Summer Economic Statement: Statements

I welcome the Minister of State at the Department of Finance, Deputy Patrick O'Donovan.

I welcome the opportunity to be in the Seanad. I was here so often it was said I could take up a bed in the Chamber.

Be careful what you wish for.

The Minister of State is always welcome

There are worse places one could be. I am here to discuss the summer economic statement which was agreed by the Government and discussed in Dáil Éireann last week. It sets out the key elements of the Government’s budgetary strategy. Broadly, it revolves around five key areas, namely, ensuring steady and sustainable improvements in living standards; rebuilding fiscal capacity; the need for prioritisation and realism; the need to avoid pro-cyclical fiscal policies and ensuring budgetary policy will focus on ensuring fiscal sustainability.

On the macro-economic position, a suite of economic indicators confirm that the economy is growing at a healthy pace. The Department of Finance is forecasting GDP growth of 5.6 % this year and 4% next year. From 2020 onwards, GDP is expected to grow broadly in line with the potential growth rate of the economy, with positive contributions from both exports and domestic demand. Of course, economic growth is a means to an end, not an end in itself. It enables us to pursue our goals of advancing social progress, promoting inclusivity and providing high quality public services. Importantly, the strong growth performance is paying dividends in the labour market, in which there are now more people at work than ever before. In parallel, the unemployment rate has fallen, from a peak of 16% in early 2012 to 5.3% in May 2018. We are fast approaching full employment. In that context, it is crucial that budgetary policy be managed in a way that will not overheat the economy.

Against that positive backdrop, broadly, we plan to balance the books by running a very small deficit next year of 0.1% of GDP. This reflects 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. The Government will not adopt taxation and spending measures that will result in a larger deficit than this. It will accommodate a budgetary package of €3.4 billion, of which €2.6 billion has been pre-committed to expenditure measures, leaving €800 million for further allocation. Any unfunded taxation or expenditure measures that go beyond this figure would necessarily involve even more borrowing and result in a subsequent increase in the deficit.

The summer economic statement makes it clear that budgetary policy will be designed to ensure steady and sustainable improvements in living standards underpinned by stable and predictable tax revenue. Incremental and sustainable improvements in public services are always to be preferred over the feast or famine alternative. Expectations have increased, given the remarkable performance of the economy. However, I make it clear that not all demands can be met. In the first instance, expenditure continues to exceed revenue and we are still borrowing to meet the shortfall. If more resources are allocated, the deficit will be even larger. Excessive levels of expenditure in an economy with full employment would be unsustainable.

The Government will prioritise spending that mitigates risk, enhances the resilience of the economy and raises our growth capacity. In that context, it has set out its vision for Ireland in the medium term in Project Ireland 2040. It includes the national development plan and is the blueprint for Ireland’s sustainable development – economically, socially and environmentally – in the future. The national development plan will improve public infrastructure to ensure all can benefit from the fruits of economic growth.

As the Minister for Fiance and Public Expenditure and Reform, Deputy Paschal Donohoe, said, the provision of public services can also be enhanced within existing allocations by reforming the way public services are delivered. That is why the Government has prioritised public sector reforms. By improving management and raising efficiency, through training, technological progress and other means, we can better align inputs with outputs and ensure better value for taxpayers’ money.

Each year central government spends more than €60 billion. I am convinced that scope remains to improve the efficiency with which this sum is allocated. The spending review which will be published in July will be crucial in that regard. It is also vital that we maintain a broad tax base that generates a sustainable revenue stream necessary to fund public services. We cannot build permanent expenditure commitments on revenues that may not be sustainable. That is why the Government is setting aside some of the historically high levels of corporation tax for the purpose of creating the rainy day fund. Our debt position continues to improve, with the general government debt-to-GDP ratio projected to be 66% for the year and declining to 63.5% in 2019. However, it must be acknowledged that the recent evolution of the debt-to-GDP ratio presents an overly benign view of public indebtedness. The debt-to-GDP ratio has decreased only because GDP has increased. Other measures, notably the ratio of debt to modified gross national income, or GNI*, show that while declining, public debt still remains high in Ireland. With a debt-to-GNI* ratio of 100% last year, the focus must be on balancing the books and reducing the nominal debt.

The legacies of the crisis persist, with the total stock of debt amounting to €206 billion this year. This represents approximately €42,000 worth of debt for every man, woman and child, one of the highest levels among OECD countries. It is essential that we start to reduce this burden of debt in order that the economy will be able to withstand adverse developments, if and when they occur.

The application of the fiscal rules has led to a focus on the total amount available, that is, the fiscal space. There are a number of reasons utilisation of the fiscal space is not appropriate in the current circumstances. First, applying the rules fully would involve the adoption of pro-cyclical policies which would not be remotely appropriate to our position in the economic cycle. Second, the elevated debt burden means that the focus must be on balancing the books and reducing nominal debt.

Risks to the global economy are increasingly titled towards the downside. In that context, the priority must be to rebuild fiscal buffers in order that the economy can best absorb economic shocks, if and when they occur. The Government will frame budgetary policy on the basis of what is right for the economy to ensure continued, steady improvements in employment and living standards.

That is why the Government is prioritising reducing public debt, establishing the rainy day fund, and avoiding pro-cyclical budgetary policies.

While the latest economic data all point to an economy with considerable momentum, a continuation of robust growth cannot be taken for granted given the increasingly uncertain external environment. The United Kingdom's imminent exit from the European Union, changes in the international corporate tax landscape, and the possibility of disruptions to the global trading system are some of the principal external risks currently facing the economy. The best way to improve the resilience of our small and open economy is to build up our fiscal capacity to respond to these challenges. That is what the summer economic statement sets out and what the Government will continue to do.

I call Senator Horkan. I remind colleagues that the order of the House is that spokespersons only may contribute. They have eight minutes each but time can be shared among groupings.

I thank the Minister of State for his comprehensive opening statement. I do not intend to repeat much of it if I can avoid it.

I welcome the opportunity to contribute to the debate on the summer economic statement. It was released on Tuesday of last week and will form the basis for the 2019 budget, which it is hoped will be passed in October of this year.

The economic progress of recent years has been underpinned by the economic and political stability provided by the confidence and supply agreement between Fianna Fáil and Fine Gael and, while not ideal, Fianna Fáil has ensured that the previous two budgets have been progressive and prioritised improved services over further tax cuts.

We are now four months out from budget 2019 and it is important that in the lead-up to the budget we make the right decisions for the people who elected us and whom we represent. As it has done in the previous two budgets, Fianna Fáil will engage positively in discussions on the budget and will insist on tangible progress in the key areas of policy where the Government has thus far failed to make much of an impact.

According to the summer economic statement, €3.4 billion will be available for expenditure. Already, €2.6 billion has been pre-announced and committed to, leaving only €800 million for new budgetary measures. Last year, the Minister for Finance, Deputy Donohoe, said his utmost priority was to ensure there was a balanced budget. Unfortunately, that was not the case and the Government has failed to meet Ireland's medium-term objectives of a balanced budget in structural terms. That has impacted negatively on the resources available for 2019.

Fianna Fáil called for a rainy day fund and the proposal was very much part of the confidence and supply agreement. The fund will be allocated €500 million. It must be structured correctly and we look forward to engaging with the Government in respect of that. Unfortunately, Sinn Féin is not in favour of the rainy day fund and voted against the fiscal treaty. It is difficult, therefore, to listen to some of its Members speak on the issue. I am not referring to Senator Conway-Walsh, who is a fantastic committee colleague, but the outbursts of some of her party colleagues leave a lot to be desired. Sinn Féin argues that the European fiscal rules are sufficient to protect the economy and the State. However, by not investing in the rainy day fund and spending the money we would allocate to it, Sinn Féin would blow any chance of reaching or maintaining our medium-term objectives. Last year, it proposed €2 billion in extra taxes. It needs to explain how it would deal with a fall in tax revenues. Would it raise taxes or cut public services and public pay?

The confidence and supply agreement has ensured that the previous two budgets have been progressive and directed at those who needed it most. This marked a shift from the policies of the previous Government of Fine Gael and the Labour Party. The agreement includes a commitment to maintain our promise of meeting in full the domestic and European Union fiscal rules as enshrined in law. It also commits to address unmet needs and introduce budgets that will involve, at a minimum, a 2:1 split between investment in public spending and tax reductions and to maintain our 12.5% corporation tax rate, which is very important.

In 2018, the National Treatment Purchase Fund, NTPF, was allocated €55 million to tackle hospital waiting lists. We secured a 50 cents reduction in prescription charges for those aged under 70 and a reduction in the drug payment scheme threshold from €144 to €134. We also secured increases in personal assistance hours, home help hours and home care packages and agreed an additional €435 million for mental health services to achieve A Vision for Change service levels. All those measures need to be put on the record and remembered.

It is critical that budget 2019 continues to be progressive and delivers on tackling housing and health issues in particular. Despite healthy economic indicators, there are more than 3,500 children in emergency accommodation, rents are becoming increasingly unaffordable and the housing crisis is impacting negatively on our economy.

Waiting lists have never been as high, with 711,000 people on both inpatient and outpatient lists. Without the NTPF, those figures would be even higher. There is also an acute shortage of consultants and nurses. That must be addressed in 2019 to ensure services become available and accessible and are provided in a timely manner for those who need them. We need to improve and increase capacity in the public system but in the short term the Government must increase resources to the NTPF to make progress on waiting lists. At this stage it would not be unfair to describe them as out of control.

In the months ahead, we must have an honest and open discussion about where our priorities lie. We should examine resources in the context of the needs of the country and make the right decisions that speak to the priorities and issues facing people in their day-to-day lives.

Before anyone on the Government side becomes too annoyed with my contribution, it is important to acknowledge the many positive measures set out in the summer economic statement. Employment figures are up and unemployment figures are down but we need to address infrastructure. I said I would try not to repeat what the Minister of State said. As members of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, Senator Conway-Walsh, Senator Kieran O'Donnell and I examine the finances of the State in depth at meetings of the committee. The challenges the economy faces include the common consolidated corporate tax base, CCCTB, taxation of the digital economy, threats from Europe and, equally, our significant reliance on corporation tax, 80% of which is from foreign direct investment, FDI. Half of the FDI tax revenue comes from ten companies and while I hope all of these companies do very well, remain here permanently and pay increasing amounts of corporation tax, if one of them decided to leave Ireland or experienced a blip in its financial performance, the economy would be left exposed.

We need to invest in infrastructure while being careful not to overheat the economy, as the Minister of State acknowledged. It is very important that the rainy day fund is established for use when the economic position is less positive than now.

I congratulate and compliment the Minister of State on acknowledging that the debt-GDP ratio is falling, not because debt is declining but because the GDP figure is increasing so much. He acknowledged that GNI* is a better measure than GDP. When I raised that issue with the Minister for Public Expenditure and Reform, Deputy Donohoe, in the joint committee he told me he could not agree with me more.

Ireland is still one of the most heavily indebted nations in the world in terms of both public and private debt. We need to remember that when we make promises to the public because citizens will not thank us for spending money we do not have. We need to target the limited resources we have on housing, health, education and physical infrastructure to cope with the demands of our growing population.

I thank the Minister of State for coming into the House this evening to discuss the publication of the summer economic statement. I acknowledge the progress has been made, much of which can be attributed to the role of my party in developing the confidence and supply agreement. Equally, there are challenges ahead and I and my party look forward to working with the Government in the coming months to deliver the next budget.

On a point of order, there seems to be some confusion regarding the Order of Business. I understand the order was for group spokespersons to contribute but I am happy to amend that if Senators want other Members to be able to contribute.

We will work with the order as it stands.

I am happy to do that if it what Senators want.

I dealt with that issue. We can share time and each group has eight minutes.

The consensus is that there will be eight minutes per group.

With a little flexibility.

I call Senator Boyhan. Does the Senator wish to share time?

I do not want to cut in on the time but I will share with my colleague, Senator Marshall.

Is the time being shared equally?

Yes. The Acting Chairman might indicate when I have one minute left.

I welcome the Minister of State at the Department of Finance, Deputy Patrick O'Donovan, to the House to discuss the summer economic statement. I note the importance of maintaining a broad tax base which generates sustainable revenue streams necessary to fund public services. It is important to remember that we live in a society and not in an economy. That is a much bandied around expression but it is an important point to make, particularly as we are heading into a budget and discussing services.

The Minister of State noted that the Government has decided to be prudent regarding the management of our public finances, which is the appropriate approach to take. While there are risks ahead, there are also opportunities, as the Minister of State also pointed out.

We have to acknowledge that our economy is improving and that we have virtually full employment. There are certain categories and areas where we do not have full employment and we need to address those. In particular, I am thinking of people with disabilities who do not have equal access to employment opportunities.

As I said, prudent financial decisions must be pursued. We must remember that we have to secure the hard-won gains achieved as a result of the many sacrifices made by the people, and not by politicians or banks or financial institutions. The people made many hard decisions over many years, which is something of which we have to be mindful at all times.

I understand the Government's intention to reduce the public debt, which is particularly welcome. The objective of improving living standards and public services is welcome. The economic recovery is not solely about money in our pockets. It has to be about public services. I heard Senator Conway talking about the rainy day fund the other day. I am not going to leave a jar of money on the counter if I have a commitment or a debt, a medical bill or rent to pay. I have concerns about the rainy day fund. It is all very well when one has loads of money but we have people who have disabilities. We have institutions like the National Rehabilitation Hospital where six beds have been closed since 2017 and Minister after Minister have come in here and argued that there is not the resources or the money to open them. One cannot have rainy day money in a jar when one cannot provide basic services.

This Government will be judged on education, health and housing. These are three of the biggest issues and, as he knows well, I am not here to lecture the Minister of State. I want to flag a dedicated fund to reduce our hospital waiting lists because it is important. We need to invest in primary and community care, recruit more consultant doctors, midwives and therapists, provide faster access to mental health, reopen all rehabilitation hospital beds, dismantle the dysfunctional HSE, establish funds for community welfare and develop community welfare trusts. Many of these requirements are not mine but are those of the Taoiseach, Deputy Leo Varadkar. They are on Fine Gael's website, which I looked at today. That is Fine Gael policy on Fine Gael's website. They were put forward by our Taoiseach, who I have a lot of time for and who I respect, when he was Minister for Health. Perhaps the Minister of State and the Fine Gael Members might look at them.

Can the Minister of State tell me, not necessarily today, where the plan on universal healthcare is because the nation wants to know? It is all over the Fine Gael election literature, which I have. There is a promise by Fine Gael that it will deliver on a universal healthcare plan.

I looked up Google today and saw wonderful photographs Fine Gael Ministers at a train station with a big banner saying Fine Gael would abolish the USC. Has all of that changed? What is the story in the run up to the budget? We can talk all we like about a rainy day fund but we must address housing, health, education and infrastructure. We must bring into use State lands which are not being utilised and are not being built on because we have thousands of people waiting for houses.

Yesterday the Oireachtas disability group launched its budget submission. It is really good and I acknowledge what Senator Dolan has done. I ask everyone to look at it and to lobby the Government so that in the forthcoming budget, the key objectives set out in this infographic are considered and, hopefully, implemented.

I call Senator Marshall who has four minutes.

I welcome the Minister of State, Deputy O'Donovan. It is good to confirm that the Irish economy is growing again at a healthy pace. That is encouraging. An effort is being made to balance the books. Comments have been made about labour. Even though the labour market is fairly buoyant again, it is not that long ago since the figures were alarming and everybody was concerned about where the labour market was.

When we look at the summer economic statement and the reference made to policy designed to ensure steady and sustainable growth, we need to be cognisant of the fact there is so much uncertainty, especially with reference to Brexit. There is a lot of uncertainty out there and people are still nervous. We probably have not had sustainable growth for a long enough period to be reassured that we are back onto a steady track.

For me and for many of my colleagues, risk is a big component of this. It is about mitigation of risk and building resilience into the economy. Ultimately, we must take a strategic approach to what is sustainable and what a sustainable economy will look like and all the components of that.

When I look through the document, I see we are dealing with the legacies of a crisis, and those legacies persist. What concerns me is the €42,000 of debt for every man, woman and child in the country. It is alarming not just in the context of Ireland. When one looks to our neighbours and to trade, we really need to address this. How long will it take to address this and to get it down to a manageable level? What does a manageable level look like? Is it the top or bottom quartile of OECD countries? It is encouraging to see that the Government is prioritising the reduction of public debt and a rainy day fund is prudent for any economy. The avoidance of the pro-cyclical budgetary policy is also to the Government's credit.

Ultimately, this Government will be judged by what policy feels like for the man and woman in the street. Could it feel better? Credit must be given where credit is due. It is very much a case of steady as it goes but to quote Mr. Donald Rumsfeld, it is about the known knowns, the known unknowns and the unknown unknowns. Unfortunately, there are still a lot of unknown unknowns out there. Brexit has posed a lot of uncertainty with a knock-on effect or consequences for Europe. When I say steady as it goes, we need to chart a straight path through what are very choppy waters in the short term.

I thank Senator Marshall. If the Senator has time, he might give a tutorial to other Members on how to stick to time. He was right on the button and well done.

Is Senator O'Donnell sharing time?

I am sharing two minutes of my time with Senator Colm Burke. I welcome the Minister of State, Deputy O'Donovan.

This debate is about the summer economic statement. It is a time to reflect. This will feed into the budgetary process this year and in future years. Putting this in context, we are at full employment. Who would have thought a number of years ago that we would be at full employment? We are operating a very small deficit of 0.1% and I would like to see that balanced. We should not be running a deficit. We are nearly there and I note the Government has given a commitment that it will not go beyond 0.1% of current deficit. We are bringing down our debt to GDP ratio. We are roughly at 66%, going down to 62% and, if I am correct, we will be at 63% by 2019. That slightly disguises the fact we have €206 billion of national debt, which people forget.

We have had such extraordinary growth in recent years that it has slightly disguised the level of debt we are carrying as an economy and it is something we have to look at. The average debt for every man, woman and child in Ireland is €42,000. That is above the average industrial wage. There are a lot of positives but there is still a bit of lumber there with our national debt and we must get it down. It is probably the accountant in me coming out but that prompts me to look at what lies behind the figures.

Our debt to GNI ratio is at 100% this year and takes multinationals into account.

Side by side with that, our capital budget was historically low, but is now increasing and will total €7 billion next year. In the mid-west, the M20 got the go-ahead and will make a significant difference in terms of infrastructure. We need to build on that. Due to the fact that the economy has recovered we are able to put money into capital projects, but we have to think about the risks. The major risk to our economy at the moment is Brexit, which is outside of our control. We do not know precisely what the UK will do. I see no upside to Brexit. People have said our major trading partner is the EU, and that is probably the case, but the major trading partner for the SME sector is the UK. Ireland and UK produce and consume most of the cheddar produced worldwide.

The rainy day fund is extremely important and I wish to put it in context. If the National Pensions Reserve Fund was not in place I am not convinced we would have been able to come through the crisis. It was established for a different reason, namely, to provide for pensions, but it became a rainy day fund. If it had not been in place, the question is whether we would have been able to bail out the banks, which is something people should bear in mind. It has now evolved into the Ireland Strategic Investment Fund. We need to prepare for a rainy day.

I was first elected to the Dáil in 2007 and proposed a rainy day fund in one of my first speeches because I always felt that we needed to be cautious. We have good growth, but we must make sure it is sustainable. A rate of 3% or 4% is sustainable. If the country is reaching very high peaks consistently that is worrying and means something is fuelling the economy which may not be sustainable in the long-term. We have to ask those questions.

I wish to examine the economy on a sectoral basis. Tourism is going very well. Agriculture is going well, but has had difficulties in terms of fodder, milk prices and various other issues. It is an important element of our economy. Industry is going well. Over time the economy has to build on the SME sector. We have a very large and welcome multinational sector in terms of employment creation, but I would like the SME sector to become the future.

We have lagged behind in construction. There was a lost generation and we have lost skills. I spoke earlier today about the diaspora and putting the call out to people who have emigrated. When Ireland had a fantastic victory over Australia in the test rugby match many of us watched it in local pubs early in the morning rather than on television at home. The majority of people watching it in Australia were young. There is a skills deficit in the construction sector. Carpenters, electricians and plasterers need to come home from abroad and we need to upskill in that area. I very much look forward to the Government's publication on affordability in the housing sector. It is a missing piece of the jigsaw in the construction and housing sectors.

Funding of €2.6 million has already been committed and €3.4 million is available. We have to prioritise. The economy is functioning again and we have full employment, but we must ensure that we go gently because of Brexit. We must ensure that we steadily decrease our national debt figure of €200 billion.

I wish to allocate two minutes of my time to Senator Lawlor.

I welcome the Minister of State to the House and will try to be as brief as possible. We are at a crossroads in our economy. People have major expectations, in particular after the past number of years where we went through difficult times. We are now coming out of the difficulties and people can see ahead. They expect what they got during the boom times. It is crucially important that we manage those expectations.

The previous Dáil developed a broad tax base which we need to keep, irrespective of what people are shouting for such as the removal of property tax. Without a broad tax base one can be certain that what happened in the past will happen again, namely, boom and bust economics. We certainly do not want that.

I am glad we are putting a rainy day fund in place. The fund established by the former Minister, Charlie McCreevy, was used incorrectly. It should have been used for infrastructure within the economy rather than given to banks to allow them to pay off their debts and bail them out. The rainy day fund should be used when there is an economic downturn to assist those areas in the economy which are not performing in order to get them working again.

The Minister of State and I will have different viewpoints on our debt. The American economy grows its GDP rather than paying down debt and manages to run trillions of dollars of debt each year. It grows it GDP so that, as a percentage, the debt becomes smaller and smaller.

We need to have something in the budget for employed people who are returning to work and are availing of internal training. We are training people to get work, but because we are at full employment we need more in-service training. I thank Senator Burke for sharing time.

This debate is a good opportunity to discuss what is happening in the real world. The Fine Gael Government is selling the core message of the summer economic statement with constant reference to the past. We are reminded that it has been ten years since the worst economic crisis in the State, yet there is little reference to the people and practices which caused the crisis. It is simply not good enough to say that as a State we have to ensure that if the same rotten practices are carried out we are able to deal with that.

The rationale for a rainy day fund is directed at those who continue to struggle in their daily lives. There is merit in having a rainy day fund if the most vulnerable people in society are looked after. We also have to remember what we did with the last rainy day fund - we gave it to the bankers. Is there an expectation that the same thing will happen?

Rather than investing in services which would improve the standard of living of our citizens, they are being told that they must hold off and we cannot be sure that there will not be a return to the bad old days. That does not fill people with confidence. Why is that the case? Surely now we have enough checks and balances in place to ensure that we do not see a repeat of the excesses, negligence and criminal activity which caused the last crisis. It seems that when Fine Gael is in government we can never be completely sure that white-collar crime and corruption will be dealt with. Therefore, it is little wonder that the idea of a rainy day fund is a hand-me-down from my friends on the left in Fianna Fáil.

We just sit on the left. We are not on the left.

At the finance committee-----

There should be no interruptions from any Senator.

I ask the Senator not be so rude, please.

No interruptions, left, right or centre.

They are all the same.

The Senator's time is being used up.

It is an objective observation. At a recent finance committee we examined the heads of the Bill for legislation underpinning the rainy day fund. Contrary to what the Minister of State has claimed, there was no mention of corporation tax receipts. The fact is that there would be a legal obligation on the State to account for €500 million a year if there was a decrease in corporation tax receipts. Many families are only one unexpected bill away from being in serious financial difficulty.

This could involve the car breaking down, an unexpected medical appointment or urgent repairs to the house. We have more than 700,000 still on the waiting lists and every day across the State there is on average 400 patients on trolleys in our hospitals. I know a man who has been waiting four years in excruciating pain and he cannot have the treatment that he needs because the resources are not there to do it. I have raised it with the Minister since the first day I came into the Seanad. That gentleman is not the only one. There are many such people. The concept of a rainy day fund is fine, but how can we leave people in that state and say, "Never mind, we have a rainy day fund and at the end of the day, you should be really happy because the debt-to-GDP ratio is projected at 66% for this year and declining to 63.5% in 2019"? It is as if one should continue waiting in pain for an urgent appointment and ought not to worry because the GDP is okay.

Vast areas of rural Ireland are still without reliable high-speed broadband connection, and even mobile phone coverage. The Western Development Commission was before the Joint Committee on Rural and Community Development two hours ago outlining all the infrastructure deficits in rural Ireland. These are all problems that need investment right now. The trouble is that investing in capital projects, whether it be in the development of the strategic zone around Knock Airport, the western rail corridor or Merlin Park hospital, is not a zero sum game. The multiplier effect of capital investment in such projects is what will protect us. That, not saying that we have stashed away so many millions of euro that we can give to the bankers when they mess up again, is the roof over our heads that will be there if we have another economic crisis. We know from the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach that nothing has changed in the culture of our banking system, auditing system etc. They will do the same all over again. The red carpet is rolled out for the vulture funds by Government and they get charitable status. There is charitable status for vulture funds - one could not make it up. All of those millions could be put into vital infrastructure.

As a party, we have shown how we can invest in these areas in rural Ireland, and by using the fiscal rules ensure that there would be a Government surplus in 2021. There is only 12 months difference between our target time of reaching this point and the Government's. This time and the fiscal space could be used to tackle those problems that leave people who are working every available hour finding that they are barely managing to get by.

This full employment preoccupation drives me crazy for two reasons. First, there are areas within my own constituency where we have 30% plus unemployment. We have significant youth unemployment. We also have people who are working every hour of every day who cannot pay their basic bills. They are looking around to see whether they can bring their child to the doctor or not. We should not be congratulating ourselves that we have full employment when people cannot earn enough to pay their basic bills.a

Sinn Féin will have the back of these people. We will ensure that investment in areas such as childcare means that reduced costs will encourage more working women and parents back into the workforce. I will give one example of why this drives me crazy. In terms of our autism services, we have fantastic children and young people who have an autistic condition. Many of them are wonderfully talented people who could specialise in development and, indeed, do a much better job than some of our Ministers and some of those in these Houses do, were they given the opportunity and were the investments made for the diagnosis and the early intervention to encourage the unique talents that they can contribute to our economy and to innovation. For me, that is worthwhile spending. That is spending that one will get back tenfold. There has to be imagination and creativity around how we approach all of these matters.

I have much more to say but I will leave it for another day. There is a different way. There are different choices to be made. As for taking lectures from Fianna Fáil on how to run the economy, I will leave it at that.

What a way to finish. I thank Senator Conway-Walsh. Senator Dolan has eight minutes.

I did not lecture Sinn Féin on the economy.

I could not let Senator Horkan away with it.

I welcome the Minister of State, Deputy Patrick O'Donovan.

Health is in crisis, housing is in crisis, there are serious issues in Northern Ireland with the breakdown for over a year of the institutions there and, of course, Brexit. The four crises that we have are no doubt four priorities for Government.

On 19 April this year, the State ratified the UN Convention on the Rights of Persons with Disabilities. That meant that we were getting on with the job of putting to right issues that go back generations. I accept funding has been going in year on year over the past couple of years but I have not heard one Minister, when talking about funding for people with disabilities or mental health needs, state that the Government is winning the game and getting over the demographic that is working against us. People are living longer. At the other end of the spectrum, we have babies being born who would not have seen the light of day not too long ago who have significant needs.

An issue that needs to be dealt with here also is the fact that the Government has given its solemn promise, after 11 years of cogitating, to get on with dealing with the disability inclusion issue. I am saying that this coming budget has to make a significant start on that. If it does not, how can the Government say that it was honestly ratifying the UN convention?

I have studied economics for a number of years. I have no difficulty repeating what is already in the Minister of State's statement, that there is €206 billion of debt or €42,000 for every man, woman and child in the country. That is a fact. I am not walking away from that. All of us, in particular, the Government, have to struggle with the significant unmet needs that it has said it will make a real strong start on and every Department has to play a part in that.

Disability comes to everybody at some point. Women, the daughters, the sisters and mothers of Ireland, more than anybody else, stand in the gap all of the time when it comes to dealing with this issue. The point I am making is that dealing with disability is putting much needed and triage funding and services into every parish and townland in this country. It is an issue for children, for parents, for families and adults. There are chronic levels of unemployment among people with disabilities and older people and women are the ones taking it in the neck every day in this regard. The Government needs to keep faith with the commitment it has made only a couple of months ago.

The Minister of State is right to talk about the €60 billion that we have in the base and how that can be used better. I do not know if there is anyone who better appreciates that than I do when I see the way Departments and public bodies do not think inclusively, take short-term measures and then have to come back and retrofit services and support for people with disabilities.

The best way to really put money in people's pockets is to have public services they can depend on when they need them. The best way of putting money in people's pockets is where there is a sustainable floor of public services.

We talk about people coming back to Ireland. People are not going to come back here to live in an economy; they will come back because there is childcare, public services and a whole range of other things. We need a different way of looking at the importance of having sustainable public services. I believe we have to sail a bit closer to the wind in regard to the rainy day fund and we have to struggle more with it. For people with disabilities or mental health needs in their families, it is raining on them every day and it has not lifted. They are not waiting for a rainy day fund to keep things right for them. As other Senators have said, we know from the work done in clinics and in local constituencies the difficult situations that people are in.

The Minister of State's statement referred to ensuring a steady and sustainable improvement in living standards. This is the nub. Is that going to include people with disabilities and their families and are they going to see a strong start in this budget? We talk about growth rates of nearly 6% this year and 4% last year. The people I am talking about do not see that. The economists say we are at full employment but we are not. The hard core of people with disabilities are still far from those employment levels and there is a hard core of people - not particularly those with disabilities - who are intergenerationally unemployed. Those are two very important areas to deal with. Will the steady and sustainable improvements in living standards include people with disabilities?

There is a risk in not dealing with these issues now and, in a sense, there is a risk in being too careful, if that does not seem contradictory. There is a risk in being too prudent when there are huge pockets of unmet need. Instead of simply saying we need a rainy day fund, which I do not think anyone is against, we have to struggle with the massive day-to-day unmet needs. I saw information from Barnardos today. The waiting list in regard to so many services for children is a slight on this nation and on all of us. The figures dealt in particular with speech and language therapy, the mental health needs of children and so on.

Senator Boyhan mentioned the Oireachtas disability group submission yesterday, which is looking for an investment of over €200 million, and looking for it without blinking. It is a significant package but every Minister can put something into that basket. It may be about changing the way they arrange things in their base but a strong start is needed this year if there is an honesty to the Government ratifying the UN convention.

I welcome the Minister of State. I find his contribution interesting. My problem with the Fine Gael-led Government's view on the world is that it wants to be a Government not for all of the people but for about 40% or 50% of the people. There is this idea it wants to convince people they are over-taxed and that, as the Minister of State said in his statement, public services are in need of reform, that we spend €60 billion on public services and this is too much. That kind of rhetoric worries me. The very right-wing instincts of the people who are in leadership positions in the Government concern me, in particular the idea of shrinking the State, convincing people to be individualistic and the talk of the tax burden.

There is also the absolute cod of a rainy day fund, which I think was introduced into the Government's language by Fianna Fáil, which was trying to regain some credibility when it comes to economic language, seeing that it drove the country off a cliff, and so the Government has adopted it as a policy position. Let us not forget that I and my party were in government with the Minister of State and his party for five years, so we cannot be accused of not taking sensible or prudent economic decisions. However, this one is genuinely a cod. It is a political lie, in my view, because, at a time when we are still wounded as a nation from the last ten years, for the record 10,000 people on the homeless list, including 3,500 children, and for people in need of mental health services, disability services, drug treatment programmes and so on, it is raining. For people in the public services who are still hoping for pay restoration and those who are suffering from lack of motivation and morale in the teaching profession, given we now have an issue with teacher supply and cannot even get people to mark the exams, it is raining. I suggest to the Minister of State and the Government that this notion of a rainy day fund is a complete and utter cod. It is a political nonsense and is done purely to give a sense of prudence and sensible economic management, but it is not the action of a Government that cares for the entirety of the people.

I want to speak about some of the obsessions the Minister of State and his Government seem to have in regard to tax cuts. In the last budget the Government decided to throw away €200 million worth of tax for no good reason, except to again convince the vast bulk of Irish people they are over-taxed when, in fact, they are not. That €200 million could have gone a long way to addressing some of the issues I have already spoken about. Again, the Minister of State speaks endlessly about the USC. I listened to Deputy Micheál Martin on radio last weekend speaking about all the services that need to be addressed, and then he also said we need to deal with USC. Why is it not the Government's obsession to end homelessness, illiteracy, poverty or inequality rather than ending the USC?

USC brings in over €4 billion a year. I wish we had that kind of fiscal reality statement from the Government instead of constantly giving this impression of a tax burden - "we are over-taxed", "squeezed middle", "reduce tax", and so on.

Why is the 12.5% corporation tax rate the unspeakable sacred cow of Irish politics? Why is it that the absolute sacred cow of Finnish politics, regardless of the political party or political standpoint, is equality in education? If one asks anybody from any political party in Finland what is the fundamental ethos underpinning education, they will say "equality". Even in Britain, which is tearing itself apart over Brexit, fundamentally they all believe in equality in health. They argue over it, they discuss it, but the NHS is something they cling to on either side of the aisle in Britain because they know the British people believe in equality in healthcare. What is the sacred cow here? The 12.5% corporation tax rate. What a soulless thing for us to feel so passionately about that we cannot even discuss it.

My point is that while we are in a better space than we were, for the Minister of State to suggest to the House there is now space for us to reduce tax, to shrink the size of the State, to talk about public sector reforms and to say we have spent too much money, is really insulting. Effectively, he is saying €60 billion is too much. What was the phrase he used? He said:

Each year central government spends more than €60 billion. I am convinced that scope remains to improve the efficiency with which this sum is allocated.

I know what that means. The phraseology here is focused on public sector reform.

Is the Senator suggesting there are no inefficiencies in the public sector?

Jeremy Corbyn-----

The record will reflect the fact I did not interrupt any other speaker.

I ask colleagues to show respect.

I will repeat the point. We have been wounded as a country over the ten years since the collapse of the economy.

If we are expected to be bought off with talk of public sector reform, the overspend on public services the Minister of State is indicating and the nonsense about the rainy day fund at a time when the country is still wounded, I make the political charge that the Minister of State and the Government are determined to be the Government for 40% of the public. As long as that 40% can deliver the Government back after a general election, about which it keeps talking, it will be quite happy. Meanwhile, the rest of us can fight over the entrails that fall off the Government's table.

Some of the contributions were very enlightening and some were very predictable. Senator Aodhán Ó Ríordáin talked about a wounded country. It seems that his party is more wounded than the country. Not all that long ago the leader of the Labour Party was Minister for Public Expenditure and Reform when he negotiated many of the reforms in the public service and played a very effective role in that Department. It seems that the Labour Party has, unfortunately, been begotten by incurable amnesia about its time in government. It is regrettable for a once proud party is now going down the road of abandoning credibility which stems from the last Government being good. The Government continued from where it left off. Coming into the House and throwing the toys out of the cot, with all of its negativity, strikes at the heart of the lack of credibility from which the Labour Party is suffering.

There are 10,000 people homeless.

The Senator is the very one who said he did not want to be interrupted.

There are 3,500 children homeless.

The Minister of State should suck up some of his own medicine.

The Senator has made his contribution.

If someone can give it, he or she should be able to take it. I listened to Senator Aodhán Ó Ríordáin without interruption. He should, please, try to show me some respect. I want to be respectful to other Members of the House, as I am sure the Senator tried to be.

Senator Gerry Horkan never fails to let the side down. The only thing for which he did not take credit was the 30o heat.

I will claim it, too.

I knew the Senator would.

I always get the blame for the bad weather.

The Minister of State to continue, without interruption.

In fairness, Fianna Fáil has acted responsibly, unlike several other Opposition parties.

However, it is not a situation where one can take the good stuff only. One has to take an holistic approach to what is happening and have an honest and open discussion. One cannot drive an economy and a country off a cliff and fix it in five years without scarring and there has been, as the Government acknowledges. Several Members addressed our level of indebtedness. It was almost like a game of rapid roulette of contradictions, that even though we had a high level of indebtedness, we should drive public expenditure. I am sorry; one cannot do that if one has a fixed-----

(Interruptions).

I did not interrupt anybody. If there is a fixed amount of money and growing demand, one can either increase the level of indebtedness or decide not to fund things one is already funding. I listened to a range of things that we would love to do, but I did not hear one Senator say we should not do this and that we should cut that, because it would not be acceptable politically.

Senator Victor Boyhan said we were building a society, not an economy. He is right. He went on to talk about his days traversing Google images. If one starts to look through Google images to see what the Government stood for in previous general elections, one will probably need to go a little further back to the previous incarnation of Google.

The Senator referred to USC. The Government is committed to implementation of the reform needed in respect of PRSI and USC.

I thought I would give up at one stage when I was listening to some contributions, then I heard a voice of wisdom. Senator Ian Marshall spoke about risk. He is dead right - there are real risks to the economy. He comes from a Border county and probably understands things better than many of us here.

Senator Kieran O'Donnell referred to the National Pension Reserve Fund and the comparison with the rainy day fund. He is right. The rainy day fund is an absolute necessity. Everybody spoke about what had happened in the past and said we should learn from it. Some said we should learn from the past but do nothing about it, in other words, that we should not have an insurance policy. The ordinary people who have paid a heavy price would find it hard to swallow that we learn from the mistakes of the past but put nothing in place.

Senator Rose Conway-Walsh wants us all to inhabit the real world. That is a good one. She mentioned corporation tax receipts but then went on to talk about the tax choices the Government had made in the last budget, one of which was to retain the 9% VAT rate. The Senator comes from a tourism county which has some fantastic amenities, including the greenway from Westport to Newport and on to the sea. I am sure people in County Mayo would be aghast to hear the 9% VAT rate was being opposed by a Senator from a tourism county.

We are talking about hotels that charge €300 a night for a single room.

I did not interrupt the Senator.

The Minister of State to continue, without interruption.

The Senator cannot rattle the cage and get away with it that easily.

I do not mind, but the Minister of State has to be accurate.

It may be difficult, but will the Senator, please, listen?

Senator Rose Conway-Walsh mentioned corporation tax, as did Senator Aodhán Ó Ríordáin. There are many people in County Mayo working in foreign and direct investment companies. They get up in the morning, bring their children to a crèche and work hard on three and four cycle shifts. They would be gobsmacked to hear it was seriously being suggested that we do something about the 12.5% corporation tax rate which one Senator referred to as "the sacred cow". His party leader was Minister for Public Expenditure and Reform, yet now they are talking about getting rid of it. Is it any wonder the party is angry with the electorate, rather than the electorate being angry with it?

Senator John Dolan addressed the UN Convention on the Rights of Persons with Disabilities. The last time I was in the House we had a good discussion about disability budgeting. The Senator is right. I know that Senator Rose Conway-Walsh bemoans the fact that we are heading towards full employment, but she is right about people with disabilities. It will be a massive challenge for this and future Governments to make sure those on the margins - people with disabilities, people from new ethnically different communities or from parts of the country where there might be infrastructural challenges - are brought into the labour market.

This is part of an overall process which includes, although no one referenced it, the National Economic Dialogue, an overall discussion between all interest groups, all politicians and Departments before there are singular point to point contacts between the Departments of Public Expenditure and Reform and Finance and individual groups.

I will finish where I started. Everybody has asked for something, but we have only a set amount of money. Senator Rose Conway-Walsh referred to the national development plan. She did not name one project that she would like to see taken out of it to be substituted by something else because she would run the risk of becoming politically unpopular. God between us and all harm, that will never happen. Every time something is asked for, something has to come out or the level of indebtedness has to go up. The figure of €41,500 for every man, woman and child in the country would go up. The overall level of indebtedness is being masked by GDP. I do not believe the comparison between Ireland and the United States is fair. This is a small, open economy that is exposed to risks, as Senator Ian Marshall said. The United States economy is far bigger and more resilient. It is able to pile on debt because the cycle it goes through is faster, which means that the level of indebtedness is outstripped by GDP growth. We do not have that luxury in Ireland. Looking in the rear view mirror, as a Government, we definitely do not want to go back to where we were for the previous six or seven years.

I thank the Acting Chairman for giving me and the other speakers latitutde. I welcome the contributions made on the summer economic statement and look forward to coming back to the House.

I thank the Minister of State who is always welcome. I also thank colleagues for their contributions.

Sitting suspended at 6.50 p.m. and resumed at 7.10 p.m.