ( admittedly tax rates also need to be assessed in terms of international competitiveness, but the contemporary income tax increases in the uk dulls some of the impact of this caveat ). with the economy underperforming by so much, it will be some time before tax as a share of gdp gets back to its medium - term target value. what of spending? here there has been a huge expansion of what we are again calling automatic stabilisers, the largest of which are payments related to the very sharp increase in unemployment. ( and of course the higher rates on these payments also amplify this effect. ) there has been a tendency by some commentators to bemoan spending cuts, but spending has, in the past year

gabriel makhlouf : key challenges – including mortgage arrears and market - based finance – and the need to build resilience across the economy introductory statement by mr gabriel makhlouf, governor of the central bank of ireland, before the joint oireachtas ( national parliament ) committee on finance, public expenditure and reform, and taoiseach ( head of parliament ), dublin, 5 december 2019. * * * good morning. thank you for the invitation to appear before you today. i am joined by my executive leadership team : deputy governor ( central banking ), sharon donnery, deputy governor ( prudential regulation ), ed sibley and director general ( financial conduct ) derville rowland. the other member of our team, chief operations officer gerry quinn, could not make it this morning. i am now three months into my term as governor during which i have prioritised listening to colleagues in the bank and stakeholders outside of it to understand better the issues and challenges as they see them. i ’ ve spent time outside of dublin – in waterford, dundalk, and carlow ( at the national ploughing championships ) and also in frankfurt and washington dc – and i ’ ve met members of the public, business owners and business representatives from a range of sectors, governors from other central banks and officials from the imf and the european commission, among others. last week i hosted a roundtable at the central bank for 14 organisations representing civil society. your invitation asked that i address the current principal issues being dealt with by the central bank. therefore, in addition to outlining some of my reflections so far, in my remarks this morning i will outline some of the bank ’ s recent activities, as well as what i see as challenges on the horizon. of course, it will not cover all the issues that will be of interest to the committee, so i look forward to a wider discussion. reflections the central bank ’ s mandate is to serve the public interest by safeguarding monetary and financial stability and by working to ensure that the financial system operates in the best interests of consumers and the wider economy. having spent my entire career in public service, across the areas of macro and microeconomics, public policy and service delivery, i recognise the importance of that mission. to my mind, the ‘ wider economy ’ is represented by the community across ireland. over the last number of years the central bank has grown as its mandate has increased, reflecting both the response