Summer Economic Statement 2018: Statements

It is my privilege to open tonight’s statements on the 2018 summer economic statement.

Ten years after we were hit by the worst economic shock this country has ever faced, I am happy to report that the public finances have been stabilised, unemployment continues to fall, progress is being made in improving our public services and our economy is one of the fastest growing in the EU. A suite of economic indicators confirm that the Irish economy is growing at a healthy pace. My Department expects national income growth of 5.6% this year and 4% next year. Today’s Central Statistics Office, CSO, data also confirm that strong economic growth is delivering improvements in the number of jobs in our country. There are now more people at work than ever before. Indeed, we are fast approaching full employment, and in this context we need to take care with the management of our economy.

Against this positive backdrop, we plan broadly to balance our books again by running a very small deficit next year because of the political choices we have made in Project Ireland 2040 and the national development plan to increase capital spending substantially by €1.5 billion or 25% next year, bringing expenditure to in excess of €7 billion. We are prioritising capital spending in our schools, hospitals, universities and public transport system to deal with the deficits that emerged during the recession and to position our economy and society for the opportunities and difficulties that lie ahead.

As the ESRI noted in its quarterly economic commentary, more public investment increases the potential output of the economy by enhancing productivity and employment, thereby supporting growth in the long run. Crucially, by increasing internal demand appropriately, the impact of public investment is felt in the domestic sector of the economy. This is the right way to rebalance our economy in the context of the increasingly volatile world that was vividly demonstrated during the previous debate.

Well-managed economies are characterised by durable improvements in living standards rather than the all-or-nothing approach that has been a feature of Irish economic history, especially in more recent times. Our economic performance has been less consistent than that of other small open economies. Our propensity to suffer economic shocks and resilience to withstand such shocks has been out of line with countries with which we can compare ourselves. When we pursued a procyclical approach to fiscal policy, our comparator countries witnessed incremental and sustainable increases in living standards and retained their national sovereignty when the global financial crisis struck. To avoid repeating the mistakes of the past, it is critical that we are constant in our approach. In essence, this means deciding on the appropriate economic and social model for the country and having the political commitment and consensus to stick with it across many different cycles.

The Government will frame budgetary policy on the basis of what is right for the economy to ensure continued steady improvements in Irish employment and living standards and to make a difference to the many challenges we face in areas like housing and homelessness and the daily challenges we face in our health services. If we look at other small open countries like Finland, Sweden and Denmark, we will see how they deliver economies with public services that are paid for gradually. This is what I want for the Irish people. This Government and its predecessor have pursued central elements of this approach since 2011. We have taken care with our budgets, we have taken active approaches to jobs markets and we have gradually broadened the tax base. However, this work is far from complete.

Our particular priorities for the period ahead include a revised approach to social dialogue. This is why I am looking forward to next week's national economic and social dialogue. We are working on how to improve social insurance to deliver greater economic security, for example, for our self-employed. We need to continue to rebalance our economy to support our indigenous sector and improve productivity. We want to have a broad and sustainable tax base. The Minister of State, Deputy English, is at the forefront of adopting a better approach to land planning to ensure it is developed in a co-ordinated manner for the public interest. We will seek to improve incomes, particularly for people in low-income and middle-income parts of our economy.

The central argument I want to make and which is reflected in the summer economic statement is that there is a need for us to actively pursue policies that lead to an improvement in living standards for all and ensure Ireland never again faces the risks it faced in the past. That is why our budgetary strategy is based on steady increases in public expenditure and predictable tax revenue. Our minimum objective is to continue to deliver a balanced budget. I argue that incremental and sustainable improvements in public services are preferable to how we dealt with this in the past. We want to broaden our broad tax base and ensure expenditure commitments are based on revenues that will be sustainable. This is necessary not just because of the lessons of our history but also because it is common sense. This is why we will be setting aside some of the high levels of corporation tax for the purpose of creating a rainy day fund.

Outside of Ireland, we can see greater levels of uncertainty than have existed for a long time. We need to take care of what is inside our control. First, we need to continue to be careful in how we manage our public finances. The fiscal rules are currently unhelpful in this regard. A full and literal application of these rules would involve the adoption of policies that would mean more borrowing, which is not appropriate for where our economy is now. Second, we must balance the budget over the cycle and use windfall receipts to reduce public debt. Third, the Government will prioritise spending that mitigates risk, does the right thing by our society and improves the ability of our economy to grow in the future.

A headline deficit of 0.1% in the forthcoming budget was projected in the stability programme update. The Government will not adopt taxation and spending measures that result in a larger deficit than this. Pre-committed expenditure for next year amounts to €2.6 billion. That will provide for an increase of €1.5 billion in capital expenditure, €300 million in carryover costs, €400 million in public sector pay and another €400 million for demographic costs. With the deficit I mentioned earlier, all of this will accommodate a budgetary package of €3.4 billion, of which €2.6 billion has been pre-committed to expenditure measures. This leaves €800 million for further allocation. Any unfunded taxation or expenditure measures that go beyond this will necessarily involve even more borrowing. I believe this would be wrong. Targeting minimum compliance with the expenditure benchmark would allow an additional €900 million to be spent or used for tax reductions, but this in turn would increase our deficit.

We are approaching the tenth anniversary of our deepest crisis. While the economic situation is relatively healthy, we have many demands in our society. Developments in the outside world, including Brexit, changes in the international corporate tax landscape and the possibility of disruptions to trade are some of the risks we face. We need to respond to all of this to build up our budgetary strength for the future. That is why the Government is prioritising reducing public debt, establishing a rainy day fund and avoiding pro-cyclical budgetary policies. While there are risks ahead, there are also great opportunities. It is clear that there are many needs within our society. As I said yesterday, economic growth is not an end in itself. It is a necessary precondition for the creation of the resources needed to deliver a better Ireland. Continued growth is the way we will achieve our objectives of bringing about steady improvements in the lives of our citizens and meeting the sharpest needs in our society.

I welcome the opportunity to contribute to the debate on the summer economic statement, which was published yesterday. The statement sets out the economic backdrop as we begin the process of preparing budget 2019. It is fair to say that the economic picture in mid-2018 is pretty positive in overall terms. We want to ensure we make the right decisions to sustain this country's economic growth in a sustainable manner. No one wants to see boom and bust. We want to see a period of steady economic growth. If a country like Ireland could sustain annual economic growth of between 3% and 4%, and use the fruits of that economic growth to deal with many of the serious challenges in our society, we would be doing a good job.

There is a need to recognise the position our party is in and what we have done for the country to facilitate and sustain a minority Government over the past two years by means of the confidence and supply agreement. At a challenging time, especially on the external front, that agreement has been an important source of stability for our country. The value of that needs to be recognised.

We are four months out from budget 2019. It is important in the lead up to it that we make the right decisions for the people who elected us and whom we represent. Based on the summer economic statement, the budget day package will be in the region of €3.4 billion, not €800 million. It happens to be the case that there are very significant pre-committed lines of expenditure of €2.6 billion which are important matters in respect of capital expenditure, demographics, public sector pay and so on. It is a €3.4 billion budget and, if we were to add the €900 million that others wish to spend plus the €500 million earmarked for the rainy day fund, we would be looking at a €5 billion budget. That would be directly contrary to the advice of the Irish Fiscal Advisory Council, IFAC. Yes, the Government does not have to take its advice. It is a matter for the elected Government of the day to make budgetary decisions. However, we do have to take account of the advice it has given. The fiscal council has been very clear as to what is an appropriate budgetary stance in respect of 2019, namely, a package in the order of €3.5 billion. Anything more expansionary than this suggested maximum limit is not likely to be appropriate. The fiscal council goes on to say that from its point of view it would be even more desirable if a more conservative approach was adopted. I do not agree with that but I do agree with the need to continue to reduce the deficit.

If this budgetary stance is put into effect, the general Government balance next year will be 0.1% of a deficit and the structural balance will be 0.4% of a deficit, which would meet our medium term objective. If we were to spend the extra €1.4 billion, the general Government deficit would be in the order of 0.6% and the structural deficit would be approximately 0.9%.

It is correct. The outturn expected in the current year in general Government terms is a deficit of 0.2%. At a time when the economy is growing so strongly after seven or eight consecutive years of growth, that proposal would result in the budget deficit trebling next year in proportionate terms. That is not the right decision or the right course on which to take our country at this time.

The rainy day fund proposal is one which we very much support. Of course, it has to be structured correctly and we look forward to engaging with the Government in respect of the legislation in that regard. In very simple terms, one of the real lessons we must have learned from the crisis is the need to pursue counter-cyclical policies at the appropriate time. Hopefully it will not materialise, but there is a significant risk of the economy overheating. We need to start putting money aside to have a buffer in place so that when an economic shock arrives at our door, probably from an external source, we do have resources to deploy and the first decision the next Minister for Finance, whether that be Deputy Pearse Doherty, Deputy Donohoe, myself, Deputy Burton or whoever, has to make-----

What about us?

One never knows.

To rise up again would be the Deputies' main priority.

When an economic shock hits this country again, the first decision will not have to be to cut public expenditure or raise taxes. That is a scenario that we certainly want to avoid.

The risk of overheating is significant. If we look at the economy around us and the issues in terms of labour shortages, very noticeable trends in traffic and the difficulty in getting projects under way, it is evident that there are signs of it. We also have to be cognisant of the real risks that exist. The outturn from Brexit is a huge unknown with potentially very significant ramifications for our country. On the corporate tax front there are so many challenges. The growth in receipts is great but it is also a risk. We must be cognisant of the concentration of receipts among a small number of companies, the threats from the Trump Administration reforms, and the constant threats from the European Union in respect of the common consolidated corporate tax base, CCCTB, digital tax and so on. We are at the bottom of the interest rate cycle. We know quantitative easing, QE, is going to be unwound and do not know what the effect of that will be. We have a possible trade war. These are real risks. It is important to make the right decisions.

Absolutely, we have to deliver on the challenges facing our people. There is frustration at the lack of progress and delivery in the housing area. One of the provisions of the agreement we entered into two years ago was that there would be an affordable housing scheme. We have had various announcements of affordability measures but as of now we do not have an affordable housing scheme in this country and we are crying out for it. The people we represent really need to see that delivered and quickly. We need to see red tape and bureaucracy cut. Local authorities need to be allowed to get on with the job of delivering social housing units. When the Minister stood up last October and announced a new €750 million fund of private finance to facilitate construction, we welcomed it. We did expect that it would take eight months to publish the legislation and God only knows when the first euro of that money will start to be provided to enable construction to take place.

On health, we all know what the challenges are. We need to improve and increase capacity in the public system but the Government needs to increase resources in the National Treatment Purchase Fund as well, to make short-term progress in respect of waiting lists which have gone out of control and are not going in the right direction. That issue has to be dealt with.

There are really important cost of living issues of which the Government is losing control. The whole issue of insurance is becoming more important by the day, not just for motorists but for businesses the length and breadth of the country, community groups, sporting bodies and voluntary organisations. They are crippled with insurance costs. The issue needs to be dealt with, as does that of rent. That relates very much to the lack of supply on the housing front. Childcare, education and transport costs need to be addressed. When I look at the balance of our economy, I see that the Minister needs to focus on a renewed enterprise strategy in the indigenous economy. He needs to look at the challenges facing SMEs and, on the taxation front, he needs to consider specific measures to deal with that. We want to see longer term budgetary, economic and fiscal forecasts. At the moment they go out to 2021. We should see them covering at least five years and, at a lower level, we should see some forecasts out over a period of up to ten years.

We need to have an honest and open discussion in the months ahead about where our priorities lie. The Minister is already talking about income tax cuts before even talking about the really serious challenges that people are facing in housing and health. We must address where we are in terms of funding our education sector and third level. The Minister seems to be working backwards from a starting position that we have to cut tax. Let us look at the resources and the needs of our country and make the right decisions. Issues we have set out in the agreement include early assessment of children with special needs, intervention services, mental health funding and supports for older persons who wish to stay in the home. We will engage constructively over the next four months with the Minister, his officials and his colleagues in government to make the right decisions. It has to be a sensible and prudent budget but where individual budgetary decisions are made, they have to speak to the priorities and real issues that are facing people in their day-to-day lives.

Deputy Michael McGrath was wrong in terms of his facts and figures but we will forgive him for that. The deficit would be 0.4% and indeed the Minister addressed that in his opening speech. On the "significant" risks of overheating, the chair of the IFAC has said the risk of overheating is muted. He has suggested that they are medium risks with medium impact. The Deputy should not create a narrative just for the sake of supporting his own economic vision of not investing in the crisis that we have.

This document is completely out of tune with the reality of life in Ireland in 2018. If we did not know better, we would imagine Deputy Donohoe had not been Minister for Finance for the last number of months. Nowhere in this document is there a credible plan to address the massive problems we face as a State. Nowhere is there at least an intention to reclaim the lost decade of underinvestment that was presided over by Fine Gael and Fianna Fáil Governments. Families and young people at home this evening will not recognise the Ireland painted in this document. Like everyone, they see the signs of recovery but they still see the scars of the wasted potential and of budgetary policies which imposed an extortionate cost of living burden upon them and which this Government is on track to continue.

They also see a Government that has created crisis after crisis.

This statement is an attempt to build on the Fine Gael myth that nothing can or should be done about these crises that it has created in this State. The Minister is telling the families who live in fear of financial distress and who are concerned about one missed wage packet, the car breaking down or the unexpected visit to the doctor that not lifting this burden is "good governance". He is telling the 4,000 children who woke up this morning in emergency accommodation that homelessness is "prudent" because he does not attempt to deal with it using the policy response that is required. He is telling the hundreds of thousands on waiting lists that essential healthcare is beyond their grasp and that they just need to get used to the fact that they are on these lists.

This statement tries to drag the public's gaze away from the hospital trolleys and the social tragedies that all of us, not just those in this city but right across the State, hear about day in and day our in our constituency clinics. It is an attempt to convince the people of Ireland that the burden they feel every day is normal - it is about normalising all of this - and there is nothing that can be done for them. We reject this message. We reject it as a reckless choice of Fine Gael just as we rejected the Government's proposal to abolish the USC, which would have left a €5 billion hole in the public purse, or indeed Fianna Fáil's proposal, which would have left a hole of over €3 billion in the public purse. We completely reject the argument that the Government must stand idly by as thousands of young families across the island live from week to week and we reject the argument that rural communities must remain isolated with crumbling infrastructure and basic broadband.

For what will soon be three consecutive budgets, Fine Gael, in lockstep with Fianna Fáil, is on course to decide that all of this will continue. That is clear from this summer economic statement. Fianna Fáil, a party that is devoid of a coherent strategy or message, is meekly peddling the same Government line of prudence before people. In addressing the budget last year, the Fianna Fáil spokesperson, Deputy Michael McGrath, said that the budget and, more importantly, the Government will be judged by how they tackle the scourge of homelessness more than any other issue so is it time to judge this Government? What do the 10,000 people who are homeless or the 100,000 people on waiting lists think? What does Fine Gael think of this crisis and indeed what does Fianna Fáil, which supported every single one of the Government's budgets that made sure that available resources were spent on tax cuts that benefitted the well off instead of dealing with these crises, think of it? Sinn Féin hears these citizens who have been failed and ignored by the Government's policies. I believe their verdict is clear. They are the same old parties, the same old choices and the same old failures.

However, there are choices. These are the Minister's choices, these are the results of his choices but other choices can be made. Under our plan, we would use the existing space within the fiscal rules to ensure that there would be a Government surplus by 2021. The difference between our target for a Government surplus and that of the Government is 12 months. By using the available fiscal space for urgent investment, debt to GDP will still fall below 60% in the same period, as has been indicated by the Government. However, the Minister has turned his back on this need for urgent investment to deal with the social crisis we face, the need to invest in our economy and to strengthen the foundations of our economy. The Government has done so with the support of Fianna Fáil.

Of course, it will take longer than any single budget to undo the work that has been done by Fine Gael and the era of social crises. We need to start and this budget should be the start of that undoing. Instead the Minister has repackaged Fianna Fáil's hand-me-down policy of a rainy day fund. Once again, this so-called rainy day fund is presented and packaged as prudence when it is little more than an excuse that the Minister proposes to enshrine in law not to invest at a time of deep crisis in certain sections of Irish society. Let us be honest about this because the Minister's new narrative is that corporation tax receipts will go into the rainy day fund. His heads of Bill make no mention whatsoever of corporate tax. There is no siphoning off of corporation tax into a rainy day fund. Indeed the heads of Bill say that there will be a legal obligation on this State to put €500 million into the rainy day fund even if there is a reduction in corporation tax. Even if there was a year-on-year reduction in corporation tax, there will be a legal obligation to fill that rainy day fund with €500 million. This is policy on the hoof. It is "making it up as we go along" stuff to try and convince the Irish people that the Minister is all about stability when many people look at the reality of their lives and see anything but stability.

In saying that perhaps there is a silver lining. If Fianna Fáil had the chance to introduce a rainy day fund, as outlined in its 2016 manifesto, Deputy Michael McGrath would put €1.8 billion into a rainy day fund next year and I would be asking him what cuts he was going to make and what commitments he would roll back on because unless he is going to row back on his policy, his policy is that every cent above €6.6 billion in corporation tax should be invested in the rainy day fund. Perhaps he will want to tell the public sector workers that this is the commitment he is going to row back on. Perhaps he will not provide for demographics or perhaps Fianna Fáil will return to form in terms of cutting the blind pension or reducing the minimum wage because that is what the policy would have amounted to, leaving aside the fact that he wanted to cut over €3 billion in terms of the USC.

These are all old ideas that are part of an old mindset of how the economy should work but we know these tired and failed ideas have been tried and we have had some of the same results. We have results now in terms of underinvestment in public services. We can see this loud and clear. We hear them in the individual stories from those people who come to us. They are the crises in our public services, mass homelessness and the profoundly unfair and unequal nature of the Fine Gael economic plan. They did not happen by accident. The reason we have a homelessness crisis is the Minister's policies when he decided not to invest and because the spokesperson for Fianna Fáil decided to back that budgetary stance. The reason we have 707,000 people on hospital waiting lists and over 400 people on hospital trolleys every day is the Minister's budgetary decisions supported by Fianna Fáil. That is the reality. While Fine Gael is in power, there will always be loopholes for tax avoiders, there will always be poverty and exclusion and there will always be crises in our public services.

We say enough is enough. With an international environment that poses threats to our economic stability, we need to act. We need to invest in our public infrastructure to secure long-term, sustainable growth potential. We need to secure our public finances, end the leakages to tax avoiders and strengthen our tax base. By tackling the extortionate costs of childcare, we can boost our economic capacity allowing working women and parents to pursue their ambitions. We need to invest in young people and our public universities so that we can end their slide in world rankings and secure economic potential for the future. These are real socially and economically responsible alternatives that, once again, the Minister has chosen to ignore.

This summer statement is the mark of a Government which is out of ideas and which either cannot see or does not care about the problems we face as a society. This statement and this Government show a staggering lack of vision. It offers no ambition and it lacks the confidence to say to ordinary people that we will stand by the people. It is a dusting down of the old broken record which rings in the ears of families and citizens who are struggling. The message the Minister is sending to them is that we will not and cannot invest but there are choices. There is a different path the Minister could go down. We can either endure the policies of Fine Gael supported by Fianna Fáil and see these crises continue or we can stand foursquare with citizens and deal with these issues by using the resources available to us under the fiscal rules to make the necessary investments.

I start by referencing the fact that just a couple of hours ago, the courts finally imposed a penalty of six years on David Drumm who was, in many ways, the man who sank Ireland along with the bank that sank Ireland. As we look at the budget figures, we should bear in mind that this man organised a fraud amounting to €7.2 billion. For most people, €7.2 million would sound like a lot of money.

The particular arrangements he entered into to mislead in regard to the Anglo Irish accounts cost our taxpayers, our citizens, in fact, every man, woman and child in this country much misery that continues to this day, unfortunately, with regard to cleaning up the mess of the banks. It is ten years since all of this happened. It has taken a very long time for justice to be served. Ten years ago the bankers were telling us what to do and that everything was okay, which was wrong. The Minister needs to be careful when simply relying on the advice of bankers. I want the Minister to make a commitment that despite all of the special pleading going on at the moment about the restoration of bankers' bonuses, there should be no consideration of any of that until we have got all of that money back from the bankers, which is what our citizens deserve.

The summer economic statement shows there is up to €2.2 billion available in the fiscal space for new measures in budget 2019 before any new revenue raising or saving measures. The Minister for Finance and the Department are misleading the public debate. Political decisions made by the Minister and Fine Gael are limiting this to €800 million, although, obviously, there will be adjustments on budget day. A further €2.6 billion has already been committed. The Minister needs to clarify for us if a 2:1 ratio of expenditure to tax cuts continues to apply to budget measures. I would prefer a 3:1 ratio. We agree with the ESRI that it is not appropriate to talk about income tax cuts but I know that, in the context of a forthcoming election, it is something Fine Gael is wedded to and I am sure we will see some of that.

The Minister for Finance has decided to commit €500 million to a rainy day fund and leave a further €900 million unspent. These are policy decisions the Minister is making that are also deliberately misleading the public debate. The Irish people, who have made huge sacrifices over the last decade to correct the public finances, deserve to know the full facts. With €2.6 billion already committed to meeting the costs of policy decisions made last year, as I said, we do not know if the 2:1 ratio Fine Gael ratio is being maintained, or whether Fine Gael and Fianna Fáil have agreed budget measures that will encompass the extra capital spending this includes, or if this will just apply to the €800 million the Minister is proposing to allocate in October.

I want to ask the Minister about the settlement announced in respect of consultants' pay. As I understand it, that settlement is €200 million in back pay plus €60 million a year. Is that money accounted for in the summer economic statement or is it something which will be pencilled in? This was the subject of a court case but I want to know the position in regard to the section 39 organisations I have raised with the Minister time and again, such as the people who work in our hospices, helping people and families faced with terminal illnesses, those who work in rehab providing vital services to people with different kinds of disabilities and needs, and those who work with the Irish Wheelchair Association, to give just three examples. Is it the Minister's intention to rectify this and offer them compensation for the cuts they took? Is that provided for in this statement? Is it simply going to be ignored or will it be a budget day adjustment? The Minister should come clean with us on whether that issue is going to be rectified?

In the midst of a housing crisis and huge capacity issues in our health system with, unbelievably, over 700,000 people on waiting lists, the summer economic statement as structured is ignoring these capacity problems within the health service that the Sláintecare report shows need urgent strategic investment. As yet, as I understand it, we do not even have an executive officer in charge of Sláintecare and its implementation office. That was a product of new politics agreed to by everybody in the Dáil. Is the establishment of Sláintecare in any way assumed in the summer economic statement? That is another question on which we are entitled to an answer. Front-loading investment into public housing would go much further in protecting our society and economy, reducing reliance on the private rented sector and providing security to families across Ireland. This is something the Minister needs to discuss and debate with us.

The Minister has used concerns about corporation tax to justify a rainy day fund but if there is fluctuation in the money coming in, we need to take action to make our tax base more secure. Measures to do that could include implementing a minimum effective rate of corporation tax. It would also go some way to start to repair the damage that has been done to our international reputation arising from some of the tax cases currently being pursued, and the spectre of companies which are effectively paying no tax and banks which are being given an opt-out from paying any tax for possibly as long as 20 years. We could also look at the overall composition of tax revenue to see whether it would be resilient if there was a sudden economic downturn, as could be caused by a disorderly Brexit. Ireland already has a rainy day fund in the form of the Ireland Strategic Investment Fund and significant shareholdings in the banks that provide a buffer for future shocks. It is not true that this economy does not have buffers, and the Minister knows this quite well. The fiscal strategy the Government is pursuing is an effort to avoid a repeat of past mistakes but, instead, it is failing to address the crisis people in Ireland are facing today. This crisis feeds into the economy and leads the economy to a situation where it will not achieve its productive capacity.

That is why the suggestion by the Minister that a portion of corporation tax revenue should be allocated to the Government's proposed rainy day fund lacks economic coherence. The Minister for Finance is trying to create something that does not exist in Irish law. No distinction is made between money coming from income tax, VAT or corporation tax. As the Minister knows, there is no hypothecation of taxes in Ireland, even when almost everybody agrees that it may be a good idea, for example, in regard to taxes on fizzy drinks and so on. We are talking in a vacuum about something that is a very imperfect idea. All tax revenues go into the Central Fund. The idea that excess corporation tax should go into a rainy day fund is neither sensible nor desirable. The notion of a rainy day fund has not been thought through. State finances do not work like those of a company or a household.

I ask the Deputy to conclude.

The rainy day money has to go somewhere. Such a fund would be of no benefit to the real economy if it ends up invested abroad, with fees being paid to some big consultancy firm in FinTech to manage it for us at some low level of interest rate, as we have just discussed in regard to interest rates.

Nor is it desirable for Irish taxpayers' money to be gambled on the stock exchange.

The Deputy's time is expired.

I will finish. We could use the development bank proposal to spend €500 million a year on housing-----

The Deputy had ten minutes. Her time is expired. I call Deputy Paul Murphy, who is sharing time with Deputy Richard Boyd Barrett.

It is appropriate to start with the fact that it is ten years since the start of the great recession, a crisis of the neoliberal capitalist system which the establishment parties in the House defend. The crisis resulted in tens of trillions in output being lost on a world scale. It is a crisis to which capitalism responded by embedding further the inequality and neoliberal policies which were at least partly responsible for it in the first place. The consequence is weak growth globally of less than half the post-war rate. What growth exists is incredibly and unprecedentedly unequal. I note the striking fact from Oxfam that 82% of the wealth generated in the world last year went to the richest 1% while the bottom 50% got none of it. The same is happening in this country where profits have doubled, the personal wealth of the richest 300 has tripled and wages have remained barely more than stagnant over the course of the crisis. The impact continues to be felt in people's lives. It has been galling for people to hear talk of a rainy day fund. People have the sense that if the Government and Fianna Fáil are talking about a rainy day some day in the future, they must have no idea of what life is like for ordinary people now. It is monsoon season right now for the 10,000 people who are homeless, the 100,000 in at-work poverty, the half of all young women who cannot afford to buy sanitary products as reported in the media this week and the 7% of workers on temporary contracts. We need action.

Again and again, the Government statement claims we are nearing full employment. We are quite a distance from that. In any event, what is the nature of the employment being created? It is low-wage and precarious. That there are 100,000 fewer workers in full-time employment now than in 2008 is a striking illustration of the changed nature of the labour market. What is also striking in the Government's discussion of the summer economic statement is the changed rhetoric around the fiscal space. We have always disagreed with the fiscal rules, which is a neoliberal straitjacket out of which we must break. We said there was a primary surplus which could be used to invest in the economy but the Government said we could not use that because we had to stick to the fiscal rules. As such, there was a continuation of austerity. Now that the fiscal rules mean there is more fiscal space than before, the Government says we should forget about the fiscal rules as they are not good for the economy in its current situation. As such, we cannot spend. The conclusion is, therefore, permanent austerity. Whether the fiscal space is there or not, the Government says it cannot spend the money. In reality, the State was shrunk as a percentage of GDP in the course of the crisis and the Government is determined to keep it that way and to leave the public sector on rations.

One of the honest and interesting aspects of the document is the quote on page 1 to the effect that studies show aggregate levels of productivity in Ireland are heavily distorted by exceptionally high levels of productivity in a relatively small number of foreign-owned firms. A key policy challenge is therefore stated to be a need to enhance the productivity of indigenous firms. That is a euphemism if ever I heard one. If it is correct, it points to two key weaknesses in the economy. First, multinational firms are exceptionally productive, not because their workers are working 15 times harder than workers in indigenous firms, but because Ireland is a tax-haven conduit and the money is being funnelled through it. Second, it points to the ongoing weakness of the indigenous economy. That was illustrated graphically in the study published a couple of weeks ago, namely "The Missing Profit of Nations", which found that on a profit-per-wage basis, workers in the multinational sector were 16 times more productive than in non-tax havens. It is obvious what is happening. The vulnerability to external shocks which goes with that situation is the result of the development strategy of the Government and Fianna Fáil, which is about Ireland being a tax haven. The answer is to break from that and to use the €13 billion plus interest when it becomes available. The answer is a socialist industrial policy based on massive public investment to resolve social crises, public ownership and planning to build economically sustainable growth and, crucially, a transition to a green economy.

It was interesting that in his reference to other views on the economy, Deputy Michael McGrath left out the socialist left.

I thank the Minister. It was telling and will, sadly, be reflected in the media debate in the run-up to the budget. Certain serious debates take place and they are held among the people who accept the fiscal rules, which we alone reject. As such, the debate will be about the different ways we can operate inside the fiscal rules. After the banking crash, Nyberg pointed rightly to the need to challenge the cosy consensus and to listen to contrarians. Of course, we are back to not listening to contrarians and failing to take seriously the points they are making. I issue that as a serious warning. The Minister might not agree with us, but he should listen to some of the points we are making.

The media should take on board some of the points we are making too because we have led the way on important debates, including, for example, the issue of corporate tax avoidance. Whatever the Minister might think about our policies in that regard, it is a serious problem. Even mainstream economists are saying the distorting effects on our economy of profit shifting by multinationals are obvious to see. Those effects are such that we have had to create a new measure of the economy, namely GNI*, which we have because we cannot trust the GDP or GNP figures. Perhaps the socialist left has a point.

I suggest a few other things should be considered. The cosy consensus is to be prudent but, as Deputy Murphy said, "prudence" in that context means another reason to keep public spending to a minimum. If it goes over the top, there might be something called "overheating", which Deputy Michael McGrath says we must watch out for. Where are the signs of overheating? Is there rampant wage inflation? There is not. That is usually a sign of an overheating economy. In fact, even under the unravelling of the austerity cuts, wages will still not have reached the levels they were at before the crash in 2008 by the end of the current wage agreement. There is no sign of rampant wage inflation. Where, then, is this overheating?

I do not mean there are no dangers in the economy. Obviously, there are. They are the same dangers to which we have been pointing all along and the same dangers which preceded the last crash. The first is the tax haven model and its distorting effects, which I have already mentioned. It creates a vulnerability in our economy that if even one of these big firms pulled out, there would be serious trouble. That is not a sustainable model. We have to transition away from it quickly and before it backfires very badly.

One area in which the economy is overheating is the property sector. Where have we heard that before? The Government is quite happy to be prudent when it comes to the public investment and spending we need in areas like housing, infrastructure and health which would actually create buffers for our economy when the cycle comes around. Any notion, by the way, that there will be no bust in the future is fantasy. It will come and the only question is when it will happen. The place there is evidence of overheating is, of course, the property sector yet there is no talk by the Minister of prudence there. In fact, the Government's policies are actively facilitating speculation by property developers. The Government handed them the property sector via NAMA and is now doing absolutely nothing to stop the rampant and blatant speculation which is driving up the cost of accommodation.

If anything will create conditions for overheating of wage demands, it is that, but it is also what is driving the necessary labour force out of the country. The young people, who we need to restore the infrastructure, services and housing in the country, are leaving because the Minister has allowed property speculators to become rampant again - the very thing that led to the last crash.

I am grateful for the brief opportunity to comment on the summer economic statement. Last weekend there were reports that Fine Gael was trying out various general election slogans, such as Let Leo Lead On, based on the Seán Lemass slogan of the 1960s, but listening to the bluster and barefaced attempts this morning by the Taoiseach to rewrite history in response to Deputy Pearse Doherty's question on this document, a more appropriate slogan might be You Just Can't Believe Leo, or something more alliterative in that regard. The Taoiseach, of course, ignored his own vote for the blanket bank guarantee which wrecked our State finances and provided continuous support for savage cuts and austerity measures alongside Fianna Fáil since 2008. Shamefully, this included his own disastrous stint in the Department of Health.

Elements of this brazen deception are evident in this document. Chapter 4, public expenditure strategy, constantly references rises in State expenditure between 1998 and 2018 as if the failures of the Department of Finance and the Fianna Fáil and Fine Gael parties from 2008 to 2018 had never happened. The outrageous cuts in health, social protection, education, housing, public service pay and other expenditures are glossed over down to 2017 and total emphasis is placed on sustainable expenditure for 2019 and beyond. The innovations mentioned in chapter 4 in regard to public service administration and reforms are, of course, valuable. The Our Public Service 2020 framework and new expenditure invigilation, including performance budgeting, the Irish Government Economic and Evaluation Service and the spending review process are useful improvements to ensure that budgetary policy is transparent and efficient.

The summer economic statement is also important when it focuses on Ireland's productivity potential in chapter 2. It has always been rightly believed in economics, indeed, it was an axiom of economics when we studied it at college, that productivity is everything. The summer economic statement references the work of the Economic and Social Research Institute, ESRI, that Irish-owned firms have reaped only limited spill-over benefits from the activities of foreign multinationals in terms of productivity. The Department of Finance's own study, in collaboration with the OECD, disturbingly found that the productivity gap between high productivity and mainly foreign-owned firms and the rest of the economy has widened over the past decade. There was a similar widening in the services sector. The recent OECD Economic Survey of Ireland provided a menu of policy recommendations to improve productivity growth in domestic firms, including tapering of research and development supports and improving managerial skills. Yesterday, at the Committee on Budgetary Oversight, ISME proposed tax expenditures costing €54 million to improve entrepreneur relief with additional cuts in capital gains tax and increases in the research and development tax credit but the Irish Fiscal Advisory Council, IFAC, in an earlier presentation to the committee, warned that the €1 billion tax expenditure in research and development tax credits is far too large and these credits need to be much more targeted to improve productivity in domestic firms. The Minister, if he is serious about productivity and controlling tax expenditure, must carefully evaluate all these credits and reliefs by early October. That, of course, also creates more fiscal space.

The statement seems far too sanguine on risks to the economy and Exchequer. We have witnessed several rate rises by the Federal Reserve and quantitative easing is tapering towards closure. Obviously, the uncertainty for the Irish economy posed by Brexit continues to be destabilising and it is regrettable that we seem to be no further advanced in the key Brexit negotiations this June than we were six months ago at the first negotiation of a backstop. With only nine months to go to the British withdrawal, the Taoiseach and the Minister, Deputy Donohoe, cannot give us any credible fiscal roadmap for the next three to five years. With our corporation tax take so heavily dependent on US multinationals, the developing trade wars arising from Trump's America First policy are also potentially disastrous for a small open economy like Ireland's. The President of the EU Commission, Mr. Juncker, will be in this Chamber tomorrow. As its Prime Minister, he famously ran Luxembourg as a haven for tax avoidance and tax evasion. Of course, Ireland has just been referenced in a US study as the world's biggest tax haven with funds passing through our financial system equal to the size of the UK or German economies. The well-known Greek commentator and former Finance Minister, Professor Yanis Varoufakis, repeatedly said that we have behaved like leeches in international taxation policy. These claims were addressed recently by one of the economists of IFAC at the Committee on Budgetary Oversight, but the damage of these claims to our international reputation is serious. The Minister has been noticeably silent in this regard. I have raised the significant debt refinancing issues for 2018 and 2019 with the Taoiseach in this House and with the Minister for Finance. We continue to be the most indebted country per capita in the EU, with our debt at 100% of GNI*. On a positive note, the summer economic statement, SES, report states it will decline relatively to approximately 60% of GDP in 2021.

All these risks combine to create a serious backdrop to the summer economic statement but it is the failures of Government policy, in providing essential resources for health, housing, education, disability and other key services, plus the barren eight years in failing to provide key investment in all these national services which provide the biggest risks to our economy and society.

The Taoiseach and the Minister for Finance are attempting to adopt the guise of fiscal prudence and responsibility in the run-in to budget 2019. Of course, they and their Fianna Fáil partners took the opposite road when they destroyed our national finances from September 2008 and decimated our key public services. The expenditure benchmark table, on page 18 of the report, shows net fiscal space of only €1.4 billion following the adjustments to the gross fiscal space of €3.9 billion. This, of course, includes provision for a rainy day fund of €500 million. We are also informed that €2.6 billion of the planned budget expenditure of €3.4 billion is already committed to earlier expenditure leaving only €800 million for new measures, given the huge needs of our society. It is incredible that the Minister is considering spending up to €266 million in tax cuts which the ESRI has strongly advised against. Indeed, ESRI, which reported to the Committee on Budgetary Oversight last week, has rightly stated that investment in the new national development plan would be much preferable. However, a striking feature of the summer economic statement report and the Minister's own reflections is that there seems to be no plans to broaden the tax base. The Minister talks about it but there is no action. Such a broadening needs to happen anyway because of the volatility of corporation tax, especially from 2020. Mr. Seamus Coffey of IFAC recently told the Committee on Budgetary Oversight a broadening of the tax base is the only avenue to address our resource and infrastructural deficits and to comply with the EU fiscal rules, if we want to do so. I note officials of the Department are working on whether there will future changes in the commonly agreed methodology, CAM, or other aspects of the expenditure benchmark.

Yesterday also, for example, we heard from Ms Patricia King of the Irish Congress of Trade Unions, who again urged that the 9% VAT hospitality tax rate be scrapped raising an additional €500 million for the Exchequer. The Think-Tank for Action on Social Change, TASC, while urging increased expenditure of €1.1 billion on social housing, called for boosting tax revenue by €1 billion by reducing pension tax relief to the lower rate. TASC also advocated raising nearly €300 million extra by adding a third rate of income tax for incomes above €120,000. Year after year, many of us on these benches - the reports are in the bottom drawer where the former Minister, Deputy Noonan, left them for the Minister - advocated a higher rate on higher incomes, including the incomes of Deputies. At the Committee on Budgetary Oversight, we have also discussed the potential equalisation of diesel and petrol taxes and the significant additional revenue which might be raised by a gradual equalisation of excise on these key fuels but nowhere in the summer economic statement or the Minister's statement are there any references to truly sustainable budgeting by increasing taxation on those who can afford to pay more. I believe the Minister, Deputy Donohoe, will try to sneak back into Government by blathering about prudence and fiscal responsibility along with the Taoiseach when, in fact, his party and Fianna Fáil devastated our sovereign wealth fund and exploded our national debt over the last decade. Of course, Ireland reached its medium-term budgetary objective, MTO, under the fiscal rules in 2017, which is one of the astonishing items in those figures, and is on schedule to meet the MTO again in 2019, and finally, into the future, based on the figures in this report.

Given our strategic investment fund, our bank assets, our share of the Apple tax moneys and the dire needs of our population - many of us would like to see the Minister withdrawing from legal action on the Apple tax matter - I believe it is insulting to the hundreds of thousands of our citizens in grave need of housing or medical treatment to propose a rainy day fund in 2019. At the Committee on Budgetary Oversight, I told the Minister so. In fact, a number of members did. It is raining. In fact, in metaphorical terms, it is pouring for so many of our fellow citizens. It is the wrong time to talk in such terms about a sovereign wealth fund. Indeed, we had a strong sovereign wealth fund but the Minister's party and Fianna Fáil blew it away on us. Of course, some of the decisions the Minister's predecessor, Deputy Noonan, made, even into 2013, ensured that our sovereign wealth fund would still be nobbled well into the future. Additional resources might be used to pay down some national debt but there is no case for borrowing in 2019 to produce a rainy day fund. This proposal seems part of the Taoiseach's hollow efforts to impress EU leaders, who, in reality, often care little about Ireland.

In conclusion, I thank the officials in the Department of Finance who prepared the summer economic statement which, in conjunction with the earlier stability update programme report, gives Deputies and the people we represent good insights into producing a future solid fiscal policy for our nation.

I hope that in the next three months, in the run up to October, the Minister, Deputy Donohoe, and the Taoiseach come forward with a budget that will, as Deputy Pearse Doherty said this morning, address the needs of our nation in housing, health, disability and all the other areas and stop trying to flimflam the nation.

So here we are again. The Minister and the Government have laid before us the economic vision of blessed Paschal, the prudent. Sainthood should be bestowed on him. I believe he has gone to a table quiz tonight. He was not even interested in hearing our contributions.

A table quiz is more important. He sent the Minister of State in, and I mean no disrespect to him. He is a neighbour, colleague and friend-----

He is not at a table quiz.

-----but cá bhfuil St. Paschal?

He is at a budget meeting.

Is he at a budget meeting in the Shelbourne Hotel, or at a journalists' quiz? Is that the budget meeting?

The very first line of this statement states that "economic recovery is now firmly established for the future". Yet this stands in direct contradiction to the paper produced by his Department with respect to the exposures related to Brexit. The findings of the Department of Finance’s economic research paper, Brexit: Analysis of Import Exposures in an EU Context, include how Ireland is a substantial outlier among the EU 27 in terms of its import exposure to the UK, at an aggregate level in almost every sector. It also includes Ireland’s goods import exposures to the UK and they are even more pronounced than its export exposures. Food and live animals account for Ireland’s largest share of UK imports, with machinery and transport equipment, chemicals, manufactured goods, miscellaneous manufacturing articles and mineral fuels also significantly exposed. We have many companies in the west that are excellent designers and builders of equipment, much of which is exported to the UK. This compares with the concentration of export exposures in a smaller number of sectors, in particular food, live animals and chemicals.

Across the EU 27, 13 of the top 15 sub-sectors most exposed to imports from the UK are Irish. The high import exposures highlight the potential disruption to Irish supply chains, particularly for the retail, agrifood and pharma-chem sectors. What particularly struck me about this departmental report was the finding that the issue of supply chain disruption is particularly pronounced for small and medium enterprises, SMEs. We all know how vital they are to our economy, especially in rural Ireland. They may not be in blessed St. Paschal's constituency in Dublin but they certainly are down in Tiobraid Árann, in Cork West and in Roscommon where a Deputy claimed today that no job had been created or announced by St. Leo. We have all the saints in this building at the moment.

The SMEs must be protected and we must deal also with customs and procedures for goods travelling from Great Britain or Northern Ireland. The SME sector represented 93% of the 31,000 firms importing goods to Ireland in 2016, or 62% of €45 billion of the total value of imports. That is massive for a small economy by any scale. Unless the Minister is preparing a significant and robust set of measures to protect SMEs then I genuinely fear we are heading into a deeply damaging economic storm. Does he see it? Is he so blinded by his own figures and spin, as Deputy Broughan and others said? That spin machine must have spread contamination around the other Ministers and the Taoiseach.

The following question remains: how on earth does all that square with the very first line of the Minister's economic statement which reads that our economic recovery is now firmly established for the future? Who is he talking to, where is he looking or who is codding him? Is it the same officials in the Department who advised the late Brian Lenihan? Brian Lenihan, God rest him, advised me to vote for the bank guarantee, something I will regret as long as I have a breath in my body. We were conned by them and by the Europeans. Are we meant to believe them now? Questions have been raised about that and about the judgment of these senior mandarins and senior and junior Ministers.

The Minister with one of his hats on expects us to believe our economy is on solid foundations while with his other hat on he informs us of the extremely precarious situation we may experience in terms of Brexit. We might be able to put questions to our guest tomorrow but will we get answers? The total unknown in respect of Brexit is very scary and the Minister is well aware of that but he makes these kinds of pronouncements about our economy being firmly established. It may be in Dublin but I remind the Minister of State that Dublin is not Ireland and the Minister does not support the Minister of State's constituency of Carlow-Kilkenny or care about it. Indeed, some of the foundations in Dublin are not so sound either. It is all another bubble that could burst at any time.

It is beyond me how he can square those positions but I suppose when one has saintly inspiration, one can do a lot of things. The summer economic statement notes, however, that a notably faster than expected economic recovery has boosted the demand for housing, both public and private. We do not have houses for our people so it is easy to boost it. The private developers in my constituency cannot get planning permission and my colleagues say the same thing.

The statement states that to date the supply response has been insufficient to keep pace with demand with adverse economic and social implications. We know that. Our first priority should be to house our citizens. We were crowing earlier about the American immigration policy but we are incarcerating people in our asylum centres, such as the one in Carrick-on-Suir. We have no problem having homeless pregnant women in Dublin. We should look at our own house first before we tell the United States what to do. One of the greatest understatements ever uttered by a Minister has to be that the supply response has been insufficient to keep pace with demand. What supply response? Where are the houses? Where are the new builds? What about the transformation of vacant sites or lots? Where is this mythical supply that the Minister refers to?

The Government would not even do a basic thing like changing the planning conditions to allow people with vacant shops to convert those shops without planning fees and charges at punitive rates. These simple things are not being done. The Minister is dealing in myths. It is in his head because it most certainly does not exist in the real world. I live in the real world and I represent it, and so does the Minister of State, Deputy Phelan. It is all imaginary and figments of the imagination. I hope the Minister will not be asked too many hard questions at the quiz tonight because he will not be able to answer them. If he added two and four, would he get eight? If he added seven and nine, he might get 12. God help us in those rounds. Maybe he is good at geography but he is certainly not good at maths.

As far as the statement about adverse economic and social implications is concerned, is the Minister referring to the 10,000 homeless, more than 3,000 of whom are children? What about those children considering that we were lecturing about the children in America and what they are doing to them? We will not look after our own children. Mol an óige agus tiocfaidh sí. We just condemn the young here. Is he referring to the catastrophic impact the lack of housing is having on marriages and family breakdown? Is he referring to the bloodthirsty actions of the foreign vulture funds and a court system that seems unwilling and unable to offer adequate protections? We had Ed Honohan in here again today trying to progress his Bill and all he got were rejections. If it is, then why does he not say so instead of hiding behind the bureaucratic language?

I wonder if the Minister took the time to read Social Justice Ireland's analysis of budget 2019. It suggested that the Government should empower local authorities to collect a new site value tax on underdeveloped land, such as abandoned urban centre sites and landbanks of zoned land on the edges of urban areas. This tax should be levied at a rate of €2,000 per hectare, or part thereof, and that is its suggestion and not mine. The objective of the tax should be to encourage landowners to utilise the land they possess and prevent speculation and landbanking. In the context of a shortage of housing stock, building new units is not the entire solution, and we all know that. There remains a large number of empty units across the country. Social Justice Ireland goes on to note that policy should be designed to reduce the number of these units and penalise those who own the units and leave them vacant for more than a six-month period. That is a bit short but they certainly cannot be left that way.

It further proposes that budget 2019 introduces a levy on empty houses of €200 per month, with the revenue from this charge collected and kept by local authorities. Income from both these measures should reduce the Central Fund allocation to local authorities by €75 million per annum.

Social Justice Ireland's analysis goes on to acknowledge the recent report from the ESRI which recommended that, for environmental reasons, Government should equalise the excise duty on petrol and diesel, which is something Deputy Danny Healy-Rae raised today. It proposes a decrease of 6 cent per litre for petrol from 59 cent to 53 cent, and a simultaneous increase of 6 cent per litre for diesel. This would yield a total of €88 million and there are many ways we could be creative. As usual, however, it is highly unlikely that any of these measures will be implemented because the Minister and this Government have, at heart, no real social conscience in terms of the impact on the poorest of the poor, or if they have one, it is on the soles of their shoes. To talk about rainy day funds when there is a storm covering every parish in the country in terms of homelessness is appalling nonsense and I call on the Minister to be a bit more imaginative and courageous in his financial wizardry.

I watched the summer economic statement of the Minister, Deputy Donohoe, with interest yesterday and the soundbites were "prudence" and "realism". We agree that the budgetary process should be both prudent and realistic but when I contrast the priorities outlined in his statement with the Government's approach to a number of pressing issues facing Ireland, talk of prudence rings slightly hollow.

The priority for this budget must be to address the crisis in housing, in the rental sector, homelessness, in mental health services, the waiting lists, people on trolleys and the Government's abysmal performance on climate change. If we are to tackle these issues in a prudent manner, the Government needs to accept reality and change course.

In housing, how prudent is it to continue to outsource social housing to private landlords instead of implementing a significant public housing programme? It will be €23.8 million more expensive than building houses over 30 years, according to research by Maynooth university released last year. Cost-rental housing would be more affordable for our citizens and could be funded off-balance sheet but the Government continues with an expensive, wasteful, ineffective developer-led housing model and that is not prudent.

On the health service or education, how prudent is it to pay for our young people to be trained as nurses, doctors or teachers only for them to emigrate in search of better terms and conditions of work, or for a better quality of life? We then have to spend huge money trying to fill staff positions in the health and education sectors from abroad. That is not prudent. Measures that appear to Government to be prudent in the short term might not be prudent in the long term.

On the question of the long term, there is just one mention of climate change in the summer economic statement document. The Government is looking for plaudits for putting €500 million away for a rainy day when our abysmal performance on emissions reductions and climate change means we will be paying that exact same amount in fines for missing our climate change targets, according to a report from Climate Action Network, released earlier this week. That is not prudent. The Government has given up on our 2020 targets but there has been no acceptance of, or planning for, the fact that we are facing enormous fines for non-compliance. Facing up to this fact is a very necessary part of any economic realism and is the prudent thing to do.

The Minister needs to provide a comprehensive plan as to how he will account for the money for the significant fines we will face for not meeting these targets. In the report from Climate Action Network, Ireland was ranked second worst in Europe at tackling climate change, ahead only of Poland. Everyone is aware that we are failing in climate change and failing terribly so why will the Government not face up to that reality? We are facing annual non-compliance fines of €500 million if we do not change course. What could we do with that €500 million? We could cut all public transport fares in half for all services on Dublin Bus, Bus Éireann and Iarnród Éireann. The money could build one new Luas line every year and we could have a Luas in Galway, Cork and Limerick with three years' worth of climate fines. Some 20,000 homes could be retrofitted every year with €500 million, the western rail corridor could be reopened, or 125,000 hectares of our degraded bogs could be restored or rewetted. Those projects are huge but they illustrate the scale of the fines we face unless the Government changes tack on climate.

I do not doubt the Minister's commitment to prudence and realistic budgeting but perhaps his Government colleagues have not got the message yet. There is an enormous contrast between his statement yesterday and the actions of the Government. If he is preaching prudence, the Government needs to change tack in a range of areas. I hope to see that change of approach as soon as possible.

I welcome the opportunity to speak on the summer economic statement. The document produced by the Minister is absolutely out of touch with reality. It promises more of the same. It balances the books and promises more crises in the health service, a continuation of the emergency in housing and a continuation of the underfunding and under-resourcing in education. It promises to continue the poverty we have in this country. The document is completely at variance with a document that was published just two weeks ago by an organisation with 11,000 volunteers, which took 230,000 calls last year and spent €27 million supporting poor families. The organisation is really in touch with people and with communities and it is really important to put its views on the record. I speak of the Society of St. Vincent de Paul, which works in this area on a daily and hourly basis. Its document said that, with austerity no longer featuring in news bulletins, it is easy to forget that there are still thousands of people who continue to struggle on limited incomes. It is particularly stark that 70,000 more children are growing up in poverty and are missing out on childhood experiences others take for granted than was the case in 2008. It states that, every week, it meets families caught in a poverty trap and struggling to afford the basics. In 2017, one in three of the 130,000 calls to the Society of St. Vincent de Paul for help were related to food poverty. It states:

Our experience shows that when times are tough, food is typically what families cut back. Rising housing costs mean this is increasingly the case.

The 28-page document is called Paving a Pathway out of Poverty and it indicates the various issues the society comes across, such as lack of housing, with 10,000 people homeless, 100,000 families on local authority waiting lists and inadequate income. It states that 102,000 people are working poor, with 50% of lone parents experiencing deprivation. On educational disadvantage, it states that 61% of people struggle with education costs and 520,000 adults have very poor literacy skills. In the area of health, there are 700,000 on waiting lists.

It further states that men in disadvantaged areas will die 4.3 years earlier, that poverty increases the risk of depression by three, that 48% went without heating due to cost, and that one in four experience energy poverty. That is the real Ireland, not the Ireland of the summer economic statement, but the Ireland of ordinary families struggling to make ends meet, of the families on the housing assistance payment, HAP, scheme who are paying rent to the local authority, paying a top-up to the landlord and not having 2 cent to rub together at the end of the day.

This Government is proposing in the summer economic statement to continue the Ireland that is divided between what has been set out in the Society of St. Vincent de Paul's Paving a Pathway out of Poverty and the fact that this country is the fifth wealthiest country in the world, with huge wealth. Its total net financial assets are now €60 billion above peak boom levels. There is a huge amount of money in the country but there is no wealth tax. It is time the very wealthy in this country, and they are hugely wealthy - we are the fifth wealthiest country in the world - pay their fair share of taxation to ensure people who live in poverty, on the poverty line and those who are the working poor and experience the crisis in housing and health have a reasonable living in this country.

I call Deputy Bailey and I understand she is sharing her time with Deputy Durkan.

Yes. I wish to share time with Deputy Durkan. The indicators we use to measure our economic growth such as GDP or GNI* are going in the right direction. Crucially, there are more people at work today than ever before. An additional 62,100 jobs have been created this year alone and while full employment has yet to be achieved, we are well on the way to reaching our target. Fine Gael is committed to ensuring the jobs created this year and those that will be created next year will offer job security.

The greatest casualty of the crash was the people. The damage of that crash is still felt the length and breadth of our island. I never want our country but, most importantly, the future of the next generation to become a casualty of the previous bad politics we saw in this House. The Minister is clear that the next budget will not be a giveaway budget. We will not be putting the fate of our country at risk for auction politics or political gain.

The economic growth we are experiencing, while very much welcomed, has caused some positive issues with respect to our infrastructure, which is not at a rate that can keep up with our economic growth. That is as a result of underinvestment of previous Governments where spending was focused on receiving votes rather than what was in the best interest of a sustainable economy and improving living standards.

Housing and planning is an area on which I am focused and about which I am passionate, but housing cannot be looked at in isolation. We all need to plan for the future of our country. The lack of infrastructure is a contributing factor to our current housing crisis.

The Government has developed Ireland 2040 to ensure the lack of infrastructure is addressed now but also to safeguard infrastructure development into the future and create the environment where opportunity, growth and inclusive communities can flourish. Ireland 2040 is the first national development plan to be put on a statutory footing, giving it the certainty and financial package it justly deserves. Budget 2019 will see the first allocation of funding under Ireland 2040 of €1.5 billion in capital expenditure which has been committed. Ireland 2040 will build on the foundations Rebuilding Ireland has generated; it builds on a recovered residential construction industry that collapsed by 90% during the bust. The Government is committed to addressing the housing crisis. We all have a responsibility as legislators to safeguard the future of our people and to protect the most vulnerable in society.

Since 2016 between current and capital spending housing has received an increase in funding of 125%, from just over €800 million to €1.8 billion. Budget 2018 provided €1.06 billion in Exchequer funds for new builds and acquisitions. That represents a 145% increase of capital spending on housing since 2016. I welcome those figures and all indicators that are moving in the right direction. I heard previous speakers say we are in danger of overheating the economy or the construction sector. I remind people that at the height of the boom our GDP with respect to construction was over 20%, well into the mid-20s in percentage terms; it is currently 7% to 8% and it is not expected to go above 9% next year.

I would like to address some of the criticisms of the Government which are unwarranted as the alternative suggestions and policies coming forward have not been tested or thought through. The Government will miss its medium-term objectives due to technical reasons and the positive rate of growth in the economy, but it must also be recognised that the total corporation tax intake represents 16.5% of GDP. We are determined to hit that target next year to ensure we avoid the mistakes of previous Governments.

An insurance policy against future downturns in the economy is badly needed. The rainy day fund is that insurance policy. There will be an initial €1.5 billion investment and subsequent €500 million investments for the next three years at least. The rainy day fund would be used in the event of a downturn to ensure we can continue to build infrastructure, to prevent a future shortfall and to offset some of the adverse weather conditions that might come our way. Representatives from the ESRI said at a meeting of the Committee on Budgetary Oversight last week that if we had had a rainy day fund in 2008 to 2009 we could have used it to continue to build social housing which would have both prevented the collapse somewhat of the construction industry and have alleviated some of the challenges we face today in our deficit in social housing building from 2008 onwards. I find it bizarre that Members are opposed to the creation of the rainy day fund, a measure that could be used to ease the effects of a possible downturn and prevent the level of harsh cuts of the past.

Calls for us both to borrow and spend today are unhelpful. The Government is borrowing a small amount to invest in infrastructure. In essence, we are borrowing to invest in our future. We are not in the business of borrowing for electoral promises today, which would be a mistake. We cannot afford to repeat the mistakes of the past.

Fine Gael has historically been elected to government to fix a broken country. Today we have fixed a broken economy. The recovery is structurally under way and more still has to be done. With the looming threat of Brexit and perhaps of an election, we will not go down the historical path of a giveaway budget for political gain. In fact, we will go down the road less travelled and put our country, not our party, first.

I thank my colleague for sharing time with me. The red light on the microphone has just come on; it is a bit reluctant but it is working. I compliment the Minister and the Government on their economic policy so far. It has been spectacularly successful. That does not mean there are not issues such as the housing issue, which is a major one. I accept fully the point some Members made that it is unacceptable that a great number of people are homeless, technically or otherwise. I do not accept the notion, which is spread by somebody every so often, that people will not take houses. We deal with these people on a daily basis. I can assure Members that whenever they get an opportunity of a house, in any shape or form, they will take it. The possibility of remaining homeless when there is something on offer is not an issue.

Deputy Catherine Martin referred to climate change. She was right in saying we need to do more about climate change with respect to striving towards self-sufficiency, reducing our imports, contributing to the environment and avoiding the payment of fines. However, there is also a danger it seems of a tendency that we should go on a splurge, as mentioned by a number of Members.

Deputy Seamus Healy is a nice guy, and I am very fond of him, but I can assure the House he is wrong in his calculations and the preparation of those calculations is totally wrong. We should recall that before the bubble burst it was claimed Ireland was one of the wealthiest countries in the world, but that was wrong. Part of that claim was generated by the huge cost of property and houses throughout the country, which was multiples of what they cost elsewhere. It gave us a totally false impression of the factual position in the country.

(Interruptions).

Deputy Healy had his say and I did not interrupt him.

I was only trying to compliment him-----

The Deputy-----

-----but he obviously does not accept compliments.

Deputy Paul Murphy admitted previously in the House that he was in favour of total unemployment. That is the reverse of Government policy. For the first time in the history of the State we have achieved employment of more than two million people. I remember in the 1980s it was a struggle to get employment past 1 million. The people of the State who made the sacrifices during the down times, and the Government, should take a bow. They have done a great job. It was a difficult job, in difficult circumstances and for which they got little support and recognition in pursuing the reference at that time. During the darkest days of the downturn, when Ministers were going abroad and trying to generate enthusiasm for this economy, there was little solace for them. Everybody was able to point them out personally and demonise them for allowing the country to go down the tubes. The country had been well and truly down the tubes for several years prior to that.

Perhaps the Acting Chairman remembers the reference that was made to the soft landings in previous commentary. An airline pilot would not have had problems with the soft landings that were promised during that period. All Members on the opposite side of the House were full of enthusiasm for the soft landings, but we had a major crash landing. The Minister at the time, the late Brian Lenihan, put words to it in the House when he said that the economy came to a juddering halt. It was appalling that it happened, and I do not blame anybody for that, but it happened on the watch of numerous people, including economists who had spread the word of Keynesianism daily. That entails the spending of money when one is broke. I always apologise to economists when I mention this, but I do not know anybody who will give a country money to spend when it is broke. It has never happened anywhere in the world, and I was amazed by it. It did not work anyway.

Prudence is important but it is dull in comparison with a splurge. Anyone who goes to the races will know what a splurge is about. If a person has a few bob in the pocket, he or she tends to let it fly, and when it is all gone, unfortunately, the person can be prudent then. It is important, however, to be prudent beforehand and to spend carefully and wisely. It is because of prudence that Ireland is where it is now. It was tough, it is hard going, and it will be tough for some time into the future. A sobering thought for everybody is that while we have achieved great results, we still have a massive national debt of more than €200 billion, with a service cost of €5 billion or €6 billion every year. All the pseudo-economists from whom we hear from time to time should ponder on that point. They should ask themselves if they would lend to somebody who had a massive debt. Admittedly, we are close to 1.5% of GDP currently, but it must be taken into consideration when lending to anybody who is in difficulty. I strongly urge Members to consider this.

Between 2011 and 2012 almost 500,000 people were unemployed in Ireland. The figure has reduced dramatically. However, the population has increased as has the number of people in employment. That was not easy to achieve and it was not without effort. It was not an accident; it was due to the huge efforts put in by the Government, by the Minister and by the Irish people. I pay tribute to the Labour Party Ministers who played a part in that in difficult circumstance and who were ridiculed for it. As a result of their efforts and the efforts of the previous Government, we have almost full employment, as opposed to full unemployment, and some structure to our books that had not been pursued in the past. As a result, we have a better future for our people.

I welcome the opportunity to respond to the Minister's summer economic statement, which sets in train the process of delivering a budget later this year. It is the third budget of this Government's tenure. Many people had said that it would hardly deliver one. There is, however, a value associated with economic and social stability. This can only be guided by stable governance. We value this stability dearly but it may not be suitable for some political parties. It certainly did not meet with universal support among our own supporters, and nor does it still. We do, however, place great value in stable governance.

We have had two budgets and while not spectacular, they have been progressive. There have been increases in pensions, working age payments and the National Treatment Purchase Fund. There has been a reduction in the pupil-teacher ratio and additional funding for higher education and apprenticeships, and increases in personal assistants, home help and home care packages. It has not been as extensive as one would have wished, but it is progress nonetheless. The economy has the ability to grow and to be an obvious facet for the advancement of business and day-to-day living.

The Minister, Deputy Michael McGrath and others referred to the advices of IFAC. We may not be bound by history, but we must learn from it. We have to place great store in the advice that emanates from the council when it comments on the general Government deficit and the structural deficit. Those advices must be acknowledged, appraised and adjudicated on. We accept them and we note, for example, that the medium-term objective for this year is not as envisaged. That curtails the Government's ability to spend the additional €900 million that is available. This spend, in addition to the provision of the rainy day fund puts the general deficit at 0.6% and a structural deficit at 0.9%. These are the facts and the realities. Deputy Pearse Doherty failed to take into account the additional €500 million on top of the €900 million, which would bring it to 0.6%. These are the fiscal rules and these are what the people voted for. The people asked that we be bound by these rules and, therefore, we must be responsible in adhering to them.

The economy is perceived to be doing reasonably well with 4% or 5% growth, but we still have a deficit. If this is the case, then one must be cognisant of the concentration of our receipts, the impacts of a hard or cruel Brexit, Trump's policies and their effect on Ireland's economy and the pressures being placed on corporate taxation. We must analyse and note what the Minister said in the context of the 2019 budget and not necessarily in the context of the next five or ten years. It is a transparent process, which provides for pre-budget submissions by various interested parties, either to the Government or to the all-party committees. The submissions bring focus and attention to the reality of what is and is not available for the budget, rather than interested parties and others playing to their own audiences.

Let us consider the €3.4 billion package put before the House by the Minister, notwithstanding the €500 million rainy day fund. A sum of €1.5 billion is committed to the national development plan, €400 million to national demographics, primarily associated with health and education, €400 million to public pay, with a €300 million carry-over from year to year, which amounts to €2.6 billion.

It is not fair, right or appropriate that we brush over this by saying that the commitments in the national development plan account for €1.5 billion without quantifying how that will affect the economy in the forthcoming year. When it was launched, there was considerable fanfare for and advertisement of the plan, Project Ireland 2040 or whatever it is called. That fanfare is ongoing in respect of, for example, a couple of hospitals in Cork, the Luas, the underground and other transport infrastructural gains that will accrue in Dublin and other parts of the country but it is incumbent on the Government to lay out in great detail where the €1.5 billion will be spent in the forthcoming year. As we are debating a budget package, we cannot brush this question aside. The people - those whom we represent among the general public, those in business and so on - need to know exactly how much is being spent, where it is being spent and what impact it will have, not only on the economy but also on the regions where infrastructural gains will accrue.

That leaves €800 million. I assume that the pension anomaly identified last year is accounted for in current expenditure and will not impinge upon the €800 million. The €200 million that was committed to consultants recently was the result of the High Court's adjudication on a contractual obligation on the State that was signed prior to the FEMPI legislation. As an historical obligation, it should not impinge on the €800 million.

Leaving those matters aside, we believe the next call on this funding should be pay equality for new entrants to the public service. We are glad to see the Government and unions have finally sat down together to conclude a deal on this issue. Whether that will be over one, two or three years remains to be seen but we support the process and encourage agreement between the parties and accommodation for it in this budget package. This is apart from the Public Service Pay Commission, to whose recommendations on resolving recruitment and retention difficulties in the Air Corps, healthcare - nurses, consultants, GPs throughout the regions etc. - and many other areas the Government is obliged to respond.

Thereafter lies the potential for this budget to focus on addressing the areas in which there has been little or no success under the two progressive budgets, specifically the issues of housing and health. There was much talk about what would be achieved by Sinn Féin tabling a motion of no confidence in the Minister for Housing, Planning and Local Government. Motions do not build houses, but a housing-centric budget might just do it. State funding for the provision of social and affordable housing has increased but has failed to deliver. It is more about how the funding is spent and the methods used to achieve the rewards being sought.

For the Government, the issue is that the means and methods through which it seeks to provide those units are not working and must be addressed.

Despite the commitments to and stated improvements in funding for the health service, the failure has lain in addressing the difficulties with the waiting lists. These may well relate to our difficulties in recruitment and retention, which is the excuse given where the assessment of children with special needs and the availability of GPs throughout the country are concerned.

These are the two central issues of which one must be mindful. If we acknowledge - we all seem to - that there is a housing emergency, it must be the focus of this budget and funds must be made available to improve the situation. However, we cannot ensure that happens if we are also trying to realise the demands placed on some Deputies by the promises on taxation and other concerns that we would all like to see addressed were it not for budgetary rules and regulations and the question of how the budget is packaged.

We must also be mindful of the fact that, although the economy appears to be going well and growing at a rate of between 4% and 5%, we still have a deficit. Any increase in expenditure would fail to recognise the rules to which we and our people committed under the fiscal treaty, and the threat from external factors remains too great to take that risk.

The two previous budgets, though progressive, were not spectacular. Modest gains were made in certain areas because of our commitment to them. Fianna Fáil values stability. It might not be the political thing to do, but it is the right thing to do. Ultimately, people will see that for what it is, how it was meant and the good faith into which it was entered. Having assessed the two budgets and identified where opportunities exist, we have a chance at this juncture to address those issues where there have been abject failures. That remains our commitment and is central to our negotiations in order that we can represent and give value to the votes that were cast in our party's favour. We will do that in good faith.

Politics is about choice. At certain moments, these choices can be limited by the circumstances in which we find ourselves. At other times, the freedom to choose is clear. We are at such a juncture, given the upcoming budget. The Minister for Finance tells us that the public finances have been stabilised, we are the fastest-growing economy in the EU and our economy has recovered from the catastrophe that was wrought upon it by the reckless mismanagement of Fianna Fáil. However, that recovery was shouldered by the weakest and most vulnerable in our society, by those struggling to get by and by working families that pay their bills and are left with little, if anything, afterwards. The Government is now proposing that the very recovery won by these people will not be enjoyed by them. In fact, it is proposing that the recovery will be enjoyed by a minority.

Questions need to be asked. At a time when our economy grows, why do we live in a society where homelessness is becoming a fact of life? Why does our housing market continue to fail families and young couples? Why does it continue to force children to spend their childhood years living in hotel rooms? As the economy grows, why does our health service continue to fail our women, our elderly and our communities? Why do we continue to lag behind our EU partners in infrastructural investment, failing to pave the roads that will lead to the dynamic indigenous economy of the future? As the economy grows, why are we failing to address a lost decade of investment?

The Government wants us to believe that we cannot address these crises because we need to be prudent but questions must be answered in the coming months. For us, the answers are stark and clear. We can address the crises by broadening our tax base and pivoting our economy away from an over-reliance on corporation tax receipts. Answers can be found in investing in social and affordable housing, banishing the scourge of homelessness from our society and addressing the threat that housing undersupply poses to our economy. They can be found in investing in our infrastructure to address the lost decade of underinvestment, which has seen our capital stock fall far below the levels of the EU and other advanced economies. Answers can be found in investing in infrastructure and broadband, bringing our public capital stock levels from among the lowest in the EU to the highest and connecting our communities. Answers can be found in investing in childcare to ease the unsustainable burden that is placed on young families and deters women from entering the workforce.

That is the vista that lies before us and the choice that we have to make.

We in Sinn Féin choose to seize the opportunity and invest in our economy. We choose to bring a recovery to everyone and to build a sustainable future in the present. We believe it can be achieved by adhering to the fiscal rules. It can be achieved without the reckless policies of the past which were propagated by Fianna Fáil and which this Government proposes to continue. It can be achieved within those fiscal rules and without pursuing unsustainable trends in expenditure. The fiscal rules were designed to prevent the boom and bust policies and practices of the past. In these circumstances, Fine Gael has made its choice and Fianna Fáil has followed suit. Fine Gael, with the support of Fianna Fáil, has chosen to deprive the economy, the public and the very citizens who helped to rebuild this economy of the available €1.4 billion investment which can and should be included as part of the fiscal rules. They are attempting to rewrite the rules which they have preached to us about for the last number of years and to convince the public that it is necessary to under-invest and it is normal to have crisis after crisis. It falls upon us, in the real Opposition, to set the record straight.

Fine Gael will claim that spending the money available to the public purse, under the fiscal rules, is both reckless and irresponsible. It will claim it will lead to an increased Government deficit and a structural deficit. It will claim that such deficits are dangerous. Fine Gael will not tell the public that last year, in 2017, it created a deficit of 0.3%. It is not telling the public tonight that this year we will have a structural deficit of 0.6% and we will fail to reach the medium-term budgetary objective which the Minister of State is now declaring as the panacea for all our social ills.

The Government is also telling us that to solve our housing crisis and fix our broken health system would lead to economic ruin. That is a dangerous untruth. It is an untruth which ensures that the crises in housing and health remain permanent features of our society. Fianna Fáil has bought into this untruth. The Government now plans to sell that to the public over the coming months but the public will not be fooled. Fianna Fáil had a choice today about what side to stand on and it has decided to stand on the side of the Government which, in our opinion, is the wrong side. In doing so, Fianna Fáil has rendered itself unfit to solve this crisis.

There has been much talk of the rainy day fund. The Government is failing to tell people that to release funds from the rainy day fund outside the expenditure benchmark would require a change to the fiscal rules. We have had no indication from the Government that it is willing to even negotiate any change in the fiscal rules to allow the money it is now proposing to put into a rainy day fund to be spent in a time of economic downturn.

I welcome the opportunity to speak on the summer economic statement. I welcome the radical change in the budgetary process that has been brought about by Fine Gael. It is good to see that we have moved away from a disconnected annual event where we have seen a rabbit pulled out of the hat and policies being announced on the day without being stress-tested robustly. Fine Gael has adopted a different approach as recommended by the Organisation for Economic Co-operation and Development, OECD. If one looks at the process for the budget, there are spring and summer economic statements which set out the parameters of the budget, the Irish Fiscal Advisory Council, which is an independent commentator on Ireland's fiscal position, the National Economic Dialogue, which engages in debate with sectoral interests, and the Committee on Budgetary Oversight. These are key safeguards that bring the budget to a more holistic approach where people can have their views and engage with the Minister, and key actors of the State can be brought in and have their views heard.

I also welcome, with regard to the process that the Minister is embarking on, the establishment of the rainy day fund which will mitigate the harshness of future shocks to our economy. It is important that we have money to put into the economy at a time when some part of the economy falls or contracts. If one looks at the last years, when we hit the financial crisis of 2008, we had broken the golden rule and we were borrowing for current expenditure. We had huge debt levels and we had no money to inject into the economy. If we establish this rainy day fund, that will be a key tool to invest money into the economy. If we reduce our debt, it will leave us less vulnerable to the markets.

In 2008, some 3.8% of all revenue was used to service the national debt. Now the debt is around €206 billion. It is €40,000 for every man, woman and child and around 15% of all taxation income is used to service it. That is a key place where the Irish economy is exposed and the Government has to be careful with it. We are now in the 23rd consecutive quarter of employment expansion in this country. The labour force is now at a record level of 2.24 million. We are trying to get to a position by 2021 where 10% of all revenue will be going into capital projects, which is well above the EU average. We have a lost decade to make up for. There was a huge problem with the lack of investment in our infrastructure and it is critical that we do that.

I welcome that the Minister has put on record that he will not adopt spending or taxation measures that would result in a deficit larger than 0.1%. This is important for the economy because we need to ensure that we mitigate any risks at that level. When we look back, our economy at one stage in 2011 had a deficit of €22 billion. We were spending 50% more than we were taking in but we have turned a huge corner in that regard. Much has been made of our corporation tax receipts and Ireland being labelled as a tax haven. I am not aware of what metric people use to determine that. They seem to pick various different reports, yet the OECD ranks Ireland as the most transparent country for corporate taxation policy and exchange of information therein.

I noted comments made by the chairman of the Revenue Commissioners in a recent article in The Sunday Business Post about the top ten companies that pay 39% of our corporation tax. He made a key point, that the key characters that make up that top ten change year-on-year. In 2013, the top ten took in 36% of our tax take and in 2017, that same top ten were under 25%. It is clear that companies travel in and out of that top ten, which gives some level of hope that it will not collapse. It is important that we monitor that because that is a key risk for our economy and we have to ensure that it is managed appropriately. It is important that the double Irish was ended with the measures taken by this Government to tackle tax evasion, where from January 2015, all companies incorporated in Ireland are now tax resident. The key thing about this country is that when it is noticed or becomes clear that there is an issue with our tax code, it acts promptly. People need to be very careful when throwing loose terminology or loose comments around relating to Ireland's standing internationally. They are putting our country's reputation in jeopardy. As the saying goes, if one gets a name for getting up early in the morning, one can stay in bed all day.

I welcome the opportunity to speak. When one looks at the summer economic statement, one would think that everything was rosy in the garden, with the figures that are involved, especially for the next budget. One would imagine it would solve many problems. When one drills down into it and looks at the Ireland of today, we still have a major problem in our health system. I am not just saying that one should keep throwing money at something but that we have a major problem with infrastructure and our health system.

We also have more than 700,000 people on waiting lists. We have a housing problem that is getting worse. One of the first things I highlighted when the programme for Government was being put together was the need for institutes of technology, ITs, as well as universities, to be able to borrow money. That is important given the significant opportunity for accommodation to be built in various ITs around the country that would help the colleges and students and would also help to alleviate pressure in many areas, but especially in cities around the country. Unfortunately, two years later ITs are not in a situation where they can borrow money and the issue must be addressed as a matter of urgency.

Because of what those involved in the banks did, we are still burning €3 billion every year. It would help a lot if the EU were a bit more lenient towards us. This country needs to restructure its debt. We have debt of approximately €204 billion and we need to restructure it at lower rates on a long-term basis. I would structure it on a different scenario from the way it is done at present because it would give us space and money that we could use.

There is no denying there are more people at work. The statistics tell us that. The big question is whether they are earning bigger wages. Many people are barely surviving. No reference has been made in the debate thus far to the agricultural community. Once one goes outside Dublin and the larger cities, there is a major reliance on agriculture. The Minister for Agriculture, Food and the Marine needs to hammer on the table to ensure we get a payment of €200 per suckler cow because I expect that when the statistics come out in the next few months, we will have lost a massive amount of the suckler herd. I predicted that last Christmas but it was denied. One might ask what difference it makes. It affects exports in terms of weanlings and there will be a knock-on effect in terms of jobs in the haulage sector and the sale of meal in small shops. We must make sure we ring-fence such a provision.

There are ups in the economy. I am not here to hammer the Government. It is acknowledged by everyone that rural areas need a lot of infrastructure. I attended a meeting today of the Joint Committee on Rural and Community Development, which heard a presentation by Anne Graham. People talk about the new green, clean economy but each new bus bought from next year on will cost 25% more if it is an electric or diesel vehicle, so for every ten buses we buy today we will only be able to buy eight from the same purse. Those are the things that will come back to bite us.

I fear that at the end of 2019 or 2020 a lot of pressure will come on this country to change the corporation tax rate. We must stand up to it. People might say companies get away with this, that and the other but they should look at the statistics on the amount of tax that is taken in. If we get screwed by Europe on this, we will end up with a lot less money to spend. There is a significant infrastructural deficit in the west and the south in terms of roads, buses and rail. The amount of money required to deal with that is massive.

While I agree with the approach of always putting a few quid under the mattress for a rainy day, I do not think we are at the stage yet where we are fit to do that, given the number of people, including children, who are homeless, the amount of housing that is needed, and when people are waiting for a hospital appointment - everyone knows somebody in that situation - or in an accident and emergency unit that needs to be refurbished. They are the things we need to prioritise.

I wish to share time with Deputy Ferris.

Is that agreed? Agreed.

The sum of €1.4 billion is more than €500 million greater than what will be spent on mental health in the State in 2018, according to the Government, if we can trust that figure, which is questionable. The sum of €1.4 billion could help to do a lot of additional things for mental health this year. It could easily ensure that no mental health beds that are needed are closed, especially in the child and adolescent mental health service, CAMHS. It could easily pay for additional counselling hours for people at primary care level, which would take the pressure off other services. It could help to build a model of perinatal mental health screening and support and open a maternal mental health unit. It could ensure that some staff members in the mental health services are encouraged to stay in Ireland and work in our services without fear of not being able to afford to pay for accommodation or transport or many other things which now are beyond the wage they make. It could fund the establishment of new early intervention programmes, new Jigsaw centres and new CAMHS teams. It could entice the staff needed to fill the vacancies in these services to stay. It could fund a national 24-7 crisis hotline for mental health, with access to trained counsellors and a referral system. It could make some serious progress on delivery of a seven-day week service that is needed as the long-overdue first step in a 24-7 crisis intervention service. It could establish additional crisis houses for people in immediate need of acute supported care in a safe environment. It could pay for respite for families that are at breaking point. The Minister might not currently see this as an investment but it is the best kind of an investment one can make, namely, one in the people of the country and in their well-being and in doing that, it is an investment in all our future. The short-term dividend would be that the people of this nation might actually believe the Government gives a damn about them. I will finish with a quote from a famous Corkman who once said, fail to prepare, prepare to fail.

We will talk to the Corkman on Saturday night. There is much talk about the rainy day fund. Fianna Fáil and Fine Gael are on the same page but we have a different view. Our view is that because of the terrible recession and the mismanagement of the country by successive Governments, there is a need to look after those most in need.

We are told we have an education system that is free but the reality is that the cost of educating children is increasing year on year. That is due in the main to the fact that currently the capitation grants awarded to schools do not even cover the day-to-day running costs. Primary schools have seen cuts of nearly €110 million and each year hard-pressed parents are forking out more than €46 million just to keep their local schools ticking over. That is some indictment of the State.

This is taxation by stealth and it is no longer sustainable. These children are expected to meet our future demands in an ever-changing workforce. We can no longer encumber their parents with such fundraising demands where, according to a recent Grant Thornton report, the capitation grant now covers an average of only 52% of the running cost of a school. We are also spending less per primary pupil than the EU or OECD average. I demand that the Government must tackle this area in the forthcoming budget. The capitation grant should be restored to the pre-2011 figure of €200 and that should be the beginning of a phased programme of increases to match the actual running costs of schools.

Grants for special classes should be increased pro rata. Currently, on average, primary schools are being asked to run their schools with 92 cent for each pupil per day. The minor works grant, which is vitally important, should be paid every year as a non-discretionary payment. Principals and boards of management should not be spending their valuable time implementing new fundraising ideas just to run their schools. Parents have no problem fundraising for extracurricular activities but should not be expected to fork out hundreds of euro each year just to keep the school solvent.

Many parents are embarrassed on being presented with donation envelopes on a monthly basis that they cannot afford. All children should be treated equally and must have the same opportunity to have a proper, free education. I do not think there is a rural school or parish in this country that is not fundraising several times a year or, in some cases, on a monthly basis in order to keep the school running. It is an awful indictment of this Government, supported by Fianna Fáil, that it has allowed this to happen. The rainy day fund should be used to benefit our young people, our elderly and those most in need and it is up to the Government to that.

I am grateful for the opportunity to speak on the summer economic statement. Here we are again, as Deputy Mattie McGrath said. I am looking at the Minister's statement which refers to jobs and the low unemployment rate but behind the spin, the reality is that people are being forced to work for low wages. More are forced out to Turas Nua to doctor the figures. A recent report indicated that 60,000 people were engaged with Turas Nua over the last 12 months but 40,000 of them will be back on welfare again. All we are doing here is doctoring figures and rolling out loads of spin.

We need to consider those couples who have been forced out to work for low wages. This is where we should be focusing our budgets. These couples do not have enough income to get bank loans but are earning too much to get council loans. We kept calling for a solution to this and eventually we got it in the form of a mighty announcement about a new loan scheme for those who are caught in these traps, the Rebuilding Ireland home loan. However, we have found out that most of those whom we advised to apply were codded by this Government. Over 50% of applicants have been mysteriously refused, leaving more and more to seek social housing. So many young couples are caught in a vicious trap and this Government has failed to get them out of it. The same Government dishes out spin on a daily basis about how well it is doing by the young couples of Ireland. I urge the Minister for Finance to come to my constituency clinics at weekends to see reality on the ground in west Cork.

The Minister said that he plans to run a very small deficit next year because of the political choices the Government has made in Project Ireland 2040 and the National Development Plan. The people of west Cork went through that plan with a fine toothcomb and found not one idea about west Cork therein. It looks like the people of west Cork will have to put the country first and once again west Cork will be coming in second place. The Minister said that there will be a steady and sustainable improvement in living standards but this is complete nonsense. Families are struggling and when they have paid all of their weekly bills, they have nothing left. They have no rainy day funds nor do they have a caring Government that understands the difficulties they experience.

What about the way the State has treated women? It has refused to give those women who stayed at home to rear their families and run their homes a proper pension. Where is care for women, as this State turns its back on these hard working women, budget after budget? How can the Government claim that things are going well in the country when it has failed to provide pay equalisation for new entrant teachers and health workers, leading many of them to leave our country in search of the respect they deserve? Extra funding for education needs further scrutiny because there has been no improvement in the capitation grant for years. How can this Government tell us that our economy is improving when we had farmers on their knees earlier this year because of a major fodder crisis and nothing was done for weeks, despite the outcry from Deputies across this House, until it was too late for many? The Government is telling us now that it will make sure that these farmers, as well as fishermen, will have access to low-interest loans. However, applicants for such loans cannot have any borrowings. Any productive farmer or fisherman will have borrowings already and therefore will not qualify for these new loans. They are being codded with yet more super announcements leading to nothing.

This Government needs to invest properly in health. It needs to open 24-hour accident and emergency units in Bantry and Mallow to alleviate the pressure on Cork University Hospital. There are over 700,000 on waiting lists which is an astonishing figure but this Government has done little to change that. The lack of spending on home help services has left so many elderly people with little or no home-based support. What does the Government intend to do about this? It intends to publish a report, which has yet to happen. The same is true of the so-called fair deal scheme. That scheme is the most unfair deal ever and has robbed elderly hardworking men and women of their savings. Shame on any Government that would do that to the people who built this country.

The Government must reduce the excise duty on fuel and give some money back to the people. We are being robbed daily at the pump with the excise duty that the Government has added onto the price of fuel.

We spoke to IT students earlier today who need access to proper accommodation but nothing is being done for them.

If we have money to spend, which we have been led to believe is the case, then we must start spending it on the people who deserve it. I urge the Minister to speak to his fellow Ministers and make sure that happens for the people.

I am grateful for the opportunity to speak in this very important debate and will begin by speaking about health. We have five Ministers and Ministers of State in the Department of Health and we have a Government but we do not have a health service that is fair to sick and vulnerable people who need care. As was mentioned already, mental health services and treatment for people with depression and other mental health problems are practically non-existent in Kerry. If such people are unwell on a Friday evening, all they can do is ring SouthDoc or go to the accident and emergency department in University Hospital Kerry, which is already overcrowded. Proper assistance is not being given to people who present with mental health problems and so many are committing suicide. It is such a shame because a life is a life and these people are not getting the attention they deserve. What the Government is proposing with regard to congregated settings is not right because one size does not fit all. We have been asking that the policy in that regard be reviewed and an assessment be done on those who have been moved out from congregated settings to see how they are doing. We have asked for a report on that but nothing has been forthcoming.

On housing, I have said many times that if the Government does not have the money it claims to have it should just come out and say so. I believe that the Government does not have the funding it claims to have for housing. Ten rural cottages will be built in Kerry between 2016 and 2021. People are providing their own sites but there are 37 more people looking for rural cottages. Why does the Government not just give them the money? The Government said three years ago that it was giving €62.5 million to Kerry for housing but that money has not been spent.

IBEC has said, with regard to roads and infrastructure, that Ireland has the lowest amount of capital projects in Europe. I know of one project that must be progressed but which only received €25,000 this year, namely the Killarney bypass. The town is choked with traffic.

Approximately 18,600 people travel on the existing bypass every day, which is not fit for purpose. The Government is talking about the climate change effort. It is going to spend money. It is going to tax farmers and people on the road with more carbon tax, even though they are paying enough for petrol and diesel at the pumps at present. It is blaming people who cut turf for climate change. The rumour now is that the Government is going to sacrifice farmers and get them to reduce cow numbers, even though we know they are only barely existing and have to increase their numbers to survive economically and stay on their farms.

We cannot believe what the Government is coming back with from Europe to deal with the challenges of Brexit. Before Christmas, the Taoiseach and the Tánaiste said they had it all sorted and there was going to be a soft border. Now we do not know. There are different viewpoints from across the water every day. I hope the Government asks the UK to have another referendum. That is what should happen. I was the first person to ask for that when the UK decided in the initial referendum to leave the EU.

Project 2040 does not give much hope to County Kerry. It is hardly mentioned in the plan at all. The only way in which it will have an effect is that people looking to build one-off houses for themselves will be told they can get planning permission if it does not detract from an urban town or city.

On education, we had a group representing students here today and its members stated that college students are having fierce difficulty sourcing accommodation. They asked for purpose-built accommodation to be provided for students in the cities where colleges are based. Primary schools are under fierce pressure to continue. It is not right that parents and teachers have to raise funds to keep schools going. It is no different from what happened years ago when each child had to bring a sod of turf to school to keep the fire going.

I ask the Deputy to conclude.

The Government has promised that it will do something about women's pensions in the budget and I hope it does. I could talk for another hour about the many important issues that arise in this context.

The Deputy can do so on another occasion.

I only have five minutes. Other Deputies must have taken some of my time.

The Deputy stretched it to six minutes.

The summer economic statement clearly sets out the Government’s determination to ensure our budgetary strategy is based on steady increases in public expenditure underpinned by stable and predictable tax revenue. Rather than a feast-or-famine approach to funding public services, we are committed to providing incremental and sustainable improvements that serve our people. This has not always been the approach taken to expenditure and fiscal policy. Over the past 20 years, average gross voted expenditure on public services increased in line with economic growth. This period was characterised by significant expenditure growth up to 2008 which, ultimately, proved unsustainable and was followed by significant expenditure reductions from 2009 to 2014. The scale of the increases in the pre-crisis period necessitated the scale of the reductions later on. This pattern of unsustainable growth funded by high levels of economic and tax growth, followed by significant expenditure reductions, had an impact on the delivery of services and made long-term planning for expenditure on services and infrastructure difficult for Departments. While protecting the most vulnerable people in our society was a priority in the crisis years, it cannot be denied that the scale of the crisis resulted in hardship for many citizens. The goal of our expenditure policy now, therefore, must be to strive to avoid a return to expenditure shocks in the future. If we are to do this, the increases in expenditure that are provided for in the short term must be sustainable in the long term. Growth in public expenditure has been considerably more modest in more recent years. There has been a key focus on ensuring there are ongoing sustainable improvements in public services and infrastructure. This policy is aimed at ensuring the core functions of the State are sufficiently funded and sustainable improvements to public services are delivered. It also means that Departments can plan for long-term developments in public services and infrastructure. The development and maintenance of high-quality public infrastructure is at the forefront of budgetary policy. There is an increased focus on capital expenditure, particularly through the NDP, which seeks to reform how we plan and deliver capital investment in Ireland. This ambitious strategic plan signals a shift towards greater integration of regional investment plans, stronger co-ordination of sectoral strategies and a more rigorous selection and appraisal process for projects.

Reforming how we provide services has been an important element of the recovery. The fiscal consolidation of the crisis period was accompanied by a programme of public service reform to maintain public service delivery in the face of necessary reductions in staff numbers at a time when demand for public services was increasing. Although we are no longer in that difficult position, the reform of the public service remains a key priority for the Government. The first public service reform plan, which was in place from 2011 to 2013, was primarily driven by the need for fiscal adjustment and had a focus on efficiency and cost containment. The following iteration, which was in place from 2014 to 2016, maintained a focus on efficiency and had an overarching objective of delivering better outcomes for stakeholders. The current framework, Our Public Service 2020, was launched in 2017 and aims to build on the achievements of its predecessors while setting a path for reform beyond 2020. It focuses on supporting sustainable, continuous progress to build a stronger public service and deliver better quality public services to the people of Ireland. I am proud that the framework has been designed to promote and support a citizen-centred approach to public service delivery and has bee developed with input from the public and the public service. Prudent expenditure growth, strategic capital investment and a focus on reform will allow us to stay on a sustainable path and continue to deliver high-quality and effective public services to our citizens.